Years

ALLIED CONSTRUCTION INDUSTRIES

Celebrating

86TC IOU NRT IS NN D

O U

C S TD RE II EL SLA

ALLIED CONSTRUCTION INDUSTRIES

Your Primary Resource for Commercial Construction

Hands-on Experience Brings Kids to the Career PathCEO NetworkingAGC Economic Forecast2015 Build Ohio AwardsOhio Licensing Cleanup BillThird Annual Shooting Event

Boots on the Ground: Ami KulkarniOSHA Penalty Limits Are Increasing For the First Time in 25 YearsWhat Do You Consider Normal?Like-Kind Exchange – A Refresher

What’s Inside:

ACI Annual PicnicConstruction Career DaysLeadership Awards LuncheonBuilding for 2020

Fall 2015

The Cincinnati Constructor is an official publication of Allied Construction Industries, 3 Kovach Drive, Cincinnati, Ohio 45215. For information, advertising, rates or change of address, contact ACI at 513-221-8020. Submitted articles and editorials do not represent the opinions of Allied Construction Industries’ governing body.

Fall 2015

Allied Construction Industries

Executive Committee

Mark Douglas, PresidentMajid Samarghandi, First Vice President

Phil O’Brien, Second Vice PresidentSteve Eder, Secretary

Mark Weber, TreasurerSteve Klinker, Past President

Board of Directors

Mark DouglasMatt M. Barry

Joseph BeischelEric BrowneDan Denier

Whitney EckertSteve Eder

Kathleen FischerJim Flach

William G. Geisen, Esq.Steve Klinker

Majid SamarghandiMichael Strawser

Mark Weber

StaffTerry Phillips

Executive Director

Anthony Ricciardi Associate Director

Linda BachEducation Director

Kimberly Cobaugh, CPAAccounting Manager

Erica SchwegmanMembership Manager

Christie FarrowEvents Manager

Chelsea LombardiSafety Manager

Jennifer WalshOffice Administrator

Dan WrightInformation Technology & Plan Room Manager

Candace OakleyConstruction News Assistant

Lois WittekindConstruction News Assistant

Lauren Stone Administrative Assistant

Cheri ScherpenbergTri-State Area Safety Council

Eric ScherpenburgTri-State Area Safety Council

Anne MitchellSpirit of Construction Middle School Advocate

Message From the President 4

Message From the Executive Director 5

ACI Annual Picnic 6

Hands-on Experience Brings Kids to the Career Path 8

AGC Economic Forecast 9

CEO Networking 9

ACI’s 2nd Annual Leadership Awards Luncheon 10

2015 OKI Construction Career Days 12

2015 Build Ohio Awards 14

Ohio Licensing Cleanup Bill 15

Building for 2020: Construction Industry Forum 16

Third Annual Shooting Event 18

Boots on the Ground: Ami Kulkarni 20

OSHA Penalty Limits Are Increasing For the First Time in 25 Years 21

What Do You Consider Normal? 22

Like-Kind Exchange – A Refresher 24

Advertiser Index 26

Table of Contents

We are now accepting advertising for 2016 in ACI’s Constructor magazine.

The Constructor Magazine can showcase your products and services

to over 580 construction-related firms four times a year.

Call Christie at513-221-8020

Reserve Your Ad Today!

The Cincinnati Constructor is an official publication of Allied Construction Industries, 3 Kovach Drive, Cincinnati, Ohio 45215. For information, advertising, rates or change of address, contact ACI at 513-221-8020. Submitted articles and editorials do not represent the opinions of Allied Construction Industries’ governing body.

Fall 2015

Allied Construction Industries

Executive Committee

Mark Douglas, PresidentMajid Samarghandi, First Vice President

Phil O’Brien, Second Vice PresidentSteve Eder, Secretary

Mark Weber, TreasurerSteve Klinker, Past President

Board of Directors

Mark DouglasMatt M. Barry

Joseph BeischelEric BrowneDan Denier

Whitney EckertSteve Eder

Kathleen FischerJim Flach

William G. Geisen, Esq.Steve Klinker

Majid SamarghandiMichael Strawser

Mark Weber

StaffTerry Phillips

Executive Director

Anthony Ricciardi Associate Director

Linda BachEducation Director

Kimberly Cobaugh, CPAAccounting Manager

Erica SchwegmanMembership Manager

Christie FarrowEvents Manager

Chelsea LombardiSafety Manager

Jennifer WalshOffice Administrator

Dan WrightInformation Technology & Plan Room Manager

Candace OakleyConstruction News Assistant

Lois WittekindConstruction News Assistant

Lauren Stone Administrative Assistant

Cheri ScherpenbergTri-State Area Safety Council

Eric ScherpenburgTri-State Area Safety Council

Anne MitchellSpirit of Construction Middle School Advocate

Message From the President 4

Message From the Executive Director 5

ACI Annual Picnic 6

Hands-on Experience Brings Kids to the Career Path 8

AGC Economic Forecast 9

CEO Networking 9

ACI’s 2nd Annual Leadership Awards Luncheon 10

2015 OKI Construction Career Days 12

2015 Build Ohio Awards 14

Ohio Licensing Cleanup Bill 15

Building for 2020: Construction Industry Forum 16

Third Annual Shooting Event 18

Boots on the Ground: Ami Kulkarni 20

OSHA Penalty Limits Are Increasing For the First Time in 25 Years 21

What Do You Consider Normal? 22

Like-Kind Exchange – A Refresher 24

Advertiser Index 26

Table of Contents

We are now accepting advertising for 2016 in ACI’s Constructor magazine.

The Constructor Magazine can showcase your products and services

to over 580 construction-related firms four times a year.

Call Christie at513-221-8020

Reserve Your Ad Today!

Fall 20154

Mark DouglasPresident, ACI

Are you aware that turkeys may be in short supply this holiday season? We can thank the bird flu for introducing a concern none of us saw coming. Who would have thought that a shortage of turkeys would be a concern as we prepare for holiday celebrations with family and friends?

Speaking of holidays and being thankful, the ACI Board and I want to thank you for being a member. If you are active (and we hope you are)

thank you for your contributions to our industry.

There are many reasons for belonging to an association. Here are some things I'd like you to consider. While the majority of our members state that they join for networking, there are a large number that also join for safety services – not just training, but services. Some join for education programs and many join to have access to the Construction Connection/Plan Room.

What you may not hear are the reasons why people drop and /or do not join, which include: “don't have the time to participate”, “can't afford to pay this year”, “don't need your services” and even – “I have more work than I can handle so I don't need to be a member”.

ACI exists for the construction industry. While I realize that benefits are unique to each company, there are many universal benefits - both immediate and in the future. One is through the impact of our collective voice, whereby ACI is the “go-to” organization with community and political leaders. Terry Phillips is frequently contacted by the media and various leaders for input and opinions on topics. Another benefit is workforce development. Worker shortages are on everyone's mind. Even non-members benefit from ACI's work in this critical need area, both with the Urban League on the Construction Connections Pre-apprenticeship Program and construction career exploration for middle school students through our work with the Spirit of Construction.

Have you have a chance to visit the website www.buildohio.org? It is a statewide site designed for parents, educators and students geared to help them choose construction as a career.

We still have more to do for our industry, but let's do it together. Let's build the membership, build our future and let's make our industry a top career choice of future generations. Let's keep ACI growing and strong.

THANK YOU FOR BEING AN ACI MEMBER AND FOR YOUR INVOLVEMENT IN THIS GREAT INDUSTRY.

Message from the President

Fall 2015 5

Terry PhillipsExecutive Director, ACI

As we approach the close of 2015, there are exciting things to celebrate, with the first being the strongest building year that we've seen since 2008. A close second are the recent announcements about upcoming projects for 2016 to fill your pipeline of work. So as we get ready to close the books let start planning for

what's next. What is next? We don’t have all the answers, but from ACI's perspective we plan to be ready to assist where possible. For the first time in a number of years, we have a road map to improve and add to the services we provide. Our ACI Strategic Plan isn't just another book on the shelf; it's a working tool that is being drilled down through the committees to all of our volunteers. With this direction and the volunteer leadership in place, we can't lose. There are new things coming in 2016 that I want to mention, with the first being a change in our dues structure. Starting in August of 2014, Board members, Membership Committee members and Insurance & Finance Committee members have been meeting to evaluate our dues structure. The current structure has been termed cumbersome, hard to understand and confusing. The basic goal of the group involved was to create a structure that would be user

friendly and fair. While the finer details are not complete, the fact that our members wanted to tackle this touchy subject speaks for itself. We will get you information about this dues structure change soon. What I have found going through this process is what I've always known about ACI members – they are the best people in this city. This fact has been confirmed over and over and demonstrated by the willingness to have those tough discussions, to debate pros and cons and then to reach consensus, even when you know the decisions may not be popular. But isn't that what this industry is all about? As you continue reading in this magazine you'll see information about our 2nd Annual Awards program, along with who won and why. Over 61 members were recognized for membership of 25 years or more and one 75-year member was recognized as well. You'll see information on the local 2015 Ohio AGC Build Ohio Awards Program Finalist and Winners and news about OSHA's changes to their penalty system.You'll also find information on two big 2016 events including our 87th Annual Meeting, March 10th and the 17th Annual ACI/OSHA Safety Day, February 23rd. Watch for information about the new dues structure by the end of the year. Please know that we are always here, always listening and have a driving desire to serve.

Have a happy and safe holiday season – Terry

Message from the Executive Director

RKPT provides legal services for the construction industry, including development and contruction contract review, credit application and accounts receivable consulting and review, private and public lien claims, bond claims, contract disputes and collections.

Contact Richard O. Hamilton, Jr., Attorney & Shareholderrhamilton@rkpt.com

Rick has over 20 years experience in the construction industry and is a qualified Neutral with the American Arbitration Association

ATTORNEYS AT LAWPERSONAL. FAMILY. BUSINESS. LITIGATION.

ROBBINS, KELLY, PATTERSON & TUCKER, LPA7 WEST 7TH STREET, SUITE 1400, CINCINNATI, OHIO 45202

513-721-3330 WWW.RKPT.COM

THIS IS AN ADVERTISEMENT

Fall 20154

Mark DouglasPresident, ACI

Are you aware that turkeys may be in short supply this holiday season? We can thank the bird flu for introducing a concern none of us saw coming. Who would have thought that a shortage of turkeys would be a concern as we prepare for holiday celebrations with family and friends?

