Tag Archives: American Recovery and Reinvestment Act

Photo by Mike Mertes, Az Big Media

ABA-AGC apprenticeship program to fill talent shortage

The house, the cabin, the cars and the company. Dean Lundstrom lost it all when he declared bankruptcy in 2010. Twenty-six employees were out of work. His company had been awarded American Recovery and Reinvestment Act projects. At a point, though, Lundstrom says he knew it was too late to save his business. However, knowing what was on the horizon, he sold his only remaining contract — one with the City of Phoenix — to his last-standing employee, Henry Burruel.

In the meantime, Lundstrom focused on returning to the industry. With his newly restarted company, Commercial Comm & Electric, he was determined to make some changes. Then, he discovered the Arizona Builders Alliance.

In 2013, he became an ABA member. Two technicians who were joining his company, though, said they wouldn’t work for him unless they could be involved in ABA’s apprenticeship program. The apprenticeship program offers craft training in specialities, like electrical engineering and heavy machinery operation. The electrical and heavy machinery operation teaching facilities are located, respectively, at Gateway Community College and Central Arizona College. Enrollment in the four-year programs lead to the equivalent of journeymen certification, which can lead to an annual starting salary of $43,500, according to the ABA.

“It was eye-opening,” says Lundstrom, who had previously hired electricians regardless of certifications. The next year, he had two more technicians join the program and has another one starting in fall.

“I’ve seen a change,” he says. “My older guys who went through the class, they will challenge inspectors on codes because all during the class, they’re brought up on codes…(The program brings) a confidence in their ability.”

Lundstrom says he has personally enrolled in ABA’s leadership programs and is happy to report his company now has six employees.

“The construction industry, in terms of job numbers, is in a recession,” says Mark Minter, executive director of ABA. “We’re about half the number of jobs we had at the peak. They go up a few thousand one month and down another.”

This is the typical call to action by construction companies in Arizona that are looking for craftsmen.

Arizona was one of the worst states for construction growth last year, according to a report by The Associated General Contractors of America. ASU professor and economist Lee McPheters has reported that construction jobs are one of three major factors holding back the Arizona economy. The industry is down by about 100,000 jobs, he reported last December.

“More people are leaving the industry than coming into it,” says Sundt’s Director of Craft Development, Ken McKenzie. “The next three to five years, we could be 100,000 to 200,000 people short in this part of the country. You can’t do that without craft people.”

That’s why Sundt Construction invests about $10,000 a year to train employees who have worked for more than six months and pays for their wages, transportation and housing for four years.

In June, Sundt will open its first monthly classes at a warehouse the company bought to host pipe-fitting, welding and structural steel courses.

The workforce is at a further disadvantage, says Wilson Electric President Wes McClure, when the Baby Boomers retire, leaving a talent shortage in the wake. That’s why his company attempts to enter about 50 employees in the ABA-AGC Education Fund Apprenticeship Program every year, even if only 15 to 20 of them make it through all four years of the program.

By the time a student graduates from an apprenticeship program, they are qualified to work at a journeyman-level. McKenzie estimated that close to 70 percent of ABA apprentices at Sundt have become supervisors, noting a carpenter who is now a senior vice president.

“It’s important to have trained individuals and new blood coming to our company,” says McClure, who started his own career as a laborer and worked his way to president. “It’s been increasingly harder with the lack of construction over the last five or six years and the wages and things that are a barrier to construction. You’re working in heat, but it’s a good trade to go into with a lot of upside if you’re ambitious.”

Like many companies that participate in ABA’s apprenticeship program, Wilson Electric pays for its employees’ education regardless of where the student chooses to work afterwards. The company, McClure says, has an annual training budget of $1M.

“People in construction are gamblers,” he says, adding, “when it comes to the available work and being able to perform it.”

One other company that has been on board with ABA’s apprenticeship program is D.P. Electric.

“The apprenticeship program has impacted the quality of our workforce for the better,” says D.P. Electric President Dan Puente, whose company can have between five and 35 people in the program at a given time. “Trained electricians bring quality and confidence to the job site – they aren’t hesitant during the installation process and there is no re-work as the quality meets D.P. Electric’s standard. It is very noticeable who has been through the program and has not. We encourage all our employees to go through the program.”

