28 | June | 2014 | Boots on the Ground

June 28, 2014

Report on National Affiliation

The following report on National Affiliation was delivered my me (Art Rouse) at the NCSA Annual Business Meeting on June 18, 2014:

North Carolina Subcontractors Alliance, Inc.

Annual Meeting – June 18, 2014

Topic: National Affiliation

One year ago, the ASAC Charlotte Chapter changed its name and disaffiliated with the American Subcontractors Association and ASA of the Carolinas. At the Board of Directors meeting about a week later, I was asked as Past President, to investigate the possibilities of national affiliation and make a recommendation.

My first meeting was with ASA. Since my company had already paid for the ASAC Convention and July dues, I attended the convention. During the course of the convention, I was able to have a meeting with Walter Bazan, outgoing ASA president, Jack Austhof, incoming ASA president, Brian Johnson, incoming ASA vice president and Marty Swain, ASAC president. During the course of this meeting, we had a frank discussion of the reasons leading up to our decision to leave ASAC and our intention to affiliate with a national organization after NCSA stabilized its finances. I made it clear that an affiliation with ASA would need to be direct and not with ASAC. Bazan and Austhof asked to have further discussions when that happened to see if a direct membership would be available. Ensuing phone calls with Jack Austhof did not lead to an offer of direct affiliation, only an offer to review the charter with ASAC to see if it could be done in the Carolinas.

My next contact was to the National Subcontractors Alliance. I spoke to Lynne Black, executive director of NSA for several hours over the course of two days and for a couple hours more with Pete Snider, executive director of the Subcontractors Association of the Metroplex (Dallas-Fort Worth.) I got a good feeling for how NSA operates and how it differs from ASA.

The NSA has two meetings per year. One is the Executive Directors Meeting in Chicago in the fall. They invited us to send our ED to the meeting to get to know the other ED’s and how the NSA functions. We sent Margaret to the meeting and she came back with a very favorable report.

The other meeting is the annual Spring Conference. This year it was held in Denver, Colorado. I attended on behalf of the NCSA. There were two excellent seminars, one on building your business’ brand and the other on embracing technology as tools rather than toys. An example would be utilizing video conferencing to broaden the associations’ reach and how easily it can be done with Google Hangouts.

There were also breakout groups. While the lawyers’ council was meeting, the ED’s were having their meetings and the volunteer leaders had a workshop on increasing and retaining membership. There was plenty of time to network with the other chapter leaders as well as a great dinner at a steakhouse overlooking the Denver and an entertaining tour of the ghosts and scandals of Denver. Since the NSA is for the benefit of the members, the NSA only charges the actual cost of the conference to members. It is not a profit making venture like the ASAC convention. The total cost for me, including the airfare, was less that it cost to attend the ASAC convention last year. At the end of the conference, the NSA board held a special meeting and voted to offer membership to the NCSA. After my report and recommendation to the NCSA board, it was voted to affiliate with NSA.

That is really how the NSA works. Rather than a big national organization headquartered in the most exclusive section of the Washington DC area, the NSA staff consists of only the Executive Director and her assistant. They work out of space donated by one of the member companies. What makes them great is the network of business and legal contacts across the country to lean on for advice and guidance. Almost everyone came up to introduce themselves, give me a business card and an offer of help anytime it is needed. I have been able to use those offers twice already to check out general contractors from out-of-town.

All of the NSA member chapters are disassociated ASA chapters. Unlike ASA, you are members of your local organization, not the national association. The NSA is an umbrella organization of member associations. The NSA represents over 3,500 member companies. The local association pays an annual membership fee of $800 to $2500 depending on the size of the association. The rest of the local members’ dues stays with the local association. That means the local association is solidly funded and can spend their efforts on living up to the NSA motto: “Our business is helping you do yours,” and the NCSA pledge of Advocacy, Education and Networking.
The NSA itself is a member organization of ASC, the Associated Specialty Contractors. The ASC is an umbrella organization of 9 national associations with over 25,000 members. So, when we need representation in Washington, we carry the voice of 25,000 companies.

The NSA is a stakeholder and on the governing committee of Consensus Docs. The NSA has a benefit package of negotiated discounts and special rates for UPS, Fedex, Office Max, YRC Freight and other national service vendors and suppliers.

The NSA is the antithesis of ASA. It is locally focused and low overhead. Each local association is independent and self-governing. It is low overhead so the NCSA can have the benefits of a national affiliation without breaking the bank.

June 28, 2014

Legislative Committee Annual Report

The following is the Legislative Committee Annual Report as presented by Association Counsel Edward McNaughton at the NCSA Annual Business Meeting on June 18, 2014:

Legislative Committee 2013-2014 Summary Report

The NCSA Legislative Committee has been very busy over the last year, both in keeping the membership current with the recent changes to NC law, and in actively advocating for subcontractor rights with the state legislature in Raleigh.

The Legislative Committee monitored changes in statutes and case law for issues that would affect subcontractors and the construction industry, and kept the NCSA board and the membership up to date through regular presentations and Q&As at the monthly meeting. The changes discussed included:

1. Legislative:
a. Changes to the lien agent requirements for single-family residential property;
b. Expanded workers’ compensation liability for a subcontractor’s employees;
c. New e-verify requirements;
d. New underground utility damage prevention law.
2. Case Law:
a. Allowing the 6 year statute of repose overriding longer express warranty periods;
b. Elimination of the “open and obvious” defense to unsafe site conditions;
c. Allowing subsequent behavior to modify a construction contract, despite a written clause in the contract requiring all changes to be in writing;
d. Holding the director of a GC liable to a subcontractor for non-payment under a fiduciary duty to creditors, where “circumstances amounting to a winding up or dissolution” of the GC.

