MARCH/APRIL 2022 SERVING CONTRACTORS IN THE HVACR INDUSTRY A Contractor’s Guide to Planning for Success(ion) CODEWARS Press-Connect Fittings vs. Brazing for Refrigeration Delivering Value with ACCA
4 CEO’s Column 5 Chairman’s Column 6 Now@ACCA 10 Committee Crunch 12 Capitol Insights 14 Business Buzz 16 Safe@Work 18 Service Savvy 32 Tech Tips 34 Legal Toolbox 36 Training Tip 37 Corporate Partner Spotlight – Mitsubishi Electric Trane HVAC US (METUS) 38 Tech Challenge & Ad Index 32 6 contents Volume 11, Issue 2 / Published in March 2022 PUBLISHER Melissa Broadus melissa.broadus@acca.org EDITOR Natalie D’Apolito natalie.d'apolito@acca.org AD SALES Tom Murphy tom.murphy@acca.org 703-824-8875 ACCA NOWASSISTANT Heather Donaldson accanowsupport@acca.org ART DIRECTOR Lynn Riley Lynn Riley Design www.lynnrileydesign.com BLOGGERS & COLUMNISTS Jack Rise, Steve Coscia, Brooke Duncan, Tom Grandy, Barton James, Wingel Caburian, Chris Czarnecki, Wes Davis, David Bixby, Matt Akins, Ed Janowiak, Frank Besednjak, Katie Kuehner-Hebert ACCA Now (USPS 9910) is published bi-monthly for $29 per year by ACCA, 1330 Braddock Place, Suite 350, Alexandria, VA 22314. Periodicals postage paid at Arlington, VA, and at additional mailing offices. ©2022 by ACCA Association, Inc. All Rights Reserved. Postmaster send address changes to: ACCA Now 1330 Braddock Place, Suite 350, Alexandria, VA 22314 ACCA Now is published by the Air Conditioning Contractors of America. www.acca.org Air Conditioning Contractors of America ® Whether you plan on passing your company on to one of your children, selling or partnering with an outside party, or haven’t begun to think about who will eventually take over your business, succession planning is a helpful way to carve a path for the future of your company. In this article, ACCA speaks to contractors who have been there and done that, sharing all their tips and tricks to succession planning. 22 A Contractor’s Guide to Planning for Success(ion) 18
Providing for Our Industry Through Thick and Thin C EO ’ S COLUMN Barton James is President and CEO of ACCA. He can be reached at barton. james@acca.org. AS 2022 PROGRESSES, I’d like to take the time to share a few member benefits to help you have a successful year. With the challenges of supply chain stress, workforce concerns, and the continu- ing COVID-19 pandemic, it is important for ACCA to provide as much support as we can to help alleviate these burdens. We offer a variety of member benefits for you to use, including cost savings for your business and families as well as workforce development resources. Our partnership with Savings4Members provides members with discounts and solutions for every aspect of your business. With savings categories including operations, finance, shipping, and HR, Sav- ings4Members is a great resource for your company. More specifically, these discounts include fuel, busi- ness texting, freight shipping, payroll, rental vehi- cles, and supplies, to name a few. In 2021, alone, members who participated in the Savings4Members network saved over $307,000 on products and services that they use every day. From that total, members saved $231,040 on fuel purchases, $54,234 on credit card processing fees, $3,913 on essen- tial office products, and $2,503 on payroll, HR Services, and employee benefits. To access the Savings4Mem- bers network, simply visit www. acca.org/members/special-offers. This savings site also highlights savings opportunities outside of the Savings4Members network. From discounts on recruiting ser- vices through Orion Talent to utility safety work boots from Keen, our member discount page is full of savings opportunities. These savings don’t stop at business needs, they also cover travel and family expenses. Through our savings page, ACCA Members can save on movie tickets, sporting events, theme park admis- sions, hotels, and much more. Another exciting member benefit is our new HVACR Workforce Center, featuring CareerPlug. The HVACR Workforce Center is a place where owners and service managers can gain confidence when it comes to finding talent and recruiting. The Work- force Center provides you with purposeful, easy-to- use tools, and solutions to be the most effective in your role. You can access the Workforce Center here: www.acca.org/members/hvacr-workforce-center. Within the Workforce Center, you can find member-exclusive workforce resources, access to the Contractor Forum, and usage of CareerPlug. CareerPlug’s hiring software helps associations attract more qualified candidates, identify the right