Airconditioning, Refrigeration and Mechanical Contractors Association of Southern California, Inc. 3602 Inland Empire Boulevard, Suite B-206, Ontario, CA 91764 (909) 477-4515 Phone (909) 477-4516 Fax [email protected]

ALERT Fourth Quarter 2007

Board of Directors Phil Evans, President Wittler-Young Service Co.

Taxability of Stand-By Pay and Expenses Is stand-by pay taxable to the employee?

Robert Lake, Vice-President EMCOR Service Mesa Energy Systems, Inc.

Ken Westphal, Past President ACCO Engineered Systems

Peter Buongiorno, Secretary Barr Engineering

Richard J. Sawhill, Executive V.P. ARCA/MCA Southern California

Pete Bordas, Board Member Western Allied Corporation

Casey Condron, Board Member Johnson Controls, Inc.

Scott Limbacher, Board Member Stater Bros.

David Miles, Board Member Weatherite Corporation

Joe Urban, Board Member Air-Ex Air Conditioning, Inc. Sal Buongiorno Honorary Board Member Barr Engineering

Office Staff Rose Bayus, Office Manager

Stand-by pay, as defined in the new contract, is the compensation an employee receives when on-call during periods outside of the regular workday or workweek. The on-call fee shall be considered as compensated expense for maintaining required facilities as the employer sees fit. The employee will be paid at an hourly rate for the time that the employee makes himself/herself available to perform on-call activities. The stand-by pay is not paid based on the reimbursement of actual expenses, but rather is paid to the employee at an hourly rate for his/her time. If the employer has an accountable reimbursement plan, the employee can submit his/her expenses and receive reimbursement of those expenses tax-free. However, if the employer does not have an accountable reimbursement plan, then the employee can receive reimbursement of his/her expenses, but those reimbursements must be reported on the employee’s Form W-2. The employee will then be responsible to take a deduction for the reimbursed expenses on his/her personal tax return. The compensation resulting from the hourly stand-by pay is taxable to the employee and should be included on the employee’s Form W-2 at the end of the year. The employee is being compensated for his/ her time, therefore it is deemed as normal compensation and thus taxable.

Debbie Sawhill, Special Projects

www.arcamca.org

Submitted by Miller, Kaplan, Arase & Co., LLP

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The various benefit funds provided to our employees are of importance to the industry. The health and welfare coverage provided for employees and their families need constant attention to ensure a quality benefit program, which is competitively priced. A Board of Trustees made up of management and labor representatives provide this needed attention. The Airconditioning and Refrigeration Industry Joint Trust Funds recently authorized a change to Blue Shield as the new provider. This change generated a savings for the plan, which in turn has allowed the trustees to evaluate and consider increasing the maximum lifetime benefit from $500,000 to $2,000,000.

President’s Message

The Inland Refrigeration Benefit Fund Trustees have been working with the plans professionals in evaluating the possible implementation of an individually styled self-directed 401(k) account. Should the trustees decide this program would offer additional benefit to the plan’s participants, the employees will be offered the opportunity to accept such a plan.

The ongoing volatility of the stock market has resulted in difficult times for may pension funds across the country. The problems with General Motors, Delta Airlines, United Airlines, etc. are common knowledge. The Airconditioning and Refrigeration Industry Retirement Fund Trustees, representatives of District Council 16 and ARCA/MCA, resolved the ongoing funding dispute, which in turn resulted in maintaining a quality pension credit. This resolution also ensures proper funding of benefits today and into the future, which in turn ensures the plan participants that when the time comes to retire the benefits promised will be delivered.

Phil Evans, president

Governor Goes Green Despite one of the construction industry’s largest lobbying efforts in recent history, the Schwarzenegger administration has decided to adopt new emission regulations for off-road diesel vehicles in the state. The new standards apply to a wide variety of equipment, including graders, backhoes, tractors and forklifts. The new regulations adopted by the California Air Resources Board will require off-road diesel equipment operators to reduce diesel particulate emissions 85 percent from 2000 levels by 2020 and to reduce nitrogen oxide emissions 32 percent over the same time frame. The construction industry was asking that final implementation be delayed from 2020 to 2025, in an effort to give contractors who operate this type of equipment more time to comply. With the adoption of these new regulations, contractors who operate this type of equipment will either have to install pollution control equipment or replace current engines with cleaner-burning ones over the next 13 years. CLC UPDATE July 27, 2007

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Precycle...before you...Recycle What is Precycling? Precycling is stopping waste before it happens. When you precycle, you "think before you buy" products. You make purchasing decisions that create less waste, make recycling easier and have fewer harmful impacts on the environment. These decisions include buying in bulk and concentrate, and buying products with less packaging. Precycling also involves "rethinking" – that is, asking yourself whether you really need to purchase an item and whether an item could be reused before you throw it away.

