Monthly Archives: April 2011

Check out our Construction & Equipment special

Want to get an idea of how local construction companies are riding out the economy, post-recession? Or how about a few tips on how to save gas with your construction fleet? Maybe you want to see some award-winning construction projects?

Those and other pertinent issues to the construction industry can be found in the DJC’s Construction & Equipment special section. Check it out!

More than Meets the Eye to Debt Limit Proposal

Construction spending by the state could shrink by $8.6 billion over the next 20 years should a proposed amendment to the state constitution be enacted.

A legislative resolution (SSJR 8215) seeks to reduce what the Legislature can borrow by gradually lowering the debt limit in the state constitution from its current nine percent of state revenues to seven percent.  Such a move would have to be passed by a vote of the people on the fall ballot because it involves amending the state constitution, but the first step is passage by two-thirds of both houses of the State Legislature.  SSJR 8215 has already been passed – unanimously – by the Senate.  Even though the Legislative session has ended, this matter will continue to be considered in the upcoming special session called by the Governor.

While a proposal to reduce the state’s debt might seem attractive at first blush, doing so would not only harm the construction industry it would also hinder private economic development.

As AGC’s Rick Slunaker notes, “Washington State is unusual among the states in the level that the State helps fund local construction projects such as schools and local drinking water systems.  This means the state has a higher-than-average debt obligation, but that fact alone is no reason to lower the debt limit.  On the contrary, the current nine percent limit allows the state to fund infrastructure construction projects that provide thousands of jobs in the short term and facilitate private economic development for the long term.  Reducing the debt limit could increase by a relatively small amount the funding for other general government budget spending.  But at the same time it would severely reduce the ‘seed corn’ the state invests on future economic growth.”

One of the arguments used by proponents of the debt limit reduction legislation is that the percentage of the state budget reserved for funding debt obligations has increased.   In fact, debt service payments on debt limit bonds rose from 4.8 percent of the general fund 10 years ago to 6.1 percent this year.  But a major reason that the ratio has increased is the economic downturn, which is reducing the size of the “denominator” (overall revenue).  As the economy improves, that ratio will decline to normal levels, and in any event it remains well under current limits.

SSJR 8215 also seeks to stabilize debt capacity by extending the calculation period for determining average annual general revenue from the current three-year “look back” period to a ten year average.  The modest improvement in predictability is gained by significantly diminishing debt capacity and the ability to build needed infrastructure.

Obama tries to mix politics with business contracts

Earlier this week President Obama proposed an executive order that would mandate that all businesses seeking to contract with the federal government to first disclose their political contributions. The requirement would extend to officers and directors as well. This in the name of transparency. What is transparent is that the president is trying to accomplish through the executive branch what has already been rejected by the legislative branch, when the Senate failed to act on the DISCLOSE bill proposing this kind of disclosure, and the judicial branch Citizens United v. FEC.
The U.S. Chamber relates their grave concern in their statement: “The obvious danger of this is that it will lead prospective businessmen and businesswomen to a choice no American should ever be forced to make: ‘Do I support the party in power in the hopes I can continue my livelihood or do I support the candidate I believe will do the best job?’ This doesn’t apply to only the large contractors that immediately come to mind. It also includes everyone from the zipper maker for military uniforms to the daycare facility operator for federal workplaces to landscapers who service a National Park. The implication is clear – pony up for the good guys or risk paying the price. As Senator Mitch McConnell aptly said yesterday “No White House should be able to review your political party affiliation before deciding if you’re worthy of a government contract. And no one should have to worry about whether their political support will determine their ability to get or keep a federal contract or keep their job.”
White House press secretary Jay Carney claimed this egregious attempt to intimidate businesses is all done in the name of “transparency.” So that must mean we can expect all entities receiving taxpayer dollars from this Administration to disclose their political support, right?
Not a chance. The Executive Order does not impose any disclosure requirements on federal labor unions or organizations that apply for federal grants or assistance. As was the case with the DISCLOSE Act that was rejected by a Democratic-controlled Congress, the effort exempts known political supporters of this Administration.
Political litmus tests have no business in determining what companies will most responsibly serve the public interest. We can only hope this catastrophe of an Executive Order will never see the light of day.”
To which I can just say, Amen.

