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Gato Flooring:Comprehensive Solutions for Flooring, Walls, and Windows

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By Martha Conway

Sofia Gato’s journey in the flooring industry began when she arrived in the United States from Portugal and took a position as an administrative assistant at a flooring company. What started as a job soon became a passion, igniting her ambition to build something of her own. Fourteen years later, Gato Flooring, LLC, stands as a testament to her vision – a certified Woman-owned Business Enterprise that transcends the role of a typical contractor. It is a company built on expertise, reliability, and an unwavering commitment to excellence. Today, Gato Flooring serves a diverse clientele, including educational institutions, municipal buildings, healthcare facilities, commercial kitchens, laboratories, and other specialized spaces across New York state and the greater Tampa Bay Area.

 

“Our team is very strong and knowledgeable,” Gato said. “We’re not just installers; we’re problem-solvers. Whether a client needs a complete buildout or simply the right materials for their project, we deliver solutions tailored to their needs.”

 

With extensive experience in new construction and renovations, Gato Flooring offers full installation services while also acting as a trusted supplier of materials for contractors. This dual capability allows the company to adapt to a wide range of project demands, ensuring clients receive precisely what they require, executed with precision and care.

Gato’s philosophy centers on doing the job right the first time.

“We want potential customers to understand that we pour effort into every installation to ensure there are no callbacks, no punch lists, no lingering issues,” she explains. “That’s our primary objective. We’re meticulous – some might even say overly particular – because quality matters.”

This dedication has earned Gato Flooring a reputation for reliability and attention to detail, qualities that resonate with clients who value durability and performance in their built environments.

Flooring Design: Balancing Purpose and Aesthetics

When it comes to flooring, Gato stresses the importance of aligning design with functionality.

“Before making decisions about flooring, walls, or window treatments, clients must first consider the purpose of the space,” she said. “That’s the cornerstone. Too often, aesthetic is prioritized – beautiful designs that catch the eye – but if they don’t serve the 

space’s practical needs, they’re doomed to fail.”

This pragmatic approach ensures every project delivers not only visual appeal, but also long-term utility.

Gato Flooring offers an extensive array of flooring options to accommodate a wide range of needs in diverse building environments. Beyond conventional carpet and tile, the company provides specialized solutions: acoustic flooring for sound-sensitive environments, artificial turf for recreational spaces, concrete and engineered wood for durability, and polished concrete or quartz for a sleek, modern finish. For fitness centers or indoor sports facilities, Gato Flooring supplies resilient surfaces designed to withstand heavy use.

“We have something for every need,” Gato said, emphasizing the versatility of her offerings.

In addition to flooring materials, Gato Flooring provides essential interior accessories – wall base, trim, adhesives, cleaners, and transition pieces – to ensure seamless integration and a polished final result. This comprehensive approach simplifies the process for clients, offering everything they need under one roof.

Specialized Wall Solutions: Engineered for Performance

Gato Flooring’s expertise extends beyond floors to include advanced wall solutions tailored to highly specialized environments. The company specializes in hygienic PVC wall cladding, a critical component for spaces requiring sterile or seamless conditions, such as laboratories, healthcare facilities, and commercial kitchens.

“Our team is certified to install these walls with major manufacturers such as Altro and Gerflor,” Gato said. “These walls aren’t like standard drywall or fiberglass-reinforced panels. They’re purpose-built materials, engineered to meet stringent hygiene and durability standards.” Unlike traditional finishes, hygienic cladding resists impact, inhibits bacterial growth, and maintains integrity in high-moisture or high-traffic areas.

For clients undertaking combined flooring and wall projects, integrating these systems streamlines construction and enhances functionality. The compatibility of flooring and wall materials allows for a unified installation process, reducing seams and potential weak points. It also eliminates the problems associated with trying to retrofit these systems after the fact.

Beyond functionality, Gato Flooring offers customizable wall panels that blend practicality with creativity.

“We can reproduce custom images or artwork onto durable panels,” Gato said. “These are vibrant, long-lasting designs available in various formats to suit specific client needs.”

This option appeals to businesses or institutions aiming to make a statement using their branded graphics in a corporate lobby or educational institutions using murals in a school, while ensuring the robustness required for commercial use.

Window Treatments: Enhancing Efficiency and Style

The scope of Gato Flooring’s expertise doesn’t end with floors and walls; the company also provides premium window treatments that elevate function, form, durability, and beauty. Offerings include blinds, shades, drapes, and shutters, each designed to optimize light control, reduce energy costs, and enhance privacy.

“These aren’t just decorative,” Gato emphasizes. “They’re engineered to manage heat, glare, privacy, and insulation, all while complementing the space’s unique aesthetic.”

Available in a wide range of styles and materials, these treatments cater to diverse tastes, from minimalist designs to bold, statement-making installations. This holistic approach – addressing floors, walls, and windows simultaneously – positions Gato Flooring as a one-stop solution provider, capable of transforming entire interiors with cohesive, high-quality professional results.

Floor Preparation: The Foundation of Success

A successful flooring installation hinges on meticulous subfloor preparation, an area where Gato Flooring possesses unparalleled proficiency. The business invests in state-of-the-art materials, tools, and equipment to assess, prepare or repair subfloors, addressing issues such as cracks, unevenness, or moisture infiltration before installation begins. The preparation process may involve cleaning, leveling, grinding, sealing, or replacing plywood to meet manufacturer specifications. Moisture, in particular, poses a persistent threat; undetected during installation, it can lead to significant damage later. Gato Flooring mitigates this risk through rigorous inspection, testing, and remediation to ensure a stable, durable base.

“Our goal is a flawless foundation,” she said. “That’s what guarantees longevity.”

Commitment to Excellence

At the heart of Gato Flooring’s operations is a dedication to exceeding customer expectations.

“We have an excellent, professional and well-trained team to ensure project success and consistent, top-tier results,” Gato said, explaining that this commitment to pursuing perfection often manifests in added value for clients. “It’s our way of showing we care about their experience and the outcome.”