Speaking of holidays and being thankful, the ACI Board and I want to thank you for being a member. If you are active (and we hope you are)

thank you for your contributions to our industry.

There are many reasons for belonging to an association. Here are some things I'd like you to consider. While the majority of our members state that they join for networking, there are a large number that also join for safety services – not just training, but services. Some join for education programs and many join to have access to the Construction Connection/Plan Room.

What you may not hear are the reasons why people drop and /or do not join, which include: “don't have the time to participate”, “can't afford to pay this year”, “don't need your services” and even – “I have more work than I can handle so I don't need to be a member”.

ACI exists for the construction industry. While I realize that benefits are unique to each company, there are many universal benefits - both immediate and in the future. One is through the impact of our collective voice, whereby ACI is the “go-to” organization with community and political leaders. Terry Phillips is frequently contacted by the media and various leaders for input and opinions on topics. Another benefit is workforce development. Worker shortages are on everyone's mind. Even non-members benefit from ACI's work in this critical need area, both with the Urban League on the Construction Connections Pre-apprenticeship Program and construction career exploration for middle school students through our work with the Spirit of Construction.

Have you have a chance to visit the website www.buildohio.org? It is a statewide site designed for parents, educators and students geared to help them choose construction as a career.

We still have more to do for our industry, but let's do it together. Let's build the membership, build our future and let's make our industry a top career choice of future generations. Let's keep ACI growing and strong.

THANK YOU FOR BEING AN ACI MEMBER AND FOR YOUR INVOLVEMENT IN THIS GREAT INDUSTRY.

Message from the President

Fall 2015 5

Terry PhillipsExecutive Director, ACI

As we approach the close of 2015, there are exciting things to celebrate, with the first being the strongest building year that we've seen since 2008. A close second are the recent announcements about upcoming projects for 2016 to fill your pipeline of work. So as we get ready to close the books let start planning for

what's next. What is next? We don’t have all the answers, but from ACI's perspective we plan to be ready to assist where possible. For the first time in a number of years, we have a road map to improve and add to the services we provide. Our ACI Strategic Plan isn't just another book on the shelf; it's a working tool that is being drilled down through the committees to all of our volunteers. With this direction and the volunteer leadership in place, we can't lose. There are new things coming in 2016 that I want to mention, with the first being a change in our dues structure. Starting in August of 2014, Board members, Membership Committee members and Insurance & Finance Committee members have been meeting to evaluate our dues structure. The current structure has been termed cumbersome, hard to understand and confusing. The basic goal of the group involved was to create a structure that would be user

friendly and fair. While the finer details are not complete, the fact that our members wanted to tackle this touchy subject speaks for itself. We will get you information about this dues structure change soon. What I have found going through this process is what I've always known about ACI members – they are the best people in this city. This fact has been confirmed over and over and demonstrated by the willingness to have those tough discussions, to debate pros and cons and then to reach consensus, even when you know the decisions may not be popular. But isn't that what this industry is all about? As you continue reading in this magazine you'll see information about our 2nd Annual Awards program, along with who won and why. Over 61 members were recognized for membership of 25 years or more and one 75-year member was recognized as well. You'll see information on the local 2015 Ohio AGC Build Ohio Awards Program Finalist and Winners and news about OSHA's changes to their penalty system.You'll also find information on two big 2016 events including our 87th Annual Meeting, March 10th and the 17th Annual ACI/OSHA Safety Day, February 23rd. Watch for information about the new dues structure by the end of the year. Please know that we are always here, always listening and have a driving desire to serve.

Have a happy and safe holiday season – Terry

Message from the Executive Director

RKPT provides legal services for the construction industry, including development and contruction contract review, credit application and accounts receivable consulting and review, private and public lien claims, bond claims, contract disputes and collections.

Contact Richard O. Hamilton, Jr., Attorney & Shareholderrhamilton@rkpt.com

Rick has over 20 years experience in the construction industry and is a qualified Neutral with the American Arbitration Association

ATTORNEYS AT LAWPERSONAL. FAMILY. BUSINESS. LITIGATION.

ROBBINS, KELLY, PATTERSON & TUCKER, LPA7 WEST 7TH STREET, SUITE 1400, CINCINNATI, OHIO 45202

513-721-3330 WWW.RKPT.COM

THIS IS AN ADVERTISEMENT

6 Fall 2015 7Fall 2015

2015Annual PicnicACI held the 70th Annual and 1st ever “Oktober Fest” themed Picnic on September 27th at the Kolping Center in Mt. Healthy. Along with burgers, brats and metts, guests enjoyed Servati soft pretzels, a variety of German Beers and the sounds of Thunder Bay. Great door prizes were given out with Carl Kappes of Hummel Industries, Inc. winning two round trip airline tickets. A special thank you to our Sponsors: Oberson's Nursery and Landscapes, Baker Concrete Construction Co., and CareWorksComp! A very special thank you to all members who came out and enjoyed the evening with us.

6 Fall 2015 7Fall 2015

2015Annual PicnicACI held the 70th Annual and 1st ever “Oktober Fest” themed Picnic on September 27th at the Kolping Center in Mt. Healthy. Along with burgers, brats and metts, guests enjoyed Servati soft pretzels, a variety of German Beers and the sounds of Thunder Bay. Great door prizes were given out with Carl Kappes of Hummel Industries, Inc. winning two round trip airline tickets. A special thank you to our Sponsors: Oberson's Nursery and Landscapes, Baker Concrete Construction Co., and CareWorksComp! A very special thank you to all members who came out and enjoyed the evening with us.

8 Fall 2015 9Fall 2015

AGC Economic ForecastOur annual AGC Economic Forecast was held on September 10th at the Queen City Club. AGC National Economist, Ken Simonson provided members with the forecast for our industry for 2016. Lauren Della Bella,

SHP Leading Design, was also a featured presenter. Ken and Lauren's knowledge of construction trends and how they relate to what is happening on a national and local level is always informative for members.

As the first quarter of the school year wraps up, ACI continues its support of the Spirit of Construction's Middle School Outreach program. Fall's programs were held at Pleasant Hill Academy in College Hill, and at the Marge Schott-Unnewehr Boys & Girls Club in Covington, where a record number of students benefitted from the leadership of volunteer contractors. Big thanks go out to Tim Turton

from Coppage Construction, Cement Masons Local 132, Michelle Stallings from Carpenters JATC, Ben Parks OV Electric, Ohio Valley Electric, Reinforced Concrete Iron Workers Local 372, and Performance Contracting Inc . As the economy gets up and running and more companies have all of their folks out in the field, it's become an increasing challenge for companies to send volunteers. We're hoping to fix that by developing the work force of the future. If your company can support this important workforce development effort, contact Construction Advocate Anne Mitchell at amitchell@aci-construction.org.

Hands-on Experience Brings Kids to the Career Path

Anne Mitchell Spirit of Construction Middle School Advocate

Construction’s top CEO's shared an evening of networking on August 13th at the Anderson Pavilion. Universal Contracting Corp. was the featured contractor. Many thanks for the sponsorships from Universal Contracting Corp., Arthur J. Gallagher, Pension Corp. of America & VonLehman. Good food, drinks and carousel rides were had by all!

CEO Networking

8 Fall 2015 9Fall 2015

AGC Economic ForecastOur annual AGC Economic Forecast was held on September 10th at the Queen City Club. AGC National Economist, Ken Simonson provided members with the forecast for our industry for 2016. Lauren Della Bella,

SHP Leading Design, was also a featured presenter. Ken and Lauren's knowledge of construction trends and how they relate to what is happening on a national and local level is always informative for members.

As the first quarter of the school year wraps up, ACI continues its support of the Spirit of Construction's Middle School Outreach program. Fall's programs were held at Pleasant Hill Academy in College Hill, and at the Marge Schott-Unnewehr Boys & Girls Club in Covington, where a record number of students benefitted from the leadership of volunteer contractors. Big thanks go out to Tim Turton

from Coppage Construction, Cement Masons Local 132, Michelle Stallings from Carpenters JATC, Ben Parks OV Electric, Ohio Valley Electric, Reinforced Concrete Iron Workers Local 372, and Performance Contracting Inc . As the economy gets up and running and more companies have all of their folks out in the field, it's become an increasing challenge for companies to send volunteers. We're hoping to fix that by developing the work force of the future. If your company can support this important workforce development effort, contact Construction Advocate Anne Mitchell at amitchell@aci-construction.org.

Hands-on Experience Brings Kids to the Career Path

Anne Mitchell Spirit of Construction Middle School Advocate

Construction’s top CEO's shared an evening of networking on August 13th at the Anderson Pavilion. Universal Contracting Corp. was the featured contractor. Many thanks for the sponsorships from Universal Contracting Corp., Arthur J. Gallagher, Pension Corp. of America & VonLehman. Good food, drinks and carousel rides were had by all!

CEO Networking

10 Fall 2015 11

Cornerstone / ACI Historian Award

Presented to an active ACI member who has been a pillar of strength in forming ACI’s foundation and

supporting the construction industry.

Industry Advocate Award

Presented to an active ACI member who has been a leader in advocating for the best interest

of the industry.

Distinguished Service Award

Presented to active ACI members for their leadership through service as a board or committee member.

Kay Fischer

President

Craftsman Electric, Inc.

John Neyer

Sr. Project Manager

HGC Construction

Stephen Mann

Partner

Blue & Co.

Rising Star Award

Presented to Young Professionals who have shown leadership on ACI committees and programs.

Phil Neumann

President

Universal Contracting Group

Jenny Scheuering

Corporate Safety Director

Dugan & Meyers Construction Company

Darin Newcomer

Marketing Director

Without A Doubt Truck & Trailer Repair

Tom Young

Marketing

Representative

Pension Corp. of America

Karen Lankfer

Sales Executive

Enterprise

Commercial Trucks

Kevin Schubert

Operations VP

Browne E&C

Chris Mealy

Virtual Construction Engineer

Messer Construction Company

Workforce Development Award

Presented to active ACI members for leadership in presenting the need for skilled construction workers to local and state leaders.