Of Wind Tunnels, Laminates and Miss Elam: Sven Ellstrom

(Above, Sven Ellstrom beside a few of the awards and accolades from his many diverse endeavours)

Life holds some interesting ironies for Sven Ellstrom, CEO and Founder of Ellstrom Manufacturing, Inc.

“In 1960, I had $854 in my pocket, and no bills,” he says. Now, even though he’s led the development of several of world-renowned companies, Sven says, “I have no money in my pocket, and I have a lot of bills!”

Another irony is that Sven’s unpretentious offices and manufacturing buildings located in unassuming Ballard is where an amazing array of technologically advanced, groundbreaking and highly precise products got their start.

But it all began with that $854. Sven and his wife Kersten arrived in California from Sweden in 1959. With few prospects the couple was on their way to Fairbanks where a new job awaited Sven. But when they got to Seattle, they realized the $854 wasn’t going to get them very far, so they stayed put and Sven worked odd jobs.

With the help of that $854, Sven was able to craft a homemade press built from scrap iron and a modified table saw. Today, Ellstrom Manufacturing serves as a worldwide supplier of panel components for the marine, aircraft, fixture, furniture and specialty products industries.

That in and of itself is quite an achievement, but Ellstrom Manufacturing and its family of companies has had many diverse accomplishments throughout the years. A few examples:

  • The iconic Boeing 747 got a major boost from Ellstrom Manufacturing. In 1967, Ellstrom was commissioned by the Boeing Company to create the largest wind tunnel blades in history – measuring 36 feet in diameter – used in important testing necessary to build the plane. Boeing engineers estimated the life span of these huge blades would be from three to four years. Decades later, they were still in use. Ever since, the company has specialized in making composite paneling for numerous applications, including interiors and exteriors of buildings and airplanes. “A friend got me my first job at Boeing, which was to grind and regrout bathrooms,” Sven recalls. “My second job with Boeing was to build the wind tunnel.”
  • The first laminate flooring manufactured in the U.S. was made by a subsidiary of Ellstrom Manufacturing, STEL Flooring Inc. “I went to visit my sister in Sweden, who owns a hotel,” says Sven. “I noticed that she had this new type of flooring, so I took a sample home with me.” In 1996 Sven opened a 50,000-square foot plant, and added another 50,000 square feet in a matter of months, in Algona, WA and sold flooring under the Formica brand. A few years later Formica Corporation purchased STEL.
  • “Virtually all Class A racing boats in the world use a prop we developed with our own proprietary software,” says Sven, speaking of another subsidiary, Five-Axis Industries, which specializes in high-tolerance parts with complicated geometries machined from hard ferrous materials such as titanium and inconel. The company makes a wide variety of components for the marine and aerospace industries.

Then there’s that boat…

Of all the world-class products created by Ellstrom, perhaps the one that is most well-known by the general public is the Miss Elam Plus U-16. Miss Elam Plus (named for “Ellstrom Laminates”) is the Michael Jordon of the hydroplane racing circuit. The Ellstrom family entered the sport of Unlimited Hydroplane Racing in 1994 as sponsors of an experimental four-point Unlimited. In 1995, they built their own conventional turbine-powered Unlimited and scored the first of 20 victories in the 2000 season at the Tri-Cities. After that the Ellstrom team won, among others, the 2005 and 2007 National High Point championships, the 2007 and 2009 Gold Cups, and the 2010 World Championship in Qatar.

The main impetus for the Ellstrom family’s foray into racing was Sven’s children – Tom, Erick and Lisa – and their lifelong passion for water and boating. After their first sponsored boat did not perform well, the Ellstrom family built their own. While doing so, Erick and Tom discovered they couldn’t find parts made with the level of precision they were looking for. Thus, Five-Axis Industries was born.