candidates with confidence, and improve hiring results. It is an easy-to-use system that automates many of the tedious, manual steps of the hiring pro- cess. The built-in evaluation tools also help you to con- fidently identify, evaluate, and hire the right person. ACCA members receive a free basic Career- Plug account that comes with a branded careers page, pre-built job templates, and a configured hiring process. The built-in evaluation tools help you confidently identify, interview, evaluate, and hire the right person. For greater success, you can upgrade the free account to a paid Pro subscription at an exclusive partnership rate of $495/year for unlimited job postings to top job boards including Indeed, ZipRecruiter, GoogleJobs, Facebook Jobs, etc., and use of personality assessments. To learn more about what CareerPlug is and how it will apply to your business, watch an informational webinar at www.acca.org/viewdocument/new-acca-member- benefit-careerplu. I am grateful for the perseverance of our industry, especially through these trying times. Please know that ACCA is on your side, and will do everything we can to support you, no matter the challenge. We look forward to seeing you at the ACCA 2022 Conference & Expo, March 28-30, at the St. Louis Union Station Hotel in St. Louis, MO! Access member discounts for your business and your families with ACCA Partner Discounts ACCA members get exclusive discounts on business expenses like fuel, office supplies, phone plans, and more. Members also receive discounts on travel, sports, movie, and concert tickets, gift cards, and trips to Disney World! Visit www. acca.org/members/special-offers to learn more. The HVACRWorkforce Center is Your One Stop Shop to Finding Talent Featuring CareerPlug, the Workforce Center provides you with purposeful, easy-to-use tools, and solutions for recruitment. Visit www.acca.org/members/hvacrworkforce-center to learn more. 4 MARCH/APRIL 2022
THANK YOU for allowing me to be your chairman for ACCA this year – I can’t wait to delve into enhancing all that the association can offer its members! I started out as a member of ACCA years ago when our company’s CEO encouraged all of our team members to get involved in trade organizations. Our company has always been involved in community organizations in the markets we work in, but we realized we also needed to find organizations that fit more with our business model. While our main busi- ness is in the construction of larger commercial proj- ects across the US, my service group handles smaller commercial and industrial projects, as well as pre- ventative and on-demand commercial and industrial service. ACCA was the best choice for an association representing HVAC service companies. After I joined the association, I met Joe Nichter, a past ACCA chairman who is now retired. Joe became a friend and confidant of mine, and he told me that the more I got involved with the organization, the more benefits I would receive – and the more I personally could offer the organization. That made a lot of sense to me, and I began to sit on committees, and in time I joined the board, with a particular passion for the commercial contractor. Over the next year I will discuss the various ways that ACCA is creating additional value for its members. For this magazine issue, I want to feature an exciting new initiative that was just launched at the New Year – ACCA’s tiered membership program, versus the flat rate membership structure we’ve had for years. Over the past year, ACCA’s board and staff have sought feedback from contractors on how we can add members, increase member engagement, and deliver more value. A common theme was interest in a more comprehensive membership that ends the frustration of having to take out a credit card for every training or event. I’m excited to take the helm as ACCA acts on this feedback by launching mem- bership tiers that move beyond the one-size-fits-all model of the past six years. The enhanced convenience, value, and recogni- tion opportunities of Gold and Silver membership should entice larger companies like mine to make a larger overall investment in ACCA’s mission and add their voice to advocacy efforts in every community where they operate. For as little as $400 per location, they can ensure that every branch has full access to ACCA training, recruiting tools, and governmental representation. Amidst growing industry consolidation, this approach ensures ACCA’s independence and fiscal stability while maintaining full access to member benefits for smaller