Tonya Beesley

Regional HR Manager

Baker Concrete Construction Co.

Liza Smitherman

VP Professional Development

Jostin Construction

A special thank you to our photographer, Rusty Bird, Bird Enterprises, Inc.

and videographer, Kevin McLaughlin, Video Production Group

Fall 2015

ACI’s 2nd Annual Leadership Awards LuncheonACI Honors Members and Companies

Over 200 ACI members and guests attended the 2nd Annual Leadership Awards Luncheon on October 1st at the Cooper Creek Conventions Centre. Construction Users Round Table's Executive Vice President, Greg Sizemore, was the Master of Ceremony for this year's event. Greg knew the majority of the award recipients and definitely added his own flair to the award presentations.This year ACI recognized 61 member companies who celebrated their 25+ year membership and one company who has been an ACI member for 75 years.

A & M Service

Al. Neyer, LLC

Baker Concrete Construction Co., Inc.

Barrett Paving Materials, Inc.

BC Engineering Company

Beck Studios, Inc.

Ben Hur Construction Company, Inc.

Benjamin, Yocum & Heather

Cardno ATC

Cincinnati Floor Company, Inc. **

CINFAB

Con-Quip, Inc.

Contractors Materials Company

Danis Building Construction Company

DeBra-Kuempel

Driekast Piping Corp.

Elex, Inc.

ESI, Inc.

Evers Welding Company, Inc.

Gateway Concrete Forming Services

Graydon Head

J & A Interior Systems, Inc.

J& B Steel Erectors, Inc.

Janell Concrete & Masonry Equipment, Inc.

Jim Hauer Masonry, Inc.

John R. Jurgensen Company

Kelley & Carpenter Roofing & Sheet Metal

Kleine & Sons, Inc.

Kramig Insulation & Environmental Services

Langdon, Inc.

Marsh & McLennan Agency

McAndrews Glass

Middendorf-Niehoff Contractors

Miter Masonry Contractors, Inc.

Modern Day Concrete Construction, Inc.

Nelson Stark Company

OK Interiors Corporation

O'Rourke Wrecking Company

Overhead Door Company of Greater Cincinnati

Priority 1 Construction Services, Inc.

R. Kelly Constructors, LLC

R.J. Beischel Building Company

Ramcrete, Inc.

Richard Goettle, Inc.

Robinson (E.J.) Glass Company/Andy's Mirror & Glass Company

Saint Plastering Systems, Inc.

Schumacher Dugan Construction, Inc.

Shook Construction

Spectra Contract Flooring

Thomas J. Dyer Company

Tri-Star Contractors Inc.

Universal Contracting Corp.

USI Insurance

Valcom Enterprises, Inc.

Valley Interior Systems, Inc.

VonLehman & Company, Inc.

WALTEK & Company, Ltd.

Wells Fargo Insurance Services USA, Inc.

Westside Paving & Excavating

Wm. Kramer & Son, Inc.** 75 Year Member!

2015 Leadership Award Winnners

10 Fall 2015 11

Cornerstone / ACI Historian Award

Presented to an active ACI member who has been a pillar of strength in forming ACI’s foundation and

supporting the construction industry.

Industry Advocate Award

Presented to an active ACI member who has been a leader in advocating for the best interest

of the industry.

Distinguished Service Award

Presented to active ACI members for their leadership through service as a board or committee member.

Kay Fischer

President

Craftsman Electric, Inc.

John Neyer

Sr. Project Manager

HGC Construction

Stephen Mann

Partner

Blue & Co.

Rising Star Award

Presented to Young Professionals who have shown leadership on ACI committees and programs.

Phil Neumann

President

Universal Contracting Group

Jenny Scheuering

Corporate Safety Director

Dugan & Meyers Construction Company

Darin Newcomer

Marketing Director

Without A Doubt Truck & Trailer Repair

Tom Young

Marketing

Representative

Pension Corp. of America

Karen Lankfer

Sales Executive

Enterprise

Commercial Trucks

Kevin Schubert

Operations VP

Browne E&C

Chris Mealy

Virtual Construction Engineer

Messer Construction Company

Workforce Development Award

Presented to active ACI members for leadership in presenting the need for skilled construction workers to local and state leaders.

Tonya Beesley

Regional HR Manager

Baker Concrete Construction Co.

Liza Smitherman

VP Professional Development

Jostin Construction

A special thank you to our photographer, Rusty Bird, Bird Enterprises, Inc.

and videographer, Kevin McLaughlin, Video Production Group

Fall 2015

ACI’s 2nd Annual Leadership Awards LuncheonACI Honors Members and Companies

Over 200 ACI members and guests attended the 2nd Annual Leadership Awards Luncheon on October 1st at the Cooper Creek Conventions Centre. Construction Users Round Table's Executive Vice President, Greg Sizemore, was the Master of Ceremony for this year's event. Greg knew the majority of the award recipients and definitely added his own flair to the award presentations.This year ACI recognized 61 member companies who celebrated their 25+ year membership and one company who has been an ACI member for 75 years.

A & M Service

Al. Neyer, LLC

Baker Concrete Construction Co., Inc.

Barrett Paving Materials, Inc.

BC Engineering Company

Beck Studios, Inc.

Ben Hur Construction Company, Inc.

Benjamin, Yocum & Heather

Cardno ATC

Cincinnati Floor Company, Inc. **

CINFAB

Con-Quip, Inc.

Contractors Materials Company

Danis Building Construction Company

DeBra-Kuempel

Driekast Piping Corp.

Elex, Inc.

ESI, Inc.

Evers Welding Company, Inc.

Gateway Concrete Forming Services

Graydon Head

J & A Interior Systems, Inc.

J& B Steel Erectors, Inc.

Janell Concrete & Masonry Equipment, Inc.

Jim Hauer Masonry, Inc.

John R. Jurgensen Company

Kelley & Carpenter Roofing & Sheet Metal

Kleine & Sons, Inc.

Kramig Insulation & Environmental Services

Langdon, Inc.

Marsh & McLennan Agency

McAndrews Glass

Middendorf-Niehoff Contractors

Miter Masonry Contractors, Inc.

Modern Day Concrete Construction, Inc.

Nelson Stark Company

OK Interiors Corporation

O'Rourke Wrecking Company

Overhead Door Company of Greater Cincinnati

Priority 1 Construction Services, Inc.

R. Kelly Constructors, LLC

R.J. Beischel Building Company

Ramcrete, Inc.

Richard Goettle, Inc.

Robinson (E.J.) Glass Company/Andy's Mirror & Glass Company

Saint Plastering Systems, Inc.

Schumacher Dugan Construction, Inc.

Shook Construction

Spectra Contract Flooring

Thomas J. Dyer Company

Tri-Star Contractors Inc.

Universal Contracting Corp.

USI Insurance

Valcom Enterprises, Inc.

Valley Interior Systems, Inc.

VonLehman & Company, Inc.

WALTEK & Company, Ltd.

Wells Fargo Insurance Services USA, Inc.

Westside Paving & Excavating

Wm. Kramer & Son, Inc.** 75 Year Member!

2015 Leadership Award Winnners

12 Fall 2015

Thank you to everyone who helped to make the 2015 OKI Construction Career Days a success. This incredible event would not be possible without the support of our sponsors, exhibitors, Construction Career Days committee and volunteers. This year we had over 1,500 students in attendance from Kentucky, Indiana and Ohio representing 27 different schools. Thank you to our Exhibitors: Art’s Rental, Baker Concrete Construction, Inc., Barrett Paving Materials Inc., Bobcat Enterprises, Boy Scouts Of America, Building Value Easter Seals TriState, Butler County Engineers, Butler County SELF, Cincinnati State, ComputerEase Software, DG Frondorf and Associates, Danis Building Construction, Denier Electric, Dugan & Meyers, Duke Energy, Elite Welding Academy, Federal Highway Administration, Greater Cincinnati Apprenticeship Council, HFIAW LOCAL 8, IBEW-NECA Electrical Training Center, IEC of Greater Cincinnati, IKORCC Carpenters and Millwrights JATC, INDOT, International Code Council, Jurgensen Companies, NAWIC Cincinnati Chapter #64, Northern Kentucky University Construction Management, Ohio CAT, Ohio Operating Engineers., Ohio Utilities Protection Service, Ohio Valley Associated Builders and Contractors, OPCMIA Local 132, Pioneer Cladding and Glazing Systems, JATC, Sheet Metal Workers #24, Southern Ohio/Kentucky Regional Training Center Bricklayers, University of Cincinnati, Urban League of Greater Cincinnati Thank you to our Sponsors: Allied Construction Industries, Baker Concrete Construction, Barrett Paving Materials Inc., Bricklayers SOKRTC, cHc Manufacturing, Inc., Cincinnati Carpenter Local 2, Construction Advancement Program, Danis Building, Denier Electric, DG Frondorf and Associates, Dugan & Meyers Construction, Greater Cincinnati Apprenticeship Council GCAC, Heat and Frost Insulators Local 8, IBEW Local 212 JATC, IEC, John R. Jurgensen Co., Messer Construction Company, Millwrights Local 1090, NAWIC, Dayton Carpenters Local 132, Ohio Department of Transportation ODOT, Ohio Valley ABC, Operating Engineers Local 18 JATC, Plasters & Cement Masons JATC, Reinforced Concrete Iron Workers Local 372 JATC and Spirit of Construction

