(760) 776-7001 Office www.theDVBA.org

(760) 776-7002 Fax

Desert Valleys Builders Association 75100 Mediterranean, Palm Desert CA 92211

GOT WATER?

Want to learn about what the local regional water agencies are doing with the Coachella Valley Integrated Regional Water Management Plan? How about what is currently happening at the Riverside County Flood Control District? You won’t want to miss either of the DVBA’s July luncheon programs to learn more about how the region is coming together to deal with the unprecedented water issues facing our valley and the State of California during this period of severe drought. Join us on Thursday, July 10th at 11:30 am at Agua Caliente for insights and updates on the Coachella Valley IRWMP. Presentations will be made by participating agencies Mission Springs Water District and Desert Water Agency. Then on Wednesday, July 16th at 11:45 am at Villa Portofino our program will present information on Riverside County Flood & Water Conservation Districts: Watershed Projects, Programs & Permits. Further details are available later in the newsletter or on our website: www.TheDVBA.org, click Calendar link and then date of program.

DVBA TO COORDINATE FEE REVIEW STUDY

The DVBA is currently reviewing proposals to conduct a comprehensive Fee Study review of all cities across the Coachella Valley & Imperial County. The last study was conducted in 2007, published in early 2008, thus containing information which is 7+ years old, and currently holds little relevance to the realities of today’s housing markets.

The DVBA is seeking Sponsors to invest in this undertaking. Sponsors will have special access to the final document. Printed copies will be made available for purchase at a later date. Members interested in sponsoring this study and its publication should contact the DVBA for more details.