companies that choose to remain at the affordable Bronze tier. Contractors that upgrade to Gold or Silver mem- bership will enjoy larger discounts and get half their dues back in ACCA Bucks, good for anything ACCA sells. This includes conferences, in-person and live virtual training, 608 testing, QA accreditation, and hundreds of other products to enhance their business. Members at the Gold tier also get unlimited ComfortU on-demand training for their entire team at no additional cost. If you attend even a single ACCA conference or training each year, you can spend just a little more to upgrade instead and get exclusive discounts and recognition opportunities all year long. Explore your options and upgrade today at acca.org/benefits. This new tiered membership program is going to give members more clarity in their choices, and the value they can receive for each choice. As we start the year, I want to give a shout-out to Barton James, ACCA’s President and CEO, as well as all of the staff members who are truly engaged every day in making the organization even better. They are all really making the association a value-added prop- osition for members. I also want to thank Brian Stack, ACCA’s past chair, who remains totally involved and will con- tinue to work with me to make the association bigger and better. Everyone is excited – staff members, board direc- tors, committee members – I can hear it in their voices. It’s going to be a great year and we’re going to leverage every opportunity to make ACCA the best that it can be! Delivering Value with ACCA CHA I RMAN ’ S COLUMN By Keith Paton, Vice President of Service at Ivey Mechanical Co. based in Kosciusko, Mississippi MARCH/APRIL 2022 5
ACCA Announces NewMembership Options for Added Value to Contractors ACCA announces the creation of three new membership options that deliver convenience, value, and recognition for contractors who make a greater overall investment in ACCA’s mission. ACCA now offers three membership tiers– Gold, Silver, and Bronze, providing contractor members with the option to choose which membership commitment fits their business best. Gold members will save 30 percent on any ACCA events or products and get unlimited access to ACCA’s ComfortU® on- demand training for their entire team. Silver members save 20 percent on anything ACCA sells. Members in either upgraded tier will receive half of their dues back in ACCA Bucks, good for any ACCA training, events, products, or services. ACCA is committed to maintaining an affordable entry point for all contractors who want to ensure that the HVACR indus- try is represented in D.C., state capitals, and regulatory bodies, so the Bronze level con- tinues ACCA’s current membership benefits with 10 percent member discounts and full access to hundreds of member offerings at acca.org. “Every dollar spent on ACCA training, events, products, and accreditation supports ACCA’s advocacy mission,” said Sean Robertson, ACCA vice president of membership and business operations. “These new tiers are all about making it convenient and affordable for contractors to hire ACCA to do more for their teams – and we’re eager to celebrate those who do with exclusive events and recognition opportunities.” “Just as maintenance plans help our customers ensure system performance, I think of gold membership as a maintenance plan for my business,” said Brian Stack, ACCA board chair and president of Stack Heating, Cooling, & Electric in Avon, Ohio. “Grant- ing my team unrestricted access to ACCA training will help us reduce callbacks and increase average ticket size, without ever having to worry about the expense of each course.” “With growing industry consolidation, this membership structure also makes it more convenient for large contractors to ensure that all their locations enjoy the benefits of ACCA membership,” said Barton James, ACCA president and CEO. “I’d like to thank American Residential Ser- vices and Goettl Air Conditioning & Plumb- ing for leading the way and paying their fair share for industry representation by enroll- ing all their locations as ACCA members.” NOW @ ACCA Just as maintenance plans help our customers ensure system performance, I think of gold membership as a maintenance plan for my business. — BRIAN STACK, STACK HEATING, COOLING & ELECTRIC > > > > > > > > > > To learn more and join or upgrade, visit www.acca.org/ benefits. MARCH/APRIL 2022 6
