"Despite big gains for Democrats nationally, Republicans may end up picking up a seat in both the State House and Senate," says AGC's Director of Government Affairs Rick Slunaker. "The caveat is that some races are still too close to call, but if current trends hold, Republicans will pick up a seat in both chambers. Maybe the election did not entail as strong a mandate as a first glance would indicate." A net gain of one for Republicans would mean their deficit would shrink to 63 to 35 in the State House, and 31-18 in the State Senate.

Gov. Christine Gregoire won her bid for re-election by a margin that surprised many as the race had been deemed a toss-up. "The Associated General Contractors and its members stand ready to work with you, as we have before, to address the many problems confronting our State and its communities," AGC President Steve Barger (Northwest Cascade, Inc.) and Government Affairs Chair Gene Colin (Ferguson Construction, Inc.) told Gregoire in a congratulatory letter. "In your remarks to the media last Wednesday, you mentioned development of a state stimulus legislative proposal to address infrastructure needs facing our state and its communities. Addressing the need for these facilities is no less significant than the need to find workable solutions to finance their achievement. The benefits of providing clean drinking water, safe and adequate storm and sanitary sewage systems, are undeniable, and are fundamental for sound economic and population growth. Working together to develop effective delivery and financing mechanisms for these investments has never been more important. AGC wants to work with you, the Legislature, the broader business, labor and environmental communities to develop workable solutions which the public will understand and support."

BUILD PAC, the commercial construction industry's political action committee, had an impressive rate of success. Of the 69 legislative candidates supported by BUILD PAC, 93 percent will win their elections if current trends hold in the races for which votes are still being counted. "We had more full-scale involvement with candidates this year, including independent expenditures for many of them," said Slunaker. "Credit goes to those members of the industry who made financial commitments to the industry's PAC."

In other statewide races, BUILD PAC-supported winners included Lt. Gov. Brad Owen, Attorney General Rob McKenna and Secretary of State Sam Reed. State Lands Commissioner Doug Sutherland and State Treasurer candidate Jim McIntire, both supported by BUILD PAC, were in too-close-to-call races as of press time.

The only ballot initiative for which AGC made an endorsement was in King County. AGC supported the charter amendment to make County Council, County Executive and County Assessor offices non-partisan. The measure passed handily.

The Legislature convenes January 12. AGC's Government Affairs Council will be meeting Nov. 11 to set legislative priorities for the upcoming session. For additional information, contact Rick Slunaker.

The final rule takes effect December 29, 2008, but State Apprenticeship Agencies have up to an additional two years from that date to implement the changes.

Among key changes, the new rule:

• Adds two methods - competency-based and a hybrid approach - to the traditional, time-based method for an apprentice to obtain journeyworker status;

• Allows for the inclusion of technology-based and distance learning;

• Gives registration agencies the option to issue interim credentials;

• Establishes a 90-day timeframe for registration agencies to process sponsor requests for registering and modifying program;

• Provides for reciprocal approval, for federal purposes, of apprentices, apprenticeship programs, and standards that are registered in other states for all industries and occupations;

• Introduces provisional, one-year approval for newly registered programs;

• Limits a registration agency to a State Apprenticeship Agency; and

• Includes a new section, 29.6, on performance standards to be used to evaluate programs.

All programs currently in effect do not have to be revised as a result of this rule.
In discussing the new rule, DOL personnel said there are several areas where it will be seeking additional policy guidance in the coming months, including: performance standards, electronic media, provisional registration, interim credentials, and competency-based apprenticeship programs.

A short fact sheet, full text of the new rule, press release, and other information on the final rule are available at: http://www.doleta.gov/oa/regulations.cfm. Additionally, DOL has set up a specific email: regs.apprenticeship@dol.gov to answer questions related to the new rule. Questions and answers will be posted to the web page referenced above.

Though the economy may be slowing down, it is NOT a good idea to take short-cuts on safety. As worker-hours decrease, you'll actually want to increase your safety training and awareness.