Pro Industry

SB 1139 (B. Hueso / V.M. Perez) - Geothermal Energy Development. This bill would require, no later than December 31, 2024, each retail seller of electricity and local publicly owned electric utility to procure a proportionate share, as determined by the Energy Commission, of a statewide total of 500 megawatts of electricity generated by specified base load geothermal power plants. DVBA letter of support submitted. Re-referred to Asm. Committee on Natural Resources 6/24. 6/26 upon Adjournment of Session ASM Natural Resources. AB 1896 (V.M. Perez) – Non- Potable Water (CVWD Bill). Adds the requirement for HOA to attached to non-potable sources when reasonable available. This is CVWD territory specific adding to existing law. DVBA letter of support submitted. Senate Committee on Environmental Quality 6/25. AB 2312 (Nestande) – Metal Theft Data Base. DVBA letter of suppor t submitted. Senate Appropr iations 6/24. AB 2313 (Nestande) – Metal Theft Task Force and Funding. The bill would impose a fee, to be deposited into the fund, of up to 1% of the purchase price for each junk sale on the seller of junk for the purpose of regulating that seller, thereby making an appropriation. DVBA letter of support submitted. Senate Appropriations 6/24. SB 1451 (Hill D – San Mateo) - CEQA Document Dumping. Cur rently, an environmental document may be delayed in the 11th hour when the local agency is making its final determination by submitting written challenges. The agency must then delay the public hearing until such time as they are able to review the thousands of pages of “new” material. SB 1451 would require all challenges to be submitted in a timely fashion, with enough time for the local agency to make the determination at the scheduled Public Hearing. Bill failed to pass out of committee. 5/9 DEAD. AB 2280 (Alejo D - Salinas) - This bill would authorize certain local agencies, to form a community revitalization authority (authority) within a (defined) community revitalization and investment area, for purposes related to, among other things, infrastructure, affordable housing, and economic revitalization. The financing of these activities by the issuance of bonds serviced by tax increment revenues. 6/25 Senate Governance and Finance. **Chromium-6** CVWD has prepared a letter for State representatives asking for their assistance in providing the necessary time to develop programs and make capital improvements to meet the arbitrary and capricious standards published on April 15th, with become effective July 1, 2014. Our understanding is that a rider bill is being crafted to attach to the state budget. The DVBA has submitted letters to Assembly members Perez and Nestande, and Senators Hueso and Morell. Concern Against Industry AB 1522 (Gonzalez D – San Diego) Paid Sick Leave. This bill would qualify an employee who works 7 days in a year for sick leave. 6/25 Re-referred to Senate Appropriations. SB 935 (Leno D – San Francisco) $13 Minimum Wage. This bill would set a minimum wage of $13/hr . star ting in 2017 with automatic increases per CPI. 6/26 Labor and Employment for reconsideration. AB 1634 (Skinner D – Berkeley) OSHA Violations; appeals. Enacts var ious provisions of law related to an employer 's obligation to abate an alleged hazard pending appeal of a citation. 6/23 Senate Appropriations Suspense File. HR 29 (Gomez D. Los Angeles) Disallow Public Services Outsourcing. The Assembly opposes outsourcing of public services and assets, which harms transparency, accountability, shared prosperity, and competition, and supports processes that give public services workers the opportunity to develop their own plan on how to deliver cost-effective, high-quality services. The Assembly urges local officials to become familiar with the provisions of the Taxpayer Empowerment Agenda. The Assembly intends to introduce and advocate for responsible outsourcing legislation. Chaptered 4/3. AB 52 (Gatto D - Burbank) Native Americans: CEQA. CEQA Consultation with Tribes. Creates new opportunities for CEQA litigation by requiring lead agencies to engage in “meaningful consultation” with Native American tribes regarding land use projects that could have an adverse impact on a tribal cultural resource. The DVBA has submitted a letter in opposition. 6/25 Senate Appropriations. SB 1270 (Pavley D - Calabasas) Surface Mining operations. New Duties. Adds new or increased hurdles to mining operators’ from state oversight). Increases fee and expands state authority. Ultimately increasing building and infrastructure costs. 6/11 Senate Appropriations. AB 2416 (Stone D - Monterey) Liens: Laborers and employees. This bill would, with cer tain exceptions, authorize an employee to record and enforce a wage lien upon real and personal property of an employer, or a property owner, as specified, for wages, other compensation, and related penalties and damages owed the employee. 6/26 Senate Appropriations. AB 1897 (Hernandez, Roger D – West Covina) Labor contracting: client liability. This bill would require a client employer to share with a labor contractor all civil legal responsibility and civil liability for the payment of wages, the failure to report and pay all required employer contributions, worker contributions, and personal income tax withholdings, and the failure to obtain valid workers' compensation coverage. 6/25 Senate Appropriations.

DVBA LEGISLATIVE BILLS WATCH LIST

MEMBERSHIP NEWS

Thank you to Our Membership Re-

newals and New Members

Renewals:

Albert A Webb Associates

Alliance Protection

The Altum Group

Brabo and Carlsen, LLP

Brudvik

Coachella Valley Water District

Conserve Landcare

Desert Empire Insurance

Desert Reprographics

Farley Pavers

Ferguson

First Bank

Hermann Design Group

Horton Shepardson Association

HMBD

Lippert Construction

Levin & Associates

Market Watch

Margaret Drury Construction

Microcool

MSA Consulting

NEI

Pacific Premier Bank

Pacific Western Bank

Paul Associates Printing

PENTA Building Group

Real Estate Temps

Signarama

Shea Homes

Slovak, Baron, Empey, Murphy &

Pinkney

Smith-Kandal Real Estate

Tiger Electric

New Company Members:

Glenn M Gelman & Associates

CPA’s and Business Advisors

serving the construction

industry.

Prospect Mortgage

Retail mortgage lender and the

largest independent retail lender

in the nation.

Trench Shoring Company

Shoring Equipment and

Consultation.

DVBA Members Phil Smith– Sunrise Company Nancy Hayes– Sunrise Company DVBA 2014 President Joe Hayes Celebrating DVBA 4th Annual Birthday Bash

Barry made a festive appearance to celebrate with the DVBA!

Mark Benedetti and Bruce Maize

welcoming Carrie Landsgaard– Glenn

A Gelman & Associates– a new

member.