IMPORTANT NEWS: WE ARE DELAYING THE SOLAR FORUM With confirmed cases of the Covid-19 Omicron variant surging globally, out of the abundance of caution, ACCA and Pearl have made the tough decision to reschedule The Solar Forum for HVAC Contractors to November 14-15, 2022, at the Crowne Plaza in Phoenix, AZ. It will remain the same amazing event, just a fewmonths later. While it is unfortunate that we must wait another few months to have this unique and first of its kind event, the safety of our attend- ees, vendors, staff, and presenters remains our top priority. Sponsored by Mosaic and presented by the Air Con- ditioning Contractors of America (ACCA) and Pearl Certification, The Solar Forum is the nation’s firstever event to specifically address the challenges and opportunities you face from the rapid adoption of solar, storage, and con- nected home devices. At The Solar Forum for HVAC Contractors, you will learn strategies to expand into other home services like demand response systems, EV chargers, and home electrical upgrades. Learn how homes with solar and batteries can impact the design and sales process and drive adoption of higher-efficiency heating and cooling equipment. You will find inspiring educational sessions, innovative products, and service providers, as well as opportunities to network with contrac- tors who are engaging in HVAC and solar to varying degrees. Learn more and register at www.acca.org/solarforum. > > > > > ACCA URGES CONGRESS AGAINST TAX INCREASES, INFLATIONARY SPENDING AMID HISTORIC CPI REPORT ACCA has strongly urged Congressional Leadership against passing Build Back Better in its current state. If passed into law, the Bill would spend over $1 trillion, and target small and independently owned businesses through higher taxes in order to pay for it. ACCA’s mes- sage to Congress comes amid the most recent Consumer Price Index (CPI) report from the Department of Labor, which showed inflation rose 7 percent over the past year—the highest since 1982. “ACCA members across the country have voiced their concern to us about the challenges they’re facing from the ongoing labor crisis, the supply chain challenges, and rising inflation,” said Barton James, ACCA president and CEO. “These issues won’t be fixed through raising con- tractors’ taxes and spending more money, and we think Congress should know that.” ACCA also highlighted the need for Congress to pri- oritize addressing the supply chain issues, labor shortages, and inf lation through policies that make it easier for contractors to do business as part of its continued commitment to promoting contractors’ best interests in Washington. For more information about Build Back Better or ACCA’s government relations and advocacy efforts contact Chris Czarnecki, ACCA Government Relations Manager at chris.czarnecki@acca.org. Not yet registered? Get in early and save your space. NOW @ ACCA MARCH/APRIL 2022 8
Attend a CommitteeMeeting and SeeWhat It’s All About! ACCA depends on volunteers to help guide the team as we develop and create products, services, and programs to meet contrac- tor needs. The place that contractors are most needed to provide that guidance is in ACCA’s Committees. ACCA has five over-arching commit- tees that help the ACCA team with insight into the everyday needs of contractors across the country. These committees are Events, Member Services, Membership, Partners, and Products. Each committee meets once a month for about an hour to work with ACCA via a Zoom call. Did you know that even if you are not a member of an ACCA committee, you can still attend a meeting to see what it is all about? That’s right, there are no secrets at ACCA’s committee meetings. All ACCA members are welcome to attend the scheduled committee meetings. All you need to do is email accacommittees@ acca.org to receive the meeting login information. ACCA allows our members to attend committee meetings without being a member of the committee so that you can see what a meeting is like and decide if you would like to serve. There is no obligation or pressure to serve if you attend, and you can share your thoughts and ideas during the meeting, because your voice is important to us…whether you are a committee member or not. One of the best ways to see what an ACCA committee meeting is like is to join us at our in-person meetings taking place during ACCA’s 2022 Conference and Expo. This year will be the first time in two years that we have been able to sit down in-person together and brainstorm for the future. We are excited for these meetings, and we want to see as many ACCA members as possible there with us, March 28 – 30, 2022, in St. Louis. Committee Crunch By Melissa Broadus If you are ready to volunteer and serve on an ACCA committee, head over to www.acca.org/about-acca/acca-committees and apply today! INTERESTED IN ATTENDING AN UPCOMING ACCA COMMITTEE MEETING? HERE'S THE SCHEDULE >> March 16, 2022 @ 2:00 pm ET ACCA Events Committee Meeting March 28, 2022 @ 1:45 pm ACCA Events Committee Meeting March 28, 2022 @ 3:30 pm ACCA Partners Committee Meeting March 29, 2022 @ 10:45 pm ACCA Member Services Committee Meeting March 29, 2022 @ 1:45 pm ACCA Membership Committee Meeting March 30, 2022 @ 8:45 am ACCA Products Committee Meeting MEETINGS AT ACCA 2022 IN ST. LOUIS, MO MARCH/APRIL 2022 10