13Fall 2015

2015 OKI Construction Career Days

12 Fall 2015

Thank you to everyone who helped to make the 2015 OKI Construction Career Days a success. This incredible event would not be possible without the support of our sponsors, exhibitors, Construction Career Days committee and volunteers. This year we had over 1,500 students in attendance from Kentucky, Indiana and Ohio representing 27 different schools. Thank you to our Exhibitors: Art’s Rental, Baker Concrete Construction, Inc., Barrett Paving Materials Inc., Bobcat Enterprises, Boy Scouts Of America, Building Value Easter Seals TriState, Butler County Engineers, Butler County SELF, Cincinnati State, ComputerEase Software, DG Frondorf and Associates, Danis Building Construction, Denier Electric, Dugan & Meyers, Duke Energy, Elite Welding Academy, Federal Highway Administration, Greater Cincinnati Apprenticeship Council, HFIAW LOCAL 8, IBEW-NECA Electrical Training Center, IEC of Greater Cincinnati, IKORCC Carpenters and Millwrights JATC, INDOT, International Code Council, Jurgensen Companies, NAWIC Cincinnati Chapter #64, Northern Kentucky University Construction Management, Ohio CAT, Ohio Operating Engineers., Ohio Utilities Protection Service, Ohio Valley Associated Builders and Contractors, OPCMIA Local 132, Pioneer Cladding and Glazing Systems, JATC, Sheet Metal Workers #24, Southern Ohio/Kentucky Regional Training Center Bricklayers, University of Cincinnati, Urban League of Greater Cincinnati Thank you to our Sponsors: Allied Construction Industries, Baker Concrete Construction, Barrett Paving Materials Inc., Bricklayers SOKRTC, cHc Manufacturing, Inc., Cincinnati Carpenter Local 2, Construction Advancement Program, Danis Building, Denier Electric, DG Frondorf and Associates, Dugan & Meyers Construction, Greater Cincinnati Apprenticeship Council GCAC, Heat and Frost Insulators Local 8, IBEW Local 212 JATC, IEC, John R. Jurgensen Co., Messer Construction Company, Millwrights Local 1090, NAWIC, Dayton Carpenters Local 132, Ohio Department of Transportation ODOT, Ohio Valley ABC, Operating Engineers Local 18 JATC, Plasters & Cement Masons JATC, Reinforced Concrete Iron Workers Local 372 JATC and Spirit of Construction

13Fall 2015

2015 OKI Construction Career Days

14 Fall 2015

The Kasich Administration, through the Department of Commerce and OCILB (Ohio Construction Industry Licensing Board) has transformed regulations for licensed contractors. As part of this transformation, the Governor signed S.B. 78, which took effect on September 17, 2014 and H.B. 486 which OCILB will start regulating January 1, 2016. H.B. 486 authorizes the OCILB to institute the Ohio Business Compliance Incentive Program. OCILB will amend the current continuing education requirements and license renewal schedule for licenses by recognizing and rewarding licensees who are compliant businesses, while not reducing or easing the standards that these businesses must comply with. Beginning January 1st, 2016, H.B. 486 allows those contractors in good standing to renew every year or every three years. Renewal forms for license renewals beginning January 1, 2016 will allow those contractors to check “1 year” or “3 year” renewals. H.B. 486 also allows contractors in good standing to take 8 hours continuing education instead of 10. If the contractor chooses “1 year”, he will pay $60 per license and provide documentation of 8 hours of continuing education. If the contractor chooses “3 years”, he will pay $180 per license and documentation of 24 hours of continuing education will be due at the end of his renewal period. For those holding Electrical Licenses, half of their hours must be in code. Contractors, who did not fulfill their renewal requirements in 2015, will not be eligible for this incentive program. For 2016, they will have to renew at the end of the year AND take 10 hours of continuing education. If they complete their requirements on time in 2016, their 2017 renewal will allow them to participate in the incentive program.

Specialty Contracting Company Changes Senate Bill 78 addresses issues to specialty contractors, and seeks to eliminate some of the problems facing the industry. Of particular concern was the challenge posed by the “sale” of specialty licenses to unlicensed tradespeople to perform HVAC, plumbing, electrical, refrigeration, and hydronic work so long as a licensed contractor “directed and supervised” those activities. This had the unintended consequence of enabling unscrupulous contractors to claim supervisory relationship with an unlicensed contractor in exchange for a fee—thereby “selling their license” to the highest bidder. The Ohio Construction Industry Licensing Board had very few means of catching such abuse, and the end result undermined the OCILB and put Ohioans at risk. S.B. 78 erases this abuse by removing the “direct and supervise” provision of the law while permitting license sharing between licensed contractors and their employees, thereby ensuring accountability. The bill now requires all tradespeople to be employed, paid by a W2, by the contracting company name on the license. Contractors may also employ tradespeople from a temporary agency but the contractor is accountable for the proper installation of the work. All licensed contractors SHALL assign a contracting company name on their license. If they are employed by a non-contracting company, their license must be placed in escrow, or provide a copy of three permits obtained for each of the last three years (9 permits total). With this proof, a business entity can be assigned a license. The bill also clarifies the penalty powers of the Ohio Construction Industry Licensing Board, including the ability to require additional continuing education classes, issue fines, or make criminal referrals.

15Fall 2015

Congratulations to our local AGC and ACI Member Finalists and Winners for the 2015 Build Ohio Awards. Build Ohio celebrates the commercial construction industry, promotes the greatness of the building industry, and recognizes contractors for construction excellence. Contractors from across the state compete for annual recognition. This year there were 28 projects submitted. Awards were announced at the awards celebration on November 6th in Columbus. Congratulations to Phil Neumann and Universal Contracting Corporation for winning in the New Construction Under 30 Million category and Kokosing Industrial, Inc. for winning in the Industrial-Heavy category!

Finalists included:

Renovation under $20 Million JDL Warm Construct ion LLC for Mabley P lace Redevelopment

Renovation over $20 Million Messer Construction Co., Miami University East Quad Renovations

Industrial – Heavy Shook Construction Co., New Delaware Water Treatment Plant and OSU East Regional Chilled Water Plant

New Construction Under $30 Million Dugan & Meyers Construction Co., 5th and Race/dunnhumby HeadquartersBaker Concrete Construction, Inc., Cincinnati Children's Cancer Therapy Center

New Construction Over $100 MillionMesser Construction Co., Cincinnati Children's Hospital Medical Center Location T Clinical Sciences PavilionTurner Construction Co., OSU Wexner Medical Center

Congratulations are in order to all of these companies for their great work and performance.

Turner Construction Co. OSU Wexner Medical Center

Dugan & Meyers Construction Co.5th and Race/dunnhumby Headquarters

2015 Build Ohio Awards

Universal Contracting CorporationSmale Riverfront Park, Vine Street Plaza & Carousel

JDL Warm Construction LLC Mabley Place Redevelopment

Baker Concrete Construction, Inc.Cincinnati Children'sCancer Therapy Center

Messer Construction Co. Miami University East Quad Renovations

Messer Construction Co., Cincinnati Children's Hospital Medical Center Location T Clinical Sciences Pavilion

Ohio Licensing Cleanup Bill

Kokosing Industrial, Inc.General ContractorCity of Springfield Wastewater Treatment Plant,Wet Weather & Capacity Improvements

Shook Construction Co. New Delaware Water Treatment Plant

Shook Construction Co.OSU East Regional Chilled Water Plant

14 Fall 2015

The Kasich Administration, through the Department of Commerce and OCILB (Ohio Construction Industry Licensing Board) has transformed regulations for licensed contractors. As part of this transformation, the Governor signed S.B. 78, which took effect on September 17, 2014 and H.B. 486 which OCILB will start regulating January 1, 2016. H.B. 486 authorizes the OCILB to institute the Ohio Business Compliance Incentive Program. OCILB will amend the current continuing education requirements and license renewal schedule for licenses by recognizing and rewarding licensees who are compliant businesses, while not reducing or easing the standards that these businesses must comply with. Beginning January 1st, 2016, H.B. 486 allows those contractors in good standing to renew every year or every three years. Renewal forms for license renewals beginning January 1, 2016 will allow those contractors to check “1 year” or “3 year” renewals. H.B. 486 also allows contractors in good standing to take 8 hours continuing education instead of 10. If the contractor chooses “1 year”, he will pay $60 per license and provide documentation of 8 hours of continuing education. If the contractor chooses “3 years”, he will pay $180 per license and documentation of 24 hours of continuing education will be due at the end of his renewal period. For those holding Electrical Licenses, half of their hours must be in code. Contractors, who did not fulfill their renewal requirements in 2015, will not be eligible for this incentive program. For 2016, they will have to renew at the end of the year AND take 10 hours of continuing education. If they complete their requirements on time in 2016, their 2017 renewal will allow them to participate in the incentive program.

Specialty Contracting Company Changes Senate Bill 78 addresses issues to specialty contractors, and seeks to eliminate some of the problems facing the industry. Of particular concern was the challenge posed by the “sale” of specialty licenses to unlicensed tradespeople to perform HVAC, plumbing, electrical, refrigeration, and hydronic work so long as a licensed contractor “directed and supervised” those activities. This had the unintended consequence of enabling unscrupulous contractors to claim supervisory relationship with an unlicensed contractor in exchange for a fee—thereby “selling their license” to the highest bidder. The Ohio Construction Industry Licensing Board had very few means of catching such abuse, and the end result undermined the OCILB and put Ohioans at risk. S.B. 78 erases this abuse by removing the “direct and supervise” provision of the law while permitting license sharing between licensed contractors and their employees, thereby ensuring accountability. The bill now requires all tradespeople to be employed, paid by a W2, by the contracting company name on the license. Contractors may also employ tradespeople from a temporary agency but the contractor is accountable for the proper installation of the work. All licensed contractors SHALL assign a contracting company name on their license. If they are employed by a non-contracting company, their license must be placed in escrow, or provide a copy of three permits obtained for each of the last three years (9 permits total). With this proof, a business entity can be assigned a license. The bill also clarifies the penalty powers of the Ohio Construction Industry Licensing Board, including the ability to require additional continuing education classes, issue fines, or make criminal referrals.

15Fall 2015

Congratulations to our local AGC and ACI Member Finalists and Winners for the 2015 Build Ohio Awards. Build Ohio celebrates the commercial construction industry, promotes the greatness of the building industry, and recognizes contractors for construction excellence. Contractors from across the state compete for annual recognition. This year there were 28 projects submitted. Awards were announced at the awards celebration on November 6th in Columbus. Congratulations to Phil Neumann and Universal Contracting Corporation for winning in the New Construction Under 30 Million category and Kokosing Industrial, Inc. for winning in the Industrial-Heavy category!