Brett Bieberdorf, co-owner of Rural Electric, says that before he and his sister bought the company from their parents in 2007, the company hired “off the street.” Since Arizona is a state that doesn’t certify electricians, Bieberdorf says it’s difficult to ensure quality. However, the apprenticeship program has helped him bring quality in-house. In 2006, Rural Electric had just over 90 employees, three of whom held a Journeyman certification. Nearly a decade later, the company dropped to 80 employees — with 20 Journeymen.

The composition of the workforce is changing from more laborers to electrical tradespeople, says Bieberdorf.

“I don’t think kids realize being an electrician is just the beginning,” says Bieberdorf. “You want there to be incentive. Entry level shouldn’t be a living wage.”

Journeymen can make between $20 and $25 an hour, says Mark Minter. Every six months and 1,000 hours of work can lead to a raise, he says.

“Over the years and going forward, employees are going to be choosy,” says Bieberdorf. “If employees feel they can get a better package, they will. Our pushing the apprenticeship program has helped us retain employees. If they see you’re willing to commit for four years, that creates loyalty.”

Lundstrom sees that, too, adding that his single former employee, Burruel, who has since built his own small company of workers, will soon combine their two six-person companies into one. Despite the positive changes Lundstrom has seen in his workplace due to education, he won’t make it mandatory for employees.

“I don’t have a lot of benefits, but paying for my employees’ apprenticeship education fees is one I can offer at this point,” he says.


Laws of the land: Navigating development in Indian Country

Gerrit Steenblik, Polsinelli

Gerrit Steenblik, Polsinelli

Anyone who has tried to develop on one of the 22 federally recognized Indian tribes’ land in Arizona has probably encountered the patchwork of land ownership that can sometimes make it difficult to build. Land on reservations can be owned by the tribe, held in trust and owned by an individual (both allotted property and non). Recently, Polsinelli’s Gerrit Steenblik and Anne Kleindienst shared that to negotiate a 55-year land lease for the development of the Noah Webster school on the Salt River Pima-Maricopa Indian Community, they had to work with many departments of the Salt River Pima-Maricopa Indian Community, including the general counsel’s office, the economic development division, the treasurer’s office, the education administration and the community’s public relations office, as well as the Bureau of Indian Affairs and the allotted land owners.

Each tribe functions as a sovereign nation and provides a variety of governmental services to tribal members.

Roxann Gallagher, Sacks Tierney

Roxann Gallagher, Sacks Tierney

“Because few tribes tax their members, many tribes engage in commercial activities to generate sufficient revenue to provide these services,” says Roxann Gallagher, attorney at Sacks Tierney. “As a result, we have traditionally seen a mix of bonds, either tax-exempt or taxable, issued to acquire, construct or improve both governmental and commercial facilities.”

With the introduction of the American Recovery and Reinvestment Act of 2009, came $2B meant to broaden the reach of tax-exempt funding for commercial development. A significant portion of that $2B volume cap for tribal economic development bonds are still available.

Native American communities can issue tax-exempt bonds to finance construction projects that will benefit their own community, such as government and community buildings. Various departments also offer federal grants to fund schools, pre-school programs, health care, and infrastructure, including water systems and roads in Indian country.

“Keys to success [with regards to building in Indian country] included the personal relationships, long-range planning to avoid last-minute glitches and the fact that the new Noah Webster School responded to a genuine need of the community, leading to a win-win result,” says Steenblik, who was the borrower’s counsel for the Noah Webster School being constructed on the Salt River Pima-Maricopa Indian Community. The construction of the new Noah Webster Schools-Pima project within the Salt River Pima-Maricopa Indian Community is being funded by a tax-exempt bond issued by the Industrial Development Authority of Pima County that is only available to tax exempt, nonprofit and non-Indian owned business.

“Construction financing undertaken by a tribal government or tribal governmental entity has many of the same challenges as any other governmental financing in terms of timing, structure, respect for political processes, and adherence to regulatory requirements,” says Gallagher. “Most notably, however, there are some additional legal and business issues that must be considered if certain tribal real property or restricted revenues are intended as security for the indebtedness. For instance, there are federal restrictions on the alienation of tribal property, potentially complicated title issues, and limitations on recourse against some potential sources of repayment.”