In addition to being a certified New York State Woman-owned Business Enterprise, Gato Flooring is a certified WBE with the Port Authority of New York and New Jersey, as well as a certified Disadvantaged Business Enterprise.

Headquartered at 839 Broad St., Suite 2, Utica, and with a second location in Tampa, Fla., at 8270 Woodland Center Blvd., Suite 101, Gato Flooring serves all of New York state and the Tampa Bay region. Offices are open from 7 a.m. to 4 p.m.

“Though the company focuses exclusively on commercial projects, walk-ins are welcome,” Gato said.

For more information, visit gatoflooring.com or call 315.790.5508.

Lien Law Trusts:  More Value Than A Mechanic’s Lien?

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Lien Law Trusts can be more powerful than a mechanic’s lien and can help you get paid when you take on a construction project.  When a contractor doesn’t get paid, one of the first things they can do is get a mechanic’s lien in place.  A lien can be a valuable tool to enforce the right to get paid.  However, a mechanic’s lien can come with a minefield of problems and expenses.  An alternative for companies to consider is Lien Law Trusts.  

In common law, a trust is created when one party seeks to protect assets.  A parent might set up a trust for their child.  The parent is the grantor and the child is the beneficiary.  The parent might designate an attorney, bank or some other representative to manage the trust. 

A trustee is charged with legal responsibility for taking care of the beneficiary, which is a duty of trust and fidelity.  Their motive must always be in the best interests of the beneficiary, not themselves.  If they take money from the trust, they are responsible, and in some cases can be charged with larceny under the Penal Law. 

This concept of a trust between a trustee and beneficiary applies to construction projects in New York.  In NY, a contractor that receives payment on a project becomes trustee of those funds.  As a trustee, the contractor must apply the trust fund assets for the trust purposes before the contractor applies the money to its own overhead or profit.  Trust purposes include payment of subcontractors, vendors, and labor.  If the trustee/contractor uses trust funds for some purpose other than the payment of trust fund obligations, then the contractor may have diverted trust funds. 

A diversion of trust funds can carry serious legal implications, like personal liability for the individuals that were knowingly diverting trust funds.  The corporate form does not protect these individuals from personal liability.  Strong public policy reasons encourage the liability of corporate principals and officers who knowingly and willfully participate in the diversion.  They have taken money that belongs to another and spent it in violation of the trust.  A diversion of trust assets can be a criminal larceny.  A diversion of trust assets can be criminal because the diverting trustee has taken funds which are not its property and applied them for some purpose other than those defined by statute.  

The New York trust fund statutes permit an unpaid beneficiary to demand a complete accounting from its trustee.  The accounting must be verified under oath, and provide a detailed analysis of all trust fund assets received by the general contractor.  The accounting will include a detailed check-by-check analysis of all payments made with trust fund assets.  They require that each check be identified, together with the check number, date, payee and payee’s address. 

Discovery in trust fund litigation should include a complete report from the contractor’s cost accounting system.  These are programs where contractors enter all costs assessed against a project.  Cost accounting programs will show labor dollars paid, materials purchased and application of project funds to overhead.  Overhead may include a contractor’s general conditions such as the project site trailer, site storage facilities, vehicles dedicated to the site and project manager.  Remember that a trustee must first apply trust funds for payment of the beneficiaries.  A trustee which takes trust assets to pay its overhead or profit may be diverting trust assets.  The information contained in a complete job cost accounting report can be beneficial to the subcontractor or vendor. 

Whenever a subcontractor or vendor is unpaid, they should consider utilizing the trust fund statute. 

The information provided in this article is not intended to serve as specific legal advice for any particular situation. Competent legal and experienced counsel should be consulted.

Legislative Session 2024- Workers’ Compensation Bills

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Annette Malpica, VP Claims & Legal Counsel, Lovell Safety Management Co., LCC

Four workers’ compensation bills were passed by the NYS Senate and Assembly during the 2024 legislative session. Once a bill is passed by both chambers, the bills must be presented to Governor Hochul by December 31, 2024. The Governor has the option to 1) sign 2) veto or 3) request chapter amendments to the bill. As of December 22nd, the Governor has signed two bills and vetoed two bills. We anticipate that the bills that were signed will increase benefits, resulting in higher costs for all NYS employers and in some situations, decrease the incentives to return to work. 2024 Workers’ Compensation Bills signed into Law:

Bill A.5745/S.6635 – Amends WCL §10(3)(b) to eliminate the case law requirement that mental stress injuries be based on work related stress that is materially and substantially greater than that experienced by similarly situated workers.  “Where a worker files a claim for mental injury premised upon extraordinary workrelated stress incurred at work, the board may not disallow the claim upon a factual finding that the stress was not greater than that which usually occurs in the normal work environment.”

Bill A.5745/S.6635 was signed by  Governor Hochul on December 6, 2024, subject to chapter amendments. 

As written, A.5745/S.6635 would expand the statutory carve out that applies to police officers, firefighters, and emergency medical technicians who filed a claim for mental injury premised upon extraordinary work-related stress to include all employees. In 2017 the NY legislature, in recognition of the high standard required by the statute for mental stress claims, and the occupational hazards/exposures experienced by first responders during emergencies, removed the restriction that a mental stress claim had to be greater than the stress sustained by a similar worker. As written, the 2024 bill would treat all workers in a manner similar to first responders and would prevent employers from defending claims for mental injury by demonstrating that an employee was not exposed to stress that was greater than that experienced by other employees. Employees will still  have to have experienced “extraordinary” stress. The onus to determine what qualifies as “extraordinary,” a standard that is not defined by statute, will be placed on Law Judges.

The chapter amendments to A,5745/S.6635 were released on January 9 to the public under a new bill number A.1677/S.0755. The chapter amendments sought to clarify the psychiatric (DSM) diagnoses that would be covered under the new legislation and placed specific work-related parameters as to what incidences meet the “extraordinary worker elated stress” standard.