Last year, Ellstrom and His Excellency Sheikh Hassan Bin Jabor Al-Thani announced that the Qatar Marine Sports Federation would sponsor the boat, which can now often be seen racing as “The Spirit of Qatar U-96.”

With all of these diverse accomplishments, Sven is most proud of his family: Wife Kersten and children Tom, Erick and Lisa. All of his children have been actively involved in the businesses. In fact, the name of Ellstrom’s flooring company, STEL, is an acronym for Sven, Tom, Erick and Lisa. Tom and Erick remain very involved in the family businesses, and after serving as engineering administrator, Lisa left to raise her family.

Ellstrom Manufacturing reached another milestone in 2010: It became one of the rare 50-year members of the AGC of Washington. Sven credits Larry Johnson of Prime Construction for getting him into the AGC in 1960.

This brings us to another irony in Sven’s life: He says that business and family obligations kept him from being as active in the association as he’d like. Nevertheless, his fingerprints are all over the AGC – literally – as Ellstrom Manufacturing made all of the insulated wall panels for the AGC Building in Seattle.

Congratulations to Sven and Ellstrom Manufacturing for five decades of membership in AGC!

Contractors get a tax break

President Obama on Thursday signed a law repealing the expanded 1099 tax reporting requirements. That’s good news for contractors, according to the Associated Builders and Contractors.

“Repeal of the 1099 mandate eliminates an unnecessary administrative burden that would have negatively impacted ABC members and small businesses nationwide,” said ABC Vice President of Federal Affairs Geoffrey Burr in a statement. “Now ABC members can focus more of their time on what is most important: creating jobs and growing their businesses.”

The provision would have required businesses to file Form 1099 for all vendors to which they pay at least $600 annually for goods and services. It would have gone into effect next year.

Historic renovation fair coming Saturday

Photo by Mary Randlett

Learn how it’s done from 28 historic building renovation experts on Saturday at the first ever Historic Seattle Renovation Fair.

The experts include architects, contractors, engineers, specialty trades people and suppliers. They will talk about remodeling older homes, earthquake retrofitting and historically appropriate window weatherization for old buildings.

The fair will be held 10 a.m. to 4 p.m. at Washington Hall, which is south of Seattle University at 153 14th Ave. Cost is $5 (free for Historic Seattle members). For more information, visit Historic Seattle.

If you can’t wait, Historic Seattle is holding a pre-fair event tonight at Rejuvenation Station, which makes and sells historic lighting and hardware reproductions. Tonight’s free event is 6-8 p.m. at 2910 First Ave. S. in Seattle.

Go orange!

Image courtesy of WSDOT

Sorry, not rootin’ for the OSU Beavs here, but instead for highway workers.

It’s National Work Zone Awareness Week and organizers want everyone to pay attention to those attired in orange that make their living in work zones.

WSDOT offers up these statistics:

  • Washington averages almost 1,000 highway work zone injuries each year.
  • 99 percent the people injured or killed in work zone collisions are drivers and their passengers.
  • Most injuries and deaths in work zones are caused by rear-end collisions.
  • Inattentive drivers are not prepared for sudden slow downs and last minute lane changes in work zones.

Here’s how WSDOT wants you to drive in work zones:

  • Slow down to the posted speed and pay attention.
  • Merge as soon as possible.
  • Expect delays, plan for them and leave early or use an alternate route if one is available.

To celebrate the week, WSDOT is encouraging all to wear orange in support of the workers. You can learn more at

Dig through your wardrobe for that perfect orange outfit. But first, check out this short video:

Guess What Construction Has Done for Washington’s Economy


For years, many years, the State of Washington has depended on the construction industry for economic growth and sustaining the economy. Yes, Washington appreciates companies like Boeing, Microsoft and Starbucks as well as the many mom-and pop businesses in other markets, but the construction industry whether it be residential or commercial has been credited for consistent, stable growth and jobs. But as this recession continues into full tilt, some people have forgotten just what the construction industry offers to Washington.  As the industry continues to struggle as the one of the top three industries hit hardest by the recession, the 2011-2013 Capital Budget investment is a key factor in the employment and economic future of Washington’s residents.  Did you know,

Employment & Economic Impact in 2009
More than 216,000 workers were employed by contractors, construction services and material suppliers in the state (private sector only, doesn’t include government).

