labor monitoring report for piller usa, inc. · 4/17/2018 · labor monitoring report for piller...

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Labor Monitoring Report for Piller USA, Inc.

Retford Investments, LLC and Piller, USA

Office Space and Light Manufacturing/Assembly Building

45 Wes Warren Drive

Middletown, New York 10941

Prepared by:

Fellenzer Engineering, LLP

22 Mulberry Street, Suite 2A

Middletown, New York 10940

Project 16-269

Representing:

Orange County Industrial Development Agency

4 Crotty Lane, Suite 100

New Windsor, NY 12553

Attn: Ms. Lauri Villasuso, C.O.O., V.P. of Economic Development

April 17, 2018

OCIDA Labor Monitoring, Retford Investment

FE Project 16-268

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Table of Contents

Executive Summary .........................................................................................................................3

Authorization ...................................................................................................................................4

Overview of OCIDA’s Labor Policy ...............................................................................................5

Retford Investment’s Piller USA Project .........................................................................................6

Labor Audit Findings .......................................................................................................................7

Appendix, Breakdown of Reported Labor Hour ...................................................................................9

Appendix, Labor Tables.................................................................................................................10

Appendix, Exemption Request for Zitone Construction ................................................................11

Appendix, Zitone and Competitor Bids .........................................................................................12

Appendix, Exemption Request for Station Steel ...........................................................................15

Appendix, Exemption Request for Century Lodge .......................................................................17

Appendix, Example of Typical Documentation Received ...........................................................18


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Executive Summary

As authorized and contracted by the Orange County IDA, the auditing team represented by

Fellenzer Engineering, LLP has begun auditing the Local Labor Policy compliance of Retford

Investment’s Piller USA project. The Local Labor Policy creates two major requirements for

projects that receive benefits from the Orange County IDA; a labor requirement mandating the

use of 85% local labor and a procedural requirement that “every effort” be made to use local

vendors, material suppliers, subcontractors, and professional services.

Based on the extensive records produced by Piller USA, we can conclude that the project meets

the 85% local labor requirement. Three exemption requests have been made and have been

accepted by the Orange County IDA. Excluding exemptions, local labor made up 93.5% of the

on-site labor. Local architecture and engineering professionals were chosen for the project as

well. The detailed reporting of labor hours allowed the project to receive credit for many local

contractors and services that are normally not considered when evaluating a major capital

project. It also provides an overview of how this project benefited businesses and professionals

in the local area.


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Authorization

Fellenzer Engineering, LLP as the prime contact for our labor audit team consisting of Fellenzer

Engineering, LLP, Pangia & Company, LLC, Certified Public Accountants, and Blustein,

Shapiro, Rich & Barone, LLP were authorized, via an audit agreement dated August 15, 2016.

This authorization retained the auditing team to assist with monitoring adherence to the OCIDA

Local Labor Policy and assigned them to monitor the Piller USA project.


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Overview of the IDA’s Labor Policy

The IDA’s Labor Policy creates two labor based restrictions for projects benefiting from IRA

benefits. Both of these restrictions exist to benefit construction workers and construction related

companies that are local to Orange, Ulster, Sullivan, Dutchess, Putnam, Rockland, and

Westchester Counties and to promote the general welfare of Orange County.

First, 85% of the construction labor for IDA approved projects must be provided by workers

living in the 7 counties area. The scope of this 85% is limited to construction workers as outlined

by the IDA, not including suppliers, professional services, and vendors. The labor policy does

not define whether the 85% compliance is in regards to total hours or value (in dollars). For

compliance, the IDA requires the construction manager to “keep a log book on site detailing the

number of workers on the job for each trade and the counties in which they reside” and to make

these records available for periodic inspection. Based on Fellenzer Engineering’s discussions

with the IDA, the 85% local labor amount was meant to be calculated by hours of labor worked

across contractors and sub-contractors. It is noted that the log book of workers onsite and their

home counties may be insufficient for determining the percentage of local labor hours spent on

the project, as workers across different trades may have different lengths of time on the job site.

Exemptions are available on warranty support, specialized construction, cost differential, labor

scarcity, and special skills bases. Exempted construction labor does not count against the 85%

requirement. These exemptions are at the discretion of the Executive Director of the IDA and are

reported to the Board of Directors at each meeting.

Second, the IDA applicant and contractors “shall make every effort to utilize vendors, material

suppliers, subcontractors, and professional services from Orange County and the surrounding

counties.” This is a much wider requirement; it establishes a very high priority for both local

construction labor and local construction related businesses. The meaning of “every effort” isn’t

rigorously defined, but the IDA’s labor policy requires records of solicitations and awards to

demonstrate compliance.