The three psychiatric diagnoses covered under this new law include: post-traumatic stress disorder (PTSD), acute stress disorder, and major depressive disorder. For these specific diagnoses, claimants will not have to demonstrate that the stress experienced at work was “greater than that experienced by a similar worker” to qualify for workers’ compensation benefits. In addition, A1677/S,0755, contains language that mandates a causal nexus between the work-related stress to a distinct work-related event or events directly related to employment occurring during the performance of the employee’s job duties. A.1677/S.0755 becomes effective 180 days after it becomes law.

In 2022, the New York Compensation Insurance Rating Board (NYCIRB) hired an actuarial firm to review the impact of a similar mental stress bill that was passed by both chambers (A.2020-A/S.6373-B) and its impact on NY carriers and employers. Based on NYCIRB’s analysis, the Governor vetoed the bill. In veto memo 191, the Governor noted that the mental stress bill comes with “significant cost,” that was “imprecise” to measure. In order to overcome the Governor’s concern, the legislature negotiated the chapter amendment language noted above to control costs to her satisfaction.

Bill A.1204-A/S.9462-A – Amends WCL §13(b) to permit treatment by Licensed OT/PT Assistant.
“Under the direction and supervision of an authorized occupational therapist, occupational therapy services may be rendered by an occupational therapy assistant. Under the direction and supervision of an authorized physical therapist, physical therapy services may be rendered by a physical therapist assistant.”

The OT/PT bill was signed by Governor Hochul on September 27, 2024. This bill (or similar bills) has been present in every legislative session since 2013. Currently, OT/PT therapy assistants are not permitted to render care under WCL §13. This bill will allow OT/PT assistants who are licensed by the NY State Education Department to render services to claimants under the supervision of an authorized OT/PT. This bill will become effective on the 13th day after it becomes law. We believe that the impact of this bill will be minimal, since workers’ compensation authorized OT/PT therapists are currently using assistants to help render care to claimants.

2024 Workers’ Compensation Bills vetoed by Governor:

Bill A.1219-A/S.1974-A – Amends WCL §13(1) to add a new paragraph that would permit claimants to utilize a non-network pharmacy provider upon a finding of eight factors. “[A] claimant shall not be required to obtain prescribed medicines through a pharmacy with which the employer or carrier has a contract and may obtain prescribed medicines from a pharmacy of his or her choice when…”

Bill A.1219-A/S.1974-A was vetoed by the Governor on December 13, 2024. In her veto memo, Governor Hochul mentioned that: 1) the bill would increase litigation resulting from factual disputes associated with the eight factors that would permit the claimant to utilize a non-employer network pharmacy 2) the bill would add “bureaucratic” steps to the Workers’ Compensation Board (WCB), and 3) the bill if signed would delay benefits to the claimant. A few examples of the eight factors that would permit the claimant to go out of the employers’ contracted pharmacy network for medications are:

  • employer or carrier refused to provide payment for the prescribed medication and the claimant is unable to obtain the medication from the contracted pharmacy within 72 hours.
  • employer or carrier or network pharmacy failed to respond to reauthorization request
  • medications were previously authorized; however, the employer or carrier denies reauthorization because the medical guidelines do not support reauthorization
  •  an IME disagrees with reauthorization

In the veto memo, the Governor mentioned that WCB will be issuing regulations to address the intent of A.1219-A/S.1974-A. The proposed regulation can be found at www.wcb.gov. The regulations will require that the employer or carrier notify the claimant that they may use a non-network pharmacy when the employer or carrier objects to medications for sites of injury that have not been accepted or established by the WCB. The regulations will be published in the State Register on December 31, 2024. Carriers and employers will have 60 days from publication to submit their comments to the WCB. For Lovell clients we do not see this as a major issue since NYSIF already provides firstfill pending establishment or acceptance of the claim. It is also important that employers and carriers are reminded that if signed, this bill would roll back the pharmacy cost benefits that employers negotiated in the 2007 Reform Legislation.

Bill A.6832-A/S.6929 – Amends WCL §13-a to allow for treatment costing less than $1,500 without the need for pre-authorization. The bill will also prevent carriers and employers from using the Medical Treatment Guidelines (MTG) to deny any treatment not within the Guidelines. “Such list of pre-authorized procedures (MTG) shall not prohibit varied treatment, nor shall the list be used as a basis to deny treatment not contained therein.”

“Any special diagnostic tests, x-rays examinations, magnetic resonance or other radiological examinations or test costing more than one thousand five hundred dollars performed by a provider who is not a member of the carrier’s, selfinsured’s or state insurance fund’s diagnostic network…shall be entitled to payment at the negotiated network rate.”

The Governor vetoed A.6832-A/S.6929, the Medical Treatment Guideline (MTG) bill on 11/22/2024. In Veto Message No. 62, she noted that this bill dismantles the standard of care contained in the Medical Treatment Guidelines. The veto message also emphasizes that the Medical Treatment Guidelines were premised on evidence-based medicine to create a uniform standard of care that would serve to improve medical outcomes to injured workers while also reducing disputes regarding whether treatment is necessary and appropriate. The MTG has also been credited with reducing costs to the workers’ compensation system. As for treatments greater than $1500, the veto message noted that the carrier will be required to obtain an IME, which would cause further delays to treatment that is currently authorized without any litigation in 94% of prior authorization requests.

A.6832-A/S.6929 was the most impactful of all the bills that were passed by the legislature during the 2024 legislative session. This bill would essentially dismantle the MTG and the Prior Authorization Request (PAR) process that the WCB spent years and millions of dollars to create as part of the comprehensive Business Process Reengineering (BPR), which included PAR and OnBoard. If signed, this bill would have opened the door to dramatically increased costs for employers if providers advanced questionable medical treatments. In addition, the cost of litigation would increase significantly as employers and carriers sought to limit unwarranted medical costs. We do not need to go far into the past to recall the abusive submissions of hundreds of bills by certain medical providers for treatments that were questionable and, in some cases, injurious to claimants.

Common Construction Accounting Risks and How They Can Be Prevented

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Robert C. Reeves, CPA, CFE, Dannible & McKee, LLP

The construction industry has experienced a significant amount of growth post-pandemic. While increased job activity is a positive, several risks have become more prevalent, which could negatively impact job performance if overlooked. Implementing efficient accounting practices can prevent companies from experiencing deteriorating margins and assist in mitigating the following common risks, helping companies gain a stronger understanding of bidding processes and projected job performance.