•The construction industry represents 9.4% of the state’s private sector workforce.
•Construction sales were more than $27.1 billion in 2009.
•The construction industry has a total payroll of more than $11.4 billion.
•15.3 of all sales in the state of Washington are directly related to the construction industry.
•The construction industry represents 10.5% of total state non-government payroll.

For each $1 invested in new construction:

•The state’s economy generates an additional $1.97 in economic activity throughout the state.
•Household earnings are increased by .64 cents, all households, not just those with someone employed in the construction industry.

Washington’s budget crisis has everyone scrambling to eliminate government waste, find savings and possibly ending entire state programs. Despite all the bleak days in Olympia there is one ray of hope still left coming from the capitol dome – Washington’s capital investment plan.

The Capital Construction plan would mean nearly 62,000 new family-wage jobs and $4.6 billion in increased economic activity throughout the state in the next two years. Now we just need to make sure the legislature doesn’t throw a brick through the window of opportunity by using capital funds to feed the general government budget.

More jobs and economic activity are created by capital investments than by general government spending. Investing $1 billion in the capital budget will create nearly 1,000 more jobs and $55 million more in wages than if that same money is spent in the general government budget.

With Capital Investments

  • More family-wage jobs- $1 billion spent creates 13,820 jobs and  $723 million in wages
  • Community resources- Schools, universities, safe drinking water, low income housing, parks, local voter approved school construction, prisons, local bridges and road repair.
  • Public and Environmental Safety – Stormwater and sewage treatment systems, salmon recovery, safe drinking water.

Without Capital Investments

  • 62,700 fewer jobs.
  • $3.3 billion less in wages.
  • $4.7 billion less in economic activity .
  • $1 billion in job-creating school construction threatened (for every $3 of local voter approved school construction bonds, the state matches $1)
  • Planning and design work for future projects will stop (essential projects will cost more in the future)

Contact your legislator at the Legislative Hotline: 1.800.562.6000– ask them to spend the people’s money wisely – jobs and our Washington economy depend on it – Fund the Capital Budget for next 2011-2013 biennium.

Let them not forget!

April is Safe Digging Month

Since April is National Safe Digging Month — as proclaimed by the US House and Senate — it’s a good time to remind construction professionals and homeowners to always call 811 before any digging project. By doing so they can find out where underground utility lines are buried and prevent injury, expense and penalties.

Says AGC’s Safety Director Mandi Kime: “Striking a single line can cause injury, repair costs, fines and inconvenient outages. Every digging project, no matter how large or small, warrants a call to 811. As April marks the traditional start of digging season, we are using this month to strongly encourage individuals and companies to call 811. By calling 811 to have the underground utility lines in their area marked, homeowners and professionals are making an important decision that can help keep them and their communities safe and connected.” 

When calling 811, Washington State homeowners and contractors are connected to the Utility Notification Center, which notifies the appropriate utility companies. Professional locators are then sent to the requested digging site to mark the approximate locations of underground lines with flags, paint or both.

AGC is partnering with the state’s Utilities and Transportation Commission (UTC) to spread the word about 811 and the “Call Before You Dig” campaign, as a utility line is damaged by digging once every three minutes nationwide. AGC contractor members will prominently display large banners on construction jobsites, giving widespread visibility to the “call 811” message.

In addition, AGC, ABC, the Utility Contractors Association of Washington and other industry groups are supporting legislation to improve laws governing safe digging practices.  The bill, E2HSB 1634, would improve communication in the field between the operators of underground utilities and excavators by, among other things, clarifying the responsibility to mark underground utilities whose location is in doubt; establishing expiration dates for field markings of utilities; and requiring all damages to be reported to a central database so that education efforts can be targeted precisely.  The bill passed the House 93-4 and awaits further action in the Senate.