Finalists included:

Renovation under $20 Million JDL Warm Construct ion LLC for Mabley P lace Redevelopment

Renovation over $20 Million Messer Construction Co., Miami University East Quad Renovations

Industrial – Heavy Shook Construction Co., New Delaware Water Treatment Plant and OSU East Regional Chilled Water Plant

New Construction Under $30 Million Dugan & Meyers Construction Co., 5th and Race/dunnhumby HeadquartersBaker Concrete Construction, Inc., Cincinnati Children's Cancer Therapy Center

New Construction Over $100 MillionMesser Construction Co., Cincinnati Children's Hospital Medical Center Location T Clinical Sciences PavilionTurner Construction Co., OSU Wexner Medical Center

Congratulations are in order to all of these companies for their great work and performance.

Turner Construction Co. OSU Wexner Medical Center

Dugan & Meyers Construction Co.5th and Race/dunnhumby Headquarters

2015 Build Ohio Awards

Universal Contracting CorporationSmale Riverfront Park, Vine Street Plaza & Carousel

JDL Warm Construction LLC Mabley Place Redevelopment

Baker Concrete Construction, Inc.Cincinnati Children'sCancer Therapy Center

Messer Construction Co. Miami University East Quad Renovations

Messer Construction Co., Cincinnati Children's Hospital Medical Center Location T Clinical Sciences Pavilion

Ohio Licensing Cleanup Bill

Kokosing Industrial, Inc.General ContractorCity of Springfield Wastewater Treatment Plant,Wet Weather & Capacity Improvements

Shook Construction Co. New Delaware Water Treatment Plant

Shook Construction Co.OSU East Regional Chilled Water Plant

17Fall 2015

Predictions indicate that by the year 2020, there will be a boom of construction projects and doom for necessary skilled labor in the industry – high demand with low supply. Despite demonstrated opportunities in construction, the supply side of construction's workforce equation (labor pool) struggles to keep up with demand (open positions). The industry suffers from negative perceptions such as being dirty, dangerous and physically demanding as well as having an unwelcoming workplace culture towards minorities, women and millennials. “ We ' r e i n a changing world and our industry has been s l o w e r t h a n s o m e o t h e r s t o a d j u s t th ings ,” says L iza Smitherman, the VP of P r o f e s s i o n a l Development at Jostin Construction. “Our industry has an image issue and we haven't gotten beyond the image issue yet. These issues and many others negatively impact talent recruitment and the talent pipeline. In an effort to better position local companies for projected growth, the Construction Industry Partnership issued a call to action to stakeholders of the construction industry to become proactive in building a workforce to meet future industry demands. Why? “The easiest answer is we don't have a choice,” says Mike Strawser, CEO of Valley Interior Systems, a drywall, framing, acoustical ceiling and plastering company serving Dayton, Columbus and Cincinnati. “There isn't the manpower available in the pipelines we've used in the past to fulfill the needs we have going forward. If we want to survive and grow our businesses we have to start thinking

out of the box and investigating new pipelines for field personnel who then walk into the front offices. So it's out of necessity more than anything else.” As an important step in fostering an industry-wide commitment to Building for 2020, the Construction Industry Partnership hosted a forum on September 30, 2015 at Allied Construction Industries. Nearly 60 construction industry stakeholders attended and discussed several issues such as (1) the 2020 outlook & changing workforce demographics, (2) the cost of unfilled positions,

t u r n o v e r , l o s t revenues/business, and (3) the need to improve negative perceptions, develop a welcoming cu l ture , and bui ld c a r e e r p a t h w a y s . B e y o n d s h a r i n g information, attendees also engaged in an

interactive dialogue to better understand perspectives about workforce challenges, emerging trends and demographic changes that directly impact the industry and the best method for developing and implementing strategies to overcome concerns. Information gathered from participants at the forum will be used to validate concerns and seek input from participants on the most meaningful way to structure a Building for 2020 Professional Development Series to be made available to industry representatives. There will be more to come on this exciting initiative. The Construction Industry Partnership is convened by Partners for a Competitive Workforce and Allied Construction Industries with the objective of providing the industry with a qualified construction workforce and building the talent pipeline for the future.

16 Fall 2015

Building for 2020: Construction Industry ForumHosted by Allied Construction Industries

Survey Results and FeedbackAttendees overwhelmingly committed to join the call to action and supported the development of a series of forums to better position local companies for projected growth. Attendees indicated that breakfast briefings would be the preferred method of delivery and identified educating and attracting students as the top priority. Series topics will also include: attracting and retaining diverse workers, negative perceptions of the construction industry and employee engagement and retention. The details of these

results were presented at the Construction Industry Partnership Meeting on November 19, 2015. The committee will be discussing a plan to form new subcommittees with an employer champion to develop breakfast briefings or strategies to address the following topics: Educating & Attracting Students – February; Attracting & Retaining Diverse Workers – April; Negative Perceptions of the Construction Industry – June and Employee Engagement & Retention – October.

By Anthony Ricciardi, Associate Director, ACI & Stephen Tucker, Director of Industry Partnerships, PCW

17Fall 2015

Predictions indicate that by the year 2020, there will be a boom of construction projects and doom for necessary skilled labor in the industry – high demand with low supply. Despite demonstrated opportunities in construction, the supply side of construction's workforce equation (labor pool) struggles to keep up with demand (open positions). The industry suffers from negative perceptions such as being dirty, dangerous and physically demanding as well as having an unwelcoming workplace culture towards minorities, women and millennials. “ We ' r e i n a changing world and our industry has been s l o w e r t h a n s o m e o t h e r s t o a d j u s t th ings ,” says L iza Smitherman, the VP of P r o f e s s i o n a l Development at Jostin Construction. “Our industry has an image issue and we haven't gotten beyond the image issue yet. These issues and many others negatively impact talent recruitment and the talent pipeline. In an effort to better position local companies for projected growth, the Construction Industry Partnership issued a call to action to stakeholders of the construction industry to become proactive in building a workforce to meet future industry demands. Why? “The easiest answer is we don't have a choice,” says Mike Strawser, CEO of Valley Interior Systems, a drywall, framing, acoustical ceiling and plastering company serving Dayton, Columbus and Cincinnati. “There isn't the manpower available in the pipelines we've used in the past to fulfill the needs we have going forward. If we want to survive and grow our businesses we have to start thinking

out of the box and investigating new pipelines for field personnel who then walk into the front offices. So it's out of necessity more than anything else.” As an important step in fostering an industry-wide commitment to Building for 2020, the Construction Industry Partnership hosted a forum on September 30, 2015 at Allied Construction Industries. Nearly 60 construction industry stakeholders attended and discussed several issues such as (1) the 2020 outlook & changing workforce demographics, (2) the cost of unfilled positions,

t u r n o v e r , l o s t revenues/business, and (3) the need to improve negative perceptions, develop a welcoming cu l ture , and bui ld c a r e e r p a t h w a y s . B e y o n d s h a r i n g information, attendees also engaged in an

interactive dialogue to better understand perspectives about workforce challenges, emerging trends and demographic changes that directly impact the industry and the best method for developing and implementing strategies to overcome concerns. Information gathered from participants at the forum will be used to validate concerns and seek input from participants on the most meaningful way to structure a Building for 2020 Professional Development Series to be made available to industry representatives. There will be more to come on this exciting initiative. The Construction Industry Partnership is convened by Partners for a Competitive Workforce and Allied Construction Industries with the objective of providing the industry with a qualified construction workforce and building the talent pipeline for the future.

16 Fall 2015

Building for 2020: Construction Industry ForumHosted by Allied Construction Industries

Survey Results and FeedbackAttendees overwhelmingly committed to join the call to action and supported the development of a series of forums to better position local companies for projected growth. Attendees indicated that breakfast briefings would be the preferred method of delivery and identified educating and attracting students as the top priority. Series topics will also include: attracting and retaining diverse workers, negative perceptions of the construction industry and employee engagement and retention. The details of these

results were presented at the Construction Industry Partnership Meeting on November 19, 2015. The committee will be discussing a plan to form new subcommittees with an employer champion to develop breakfast briefings or strategies to address the following topics: Educating & Attracting Students – February; Attracting & Retaining Diverse Workers – April; Negative Perceptions of the Construction Industry – June and Employee Engagement & Retention – October.

By Anthony Ricciardi, Associate Director, ACI & Stephen Tucker, Director of Industry Partnerships, PCW

18 Fall 2015

The 3rd Annual ACI Shooting Event was held October 22nd and the weather was AMAZING! You could not have asked for a more perfect fall evening. Members enjoyed Trap, 5-Stand and Skeet Shooting. Dinner and networking followed the shooting activities.

Third Annual Shooting Event

19

Fall 2015

18 Fall 2015

The 3rd Annual ACI Shooting Event was held October 22nd and the weather was AMAZING! You could not have asked for a more perfect fall evening. Members enjoyed Trap, 5-Stand and Skeet Shooting. Dinner and networking followed the shooting activities.

Third Annual Shooting Event

19

Fall 2015

20 Fall 2015

“It is our client empathy that sets us apart- seeing the project through their eyes and with their priorities” - Ami Kulkarni

Solica Construction is a regional commercial construct ion f irm headquartered in Blue Ash and operating in Ohio, Indiana, and Kentucky. Solica's unique approach is to truly act as an extension of the client. We first focus on being our client's trusted partner for planning, risk and cost management. Then we have the priviledge to bring to life their vision through construction. Q. Before Solica you worked for P&G. What did your brand management experience marketing Global Olay t e a c h y o u a b o u t p r o d u c t i v e construction operations?A. There are certain essential skills to managing any business well and I was lucky enough to learn them during my seven years in brand management at P&G. Learning in such a competitive environment sharpened my skills quickly. The core skills are the same no matter the industry: Have a clear vision for your brand positioning; Determine who wants to buy what you are selling and reflect their priorities; Put the right people in the right roles; Understand your businesses cycles for proactive cash flow management and deliver your product or service with excellence at every touch point.

Q. How do you help shape your company organization and the business by giving employees a sense of ownership and drive?A. The only employees that are a fit with our company are the ones who have a natural sense of ownership and drive. We don't give it to them. Solica is only seven years old so our current team has been huge in shaping our company to date and also our future. Samir and I innately lead through empowerment– this is the most emotionally satisfying part of our job. We love it when our team members take a new project or process into their own hands and lead it.