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Retford Investment’s Piller USA Project

Fellenzer Engineering, LLP was contracted to assess the compliance of Retford Investment

Group’s project in Wallkill, NY. The project is a new headquarters and light manufacturing

facility for Piller USA, a manufacturer and distributor of uninterruptible power supplies and

switching hardware for data centers. It is located on Wes Warren Drive, just off of Route 211 in

the town of Walkill. Construction began in April 2015 and concluded in June 2016. The 24,000

square foot building represented a $4.6 million dollar capital investment and the project was

expected to provide 84 temporary construction jobs.

Fellenzer Engineering was not assigned labor monitoring responsibilities for this project till after

construction had concluded. On September 8th

, we attempted to contact Michael Haber, Piller’s

financial controller and the project contact listed by the IDA. Our emails and calls were

redirected to Joseph McFadden, who had replaced Michael Haber. Joseph McFadden connected

us with Anthony Martinisi, another Piller employee, who asked for a few weeks to compile their

available records.

After several attempts to check on Piller’s progress, we were referred to Charles Daling, who had

taken over the compilation project from Anthony Martinisi. On October 5, 2016, Daling

informed Fellenzer Engineering that records of the hours and contractors’ employees on-site had

been kept and that Piller is putting together those records. Records of labor hours were first

received on December 7th

, 2016 and documentation was not complete until January 25th

, 2017.

During this documentation process, Piller reported that they had considered several contractors

exempt, but had not formally received exemption from the IDA. This appears consistent with

how the IDA had treated labor policy exemptions during the project’s construction phase. In

order to maintain consistency with current IDA projects, Piller USA has submitted 3 formal

requests for exemption.


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Labor Audit Findings

Piller USA has supplied a very detailed record of hours, both for onsite and offsite labor related

to their new headquarters. This includes work from the design and planning phase through to

relocation of their corporate offices. To properly assess compliance, we have separated

construction services and on-site work from planning and design. We have considered both

under the two requirements of the labor policy.

In order to verify the hour reports, Piller USA supplied letters from several contractors

confirming their hour reports. These letters were reviewed and compared against the spreadsheet

of hours provided to ensure accuracy.

The IDA’s labor policy specifies that “shall make every effort to utilize vendors, material

suppliers, subcontractors, and professional services from Orange County and the surrounding

counties.” To this point, we can acknowledge that much of the professional services required in

the design and planning of the building were from local companies. While these companies are

not considered on-site construction labor (and not tabulated as part of the 85% under the local

labor policy), all five of the design, architecture, and engineering firms responsible for the new

Piller headquarters were from Orange County. This fulfills at least the intent of the IDA labor

policy’s second requirement with regards to professional services.

Of the 48 companies that worked on-site, 37 were from the local counties in the IDA policy.

Exemption requests were filed for three of the non-local companies. These include Zitone

Construction, the general contractor; Station Steel Services, the steel erectors; and Century

Lodge LTD, the metal stud and drywall installers. We have reviewed each of these requests and

the Orange County IDA has granted all of them; a letter outlining the requests and

recommendations has been submitted with this report. These exemptions cover 7,379 labor hours

out of the total of 25,693 labor hours reported by Piller, or almost 1/3 of the on-site labor. While

Zitone Construction’s non-local labor hours are exempt, the project is given credit for the local

labor hours that Zitone reported.

Local labor made up 93.5% of the non-exempt on-site labor, or 17,124 out of 18,314 labor hours.

This exceeds the 85% required by the IDA labor policy. Included in this tally are the labor hours

required for all on-site work, ranging from excavation and site clearing to the final relocation of


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offices. Charts are provided in the appendix to break down the sources of local labor. As would

be expected, the electrical contractor and the HVAC/plumbing contractor make up the bulk of

local labor hours.

Overall, this project fulfilled the intent and purpose of both IDA labor policy elements. The level

of detail in the reported labor hours allows for a more in-depth review than usual. This depth

allows the project to be given credit for the use of local services not ordinarily considered in the

scope of such capital project, such as the local moving services used for the office relocation, and

for a more complete review of the project’s overall contribution to Orange County businesses

and professionals.