  1. Inaccurate Cost Estimates: With numerous jobs available for bid, construction industry experts face a rising risk of inaccurate cost forecasts. Poor estimates lead to underbidding and cost overruns. Contractors should use detailed, line-item estimates for each job site activity, including labor, materials, and equipment hours. These costs should be continuously evaluated and adjusted as the project progresses and work scopes change. Regular evaluation of estimates and comparison of budgeted to actual costs enables accurate forecasting of the job’s trending performance and helps refine estimates in future projects.
  1. Overhead Overlook: Overhead costs are a notable expense in the construction industry. Fixed overhead costs, such as office rent or insurance, are straightforward to account for, whereas variable overhead costs, such as labor burden, repairs and maintenance, and advertising, can fluctuate and be easily overlooked. Common pitfalls include not considering indirect costs and overhead during the bidding process and not allocating these costs to the work-in-process schedules on a timely basis when evaluating a job’s performance. To prevent overhead overlook, companies should utilize a variety of formulas to allocate indirect costs and overhead. Allocation formulas most commonly used include, but are not limited to:
  • Allocate indirect costs and overhead based on direct labor;
  • Allocate indirect costs and overhead based on material costs; and
  • Allocate indirect costs and overhead based on equipment use.

Tracking construction project costs is already time-consuming without factoring in overhead and direct costs. However, it is crucial for companies to understand and track the difference between direct, indirect, and overhead costs on each job, starting from the bidding stage and on a continuing basis as projects progress.

  1. Increased Market Prices: Post-pandemic, the construction industry has faced extreme cost volatility. Since 2020, average hourly wages have risen approximately 17%, and overall construction input costs have surged by 40.7%. Costs throughout the industry are expected to continue increasing for the foreseeable future, requiring companies to take into consideration and adjust their budget and bidding processes accordingly. They can even look for other avenues to help mitigate inflationary costs, including:
  • Requesting deposits to purchase and store materials before construction of a project begins.
  • Incorporating percentage change clauses in contract agreements that allow cost overruns from price increases to be billed back to the project’s owner.
  1. Cash-Flow Overruns: Rising costs can also lead to cash flow shortages, which can create materials and equipment delays. When materials and equipment have delayed deliveries, companies may need to postpone projects, which can have various negative impacts. To prevent this, companies should establish strong budgeting and accounting estimates of cash flows. Estimating when certain milestones will be met will help you develop and track a proposed payment schedule and provide a good idea of how cash inflow will correlate with cash outflow on jobs.
  2. Out-of-Scope Work: It is inevitable that construction projects will face unexpected changes, such as poor weather, last-minute changes, punch list items and job add-ons. It is essential to consider and account for out-of-scope work during the bidding process and when forecasting the project’s expenses and performance. Project managers should maintain open communication with the accounting department to continuously compare actual costs with estimates throughout the life of the project. Identifying lower-than-expected margins early provides management time and justification to refuse extra work or work with the project’s owner to find a suitable middle ground. Having strong accounting procedures and controls, such as budgeting, tracking job performance, accurate cost allocation, cash flow projection, and many more, helps mitigate these risks and their negative impact on job performance and a company’s bottom line. Paying attention to the numbers and prioritizing the accounting and financial aspects of jobs can be a crucial factor in increasing margins and advancing your company’s success.

Robert C. Reeves, CPA, CFE, is an audit partner at Dannible & McKee, LLP, a public accounting firm with offices in Syracuse, Auburn, Binghamton and Schenectady, NY, and Tampa, FL. He has over eight years of experience at the firm providing audit, review, compilation and consulting services to a variety of clients with a focus on the construction, architectural and engineering industries. For more information on this topic, you may contact our firm at (315) 472-9127 or visit online at www.dmcpas.com.

Contracts: A Guide to Managing Risks

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By Kirsten Shepard, CIC, CISR Elite, Senior Risk Management Consultant – Contractual Risk Transfer, OneGroup

A contract is a formal agreement between two or more parties that creates binding obligations to perform or refrain from certain actions. While contracts establish these obligations, they also introduce potential risks to your organization. Therefore, each time your organization enters into a contract, it should:

  • Evaluate the risks the agreement may pose
  • Decide whether to accept or transfer those risks
  • Determine the method of financing those risks, be it through your organization or the contractor

It’s crucial to scrutinize the terms of any contract thoroughly. While some contracts may appear to contain standardized language, they could include commitments your organization should avoid. We recommend a detailed review to anticipate potential scenarios affected by the contract, such as:

  • Scope of Work: What will the contractor be responsible for?
  • Potential Losses: What types of losses might occur?
  • Financial Impact: What’s the “worst-case scenario” in terms of financial loss?
  • Protection Measures: How can you safeguard your organization?

Particular attention should be paid to clauses like Limitation of Liability, Hold Harmless, Indemnity, and Insurance. These clauses can obligate you to indemnify another party for property or liability losses. Should you find a contract’s provisions unfavorable, we advise seeking legal counsel.

Transferring risk to other entities helps manage and reduce losses. When feasible, your organization should endeavor to transfer risk through contractual agreements. For example, you might require a vendor to assume all liability for a product they sell to your organization, a term typically embedded in the contract. Your ability to transfer risk often depends on your bargaining power and the nature of the business involved.

Hold Harmless and Indemnity Agreements

Hold harmless and indemnity agreements are essential tools for risk transfer. These may be labeled as hold harmless, waiver and release, save harmless, or indemnity agreements within a contract. Always read contracts meticulously, as these terms can be included without explicit labeling.

In a hold harmless agreement, one party agrees to assume the liability of another. Although often used interchangeably, hold harmless and indemnity agreements differ in the scope and manner of risk transfer. Hold harmless agreements typically pertain to claims between the contracting parties, such as property damage or consequential losses like lost income. These agreements often accompany indemnity agreements because third parties may still file negligence claims against any involved party.