Capitol Insights By Chris Czarnecki Build Back Better Down, Not Out In December, Senator Joe Manchin (D-WV) dealt a major blow to President Biden’s agendawhenhe announced that he would not support the multi-trillion dollar ‘Build Back Better’ (BBB) spending and tax plan, which would create numerous programs—mostly related to climate change and social policy—and would also target small and independent businesses in order to pay for them. Some of the tax changes under consideration include the following: raising the tax rate on S-corporations (opposed to typically larger and/ or publicly traded C-corporations), elimi- nating the stepped-up basis, taxing unrealized capital gains, taxing unrealized capital gains at death, cutting the current unified estate and gift exemptions in half to pre-2017 tax cut levels, and eliminating small business valuation discounts in Sec- tion 2704 of the tax code. This bill, in its current form, would raise the cost of doing business for con- tractors, which would then likely be passed down to consumers. This all comes at a time when rising inflation, supply chain disruptions, and labor shortages are already affecting small businesses across the country. For these reasons, ACCA urged Congress against inflationary spending and tax increases for small businesses. Our message came amid a his- toric CPI report in January that indicated 7 percent year over year inflation (the highest in 40 years). While BBB has faced significant setbacks, it is not dead yet. President Biden signaled support for breaking up the mas- sive bill and moving smaller portions of it on separate tracks. The idea behind this is that they might be able to get at least some of it passed into law even if the broader bill has no chance of passing. This pres- ents a silver lining for contractors. Part of BBB included extension and expansion of major energy efficiency tax incentives including the 179D commercial deduction, 25C residential credit, and 45L credit for developers and new construction. It’s also worth noting that 25C and 45L expired at the end of 2021. 179D was made perma- nent at the end of 2020 thanks in part to ACCA’s efforts. ACCA and its members have urged Congress to both extend and expand these measures separately from the broader BBB bill. At the time of writing, no portion of BBB has been passed into law, and it is not yet clear what, if any, parts will pass. ACCA will continue to engage Congress regard- ing this legislation and keep members up to date on any notable developments. Supreme Court Blocks OSHA Employer VaccineMandate On January 13 the Supreme Court blocked President Biden’s vaccine or weekly testing mandate for employers with 100 or more employees in a 6-3 ruling. The mandate required that workers at companies with 100 or more employees must get vaccinated or submit a negative COVID-19 test weekly to enter the workplace. It also required unvaccinated workers to wear masks indoors at work and would have affected an estimated 80 million Americans. The court did allow a vaccine mandate covering Centers for Medicare & Medicaid Services (CMS) workers to go into effect. The deciding justices stated in an unsigned opinion on the large employer mandate: “OSHA has never before imposed such a mandate. Nor has Con- gress. Indeed, although Congress has enacted significant legislation addressing the COVID–19 pandemic, it has declined to enact any measure similar to what OSHA has promulgated here.” ACCA will continue to keep members up to date regarding COVID-19 rules and regulations. Join ACCA for a Town Hall Event at ACCA 2022 Conference and Expo All ACCA members are invited to join our government relations team and ACHR NEWS’ Kyle Gargaro for a town hall meet- ing on Tuesday, March 29 at 12:00pm CT during the General Session of ACCA 2022 Conference and Expo. You’ll have the opportunity to give ACCA direct input on the issues that affect your business most and to learn about