Q. Solica was selected by the Cincinnati USA Regional Chamber for the 2010 Small Business Excellence Minority Business award. What factors contributed to the award? A. We have a fresh approach to construction and strive to take the chaos out of the process for our clients. The chamber recognizes businesses with a clear plan and results to support it. We strive to run our company as a business grounded in logic and values-based decision making. Our strong growth even during the times of a commercial recession reflects our values being put to action. All of

Solica's employees must demonstrate our business values which include: personal accountability, proactive communication, creative problem-solving and excellence in job site safety and cleanliness.

Q. T h o u g h t s a b o u t h o w t h e commercial construction industry could figure out how to use a more diverse workforce to create better projects and improved business results? A. A diverse work force is required if the construction industry wants to evolve and stay competitive. The current approach is antiquated and stale. The most talented millennials want to work in a community-minded, diverse, and modern environment regardless of whether their field is project management, skilled craft

workers, or business administration. If the Cincinnati construction industry has any desire to attract this next generation of intelligent driven performers, they need to modernize.

Q. What are some of the business challenges and opportunities in the commercial construction industry in the Greater Cincinnati region?A. The biggest challenge is also the biggest opportunity - the Cincinnati area lacks a young, diverse, driven craft force. The ridiculous thing about this is that there are very few other skilled craft careers that offer the challenge and pay of commercial construction. Thank goodness that the leaders are getting smart and reaching out to students in junior high. To take this to the next level, I think students need to see who the leaders they would be working with are. Whether it is CEOs like myself or experienced craft leaders, the future candidates should feel excited about the opportunity and who they will be working with.

Q. What do you consider some of the most important leadership lessons you learned? A. I have learned from many outstanding bosses, teachers, and co-workers over the past 20 years. A few particularly stand out in my mind and the common factor between them was they identified true potential in people and developed it into skill. They went the extra mile to give feedback and push people into more challenging roles because they believed in the individual. Investing time in people has the greatest ROI. Having a mentor or boss who recognizes potential and helps develop it into tangible leadership skills is a game changer in any one's career. The flip side of this skill is to know when to walk away from someone who doesn't want to help themselves.

Boots on the Ground: Ami KulkarniBy Anthony Ricciardi, Associate Director, ACI

21

Fall 2015

Q. How would you describe your approach to hiring and talent management?A. Hiring is always hard. Especially when you are a smaller player who is not willing to sacrifice quality of talent. We have always invested in our firm as if we are a much larger company then we are. This approach of “be now who you want to become” has proven to be a huge asset. We have been in business over seven years now, and we are finding it easier to find talented team members who fit our culture and long-term plan. We are more clear about who and what we are looking for then ever before. Also, our track record of growth and rewarding employees who strive to push the business forward is getting noticed.

Q. Why did you leave P&G to start a construction company? A. Construction actually makes a lot of sense to people who know us well. Commercial construction is a natural fit for two creators who love a challenge. Samir Kulkarni loves to create operationally – to design, plan, and bring to life with operational excellence. I love to create strategically – to imagine, develop, and hone towards a specific goal. We both desire to make a difference in the community. We get to create spaces that bring to life the vision of our clients, create a company and culture that reflects our personal values, and to create jobs for people we want to enable. The last seven years has been terrifying and yet so innately satisfying. We can literally drive around Ohio, Indiana, and Kentucky and show our girls what we have been doing at work for the past seven years. That is amazing.

On November 2nd, 2015, President Obama signed into law the Bipartisan Budget Act of 2015 (H.R. 1314). Buried within the budget, in a section entitled the "Federal Civil Penalties I n f l a t i o n A d j u s t m e n t A c t Improvements Act of 2015," are provisions requiring OSHA to increase the limits on penalties that t h e a g e n c y c a n

assess through its enforcement activities. These increases will go into effect sometime within the next nine months and will mark the first time in 25 years that OSHA has increased its penalty limits. The last time OSHA's penalties increased was under the Omnibus Budget Reconciliation Act of 1990 (P.L. 101-508). That law increased OSHA's authorized penalties from $1,000 to $7,000 for Serious and Other-than-Serious violations and from $10,000 to $70,000 for Willful and Repeat violations. And while most federal regulatory agencies have automatically increased fines to keep pace with inflation, Congress specifically exempted OSHA from those automatic penalty increases under the Debt Collection Improvement Act of 1996 (Pub. L. 104-134, title III, §31001(s)(1)). The exemption for OSHA has now been lifted. In terms of the timing of the penalty increases, the Bipartisan Budget Act of 2015 requires that OSHA make its "catch-up adjustment" of authorized penalty amounts no later than August 1, 2016, but OSHA will probably impose the penalty increases well before that deadline. As for the

amount of the increases, the law provides that the adjustment be calculated based upon the percentage difference between the October 1990 Consumer Price Index (CPI) and the October 2015 CPI. October 2015 CPI figures have not yet been published, but experts anticipate that the calculation will result in an increase of roughly 75% to 80% over current penalty limits. While the budget technically gives OSHA discretion to propose a smaller

penalty increase, it is unlikely the agency will authorize anything less than the maximum. Assuming October 2015 CPI figures result in an adjustment calculation permitting an 80% penalty increase and that OSHA chooses to impose the maximum permissible

increase, the new maximum penalties for OSHA violations would be as follows:

! Other-than-Serious violations - $12,600! Serious violations - $12,600! Willful violations - $126,000! Repeat violations - $126,000

In addition, after the initial adjustment, OSHA will be required to implement annual cost-of-living increases by January 15 of each subsequent year, with the adjustment tied to increases in CPI. We will continue to monitor this development. Please contact Jay Schoeny or any Frost Brown Todd OSHA specialist if you have questions about OSHA's penalty increases or any other matter related to OSHA compliance, inspections, or citations.

Jay SchoenyFrost, Brown & Todd

OSHA Penalty Limits Are Increasing For the First Time in 25 YearsMember Article

20 Fall 2015

“It is our client empathy that sets us apart- seeing the project through their eyes and with their priorities” - Ami Kulkarni

Solica Construction is a regional commercial construct ion f irm headquartered in Blue Ash and operating in Ohio, Indiana, and Kentucky. Solica's unique approach is to truly act as an extension of the client. We first focus on being our client's trusted partner for planning, risk and cost management. Then we have the priviledge to bring to life their vision through construction. Q. Before Solica you worked for P&G. What did your brand management experience marketing Global Olay t e a c h y o u a b o u t p r o d u c t i v e construction operations?A. There are certain essential skills to managing any business well and I was lucky enough to learn them during my seven years in brand management at P&G. Learning in such a competitive environment sharpened my skills quickly. The core skills are the same no matter the industry: Have a clear vision for your brand positioning; Determine who wants to buy what you are selling and reflect their priorities; Put the right people in the right roles; Understand your businesses cycles for proactive cash flow management and deliver your product or service with excellence at every touch point.

Q. How do you help shape your company organization and the business by giving employees a sense of ownership and drive?A. The only employees that are a fit with our company are the ones who have a natural sense of ownership and drive. We don't give it to them. Solica is only seven years old so our current team has been huge in shaping our company to date and also our future. Samir and I innately lead through empowerment– this is the most emotionally satisfying part of our job. We love it when our team members take a new project or process into their own hands and lead it.

Q. Solica was selected by the Cincinnati USA Regional Chamber for the 2010 Small Business Excellence Minority Business award. What factors contributed to the award? A. We have a fresh approach to construction and strive to take the chaos out of the process for our clients. The chamber recognizes businesses with a clear plan and results to support it. We strive to run our company as a business grounded in logic and values-based decision making. Our strong growth even during the times of a commercial recession reflects our values being put to action. All of

Solica's employees must demonstrate our business values which include: personal accountability, proactive communication, creative problem-solving and excellence in job site safety and cleanliness.

Q. T h o u g h t s a b o u t h o w t h e commercial construction industry could figure out how to use a more diverse workforce to create better projects and improved business results? A. A diverse work force is required if the construction industry wants to evolve and stay competitive. The current approach is antiquated and stale. The most talented millennials want to work in a community-minded, diverse, and modern environment regardless of whether their field is project management, skilled craft

workers, or business administration. If the Cincinnati construction industry has any desire to attract this next generation of intelligent driven performers, they need to modernize.

Q. What are some of the business challenges and opportunities in the commercial construction industry in the Greater Cincinnati region?A. The biggest challenge is also the biggest opportunity - the Cincinnati area lacks a young, diverse, driven craft force. The ridiculous thing about this is that there are very few other skilled craft careers that offer the challenge and pay of commercial construction. Thank goodness that the leaders are getting smart and reaching out to students in junior high. To take this to the next level, I think students need to see who the leaders they would be working with are. Whether it is CEOs like myself or experienced craft leaders, the future candidates should feel excited about the opportunity and who they will be working with.

Q. What do you consider some of the most important leadership lessons you learned? A. I have learned from many outstanding bosses, teachers, and co-workers over the past 20 years. A few particularly stand out in my mind and the common factor between them was they identified true potential in people and developed it into skill. They went the extra mile to give feedback and push people into more challenging roles because they believed in the individual. Investing time in people has the greatest ROI. Having a mentor or boss who recognizes potential and helps develop it into tangible leadership skills is a game changer in any one's career. The flip side of this skill is to know when to walk away from someone who doesn't want to help themselves.

Boots on the Ground: Ami KulkarniBy Anthony Ricciardi, Associate Director, ACI

21

Fall 2015

Q. How would you describe your approach to hiring and talent management?A. Hiring is always hard. Especially when you are a smaller player who is not willing to sacrifice quality of talent. We have always invested in our firm as if we are a much larger company then we are. This approach of “be now who you want to become” has proven to be a huge asset. We have been in business over seven years now, and we are finding it easier to find talented team members who fit our culture and long-term plan. We are more clear about who and what we are looking for then ever before. Also, our track record of growth and rewarding employees who strive to push the business forward is getting noticed.

Q. Why did you leave P&G to start a construction company? A. Construction actually makes a lot of sense to people who know us well. Commercial construction is a natural fit for two creators who love a challenge. Samir Kulkarni loves to create operationally – to design, plan, and bring to life with operational excellence. I love to create strategically – to imagine, develop, and hone towards a specific goal. We both desire to make a difference in the community. We get to create spaces that bring to life the vision of our clients, create a company and culture that reflects our personal values, and to create jobs for people we want to enable. The last seven years has been terrifying and yet so innately satisfying. We can literally drive around Ohio, Indiana, and Kentucky and show our girls what we have been doing at work for the past seven years. That is amazing.