Indemnity agreements shift the responsibility to cover third-party claims. They ensure one party (the indemnitee) can seek reimbursement from another (the indemnitor) for losses, claims, and expenses related to third-party damage claims. A well-crafted indemnity agreement should clearly outline the allocation of responsibilities.

Insurance as a Risk Financing Method

Requiring contractors or service providers to purchase insurance is a practical way to finance loss payments. However, insurance has its limitations and exclusions. For instance, professional liability policies may only cover the insured’s negligence.

When transferring risk, ensure the other party understands the transfer and has the financial resources or suitable insurance to cover potential losses. An indemnity agreement does not absolve your organization from liability; rather, it mandates that the other party covers related costs. If the indemnitor lacks financial stability or insurance, your organization may still be liable.

Including your organization as an additional insured on the contractor’s liability policy offers several advantages:

  • Defense and Costs: The insurer must defend and cover your organization’s defense costs if sued.
  • Obligations: The insurer remains obligated regardless of the named insured’s financial status.
  • Personal Injury Coverage: Typically included under general liability.

However, additional insured status is not a replacement for a hold harmless and indemnity agreement, as insurance policies have limitations and may not cover all claims.

Combining hold harmless and indemnity agreements with insurance provides comprehensive financial security for your organization.

For more information please contact:
Kirsten Shepard, CIC, CISR Elite

315-418-4955

KShepard@OneGroup.com

“Piggybacking” Misapplications by Public Owners

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A New York Court’s Decision to Remedy the Practice

Earl R. Hall, Executive Director – Syracuse Builders Exchange

Over the past few years, some public owners have taken the position that piggybacking is permissible for public work construction projects, capital improvements and other public works contracts associated with conventional construction projects. 

To provide context, piggybacking is a permissible means for municipalities or other public entities (i.e., public schools) to purchase “apparatus, materials, equipment or supplies, or to contract for services related to the installation, maintenance or repair of apparatus, materials, equipment, and supplies…”  In short, it may be proper for the purchase of “things,” but not construction.  Utilizing “piggybacking” in lieu of the competitive bidding process is permissible only if certain conditions have been met; however, none of those conditions include public works construction or capital improvement projects to infrastructure or buildings.

Public works, public works contracts and public works projects include construction or repair projects undertaken by the public owner or municipality on their infrastructure or building project.  Public works construction projects are subject to New York State’s competitive bidding laws consistent with General Municipal Law (GML) Article 5-A.  Article 5-A includes Wicks Law (Section 101) and competitive bidding of public works construction projects (Section 103).

Piggybacking is intended for the purchase of specific classes of “things,” such as apparatus, materials, equipment, and supplies, as well as service contracts related to those specific things.  It does not include public works, public works contracts or public works projects, which the court has interpreted to mean “construction” or “repair projects” undertaken by municipalities which are clearly distinct in nature and scope from apparatus, materials, equipment, and supplies.

A recent case against the Board of Education of the Maine-Endwell Central School District; the Maine Endwell Central School District, Judge Oliver N. Blaise, III determined such piggybacking application and usage on a $64 million capital improvement project for the school district’s various buildings and facilities was impermissible.  The court determined that, in this case, the contract to be piggybacked should have been let in a manner consistent with GML 103, and requiring sealed bid, public advertising of projects and awarded to the lowest responsive and responsible bidder.  Finally, the court determined that the use of the word “vendor” for piggybacking purposes means suppliers of apparatus, material, equipment, supplies, and services related thereto, as opposed to ‘contractors’ seeking to erect, construct, reconstruct or alter buildings…”

The construction industry, including contractors throughout New York State, remain optimistic that future misapplications of the piggybacking provision by public owners will be diminished as a result of this court 2025 decision, as New York’s public bidding laws defined in GML 103 cannot be circumvented on public works construction projects which the courts have defined.

Source:   Daniel J. Lynch, Inc.; Kelly Lynch Individually, and as a Taxpayer; Slavik & Co. Inc.; George J. Slavik, Jr. Individually and as Taxpayer; Andrew R Mancini Associates, Inc.; Louis N. Picciano & Son, Inc. and William H. Lane Incorporated against Board of Education of the Maine-Endwell Central School District; the Maine Endwell Central School District; and Smith Site Development.  Broome County Clerk February 13, 2025.

W2O: Finding Success Through a Service-Based, Customer-First Approach

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By Elizabeth Landry

When Dereck Withey ventured out to start W2O Pump & System Services in 2015, the decision was made with his family in mind.

“I had been working as a regional service manager for Wilo, a pump manufacturer, since 2012, doing most of the troubleshooting across the US. My daughter was born in 2014 and at the time I was on average about 25 days away from home every month. You can’t be a part of your family’s lives when you’re not there. It was time for a change,” Withey explained.

Today, almost 10 years later, Withey is the owner of the successful W2O business located in Cortland, NY, a family-owned pump and system services company that specializes in the operation and maintenance of water and wastewater treatment plants along with collection and distribution systems. He shares part ownership with his sister, Jenae Withey, and the company was created as a division of W2Operator Training Group, a retirement business that Withey’s parents, Douglas and Marian, created in 2005. W2Operator Training Group offers initial certification and recertification for every grade of water license, as well as additional training based on customer requests.

Withey grew up around the water treatment industry. His father spent about 30 years with the City of Cortland Water Department, ending his career as the Superintendent. With almost 18 years of experience working in various aspects of the industry, Withey has built W2O to be a one-stop shop for everything related to service and maintenance of pumping equipment, while remaining true to his focus on family and doing what’s best for his team.

“The motivation behind our day-to-day efforts is ultimately our team,” said Withey. “Most of us come from big corporations where you put in long hours but at the end of the day, you’re a number. With W2O, we decided we wanted to do things differently, where your co-workers and your employees truly matter. With that in mind, we have a lot of flexibility and we’re very supportive of our employees and their families.”