Historically, as work starts to slow down, the number of workers' compensation claims filed tends to increase. Therefore, when the claims are filed, there are less worker-hours to offset the claims costs. This may result in an increase in your Experience Modification Rate (EMR), which then means increased premiums being paid to the Department of Labor & Industries. Additional costs may include worker replacement, time involved on working the claim, possible kept-on-salary (KOS) benefits, as well as others.

Even with the recent decrease in worker-hours, accidents are still happening. There have been 6 construction related fatalities within the last few months.

With the increased safety training and awareness within your company, the goal is to decrease or eliminate any workplace accidents. Several tips on increasing awareness:
• Make sure your weekly safety meetings are being performed.
• Make sure your jobsite inspections are performed daily/weekly.
• Encourage workers to report unsafe conditions and practices.
• Ensure that what your safety manual states, is effective in practice.
• Enforce your Disciplinary Policy.

If you have any questions or need assistance with your safety program, feel free to contact the AGC Safety Department at (206) 284-0061.

Help Emergency Responders Help You!

Did you know that when emergency responders happen upon an unconscious victim the first thing they look for is a cell phone to identify the individual and their next of kin for medical information? When they look for whom to contact, they look for an entry in your contacts titled: ICE (for In Case of Emergency).

Put an ICE entry into your cell phone contacts and in that entry you should have the person's name, relationship to you if you can, and their most answered phone number. That way, in the event of an emergency, someone will be contacted on your behalf, and ESPECIALLY if you have any medical concerns, they will be a lifesaving connection to the emergency responders.

Please take a moment to put an ICE entry in your cell phone today and encourage your employees to do the same.

Wet, Windy Winter... ARE YOU READY?

The National Weather Service, King County, Seattle City Light, and the city of Seattle are urging residents to get prepared now for a blustery wet winter with the new "Take Winter by Storm" Campaign.

Please take time now to build your emergency preparedness kits, prepare for power outages that could last days and stock out of non-perishable foods and WATER. Remember, in the clutch of a weather emergency, other people will be competing for supplies as well, so the more prepared you are, the less stressful the situation will be for you and your family/coworkers.

Weather emergencies can happen day or night and it is as important to be prepared at home as it is at work! Check out the "Take Winter by Storm" Campaign website for details on the weather predictions, resources on building kits for home and work, as well as information on roads and transit, utilities, and public safety. http://www.govlink.org/storm/

You can also always seek out the nearest Red Cross for supplies checklists, family and work emergency plans, and pre-made kits: www.redcross.org.

Information from these two sources would make great items for payroll stuffers to help remind your employees of the impending winter season and helping them get prepared. The more prepared your employees are, the less likely they are to miss work and if you help them with preparing, you'll show how much you care!

AGC members should feel free to contact the AGC Safety Department for help in developing emergency plans and kits. Give us a call at 206-284-0061.

The sooner the better as you don't want to be caught with winter taking you by storm!

Among the issues likely to be in-play during the next Congressional session are an economic stimulus package, immigration reform, project labor agreements, union card check legislation and greenhouse gas legislation. AGC of America has created a webpage to give members a comprehensive look at the battles that lie ahead. Click AGC's 111th Congress Resource Center, and click the link to "New President, New Congress, New Threats and Opportunities."

"The construction economy supports the American economy," said AGC of America CEO Stephen E. Sandherr. "In the next administration, AGC will focus on targeted spending initiatives as it works in support of construction priorities that will boost the overall economy and create jobs."

AGC's chief economist, Ken Simonson, forecasts a potentially long slide in construction spending. AGC would like to see that slide reversed with a significant injection of construction stimulus spending. Construction is an economic catalyst with more than $1 trillion worth of construction put in place last year (about 8.4% of GDP), employing 7.3 million people and providing strong careers for entrepreneurs.

"AGC looks forward to bipartisan work on pensions, immigration and long term programs to invest in America's infrastructure such as the transportation reauthorization, clean water infrastructure and investment in federal buildings," Sandherr said. "With strong democratic majorities in both the House and Senate, AGC will work to show the impact of tax, health care and labor issues on the businesses that are members of the AGC."

In a conference call with members, Sandherr and AGC of America's chief lobbyist Jeff Shoaf detailed some of these issues and indicated that, with the significant exception of its support for infrastructure investment, the association will spend much time "playing defense" in the next Congressional session.