what ACCA has been working on and how it impacts you. Having direct input from contractors helps us understand what issues are affecting you and your business on a day- to-day basis and allows us to represent your interests in Washington more effec- tively. We hope to see you there! ACCA-PAC Prior Approval Federal law and the Federal Election Com- mission (FEC) requires that all trade associations connected to political action committees (PACs) obtain written approval from their members before talking to that member’s employees about the importance of the PAC. Organizations may only grant prior approval each calendar year to one of the trade associations to which they belong. Granting prior approval simply gives ACCA-PAC permission to communicate to eligible employees in your company about ACCA-PAC and the role it plays in advancing and protecting the industry’s interests. It does not obligate your company or employ- ees to support or contribute to ACCA-PAC. You can visit acca-pac.mmp2.org/welcome/prior-approval to enter your form online, or scan the QR code. Chris Czarnecki is ACCA’s Government Relations Representative and Coalitions Manager. He can be reached at chris. czarnecki@acca.org or 703-824-8869. ACCA urged Congress against inflationary spending and tax increases for small businesses. MARCH/APRIL 2022 12
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Business Buzz By Tom Grandy Most of us have heard the fol- lowing phrase, “Do you have thirty years’ experience, or one year of experience repeated thirty times.” Another phrase we have all heard is, “The definition of insanity is doing the same thing over and over again but expecting different results.” The point is the same in either case. Are we learning and changing, or continuing to make the same decisions, even if they do not benefit us? As the new year continues, it’s impor- tant to reflect on our victories as well as our failures. What did the company do well over the past year? More impor- tantly, what area did not do as well? My suggestion would be to have a company meeting to discuss this very topic with the objective of setting specific goals for the coming months. Below are a few topics you might want to include on your discussion list. TURNOVER. How many employees (techs or staff ) left the company over the past year? If the number is high, then the question becomes why? Sure, they may have been a poor fit, but the bigger ques- tion comes when you look at your hiring practices. How do you interview, and do you utilize DISC testing? Are there core issues with how you treat employ- ees? Yes, they may have done a poor job, but again, take a good look at your new employee orientation program and training process. I heard a great quote a while back, “Seldom is the problem in front of you the real issue. There is usu- ally a foundational problem behind the issue.” Having an open and honest dis- cussion with all employees on this topic can be very telling. If you are an owner or manager, remember being critical or defensive of comments being made will cause the room to suddenly become very quiet. Swallow your pride to accomplish the larger objective of getting better. GAIN/LOSS OF MAINTENANCE AGREEMENT CUSTOMERS. Maintenance agreements are literally the foundation stone for profitable growth. As a matter of fact, the final selling price for most trade companies is usually heavily dependent on the number of active maintenance agreements the company has. Keep accurate records of the number of maintenance agreements customers gained and lost during the past year. Compare total active mainte- nance agreement customers at the end of the year with each previous year. Is the number growing? If not, why? DID THE COMPANY MAKE A NET PROFIT IN ALL DEPARTMENTS. This can be an elusive number for a couple different reasons. The first is cash flow verses accounting. As most are now aware, it’s not unusual to see an accounting P/L statement that says you made a profit (which you will have to pay taxes on) while noting there is far less money in the company check- book. Be sure to look at net profit from both perspectives. The other issue is departmentalization. Few companies departmentalize all the way through sales, overhead, labor, and materials only looking at the company’s overall net profit. The potential problem here is obvious. One department can easily be subsidizing another one and no one knows it.... until it’s too late! Review your real net profit, by department, and com- pare this year with past year. Are profits increasing or