Service First, Sales Later

Alongside the focus on family and flexibility, W2O’s business model emphasizes service-based sales, in which the main offering is maintenance and repair work, and the actual sale of equipment follows later. Withey explained how this style of business is somewhat unique in the industry and stands out from other businesses in the water treatment and pump space.

“Most other companies in the industry are sales companies that have a service department. They typically have exclusive contracts for sales from numerous manufacturers within a given territory,” Withey explained. “We approach things differently, understanding that customers may prefer one brand versus another, and we want to service and maintain their equipment no matter the manufacturer. We offer service on all manufacturers and types of pumps, including preventive maintenance, repair, and installation. We’re the distributor as well as an installing contractor, and we offer turnkey proposals on projects where we’re involved from beginning to end.”

This service-based approach makes W2O a true one-stop shop for all their customers’ various needs. Jeff Kruger, Superintendent of Water and Sewer for the City of Binghamton, described how W2O’s service-first, yet all-encompassing offerings make the company stand out from the rest.

“It’s quite easy to choose a company that’s getting everything done, working above and beyond. Dereck and his team have been an amazing resource – he’s been my first call for the past four or five years and he hasn’t let me down yet. The service, sales and installation being out of the same shop is a bit different from other places. With W2O you get everything from start to finish. It really makes the business unique,” stated Kruger.

Solving Problems Reliably and Efficiently

W2O’s service-based sales approach includes an emphasis on troubleshooting, preventive maintenance and guaranteeing that their work will continue to perform over the long term for customers. All the company’s repairs are warrantied for 12 months from the date of invoice, and sometimes that warranty has been extended to 18 months.  Withey explained how the team’s deep knowledge of how pumps and water systems operate allows them to deliver high-quality work for their customers.

“We stand behind our work. If we have a pump go in and it fails at 18 months and we can’t figure out why it failed, we’ll typically cover it. We have a very good knowledge of installation standards, the hydraulics and the electrical end of the pumps and the pump and system process overall. When issues arise, we can do a full evaluation of every part of the system in detail to find out what’s causing the failure and then come up with the best way to fix it,” said Withey.

W2O provides service and preventive maintenance for customers of various sizes, from large cities and municipalities to small villages and towns, and their customer base extends throughout New York State and Pennsylvania and into New England. One of W2O’s preventive maintenance contracts is with the Village of Marcellus Wastewater Treatment Plant. Even though it’s one of the company’s smaller customers, Greg Chrysler, Department of Public Works Supervisor for the Village of Marcellus, said they’ve received consistent reliability from Withey and his team.

“Probably the number one reason we do preventive maintenance with W2O is they’re always right there and on time when we have a problem,” Chrysler said. “That’s huge for a wastewater treatment plant because everything needs to run 24/7 and when something breaks, we need a quick response. The team at W2O is very efficient and we don’t have to worry about whether the job is done right or wrong – it’s always done right. Even though we’re a smaller customer for them, we still get the same quality and efficiency they offer their larger customers.”

Focusing on Customers’ Needs

Working with customers of all sizes means W2O provides service plans and contracts ranging from one pump all the way up to several municipalities. As Withey explains, “There’s no ‘cookie cutter’ or ‘take it or leave it’ approach with us. Everything we do is centered on what the customer wants and what’s in the customer’s best interests.”

W2O’s customized service offerings go hand-in-hand with a reputation for honesty and integrity that often also benefits customers financially. Withey described a project in which W2O consulted with engineers during a wastewater treatment plant upgrade at the Village of Moravia, in which several pieces of equipment were failing and wouldn’t last until construction on the upgrade was planned to begin.

“We worked with the engineers to make sure the equipment used for the urgent repair could be repurposed for the future upgrade as well, so they only had to spend the money once,” Withey said. “Through the process, we also found an engineer had made a mistake, but we caught it on the front-end, helped them fix it right away and ultimately saved them money down the line. With every project, our main goal is to provide the best service possible at a fair price.”

Another project Withey and his team completed was a pump replacement for YAWS Environmental at the Cayuga Heights Wastewater Treatment Facility in Ithaca. Three of the facility’s pumps that distribute to the trickling filters had either failed or were failing, and by leaning on a relationship Withey had developed with Wilo Pumps, he discovered the best solution for the specific needs of the facility.

“We had reached out to Wilo about a different style of pump we initially thought would be best, but through the conversation we found they had been developing a brand-new style of pump that turned out to be a great application for this project. Wilo Germany agreed to let us bring the pumps in and install them here in the US for the first time. It’s been a tremendous success,” Withey explained.

Mike Albro, Lead Operator for YAWS Environmental, emphasized how Withey and the team at W2O continue to provide honesty and cost-savings as they focus on how to best meet their customers’ needs.

“Dereck genuinely cares about his work and the people he’s doing the work for,” said Albro. “If he can ever help anyone out by giving them a break or saving them some costs, he’s always looking to do that, and so honesty is a big factor. If he feels like something isn’t going to work right or if there’s a better way to go about a situation, even if it’s through another company, he’ll be honest and tell you the truth. He’s just a stand-up individual. I’ve enjoyed working with him very much.”

Plans for Future Growth and Expansion

With Withey leading the way and developing an honest business strategy that delivers value for customers time after time, W2O has seen consistent growth since its inception. In almost 10 years of business, the team has grown to include five employees, completing between 200 and 240 projects per year and driving revenue growth by nearly $1 million over the last year. For Withey, these accomplishments fuel his drive for even more expansion in the coming years.

“The thing I’m most proud of is how everyone on the team has come together and how much the company has grown in a short period of time. We’re now in the planning phases of a very large expansion of our repair shop – we currently operate out of a 3,000-square-foot building and we’ll be adding 13,000 additional square feet. We’re also going to expand the services we offer, getting into some light manufacturing and taking the leap into engineered sales, and we’ll be expanding our service fleet from two to four service body crane trucks. I hope to double our staff by 2026 and then expand the training side of the business, as well, within the next five years.”

Although the business continues to grow, it appears the focus on meeting customers’ needs first will remain at the center for W2O, as emphasized by the company’s customers themselves.