Below is a recap of some of the upcoming issues; for more detail visit the AGC Congress Resource Center linked above.

• Infrastructure: 2009 will hopefully be the year Congress realizes the economic benefits of increased investment in infrastructure. Major bills that need to be considered are surface transportation reauthorization, FAA reauthorization, another Water Resources Development Act, and investment in water infrastructure. Democrats have historically made more funding available for infrastructure but with caveats such as Davis-Bacon provisions increasing the use of Project-Labor Agreements, and funding for union training programs only.

• Taxes: The current tax structure is expected to undergo major changes beginning in 2010. If Congress fails to address the 2001 and 2003 Bush tax cuts, businesses could face increases in the marginal and capital gains tax rates and restoration of the death tax to a 55 percent rate. Increased Democrat majorities will make permanent extension of Bush tax cuts nearly impossible, but momentum to reform the "Death Tax" will gain traction because of the pending deadline. A major concern is the 3 percent withholding tax on government contracts, which Congress must repeal before January 1, 2011.

• Labor and Immigration: The top priority for Democrats will be passage of "Card Check." The bill will easily pass the House, and increased majorities in the Senate will make passage a real possibility. Congress may address immigration reform with the Presidential Election in the rear view mirror. Congress must again extend the "E-Verify" program in March 2009, and it is possible that it will serve as the springboard for broader reform. Other concerns include a revival of ergonomics, increased OSHA enforcement and oversight that will lead to less cooperation with the industry, and a change in the definition of "supervisors" in an effort to strengthen unionization.

• Energy and Environment: Expect more attention to mandates on energy conservation and, in particular, legislation to regulate and control greenhouse gas emissions from all sectors of the economy through emission caps and increased permitting. There may also be an effort to apply the California Air Resources Board (CARB) mandates for diesel equipment nationwide. The House will likely continue to pursue amending the Clean Water Act to define navigable waters broadly, requiring contractors to obtain permits in more circumstances.

Presentations and panel discussions will include subjects such as accomplishments to date, good faith effort criteria and options to achieve apprentice participation. Please come take advantage of this opportunity to share experiences and get your questions answered. Please RSVP to Van Collins at vcollins@agcwa.com.

The Business Confidence Index (BCI) uses a 100-point scale. Scores above 50 generally indicate an expanding economy while scores under 50 indicate economic decline. The BCI has fallen precipitously in the past year to a decade low of 33, well under the historical mean score of 55.

The BCI is composed of four variables: The actual confidence ratings by executives, expectations of change in revenues, expectations of change in wages, and current employment compared to last year. The revenue variable has taken the steepest fall, going from 43 in the previous quarter to just 11 in the third quarter - the lowest in more than ten years.

Even though the revenue variable has reached a low point overall, more companies expect increased revenues than those that expect a decrease (43 percent to 33 percent). However, at 43 percent the number of firms that expect an increase in revenues is the smallest percentage in ten years. In the third quarter of last year, 78 percent were expecting an increase in revenues.

On average, companies now earning more than $5 million were more likely to expect decreased revenues next year, while smaller companies expect an increase.

The variables regarding wages and the perceptions of confidence both reached lows for the decade while the employment variable sank to a five-year low.

The business confidence question required responding executives to give their perspective on how the health of the local economy will change in the next year on a 0 to 10 scale, with 10 meaning it will greatly improve. Of the 175 business executives surveyed, 18 percent believe that the local economy will improve in the next year, while 57 percent expect it to deteriorate further. Spanning the last decade, the percent of optimists and pessimists are at their lowest and highest points, respectively.

Construction executives gave an average confidence rating of only 2.64, the lowest among industry types. This compared to an average rating of four by all the executives. Perhaps the construction executives' pessimism is due in part to results of another question that asked business leaders about the expected change in total space that will be required for industrial, manufacturing, high-tech, warehouse or retail for the next year. Only 10 percent expect an increase in needed space, down by almost a half from the previous quarter.

Hebert Research conducts the Business Confidence Research quarterly on behalf of Key Bank. For more information contact Hebert Research at 424-643-1337.