Why is Precycling so important? If you are not precycling, you are wasting resources and creating more waste than necessary! Over-packaged and disposable items are wasteful. However, there are alternatives to the wasteful packaging and merchandise on the market today. You, as a consumer, have the power to influence the types of products sold and the amount of waste generated in your community. Remember that today’s consumerism affects tomorrow’s environment.

How does Precycling benefit me? When you precycle, you eliminate the need to purchase items and you make buying decisions that can save you time and money. Not only will you reduce waste, you will also generate fewer recyclables!

How does Precycling differ from Recycling? Precycling focuses on the first two of the "3Rs": reduce, reuse and recycle. Precycling stops waste before it is created, whereas recycling takes waste that is created and turns it into something else. Recycling is important, but it is not the whole solution to managing our solid waste.

Here are ways you can Precycle! Bring reusable cloth or paper bags to the store with you. (ask the store manager to provide cloth reusable bags) Buy Large Quantities. If you buy products in bulk or in large sizes, you can put them in smaller containers as needed. Buy products with the least amount of packaging or none at all. Buy products packed in recycled packaging. (make sure you look for the recycled symbol) Do not buy disposable items (plates cups, pens, diapers, batteries, etc.) Buy less paper towels and napkins or none at all. Use cloth when possible. Buy long life and concentrated items (batteries, light bulbs, etc) This saves on packaging as well as product. Do not purchase Styrofoam. It contains polystyrene, and is the most difficult material to break down in our landfills. Buy items in cardboard. aluminum, steel, glass, and plastic containers marked 1 and 2 (These recycle more easily) Read labels for ingredients. Stay away from chemicals that harm our plant and animal life and poison our land.

Social Security Mismatch Letters:New ICE Rule Increases Risk to Employers On August 10, 2007, U.S. Immigration and Customs Enforcement (ICE) announced plans to publish a final rule requiring employers who receive a social security mismatch letter to take specific steps to resolve the mismatch within a given time-frame. Under the rule, if the mismatch is not resolved and if the employer continues to employ the individual, then ICE can use the mismatch letter as the basis to find that the employer knowingly continued to employ an unauthorized worker in violation of Federal I-9 law. The rule establishes so-called “safe-harbor” provisions describing clearly what an employer should do if it receives a mismatch letter and wishes to avoid being charged with “constructive notice” that the employee is an unauthorized worker. The regulations make clear that an employer who does not follow these guidelines will be susceptible to an I-9 violation and possible fines in the event of an audit or workforce raid. Submitted by Seyfarth Shaw LLP

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Project Home Again Fact Sheet The program began in 1998 to assist the National Center for Missing and Exploited Children (NCMEC) in its nationwide search for missing, abducted and runaway children. Since its inception, MSCA has distributed over 6,000 magnetic posters of 244 different children. 127 of the 244 children depicted on the posters have been recovered. 184 MSCA contractors have participated in Project Home Again nationwide. The magnetic 12”x18” posters include a photo of the child, biographical and contact information. In 2001, Project Home Again was the recipient of two national American Society of Association Executives awards for a “program that truly embodies the spirit of the Association’ Advance America campaign.” John Walsh, host of FOX-TV’s “America’s Most Wanted”, spoke at the Mechanical Contractors Association of America’s (MCAA) 2005 convention, where he recognized and commended MSCA’s Project Home Again for making a significant difference in the search for missing children.