“We’ve been with W2O for several years and they’ve grown a lot as a business – they’re offering many more services and products. But Dereck has made sure he has enough great people on the team to continue that quality of work and reliability we need to keep things running smoothly. As the business is getting bigger, he’s not forgetting about the needs of customers when something breaks – it’s the same level of service as when they were a smaller company,” said Chrysler.

It’s a sentiment echoed by Albro, as well: “I believe they’re going to go very far. The quality of work is nothing less than the highest expectation. With Dereck and his team, the relationships they develop with customers are personal – it’s not always about business. I believe that’s going to go a long way for the company as they continue to expand in the future.”

www.W2Pump.com

2024 Laws That Businesses Need To Comply With

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Diana Plue, Esq., Sheats & Bailey, PLLC

Every year New York State passes new regulations and laws that impact how you do business. This past year was no different. Below is a summary of new laws and regulations that Employers must comply with or risk potential fines. 

  1. Effective January 1, 2024, small businesses will be required to file Beneficial Ownership Information (BOI) Reports with the US Department of Treasury, disclosing the company’s ownership information. Failure to file a BOI report can result in hefty fines of up to $10,000.00 per violation and prison time. The deadline for filing depends on when the company was formed. Companies formed before January 1, 2024, must file their BOI report by December 31, 2024. Companies formed after January 1, 2024, must file a BOI report within 90 calendar days from the formation date to comply.
  2. Effective February 15, 2024, the statute of limitations to file a claim with the Division of Human Rights for claims involving any type of unlawful discriminatory practices (race, sex, gender, age, disability, etc.), is extended from one year to three years.
  3. Effective March 12, 2024, employers are prohibited from requesting or requiring access to worker’s social media information and accounts. Employers cannot require an employee to disclose their social media accounts username and passwords.
  4. Effective March 13, 2024, executive, administrative and professional employees making $1300.00 or less per week will no longer be confined to commencing a civil action in court to recover owed wages but may now bring an action with the Department of Labor to recover owed wages.
  5. Effective June 19, 2024, employers must provide 30 minutes of paid lactation breaks to an employee each time an employee has a reasonable need to express breast milk for up to three years following the birth of a child. These breaks are in addition to regular meal and break times. Prior to this date, lactation breaks did not have to be paid. Employers must inform employees when they are hired, once a year thereafter and when they return from maternity leave about their right to take paid breaks for pumping breast milk.
  6. Effective December 30, 2024, contractors and subcontractors must be registered with NYS Department of Labor as a public works contractor, before submitting a bid or commencing work on public projects or private projects subject to prevailing wages. Contractors and subcontractors who submit bids or work on public projects without registering will be subject to a civil penalty.
  7. Effective January 1, 2025, employers must provide eligible employees with 20 hours of paid prenatal leave during any 52-week period. Prenatal leave is in addition to any statutory sick leave benefits.  Notice of this leave must be given in writing to employees.
  8. Effective January 1, 2025, minimum wage for counties outside of NYC, Long Island and Westchester County is increasing to $15.50/hour and the salary exempt threshold for overtime exempt employees increases almost two thousand dollars to $60,405.80 per year.
  9. Effective January 1, 2025, NYS Buy Clean Concrete Act, which puts forth emission limits for concrete used in state funded public building and transportation projects becomes mandatory. All State agency building contracts over $1 million that involve the use of 50 cubic yards of concrete and all transportation contracts over $3 million that include at least 200 cubic yards of concrete are subject to the Buy Clean Concrete Act. Starting January 1, 2025, concrete used in these projects will need to comply with mandatory emissions limits and all concrete used in such projects needs to have an environmental product declaration (EPD) submitted.
  10. Effective July 1, 2025, Covid Sick Leave Act expires, and employers no longer must provide paid Covid Leave.

As New York State is constantly enacting new laws and regulations, expect additional laws to be passed in 2025.  If you need further assistance or have additional questions, please contact Sheats & Bailey, PLLC.  www.TheConstructionLaw.com; Tel. 315-676-7314.

The information provided above is not intended to serve as specific legal advice for any particular situation.  Competent legal and experienced counsel should be consulted.

Simplifying Safety: The Urgent Need for Usable Safety and Health Plans by Small Construction Firms

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Wael Khalil, Vice President, Director of Safety & Health, Lovell Safety Management

For small construction firms and subcontractors, having a usable safety and health plan is not just a formality, it’s a necessity for safeguarding their workforce. Regardless of a company’s size, it’s crucial to have a clear, effective strategy to mitigate workplace hazards and ensure employee safety.

Many small construction business owners believe that extensive field experience can substitute for a formal safety and health plan. This perception often stems from their day-to-day involvement in operations, which they feel gives them direct control over safety issues. Many others have the approach that a safety and health plan is only a document needed when bidding for new work.                                   

However, this informal approach lacks the structured benefits of a documented plan.

A concise and relevant safety and health plan is more than a compliance measure, it organizes essential safety protocols and serves as a practical guide for employees. It helps standardize responses to high-risk tasks and ensures consistent safety practices among all workers, thereby enhancing overall site safety.

Safety and health plans should encompass a variety of elements tailored to the specific needs and risks of the workplace. Key components should include hazard identification, risk assessment, control measures, emergency procedures, and employee training. Plans should clearly outline responsibilities and provide a framework for reporting incidents and near misses, which is crucial for ongoing improvement and prevention strategies.

Moreover, the plans should facilitate compliance with relevant OSHA standards and other legal requirements, but they must also remain practical and directly applicable to the daily operations of the workers they are designed to protect. For instance, topics like proper handling of tools and materials, specific protocols for working at heights, and guidelines for the use of personal protective equipment are essential for construction sites. Each procedure outlined should be actionable and devoid of unnecessary complexity that could hinder its real-world application.

The prevailing trend steered by larger general contractors often emphasizes voluminous safety documentation, valuing quantity over quality. This leads to overly extensive safety plans that are cumbersome and impractical for actual field application. Rather than improving safety, these exhaustive documents primarily serve to shield the job site from potential litigation, rather than ensuring the actual safety of workers on the ground. Additionally, general contractors frequently employ third-party vetting firms, which contribute further to the complexity of subcontractors’ safety and health plans.