On November 2nd, 2015, President Obama signed into law the Bipartisan Budget Act of 2015 (H.R. 1314). Buried within the budget, in a section entitled the "Federal Civil Penalties I n f l a t i o n A d j u s t m e n t A c t Improvements Act of 2015," are provisions requiring OSHA to increase the limits on penalties that t h e a g e n c y c a n

assess through its enforcement activities. These increases will go into effect sometime within the next nine months and will mark the first time in 25 years that OSHA has increased its penalty limits. The last time OSHA's penalties increased was under the Omnibus Budget Reconciliation Act of 1990 (P.L. 101-508). That law increased OSHA's authorized penalties from $1,000 to $7,000 for Serious and Other-than-Serious violations and from $10,000 to $70,000 for Willful and Repeat violations. And while most federal regulatory agencies have automatically increased fines to keep pace with inflation, Congress specifically exempted OSHA from those automatic penalty increases under the Debt Collection Improvement Act of 1996 (Pub. L. 104-134, title III, §31001(s)(1)). The exemption for OSHA has now been lifted. In terms of the timing of the penalty increases, the Bipartisan Budget Act of 2015 requires that OSHA make its "catch-up adjustment" of authorized penalty amounts no later than August 1, 2016, but OSHA will probably impose the penalty increases well before that deadline. As for the

amount of the increases, the law provides that the adjustment be calculated based upon the percentage difference between the October 1990 Consumer Price Index (CPI) and the October 2015 CPI. October 2015 CPI figures have not yet been published, but experts anticipate that the calculation will result in an increase of roughly 75% to 80% over current penalty limits. While the budget technically gives OSHA discretion to propose a smaller

penalty increase, it is unlikely the agency will authorize anything less than the maximum. Assuming October 2015 CPI figures result in an adjustment calculation permitting an 80% penalty increase and that OSHA chooses to impose the maximum permissible

increase, the new maximum penalties for OSHA violations would be as follows:

! Other-than-Serious violations - $12,600! Serious violations - $12,600! Willful violations - $126,000! Repeat violations - $126,000

In addition, after the initial adjustment, OSHA will be required to implement annual cost-of-living increases by January 15 of each subsequent year, with the adjustment tied to increases in CPI. We will continue to monitor this development. Please contact Jay Schoeny or any Frost Brown Todd OSHA specialist if you have questions about OSHA's penalty increases or any other matter related to OSHA compliance, inspections, or citations.

Jay SchoenyFrost, Brown & Todd

OSHA Penalty Limits Are Increasing For the First Time in 25 YearsMember Article

22 Fall 2015

What do you consider normal? According to the trusty Encarta Dict ionary i t could mean: “Conforming to the usual s tandard, type or custom; p h y s i c a l l y , m e n t a l l y , a n d emotionally healthy; maintained or occurring in a natural state.” All reasonable definitions so just keep this in mind as you continue reading. We'll get back to this! In December of 2014, I had

the pleasure of meeting Neil Swidey, a staff writer for The Boston Globe Magazine and author of Trapped Under the Sea: One Engineering Marvel, Five Men, and a Disaster Ten Miles into the Darkness. For me it was a life changing 15 minute conversation and if you attend the 17th Annual ACI/OSHA Safety Day on February 23rd you'll also get this opportunity since Neil will be one of the keynote speakers. Pr i o r t o m e e t i n g N e i l , a f r i e n d recommended that I get his book and read it immediately. The book describes construction, starting in the 1990s, of a state-of-the-art water treatment plant located on Deer Island and consists of a 10-mile long tunnel under Boston Harbor. More specifically, it details the events that led up to the deaths of two highly skilled and trained professional divers who lost their lives performing a task that ultimately proved unnecessary. According to fatality statistics, at least four people lose their lives working on construction projects every day and we rarely hear about them. I did not hear about this particular Boston tragedy and I'm sure you didn't either and the reason is that a few days earlier, JFK Jr. crashed his plane on the way to Martha's Vineyard, killing all aboard. Therefore, this incident overshadowed the deaths of two construction workers working inside the longest underwater tunnel ever constructed at the time. Neil's book mentions that one of the divers spent time in Wolfeboro and I recalled that there is a dive shop right in the heart of town. On a whim, I visited “Dive Winnipesaukee” and met Tom Wachsmuth, proprietor, who as it turns out, is a longtime friend of Billy, one of the victims involved in the tunnel incident. During our conversation, Tom renewed my desire and conviction for workplace safety. I began to feel a real connection to Billy – the individual, rather than just a name in a book or newspaper article. I was reminded of just how personal an accident can be. I could tell even after all of these years, Tom was very sad he lost his friend, and was very angry that his life came at the cost of a, “hurry, hurry, hurry” type of situation.

In Neil Swidey's book, Trapped Under the Sea, he writes “Injuries and deaths tend to happen late in projects, when confidence runs high and tolerance for delay dips especially low. This springs from a phenomenon known as normalization, which, in this case, allowed people to accept looser standards in the name of greater speed. The more people do something without suffering a bad outcome, the harder it becomes for them to remain aware of the risks associated with that behavior.” So let's go back to the beginning of this tale. Normal – isn't conforming to the usual standard, type or custom commonplace in our industry? After all, we've been doing it that way for x-number of years! In the realm of safety it takes a real impactful incident to get people to change an unsafe

behavior. Yes we train, show ugly images of injuries, tell scary stories, but you ultimately need to experience a violent act to fully comprehend just what can happen to our employees out on a jobsite. Just witness how many people will approach an open shaft unwary of the long fall distance that could await them, or how many times have you been inside the swing radius of a track hoe, drill rig or crane? But for many of us who work in this dangerous environment, it is normal for us to not be too worried about situations such as these, especially if we have not experienced a bad outcome firsthand. As designers and engineers continue to push the

limits of what is believed to be possible, people forget that these kinds of grand infrastructure of buildings are built by real field employees, using real equipment and facing real danger, every day. For most employers, Safety is a priority – something of high importance. A good thing to be sure, but remember a priority can and often does change, especially on a construction site. A value on the other hand, is the worth, importance, or usefulness of something to somebody and must never change. In our respective companies, safety must become a value. Each action must reflect that value, and each employee must believe it is true. In my opinion, there is really no right way to eliminate complacency or normalization. Each company has to find their own approach and methods. You know your people better than anyone else, so give it a shot! Do not accept looser standards in the name of greater speed. Do not allow your safety to be normalized. My sincere condolences go to the family and friends of Billy Just and Tim Nordeen, who each lost their lives at the Deer Island project. Don't forget to register for Safety Day to hear firsthand all of the details of this fateful project. Neil will be here with his books and you won't want to miss this message.

23Fall 2015

What Do You Consider Normal?

Rick Marshall, Safety DirectorRichard Goettle, Inc.

Member Article

22 Fall 2015

What do you consider normal? According to the trusty Encarta Dict ionary i t could mean: “Conforming to the usual s tandard, type or custom; p h y s i c a l l y , m e n t a l l y , a n d emotionally healthy; maintained or occurring in a natural state.” All reasonable definitions so just keep this in mind as you continue reading. We'll get back to this! In December of 2014, I had

the pleasure of meeting Neil Swidey, a staff writer for The Boston Globe Magazine and author of Trapped Under the Sea: One Engineering Marvel, Five Men, and a Disaster Ten Miles into the Darkness. For me it was a life changing 15 minute conversation and if you attend the 17th Annual ACI/OSHA Safety Day on February 23rd you'll also get this opportunity since Neil will be one of the keynote speakers. Pr i o r t o m e e t i n g N e i l , a f r i e n d recommended that I get his book and read it immediately. The book describes construction, starting in the 1990s, of a state-of-the-art water treatment plant located on Deer Island and consists of a 10-mile long tunnel under Boston Harbor. More specifically, it details the events that led up to the deaths of two highly skilled and trained professional divers who lost their lives performing a task that ultimately proved unnecessary. According to fatality statistics, at least four people lose their lives working on construction projects every day and we rarely hear about them. I did not hear about this particular Boston tragedy and I'm sure you didn't either and the reason is that a few days earlier, JFK Jr. crashed his plane on the way to Martha's Vineyard, killing all aboard. Therefore, this incident overshadowed the deaths of two construction workers working inside the longest underwater tunnel ever constructed at the time. Neil's book mentions that one of the divers spent time in Wolfeboro and I recalled that there is a dive shop right in the heart of town. On a whim, I visited “Dive Winnipesaukee” and met Tom Wachsmuth, proprietor, who as it turns out, is a longtime friend of Billy, one of the victims involved in the tunnel incident. During our conversation, Tom renewed my desire and conviction for workplace safety. I began to feel a real connection to Billy – the individual, rather than just a name in a book or newspaper article. I was reminded of just how personal an accident can be. I could tell even after all of these years, Tom was very sad he lost his friend, and was very angry that his life came at the cost of a, “hurry, hurry, hurry” type of situation.

In Neil Swidey's book, Trapped Under the Sea, he writes “Injuries and deaths tend to happen late in projects, when confidence runs high and tolerance for delay dips especially low. This springs from a phenomenon known as normalization, which, in this case, allowed people to accept looser standards in the name of greater speed. The more people do something without suffering a bad outcome, the harder it becomes for them to remain aware of the risks associated with that behavior.” So let's go back to the beginning of this tale. Normal – isn't conforming to the usual standard, type or custom commonplace in our industry? After all, we've been doing it that way for x-number of years! In the realm of safety it takes a real impactful incident to get people to change an unsafe

behavior. Yes we train, show ugly images of injuries, tell scary stories, but you ultimately need to experience a violent act to fully comprehend just what can happen to our employees out on a jobsite. Just witness how many people will approach an open shaft unwary of the long fall distance that could await them, or how many times have you been inside the swing radius of a track hoe, drill rig or crane? But for many of us who work in this dangerous environment, it is normal for us to not be too worried about situations such as these, especially if we have not experienced a bad outcome firsthand. As designers and engineers continue to push the

limits of what is believed to be possible, people forget that these kinds of grand infrastructure of buildings are built by real field employees, using real equipment and facing real danger, every day. For most employers, Safety is a priority – something of high importance. A good thing to be sure, but remember a priority can and often does change, especially on a construction site. A value on the other hand, is the worth, importance, or usefulness of something to somebody and must never change. In our respective companies, safety must become a value. Each action must reflect that value, and each employee must believe it is true. In my opinion, there is really no right way to eliminate complacency or normalization. Each company has to find their own approach and methods. You know your people better than anyone else, so give it a shot! Do not accept looser standards in the name of greater speed. Do not allow your safety to be normalized. My sincere condolences go to the family and friends of Billy Just and Tim Nordeen, who each lost their lives at the Deer Island project. Don't forget to register for Safety Day to hear firsthand all of the details of this fateful project. Neil will be here with his books and you won't want to miss this message.

