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October 28, 2011- Volume 3 - 21                                                                         

backtotopABC ENDORSES HOEKSTRA FOR U.S. SENATE

  

This week, Associated Builders and Contractors of Michigan announced its endorsement of Pete Hoekstra for the United States Senate.

 

"Pete Hoekstra has a proven track record of job creation and is the best candidate to help Michigan continue on its path to economic recovery," explains Chris Fisher, president of ABC of Michigan. 

 

 

GOVERNOR SNYDER SAYS REVITALIZED INFRASTRUCTURE IS ROAD TO MICHIGAN'S SUCCESS

 

Better roads drive better jobs, Governor Rick Snyder said in calling for the revitalization of Michigan's deteriorating infrastructure.

 

Snyder highlighted Michigan's critical needs in his Special Message to the Legislature on Infrastructure. He released the recommendations during a news conference at Lawrence Technological University in Southfield, a leader in developing innovative road construction materials.

 

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ABC NATIONAL: ERIC REGELIN ELECTED TO LEAD ABC IN 2012

 

At its Oct. 18 meeting in Tampa, Fla., the ABC Board of Directors elected Eric Regelin of Granix, LLC in Ellicott City, Md. to serve as the association's national chairman in 2012. Greg Hoberock of hth companies, inc. in Union, Mo., was elected to serve as ABC's 2012 chairman-elect.  

 

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BUSINESS LOAN COVENANTS - WHAT'S IN YOUR LOAN DOCUMENTS?

 

Loan covenants are requirements and/or restrictions that a lender imposes as part of a business loan agreement. With credit still tight and the economy still sluggish, lenders are very serious about loan covenants. You should be, too.

 

Different Types

Covenants fall into three categories:

  • Affirmative covenants are requirements that your business must fulfill. Some examples include submitting periodic financial statements to the lender, carrying certain types of insurance policies, and making current employment-tax payments.

 

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In This Issue
ABC Endorses Hoekstra for U.S. Senate
Governor Snyder Says Revitalized Infrastructure is Road to Michigan's Success
ABC National: Eric Regelin Elected to Lead ABC in 2012
Business Loan Covenants - What's in Your Documents?

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About ABC of Michigan
Associated Builders and Contractors of Michigan is a statewide trade association, working in partnership with four local chapters, dedicated to providing Michigan with high-quality, affordable, safe and on-time construction.  ABC of Michigan is an equal opportunity organization that opposes all discrimination in the construction industry including discrimination based on union affiliation. A leading construction industry voice with state government, ABC provides many member services including legislative advocacy, networking opportunities, member benefits, legal updates, business development and educational opportunities.
 
hoekstraABC ENDORSES HOEKSTRA FOR U.S. SENATE

  

This week, Associated Builders and Contractors of Michigan (ABC) announced its endorsement of Pete Hoekstra for the United States Senate.

 

"Pete Hoekstra has a proven track record of job creation and is the best candidate to help Michigan continue on its path to economic recovery," explains Chris Fisher, president of ABC of Michigan. "He recognizes the importance of government being limited, open, fair and accountable, as well as having what it takes to clear the way for business growth and job creation."

 

ABC of Michigan's Board of Directors unanimously voted to endorse Hoekstra based on his record of proven leadership in both the private and public sectors and because of his commitment to limited government, free enterprise and job creation.

 

"It is an honor to receive the endorsement of ABC of Michigan," said Hoekstra. "From supporting more regulations on America's businesses to higher taxes for job creators, Debbie Stabenow and Barack Obama have severely damaged our economy and made it harder to do business in Michigan. In the U.S. Senate, I will fight for workers, like I have done my whole career, eliminating senseless red tape and cutting spending so our economy is strengthened for generations to come."

 

Click here to return to top of Merit Minute.  

 

infrastructureGOVERNOR SNYDER SAYS REVITALIZED INFRASTRUCTURE IS ROAD TO MICHIGAN'S SUCCESS

 

Better roads drive better jobs, Gov. Rick Snyder said in calling for the revitalization of Michigan's deteriorating infrastructure.

 

Snyder highlighted Michigan's critical needs in his Special Message to the Legislature on Infrastructure. He released the recommendations during a news conference at Lawrence Technological University in Southfield, a leader in developing innovative road construction materials.