For instance, I came across a drywall contractor that was required to have a crane and rigging policy, a demand imposed by the general contractors but disconnected from the subcontractor’s actual work. This mismatch exemplifies the disconnect that arises when safety plans are dictated by entities removed from the specific realities of the job site.

Instead of one-size-fits-all documents, safety plans should be dynamic, living documents that are updated regularly to reflect actual job scope and hazards. This approach not only enhances compliance and safety but also fosters a safety culture that values input from employees, making safety an observed priority every day.

For real improvement in workplace safety, the industry needs to assist small construction firms and subcontractors in crafting straightforward, pertinent safety and health plans. These plans should focus on actionable, relevant safety measures tailored to the specific needs of the job and the workers. By moving away from unwieldy documents to more manageable and applicable plans, we can ensure that safety protocols are not just theoretical requirements but practical tools that significantly enhance safety on construction sites.

Larger general contractors have a significant responsibility to prioritize the relevance and effectiveness of the safety and health plans they require from subcontractors. It’s imperative that they shift their focus from merely mitigating litigation risks to genuinely enhancing on-site safety. This approach ensures that the safety and health plans demanded are not just formalities or overly cumbersome documents but are instead practical, applicable tools that subcontractors can realistically implement and maintain. This change will foster a safer workplace environment, where the actual safety of employees is the cornerstone of all safety protocols. By aligning safety documentation with the real-world needs of those on the ground, larger contractors can play a pivotal role in promoting a culture of safety that transcends legal compliance and truly protects workers.

At the end of the day, training employees on a 250-page safety and health plan filled with information that doesn’t directly apply to their tasks or the specific hazards they encounter is not just difficult, it’s ineffective. Workers are far more likely to understand and adhere to safety protocols when they are presented in a straightforward, relevant, and concise manner. Complex, overly lengthy safety plans can overwhelm employees, obscuring the key safety measures that directly impact their day-to-day work.  Streamlined, tailored plans make training simpler, helping employees retain critical information and apply it effectively, creating safer job sites where every worker feels protected and empowered.

For more information on this issue and other safety related concerns you may contact Wael Khalil, VP & Director of Safety & Health, Lovell Safety Management at wkhalil@lovellsafety.com or 917-692-9108.   You may also visit online at www.LovellSafety.com.

How Trump’s Presidency Could Impact Taxes for Construction Companies

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Shawn T. Layo, CPA, Dannible & McKee, LLP

Donald Trump’s victory in the 2024 presidential election has revived discussions about potential tax policy shifts his administration could implement. Many provisions from the 2017 Tax Cuts and Jobs Act (TCJA), President-Elect Trump’s major tax code overhaul signed into law during his first presidency, are set to expire at the end of 2025.

With his reelection, Trump has signaled a commitment to extending and building upon these reforms, potentially introducing new measures designed to lower costs, incentivize investments and spur job creation within industries aligned with his infrastructure-focused agenda.

Most contractors are familiar with the Qualified Business Income (QBI) deduction, also known as Section 199A, which has allowed owners of pass-through entities to deduct up to 20% of qualified business income. This provision, which originated with the TCJA, has been a substantial benefit for pass-through companies by serving as a 20% deduction from taxable income passed through to partners and shareholders. It is currently scheduled to expire on December 31, 2025. With Trump’s potential push to extend or enhance tax cuts, the QBI deduction could be preserved, further easing financial pressures on small and mid-sized construction businesses.

Another significant component of the TCJA that has already begun to phase out is bonus depreciation for qualified property, such as heavy construction equipment. For assets placed in service from September 28, 2017, through December 31, 2022, contractors and other businesses were allowed to take 100% bonus depreciation. This has been a huge benefit for companies. Unlike Section 179 expensing, bonus depreciation can be used to create a loss. However, this provision began to sunset in 2023, with bonus depreciation decreasing to 80% for assets placed in service during 2023 and 60% during 2024. If not extended, bonus depreciation will continue to decrease by 20% each year and eventually expire entirely at the end of 2026. Trump’s return to office could result in the extension or expansion of these provisions, enabling construction companies to modernize their operations without incurring sizable upfront tax liabilities.

Corporate tax rates also remain a topic of discussion. Before the TCJA, corporate tax was calculated on a progressive basis, with a maximum tax rate of 35%. Post TCJA, corporations are now taxed at a flat rate of 21% which was made permanent and is not expiring. While there is no specific proposal currently regarding the corporate rate, Trump has suggested reducing it to 20% or possibly even lower for companies that make their products in the United States.

Infrastructure development has long been a cornerstone of Trump’s platform. His administration is expected to push for significant federal spending on roads, bridges, and other critical projects. Tax policies may be structured to incentivize private-sector participation, such as offering tax credits for companies engaging in public-private partnerships.

Furthermore, the administration could introduce targeted tax breaks for companies sourcing materials domestically, benefiting companies that rely on U.S.-produced steel, concrete and other construction inputs.

While many of these potential tax changes could positively impact construction companies, such tax cuts would likely need to be offset by revenue-generating measures. Trump has proposed steep tariffs on foreign-manufactured goods, which may increase the cost of imported materials such as steel and aluminum. Construction companies would need to account for these potential price increases when budgeting for projects.

Undoubtedly, 2025 will be a year full of proposed major tax legislation changes. Trump’s presidency could create a favorable environment for construction companies to expand and thrive. However, companies must remain vigilant about balancing potential benefits with challenges like rising material costs or fluctuating federal budgets. Staying informed and engaging in proactive tax planning will be crucial for businesses seeking to maximize opportunities under the new administration.

Shawn T. Layo, CPA, is a tax partner at Dannible & McKee, LLP, a public accounting firm with offices in Syracuse, Auburn, Binghamton and Schenectady, NY, and Tampa, FL. The firm has specialized in providing tax, audit, accounting and advisory services since its inception in 1978. For more information on this topic, you may contact Shawn at slayo@dmcpas.com or (315) 472-9127.