23Fall 2015

What Do You Consider Normal?

Rick Marshall, Safety DirectorRichard Goettle, Inc.

Member Article

24 Fall 2015

Selling property? Gain cash flow advantages with a like-kind exchange Many bus iness owners are somewhat familiar with the concept of a Section 1031 "like-kind" exchange, but are not aware o f t h e s e v e r a l o p t i o n s surrounding it. Proper planning can result in significant cash flow advantages from a like-kind exchange when reinvest ing

proceeds from the sale of a property in to the purchase of a new property.

Like-kind exchanges: A refresher A like-kind exchange goes by many names - a Section 1031 exchange, a Starker exchange, a " tax-free" exchange (although "tax-free, for now" would be a better term), etc. Normally, when a taxpayer sells property at a gain, they will owe tax on that gain. However, with like-kind exchanges, if the owner uses the proceeds from that sale to reinvest in property that is similar in nature (i.e., equipment for equipment, or real property for real property), the gain from the sale, and the corresponding tax burden, can be deferred by reducing the basis of the new property. The original gain will therefore not be subject to tax until the new property is sold at some point in the future. The only catch is that both the old property and the new property must be held for investment, or for productive use in a trade or business - both of which have specific meanings for tax purposes.

Exchange requirementsAll like-kind exchanges must use a qualified intermediary (QI) to assist with both the selling of the old property and the acquisition of the new property. The QI holds the sales proceeds from the old property until the new property is acquired in order to comply with tax laws and ensure that the sales proceeds are used specifically to acquire the new property. After selling the old property, the new property must be identified by the taxpayer to the QI within 45 days of the sale. If the new property is acquired before the old property is sold, then the QI must hold the new property until the like-kind exchange is complete (i.e., the old property is sold). In either case, the taxpayer must sell the old property and acquire the new property within 180 days, or six months, of each other. After the exchange is complete, however, the

25

Fall 2015

Like-Kind Exchange – A Refresher

taxpayer will not owe any tax related to the gain on the sale of the old property in the year of the exchange. The gain from the old property is offset against the basis of the new property, which results in the gain, and the related tax burden, being deferred until the new property is sold at some point in the future.

Know your optionsThere are several variations on the direct property-for-property exchange for which the tax benefits of a like-kind exchange are avai lable. Two examples include Improvement/Build-to-Suit Exchanges and Partial Exchanges.

! Improvement/Build-to-Suit ExchangesIf you want to do a like-kind exchange, and make improvements to the new property with some of the proceeds from the sale of the old property, you could initiate an "improvement" or "build-to-suit" exchange. This allows you to add improvements to the new property and still defer the gain from the original sale. In this case, the title to the new property will sit with an exchange accommodation titleholder

(EAT) until it is ready to be transferred to the taxpayer. Again, the improvements to the new property will have to be completed within 180 days, but this option allows for some flexibility on how the cash from the old property is reinvested.

! Partial ExchangesReinvesting some of the cash from a sale and taking the rest out at the end of the exchange is allowed; however, any cash taken out will be taxable in the year it is received. Conversely, if a taxpayer wants to add cash to the exchange in order to acquire or improve the new property, that is allowed as well - the cash given up will simply be added to the basis of the new property. Partial like-kind exchanges give business owners options and eliminate the "all or nothing" scenario when deciding how to best reinvest their cash.

Take another lookAlthough they require careful planning and documentation to meet Internal Revenue Service requirements, like-kind exchanges can result in significant cash flow advantages. Even property that is financed with a secured loan or mortgage could be eligible for a like-kind exchange. If you are planning to sell property and reinvest the cash in the near future, it is always worth a call to your tax advisor to see what options are available to help reduce your tax burden.

Chris Michel, MSA, CPAClark, Schaefer, Hackett & Co.

Member Article

24 Fall 2015

Selling property? Gain cash flow advantages with a like-kind exchange Many bus iness owners are somewhat familiar with the concept of a Section 1031 "like-kind" exchange, but are not aware o f t h e s e v e r a l o p t i o n s surrounding it. Proper planning can result in significant cash flow advantages from a like-kind exchange when reinvest ing

proceeds from the sale of a property in to the purchase of a new property.

Like-kind exchanges: A refresher A like-kind exchange goes by many names - a Section 1031 exchange, a Starker exchange, a " tax-free" exchange (although "tax-free, for now" would be a better term), etc. Normally, when a taxpayer sells property at a gain, they will owe tax on that gain. However, with like-kind exchanges, if the owner uses the proceeds from that sale to reinvest in property that is similar in nature (i.e., equipment for equipment, or real property for real property), the gain from the sale, and the corresponding tax burden, can be deferred by reducing the basis of the new property. The original gain will therefore not be subject to tax until the new property is sold at some point in the future. The only catch is that both the old property and the new property must be held for investment, or for productive use in a trade or business - both of which have specific meanings for tax purposes.

Exchange requirementsAll like-kind exchanges must use a qualified intermediary (QI) to assist with both the selling of the old property and the acquisition of the new property. The QI holds the sales proceeds from the old property until the new property is acquired in order to comply with tax laws and ensure that the sales proceeds are used specifically to acquire the new property. After selling the old property, the new property must be identified by the taxpayer to the QI within 45 days of the sale. If the new property is acquired before the old property is sold, then the QI must hold the new property until the like-kind exchange is complete (i.e., the old property is sold). In either case, the taxpayer must sell the old property and acquire the new property within 180 days, or six months, of each other. After the exchange is complete, however, the

25

Fall 2015

Like-Kind Exchange – A Refresher

taxpayer will not owe any tax related to the gain on the sale of the old property in the year of the exchange. The gain from the old property is offset against the basis of the new property, which results in the gain, and the related tax burden, being deferred until the new property is sold at some point in the future.

Know your optionsThere are several variations on the direct property-for-property exchange for which the tax benefits of a like-kind exchange are avai lable. Two examples include Improvement/Build-to-Suit Exchanges and Partial Exchanges.

! Improvement/Build-to-Suit ExchangesIf you want to do a like-kind exchange, and make improvements to the new property with some of the proceeds from the sale of the old property, you could initiate an "improvement" or "build-to-suit" exchange. This allows you to add improvements to the new property and still defer the gain from the original sale. In this case, the title to the new property will sit with an exchange accommodation titleholder

(EAT) until it is ready to be transferred to the taxpayer. Again, the improvements to the new property will have to be completed within 180 days, but this option allows for some flexibility on how the cash from the old property is reinvested.

! Partial ExchangesReinvesting some of the cash from a sale and taking the rest out at the end of the exchange is allowed; however, any cash taken out will be taxable in the year it is received. Conversely, if a taxpayer wants to add cash to the exchange in order to acquire or improve the new property, that is allowed as well - the cash given up will simply be added to the basis of the new property. Partial like-kind exchanges give business owners options and eliminate the "all or nothing" scenario when deciding how to best reinvest their cash.

Take another lookAlthough they require careful planning and documentation to meet Internal Revenue Service requirements, like-kind exchanges can result in significant cash flow advantages. Even property that is financed with a secured loan or mortgage could be eligible for a like-kind exchange. If you are planning to sell property and reinvest the cash in the near future, it is always worth a call to your tax advisor to see what options are available to help reduce your tax burden.

Chris Michel, MSA, CPAClark, Schaefer, Hackett & Co.

Member Article

26 Fall 2015

3-HAB, Inc. 19

Benjamin, Yocum & Heather, LLC 23

Blue Book, The 17

Janell Concrete & Masonry Equipment, Inc. Inside Front Cover

JC Equipment Sales & Leasing, Inc. 26

LaForce, Inc. 26

Loveland Excavating & Paving, Inc. 13

Mort, White, & Bushman 23

OnDemand Container 4

PFI, Inc Back Cover

Robbins, Kelly, Patterson & Tucker 5

Scherzinger Drilling 19

Tony Ravagnani Architects 7

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JC EQUIPMENT

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513-772-7612 Fax: 513-772-7618

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Machine Control Lasers 3D GPS

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26 Fall 2015

3-HAB, Inc. 19

Benjamin, Yocum & Heather, LLC 23

Blue Book, The 17

Janell Concrete & Masonry Equipment, Inc. Inside Front Cover

JC Equipment Sales & Leasing, Inc. 26

LaForce, Inc. 26

Loveland Excavating & Paving, Inc. 13

Mort, White, & Bushman 23

OnDemand Container 4

PFI, Inc Back Cover

Robbins, Kelly, Patterson & Tucker 5

Scherzinger Drilling 19

Tony Ravagnani Architects 7

ADVERTISER INDEX

!2

3D-MC Machine Control Specialists

! 3D Layout Solutions! Authorized Service Center! Construction Lasers! Sewer Lasers! Surveying Supplies! Sales, Service & Rental

JC EQUIPMENT

JC EQUIPMENT SALES & LEASING, INC.2300 East Kemper Road, Suite 11A, Cincinnati, OH 45241

513-772-7612 Fax: 513-772-7618

1-877-LAZRMAN

Only TOPCON Has a Simplified Robotic BIM Solution to Jobsite Layout

Machine Control Lasers 3D GPS

*NEW*

PFI Inc.11257 Williamson RoadCincinnati, Ohio 45241

PH: 513-489-6710Fax: 513-489-7237

INC.

Authorized Distributor

INC.