How the program works The Project Home Again program is very straightforward – members of the Mechanical Service Contractors of America purchase magnetic signs depicting missing children in their area and place them on their service vehicles. These “moving billboards” travel throughout the community, raising awareness for the missing child and providing contact information for those with information. The contractor's service vehicles are highly visible, conveying the missing child information to the general public while the vehicle is stopped at a red light, parked at a jobsite, at a customer's facility or just driving down the street. Contact: Sobeida A. Orantes Associate Director, MSCA 1385 Piccard Drive Rockville, MD 20850 301-990-2207 Direct 301-990-9690 FAX 301-869-5800 Main [email protected]

If you have information to report on a missing child, please visit www.missingkids.com for contact details

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Liability Insurance Reform…Your Help Is Needed! Liability insurance reform has been positioned as a high priority item for our industry to address. Currently in California, it is legal for a developer or prime contractor to contractually require a subcontractor to insure against losses caused by the negligent actions of the developer or prime contractor or any other subcontractor they may have hired. These contract agreements are commonly called “Type - 1” indemnity agreements. These unfair “Type - 1” indemnity agreements force subcontractors to defend, at their own expense, against any negative occurrence on a project, which is real or alleged, regardless of fault. In 2005, with our assistance, a coalition of subcontractor organizations corrected this imbalance in the residential, multifamily and condominium market by passing legislation banning these “Type - 1” indemnity provisions in all contracts for the construction of those types of projects. The first step in banning these unfair contract provisions in the commercial and industrial industry is to gather background information and real life examples of "Type-1” indemnity contract language that has been used to damage our contractors performing commercial and industrial work. If you have experienced any problems or have been subject to abuse or financial loss due to these "Type - 1" indemnity clauses contact the ARCA/MCA Southern California office for a survey form. Submitted by the Politico Group

NEW! NEW! NEW! EFFECTIVE SALES MANAGER TRAINING December 11 – 13, 2007 - Baltimore, MD This new training program exclusively for sales managers is now being offered by MSCA. The three-day highly interactive program is designed to help new sales managers develop the skills, capabilities and expertise required for successful sales management. Team taught by Nancy Bandy and Woody Woodall, this intensive program will include small group exercises, team presentations, role playing, roundtable discussions, and development of a personal action plan. Attendance is limited to the first 25 registrants. For further information and a registration form, go to: http://www.mcaa.org/education/msca/salesmgrtraining or register on-line at www.mcaa.org/education

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Upcoming Events for 2007 October 2 8:00 am 2 9:00 am 10 8:00 am 11 10:00 am 14-17 23 5:30 pm 30 31 31

ACRT Appeals Committee ACRT Delinquency and Benefits Committees SCPT Administrative and Delinquency Committees ARCA/MCA Board of Directors MSCA Annual Educational Conference (Colorado Springs, CO) ARCA/MCA Annual Membership Meeting Pacific Palms Resort (Industry Hills, CA) 9:00 am Inland Refrigeration Benefit Funds Board of Trustees 8:00 am SCPT Appeals Committee 10:00 am SCPT Board of Trustees

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MSCA Star Qualified Companies ACCO Engineered Systems Glendale, CA Air-Ex Air Conditioning, Inc. Pomona, CA Allison Mechanical Redlands, CA Barr Engineering Santa Fe Springs, CA Cal-Air, Inc. Whittier, CA Emcor Service/Mesa Energy Systems Irvine, CA

November 4-7 12 13 13 15 20 22-23 28-30

8:00 am 10:00 am 11:00 am 11:00 am

International Foundation Conference (Anaheim, CA) ARCA/MCA office closed ACRT Investment Committee ACRT Board of Trustees Service Managers Roundtable A&J Board of Trustees ARCA/MCA office closed MCAA Industry Funds Conference (Longboat Key, FL)

Thermalair, Inc. Anaheim, CA United A/C Service Co., Inc. Yorba Linda, CA Wittler-Young Service Company Los Angeles, CA

December 3 12:00 pm Inland Refrigeration Training JAC Meeting 12 8:00 am SCPT Finance Committee 13 1:30 am ARCA/MCA Board of Directors Year End Luncheon 24-25 ARCA/MCA office closed 31 ARCA/MCA office closed

Mission Statement ARCA/MCA Southern California

Graph Provided By International Foundation www.ifebp.org

The Mission of the Airconditioning, R e f r i g e r a t i o n a n d M e c h a ni c al Contractors Association of Southern California, Inc. (ARCA/MCA Southern California) is to exceed the expectations of the Association’s member companies. The Association will provide a link of communication that will address, advance, and inform the Association membership of the latest updates on legislation, technology, and issues pertinent to the Airconditioning, R e f r i g e r a t i o n a n d M e c h a ni c al Contracting Industry. The success of the Association in achieving this Mission is to be based on integrity and loyalty to its members. We will strive to be diligent and flexible by supplying services the membership needs to be competitive in an ever-changing business environment.