 

"Michigan's infrastructure is living on borrowed time," Snyder said. "We must reinvest in it if we are to successfully reinvent our economy. I haven't met a Michigan driver yet who is satisfied with the condition of our roads and yet we're facing a $1.4 billion shortfall just to maintain our current system. If we want to grow our economy and keep our children here, then we need to fix the very foundation of our state. Michigan put the world on wheels. We can continue being a transportation leader through bold, innovative approaches to upgrading our infrastructure. It's time to seriously engage in this discussion that is so vital to our state's future."

 

The governor's message focuses on four primary needs:

  • A modern transportation system that moves people and goods efficiently, reliably and safely.
  • A multimodal system serving the movements of a new generation of Michiganders that is more active, urban-based and tech savvy.
  • Water and sewer systems that support and protect Michigan's rich environment.
  • Integrating the broadband telecommunications network, connecting every business and household to the Internet.

 "Modern roads, clean water and broadband access are among the building blocks of Michigan's prosperity," Snyder said.

 

Michigan is ideally positioned to emerge as a global trade center due to its location within the international shipping and logistics stream between Detroit, Chicago and Toronto. Taking advantage of that opportunity demands a modern infrastructure.

 

While noting the state's continued innovations in transportation infrastructure and new technology, Snyder called for further cost savings and efficiencies through additional reforms and best practices. Proposals include:

  • Allowing counties to absorb their county road commissions to ensure greater accountability. Michigan is the only state with county road agencies.
  • Giving the state the authority to audit county road agencies.
  • Updating Public Act 51 of 1951 to remove cities and villages that receive less than $50,000 in transportation funding from the distribution of P.A. 51 funds. Rather than go to jurisdictions, money will stay with the road so it can be distributed to whatever larger road agency maintains those roads and bridges.
  • Ensuring that agencies covered under P.A. 51 conform to Michigan's new law requiring employees to contribute 20 percent of their health care premiums, and have new employees placed on defined contribution retirement plans.
  • Allow agencies covered by P.A. 51 to open construction and maintenance contracts to competitive bidding from the public and private sectors.

Snyder also is urging dramatic reforms to Michigan's transportation user fees to ensure sustainable funding for roads and bridges. He pointed to the 2008 Transportation Funding Task Force and this year's House Transportation Committee work group, both of which cite the need for significant funding increases. Recommendations include:

  • Allowing counties and regional authorities to levy a local vehicle registration fee to support transportation if approved by local voters.
  • Eliminating the state's current 19-cents-per-gallon gas tax and 15-cents-per-gallon diesel tax in favor of a percentage wholesale tax on fuel, which is a more viable long-term funding approach. The wholesale tax would be revenue neutral upon enactment.
  • Increasing investment in our infrastructure by $1 billion to $1.4 billion each year. For the sake of discussion, a state registration fee increase of $10 per month on the average passenger vehicle would raise nearly $1 billion.
  • Distributing new transportation funding based on road use and traffic volumes, with a seven- to 10-year transition period for full effect. This would include any new revenues beyond what is collected and spent today.

The governor pointed out that Michigan loses nearly $3 million each day in the value of its transportation assets, or $1 billion annually. Each dollar spent today to preserve a road or bridge saves Michigan at least $6 in future rebuilding costs.

 

Further developing Michigan's bus and rail transit, aviation system and ports is essential to the state's future as well. Michigan has rail freight projects, such as the Detroit Intermodal Freight Terminal and Detroit Railroad Tunnel expansion, ready for construction with additional investment. Thanks to the Legislature's actions, Michigan also has secured $440 million in federal rail funds to accelerate passenger rail service from Detroit and Pontiac to Chicago.

 

Recognizing the importance of aviation to the global transportation network, Snyder proposes continued investment in the safety and efficiency of airports. He also will work with Michigan's congressional delegation to secure additional funds to dredge Great Lakes ports and pursue construction of a new shipping lock in Sault Ste. Marie.

 

Michigan's abundant water resources, which support many of our economic and quality of life benefits, must be protected as well. For example, failing sewer systems can have a direct impact on the number of beach closings across Michigan each year. The governor is endorsing recommendations of the State Revolving Fund Advisory Group to use $1 billion approved by voters in 2002 to provide grants and low-interest loans to help communities upgrade sewer and water systems.