Evening Entertainment provided by

Generous Thieves

DVBA Says Thank You!

Special thanks to SubZero Wolf, with Mike Avery & Melissa Auten Coordinating efforts, for the support to the Annual Birthday Bash as our Food Sponsor. Great grilling and wonderful Mexican Cuisine!

November Golf Tournament

Don’t forget to sign up early and receive our “Early Bird Specials” for the 7th Annual Dave Watson Golf Classic on Friday, November 21st. This years scramble starts at 8:30 am SHARP!

Can’t attend, but would still like to be part of this great event, or looking to promote your company? We have you covered! Talk to Gretchen about the different ways you or your company can sponsor.

LOOKING TO CONNECT TO MEET MEMBERS?

Please consider joining the DVBA Membership Committee! This fun committee (really it is!) meets once a month (at the 19th Hole) and works to promote and retain membership within the DVBA. Want more details about being a committee member or its goals? Contact the DVBA office for more info.

4th Annual Birthday Bash

Based on interactions with contractors both large and small over the past year, there appears to be a generally strong

sense of hope and optimism for recovery and growth in 2014 and 2015. The general consensus seems to be that while we

may not see 2006 and 2007 levels anytime soon, the next two years will bring significant growth in the industry.

The questions at hand, however, are will there be enough qualified workers to fulfill the work requirements, and will the

escalating costs of fringe benefits, overhead and wages allow for profit at the end of the year? And most importantly,

what can a contractor do right now to ensure profitability?

There are a number of simple steps we recommend to help build your bottom line and maximize your profit in the year

ahead. Let’s take a look at some of them here.

Step One: Analyze Your Sales and Costs.

Prepare a break-even analysis indicating what your sales volume has to be to cover all your fixed and known variable

costs. While this requires an assumption as to gross profit percentage, it should highlight for you at different levels of

volume and gross profit what your company must reach in terms of volume to at a minimum break even. Without this

critical first step it is difficult for a contractor to avoid chasing volume instead of chasing profit.

Step Two: Seek Out Every Tax Break Imaginable.

Since 2014 and 2015 project to be profitable, it is imperative not to lose more than half of it to taxes. Taxes can be

minimized by careful planning. Ask your CPA and/or financial advisor to meet NOW to plan for minimizing taxes. Do

not wait until the last minute to determine if you are profitable. The planning should be sophisticated enough to be able to

increase your bonding capacity and banking credit while still minimizing taxable income.

Many of our clients have recovered over $1 million in taxes based on credits they did not even know applied to them.

Many credits can be obtained going back to profitable years and through carry forwards as well. It simply pays to save

taxes at any time, even during tough times.

Step 3: Have a Business Plan.

Prepare a business plan for both years and be sure it has a “mission statement” in it. Your mission statement should be

known to all your employees and essentially enforced through performance reviews. Incentive compensation plans

should be implemented to encourage full company participation.

Step 4: Add Some Incentives.

Motivate your project managers through the implementation of incentive bonuses based on performance on the job. Job

costing is the lifeblood of a contractor's financial analysis and projections. It is imperative that your job cost system is

accurate.

Step 5: Manage Your Risk.

Review your risk management techniques with your project managers. Knowing the contract terms such as notice provisions and other milestones in each contract, prepares a project manager to minimize risk of claims and unapproved change orders. Risk management does not just apply to management of insurance coverage. You can obtain quotes on insurance costs, BUT be sure to compare apples to apples. Be sure the coverage is adequate, sufficient and will meet all requirements. Step 6: Communicate Internally.

Build morale through strong employee communications. Be sure your employees know what scores a touchdown and

what are simply minimum expectations of them. Otherwise, they are guessing at what the goals of the company are.

Prepare for success in 2014, and send out consistent, positive messages to your employees at all times!

Step 7: Look at your Burden Rates.