Ed Rubacha, Jennings, Haug & Cunningham

Ed Rubacha, Jennings, Haug & Cunningham

Though Jennings, Haug & Cunningham’s Ed Rubacha says it’s unlikely for tribal communities to resist payment by declaring sovereign immunity after a project is completed, the disputes of the Hualapai Skywalk and Ranch can make some developers nervous. Granted, if it’s a large project, Rubacha says, with a well-known tribe it may be smart to ask for a waive of immunity. A recent example being the Navajo Nation waiving its right to declare immunity on a $500M purchase of a coal mine being purchased by the Navajo Transitional Energy Company.

In the early 2000’s, the Navajo Nation decided to build its first casino in Arizona. It wouldn’t break ground until 2011 or open until May 2013. Twin Arrows employs 1,300 people and will make $45M a year. Instead of enlisting the help of a commercial bank, developers worked with the Navajo government to secure adequate funding.

“In 2009-10, the capital market was really soft,” says Navajo Nation Gaming Enterprise Chief Executive Darrick Wachtman. “Wall Street wasn’t lending to the casino startups. There was no activity. It was a good opportunity for the nation to get good returns. The interest rate was higher than market. It’s dependent on the cash-flow leverage.”

As for developers, Gallagher reports positive feedback: “Sacks Tierney’s clients have found that successful tribal finance transactions are akin to hitting a perfect golf shot in that the result is well worth the effort.”

Grand Canyon

Solar-Power, Eco-Friendly Grand Canyon & More

With so much happening locally, this week we’ve gathered stories about Arizona’s green endeavors, including a solar-powered plane and the Grand Canyon’s eco-friendly practices, and why a massive lawn is part of the Postal Service’s goal to reduce its energy needs.

Please feel free to send along any interesting stories you’d like to see featured in the roundup by e-mailing Shelby Hill.

Also visit AZ Green Scene for informative articles on sustainability endeavors in the Valley and state. Read the latest article here.

Green Roof Gives Postal Service Energy Savings
In Midtown Manhattan one building is lucky enough to have a lawn, on its roof.  This 2.5-acre lawn isn’t for sunbathing; it is part of the United States Postal Service’s goal of reducing its energy 30 percent by 2015.  With the help of this immense lawn, the USPS is more than two-thirds of the way to meeting its goal.

Unmanned Solar Plane Flies for more than a Week
A solar-powered unmanned plane flew a total of 336 in Arizona and landed last Friday.  The previous record for longest flight of an unmanned solar-powered plane was 30 hours, which the 110-pound plane beat by more than 10 times.

The Grand Canyon Goes Green
As previously mentioned ecotourism is a new way to be green while on vacation.  Well, now one of the most famous and most visited vacation spots in Arizona, the Grand Canyon, is a little bit greener.  With solar panels powering a building and recycling bins scattered along trails, your family’s visit to the Grand Canyon just got more eco-friendly.

The Greenest Wedding So Far
We’ve written about green weddings before ,but all of the others pale in comparison to this greenest of the green weddings.  A couple from Maine is growing and raising (yes they’re raising their own chickens) all of the food to be served at their wedding.  Aren’t weddings stressful enough?

Feds Capture and Recycle CO2
The federal government, via the American Recovery and Reinvestment Act, is putting $106 million into six projects that turn carbon dioxide (CO2) into beneficial products.  The products range from biofuel to cement

Renewable Energy

Arizona Awarded $9.5 Million For Energy Projects

Energy Secretary Steven Chu announced that over $354 million in funding from the American Recovery and Reinvestment Act is being awarded to 22 states to go toward energy efficiency and conservation activities.

This money will be used to support state-level energy efficiency priorities as well as fund local conservation projects in smaller cities and counties.

Arizona received approximately $9.5 million “to reduce greenhouse gas emissions, and encourage development, promotion and application of advances building codes and green buildings statewide.”

Eighty percent of the funds will be distributed to local cities and counties to implement their own energy efficiency programs.

In order to receive funding, it is then up to the local governments to focus on projects demonstrating a high return on investment, leveraged funds, jobs created, interactions with community colleges and technical and trade schools and a shared community approach.

The goal of the Recovery Act-funded projects will be to “..reduce energy usage and costs, increase the use of renewable energy applications within communities, and create jobs across the state.”

So what does this mean for Arizona? Only time will tell but I’m looking forward to seeing the various programs and incentives. One thing’s for sure, this is great news for our state, our nation and our sustainable future.

Read more about the announcement here.