 

Broadband service is another critical link to Michigan's future, according to Snyder. To complement $247 million in federal broadband funding, Snyder is calling for the interconnecting of local governments and school districts to avoid duplication. He is also urging the Michigan Public Safety Commission to open its communications system towers to Internet service providers, and is encouraging the streamlining of utility work permit clearances in state road rights of way.

 

The entire Special Message on Infrastructure is available at www.michigan.gov/snyder.

 

Click here to return to top of Merit Minute.

 

 

 

NATABC NATIONAL: ERIC REGELIN ELECTED TO LEAD ABC IN 2012

 

At its Oct. 18 meeting in Tampa, Fla., the ABC Board of Directors elected Eric Regelin of Granix, LLC in Ellicott City, Md. to serve as the association's national chairman in 2012. Greg Hoberock of hth companies, inc. in Union, Mo., was elected to serve as ABC's 2012 chairman-elect.  

 

In addition, David Chapin of Willmar Electric Service in Lincoln, Neb., a member of ABC's Cornhusker Chapter, was elected region 2 vice chairman.

 

The 2012 Executive Committee will be as follows, effective Jan. 1, 2012:

 

Chairman: Eric Regelin, Granix, LLC, Ellicott City, Md.
Chairman-Elect: Gregory Hoberock, hth companies, inc., Union, Mo.
Immediate Past Chairman: Michael J. Uremovich, Great Lakes Energy Consultants, Manhattan, Ill.
Region 1 Vice Chairman:  Wade Pope, Roche Constructors, Inc., Las Vegas, Nev.
Region 2 Vice Chairman:  David Chapin, Willmar Electric Service, Lincoln, Neb.
Region 3 Vice Chairman:  Dallas Cloud, Moore Erection, Garden Ridge, Texas
Region 4 Vice Chairman:  Dan Brodbeck, American Constructors, Inc., Nashville, Tenn.
Region 5 Vice Chairman:  Pamela Volm, Annapolis Contracting, Inc., Annapolis, Md.
Region 6 Vice Chairman:  Charles Henry, Henry Electric, Inc., Fort Wayne, Ind.
Region 7 Vice Chairman:  Tim Walton, Cianbro Corp., Pittsfield, Maine
Secretary/Treasurer:  Anthony Stagliano, Mayer Hoffman McCann, P.C., Plymouth Meeting, Pa.
ABC President and CEO: Michael Bellaman, Arlington, Va.  
ABC Chief Operating Officer: Todd S. Mann, Arlington, Va. 

 

 
loanBUSINESS LOAN COVENANTS - WHAT'S IN YOUR DOCUMENTS?

 

Loan covenants are requirements and/or restrictions that a lender imposes as part of a business loan agreement. With credit still tight and the economy still sluggish, lenders are very serious about loan

covenants. You should be, too.

 

Different Types

Covenants fall into three categories:

  • Affirmative covenants are requirements that your business must fulfill. Some examples include submitting periodic financial statements to the lender, carrying certain types of insurance policies, and making current employment-tax payments.
  • Negative covenants are restrictions that prevent you from doing certain things without the lender's approval. Some examples of things that might need to be preapproved include borrowing from other sources, making management changes, and selling equipment.
  • Financial covenants require your business to maintain various financial ratios related to working capital, net worth, profitability, and cash flow.

Finances in the Spotlight

How do lenders know if you're in compliance? They review your financial statements, tax filings, and other reports. Depending on the terms of your loan agreement, your lender may even conduct on-site field audits every now and again to verify that you have the assets that are serving as collateral for your loan.

 

The Cost of Noncompliance

If you violate a covenant, your loan will technically be in default, putting your lender in a position to either take the collateral securing the loan, call the loan, or require that the terms of your agreement be substantially modified. You may have an opportunity to "fix" the problem before the lender takes action against you - or you may not.

 

Be Careful

Anytime you apply for a new loan, be sure to carefully review the covenants that may be included in your agreement. Some terms may be negotiable. Then, just as carefully, evaluate whether your company will be able to comply.

  

For more information on capital financing and acquiring business loans, check out the article on Capital Financing for Construction Businesses in the upcoming issue of Michigan Merit magazine (Fall 2011), arriving in your mailbox and on the web soon.