The biggest victory was NCSA’s advocating for subcontractors during the latest legislative changes to NC’s mechanics’ lien laws. Under current application of NC law, contractors do not have a lien on the actual real property when their contract was with a tenant. Two years ago, however, NC Court of Appeals Judge Sanford L. Steelman wrote in an case dismissing a subcontractor’s lien for work done for a terminated Section 8 housing developer that: “the present state of our law does not provide adequate protection to suppliers of labor and materials as envisioned by Article X, section 3 of the North Carolina Constitution” and that “the increasingly complex real estate arrangements now being used make it virtually impossible for a supplier of labor or materials to protect themselves under our lien laws.”

Fearing that this judicial observation could set a legal precedent for liens attaching to rental property, the NC Land Title Association lobbied the legislature to “clarify” the state’s mechanics lien laws to expressly exempt rental property from liens for work performed under a contract with a tenant.

NCSA became aware of the NCLTA’s proposed changes through its legal counsel and immediately reacted to protect subcontractors’ rights. NCSA published a detailed position paper on February 19, 2104, dubbing the issue the “Hidden Owner” and calling on the legislature to formally extend mechanics liens to rental property to satisfy contractors’ constitutional right to an “adequate lien.” This position paper was formally submitted to the assigned Legislative Research Commission, and copies were sent to various trade organizations and individuals. The “Hidden Owner” name was picked up by numerous blogs and by the NC Construction News editors.

Two delegations of NCSA members went to Raleigh, one in February and one in March, to participate in the Legislative Research Commission hearings on the proposed changes. NCSA’s attorney was one of the speakers the March meeting. While NCSA was ultimately unable to get the legislature to agree to formally extend contractor’s lien rights to rental property, it was instrumental in defeating both the NCLTA’s proposal, along with a second “compromise” proposal, that would have required contractors and subcontractors to give written notice to a landlord of any work being performed for a tenant, while still allow the landlord to avoid liability.

Moving forward, the Legislative Committee plans to continue monitoring legislative changes and case law, and to mobilize advocacy efforts as needed. Issues being considered as the membership continues to grow are establishing a PAC to actively advocate for subcontractor sights and interests, and hiring a Raleigh based lobbyist.

June 28, 2014

NC Subcontractors – First year on our own

The following is a review of the first year since the NCSA separated from the ASA of the Carolinas as written by Margaret Drummond and submitted to the National Subcontractors Alliance quarterly newsletter:

This July, the North Carolina Subcontractors Alliance celebrates our first year as a subcontractor group independent of the American Subcontractors Association. Twelve months ago, our meager fellowship (then as the Charlotte Chapter of the American Subcontractors Association of the Carolinas) unanimously voted to disassociate from ASA and rename our organization. Under the leadership of our devoted Board of Directors, we have spent this first year working toward our renewed goals of community leadership, unity, and support for our subcontractors.

Though we changed our name when we disaffiliated with ASA, we have not changed the strong tradition associated with North Carolina subcontractors. We are still a member-driven association and proud of our accomplishments. In March, we proudly joined the National Subcontractors Alliance. Having made contact with Executive Director Lynne Black in our early days, the NSA has nurtured our first year and provided the NCSA with continued support and encouragement. Even prior to joining officially, members of the NSA have offered their guidance and experience to help our local chapter re-establish ourselves as a stronger organization for our subcontractors. NCSA knew from our first encounter with NSA that this was where we were meant to be; an affiliation with a group of like-minded, trustworthy professionals whose goal is the betterment of our businesses.
NCSA membership has continually grown since our formal disassociation from ASA; and our membership is much more active and engaged. The positives have far outweighed the challenges already. We are confident with the help of NSA our membership will continue to grow. Our current benefits of Networking, including our Business Information Exchange meeting, Educational Materials & Programs, Monthly Newsletter, Government & Industry Legislative Advocacy, and Mentorship will continue, but joining NSA will help our members to boost their bottom line. As an NSA member, they are now eligible to receive valuable discounts that include: FedEx Shipping Services, YRC Transportation, UPS, OfficeMax Advantage Program, TSYS Merchant Solutions, Lenovo Affinity Program, Intercall, and AchieveLinks. One member has already reported the advantage of reaching out to an NSA member in another state to exchange notes on their experience with a national General Contractor.
I have discovered firsthand that if we work together and rely on one another, we are less likely to feel isolated. It is comforting to not have to “reinvent the wheel” every time we try something innovative, because through NSA, we are working together with other leading associations who freely offer their experience. Moving forward will be nothing short of an adventure. After a year we are a more successful and stronger association and are looking forward to our new relationship with NSA to continue that growth. Our membership has already been priceless.

The momentum must continue because much still needs to be done. We cannot allow our progress to stagnate. We have actively been attending local meetings, participating in the North Carolina level construction legislation, networking to keep our interests on the front line and partnering with other associations across the country with the same interests and more. For NCSA change is the new status quo. Everyone owns the responsibility for making the changes work. By joining NSA we have chosen to be a part of a national organization that is leading the construction industry into the future. “NCSA is a part of those that lead and not those that follow”…and we are very excited to see what’s next.

Margaret Drummond
North Carolina Subcontractors Alliance
PO Box 30604
Charlotte, NC 28204
ncsubcontractors@gmail.com
http://www.ncsubcontractors.com