Many of the costs associated with the burden rate are hidden costs that are not necessarily apparent. Typical direct and indirect overhead costs that contribute to the burden rate include payroll taxes, worker's compensation and other insurances, employee fringe benefits, union benefits, etc. The burden rate provides a truer picture of your total labor costs than payroll costs alone, so it is imperative that you look at your burden rates used in estimates and compare them to actual costs incurred in 2013. Are your burden rates accurate? Step 8: Avert Claims And Seek Legal Counsel When Needed.

Consider the use of your attorney or legal department to carefully review any potential limitations in your contracts such

as “pay when paid or pay if paid” types of restrictions (even if not enforceable) and be very alert to liquidating damages

clauses and limits being placed on delay claims.

We have witnessed that our contractors that fail to plan, seem to plan to fail. Those that do plan proactively and follow

the simple steps above tend to thrive. By preparing carefully and taking the necessary measures, you can ensure that your

company is one that is poised to succeed in 2014 and well beyond

By Glenn Gelman, CPA, MS-Tax, CFF, Managing Director of Glenn M. Gelman & Associates, CPA's and Business

Advisors

A look into the night of good music, great people and planes at the Palm Springs Air Museum

Jim Murdock and Mary Henry –

PIRCH– enjoying a refreshing

drink.

Darlene Slater from PIRCH

having a great time!

PREPARING FOR SUCCESS: WHAT CONTRACTORS CAN EXPECT IN 2014 AND 2015

4th Annual Birthday Bash

DVBA MISSION STATEMENT

The DVBA is an association of building industry professionals, representing all levels

of the construction industry. We are committed to ensuring that

building of all types remains vibrant and strong in our region. The DVBA is

dedicated to providing excellence in community development while

protecting the natural beauty of the Coachella and Imperial Valleys.

CHECK US OUT!

Be sure to check out the DVBA website at: www.TheDVBA.org

Check your emails for notices about upcoming events—We’ve started to eblast with

Constant Contact, so if you haven’t received a notice or eblast lately, give us a call to

double check that we have your correct email address.

Attend an event…. Bring a prospective new member—there’s rewards for

recruitment—ask us about The Ladders Program!

ELECTIONS!

Results from June 3rd…

Supervisor Congratulations to Supervisor John Benoit on his Re-Election

Measures

Measure B– Cathedral City– 1¢ Tax Continuation PASSED 66.38% of voters approved Measure D– Creates formation of specific

elected district seats to Coachella

Valley Water District Board of

Directors

PASSED 74.36% of the voters

approved

Measure F– City of Desert Hot Springs– Proposed increase to vacant land "Parcel Tax"… Defeated Only 61.48% of voters approved

November General

Election…

56th District

Charles Bennett

Eduardo Garcia

US Representative– 36th District

Brian Nestande

Raul Ruiz

Senate Seat- 28th District

Bonnie Garcia

Jeff Stone

Other City and Special District Races to be

Added in September!

July 3rd: Legislative Forum Group Meeting– Rancho Mirage City Hall @ 7:30 am

Office Closed July 4th

July 7th: Executive Committee Meeting– DVBA Office @ 4:30 pm

July 9th: Membership Committee Meeting– The 19th Hole—Palm Desert @ 4:00 pm

July 10th: Public Officials Lunch– Agua Caliente @ 11:30 am

July 10th: Board Meeting– MSA Consulting @ 4:00 pm

July 16th: Public Works Group– Villa Portofino @ 11:45 am

July 17th: Networking Night– Eureka! @ 5:30 pm

Events & Meetings

SUN MON TUE WED THU FRI SAT

1 2 3

Legislative Forum Group

Meeting

4

OFFICE

CLOSED

5

6 7 Executive Committee Meetings

8 9 Membership Committee

Meeting

10

Board Meeting

Public Officials Lunch

11 12

13 14 15 16

Public Works

Group Lunch

17

Networking

Night

18 19

20 21 22 23 24 25 26

27 28 29 30 31

July 2014

OFFICE

CLOSED