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Appendix, Breakdown of Reported Labor Hours

Local; 17124;

67% Non-Local;

1190; 4%

Exempt; 7379; 29%

Total Labor Hours

LocalLocal

hours; 17124 hours; 94%

Non-Local hours; 1190

hours; 6%

Non-Exempt Labor Hours

Local

Rotolo Electric; 4381; 26%

Perry Plumbing Heating & Cooling; 2118; 12%

David Wieboldt; 1328; 8%

Piller USA, Inc.; 1292; 8% Lanc & Tully; 824; 5%

Bud DeVries & Sons Concrete; 702; 4%

Callahan & Nannini; 700; 4%

Arnoff Moving & Storage; 588; 3%

Zitone Construction; 552; 3%

Sullivan Sprinkler; 537; 3%

Checke's Metal Products; 500; 3%

Jesse G's; 320; 2%

Precision Roofing; 320; 2%

AJM Trucking; 310; 2%

Blake Engineering; 300; 2%

KC Engineering; 272; 2%

Frontier Communications; 200;

1%

Otis Elevator; 199; 1% Other Companies (27); 1681; 10%

Local Labor


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Appendix, Labor Tables

Sub Location Man Hours Local Non-Local Exempt

A&R Concrete Products New Windsor, NY 140 140 0 0

Advanced Testing Campbell Hall, NY 183 183 0 0

AJM Trucking Monroe, NY 310 310 0 0

Arnoff Moving & Storage Newburgh, NY 588 588 0 0

Blake Engineering Westtown, NY 300 300 0 0

Bud DeVries & Sons Concrete Wallkill, NY 702 702 0 0

Callahan & Nannini Salsbury Mills, NY 700 700 0 0

Checke's Metal Products Middletown, NY 500 500 0 0

David Wieboldt Middletown, NY 1328 1328 0 0

Dick's Concrete New Hampton, NY 82 82 0 0

Dutchess Overhead Door Poughkeepsie, NY 80 80 0 0

Franks Lawn Care Port Jervis, NY 48 48 0 0

Frontier Communications Warwick, NY 200 200 0 0

Jesse G's Glen Spey, NY 320 320 0 0

John to Go Spring Valley, NY 70 70 0 0

JTJ Tapping Hyde Park, NY 16 16 0 0

K&P Cleaning Services Poughkeepsie, NY 102 102 0 0

KC Engineering Circleville, NY 272 272 0 0

Ketcham Fence Otisville, NY 16 16 0 0

Lanc & Tully Goshen, NY 824 824 0 0

Lewis Sign Co. Slate Hill, NY 152 152 0 0

Liberty Iron Liberty, NY 134 134 0 0

Neversink Lumber Neversink, NY 10 10 0 0

Newburgh Win Wholesale Newburgh, NY 20 20 0 0

Organic Recycling Inc Tappan, NY 24 24 0 0

Peenpack Sand and Gravel Huguenot, NY 6 6 0 0

Perry Plumbing Heating & Cooling Cornwall on Hudson, NY 2118 2118 0 0

Piller USA, Inc. Middletown, NY 1292 1292 0 0

Pine Bush Equipment Pine Bush, NY 6 6 0 0

Precision Roofing Southfields, NY 320 320 0 0

Rotolo Electric Middletown, NY 4381 4381 0 0

Safe & Sound Cornwall on Hudson, NY 112 112 0 0

Scmitt's Wholesale Monticello, NY 26 26 0 0

Sullivan Sprinkler South Fallsburg, NY 537 537 0 0

Tam Enterprises Goshen, NY 12 12 0 0

Tank Specialist Plus Middletown, NY 80 80 0 0

Taylor Recycling Montgomery, NY 16 16 0 0

TG Elliot & Sons Pearl River, NY 24 24 0 0

United Rental Newburgh, NY 18 18 0 0

Valley Construction Corp Pine Bush, NY 80 80 0 0

Viking Enterprises Middletown, NY 24 24 0 0

Ward Paving Goshen, NY 184 184 0 0

A Plus Stripping Glenwood, NY 16 16 0 0

Binghamton Material Handling Binghamton, NY 384 0 384 0

Century Lodge Berwick, PA 2442 0 0 2442

CJM Painting Berwick, PA 160 0 160 0

Deanna Turvin, DBA CNJ Construction Webb, Al 352 0 352 0

Guzzo Stucco Masonary Vineland, NJ 24 0 24 0

Malishchak Brothers Naticoke, PA 144 0 144 0

Mesko Glass & Mirror Avoca, PA 126 0 126 0

Otis Elevator Albany, NY 199 199 0 0

Station Steel Erectors Milford, PA 1850 0 0 1850

Zitone Construction Sussex, NJ 3639 552 0 3087

25693 17124 1190 7379

Local Labor Percentage 93.5%


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Appendix, Exemption Request for Zitone


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Appendix, Zitone and Competitor Bids


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Appendix, Exemption Request for Station Steel


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Appendix, Exemption Request for Station Steel


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Appendix, Exemption Request for Century Lodge


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Appendix, Example of Typical Documentation Received

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