decreasing, and why? DEBT STATUS. This can be an eye opener. Simply list all outstanding debt including balances owed on loans, unpaid credit card balances, overdue money owed sup- pliers, personal loans to the company, balances on your lines of credit, and overdue taxes. Totaling those dollars can be a wakeup call. The objective is to have the “total owed” figure substantially decreasing each year. Hint: Build debt repayment into your overhead cost when setting proper hourly rates. If you don’t, all that net profit you made will quickly be swallowed up by debt repayment. CLOSING RATE ON SALES PRESENTATIONS. An acceptable closing rate for sales pre- sentations is at least 50% or more. What is your rate, per individual? Is it going up or down from year to year? If the closing percentage is not increasing, you need to know why. Do some, or all, salespeople and/or sales technicians need some addi- tional formal training? Reviewing these percentages, at least annually (monthly or quarterly is better), can keep the sales team on track. TOTAL DOLLARS TIED UP IN INVENTORY. Howmany dollars does the company have tied up in inventory? If the dollar figure is going up, it might be because the company is growing, therefore additional inven- tory is needed. It also might be caused by a sloppy purchasing policy. Do yourself a favor by looking at the number and asking the question. HOW OFTEN DO YOU MEET WITH YOUR CPA. This topic was purposely brought up last. It’s hard to manage the company without taking a really close look at the numbers. All the above topics are impor- tant, but the bottom line is what is really important. Did the company make a profit this past month? It does little good to find out you had a rotten year three months after the close of the year. Company owners need to know how they did financially within 10 days of closing out each month. Make it a habit (not a goal) to sit down with your CPA by the 10th of each month to review your numbers. If they are not providing “practical” advice on how to improve your bottom-line profit, it’s time to find a new CPA! Before you put this article down, pick up your calendar and select a date for your annual company meeting to discuss at least some of the above items. Make it fun. Select a nice restaurant so you can not only review progress, but provide a big thank you to those that helped the company grow and prosper. Everyone wants, and needs, to be appreciated. Tom Grandy is president of Grandy & Associates, producers of the well-known “Business Boot Camp” training series. What Did You Learn Last Year? MARCH/APRIL 2022 14
In the Blink of an Eye DISCLAIMER This article is for general information only and should not be considered legal or other expert advice. The recommendations herein may help reduce but are not guaranteed to eliminate any or all risk of loss. The recommendations herein are not intended to cover or identify all risk exposures. The information herein may be subject to, and is not a substitute for, any laws or regulations that may apply. Qualified counsel should be sought with questions specific to your circumstances. © 2021 Federated Mutual Insurance Company. SAFE@WORK By Nate Oland, Senior National Account Executive, Federated Mutual Insurance Company WORKPLACE HAZARDS can, quite literally, lead to injuries in the blink of an eye. Your eyes are one of your most valuable senses, and are definitely not something to take for granted. Protecting yourself should be high on your list of things to remember while working. Any negligence could lead to devastating injuries, long-term pain or side effects, or even loss of eyesight, if an accident were to occur. Common worksite hazards types can include, but are not limited to: • Flying particles and objects from grinding, sawing, etc. • Extreme heat • Sparks from welding • Molten metal • Harmful dusts from wood, metal, etc. • Fumes and splashes • Radiant energy, glares, or harmful light It is important to adhere to company policies and wear the right kind of Personal Protective Equipment (PPE) for your job. Keep in mind that eye injuries are often preventable with the use of the right kind of protective eyewear, and the majority of those who are injured were wearing no eye protection at all. Follow these eye safety basics to help protect yourself while working at any job that could cause eye damage: WEAR EYE PROTECTION – This includes safety glasses, goggles, shields, and helmets. This may help to reduce the number of eye injuries in your workplace, and demonstrate to others that wearing eye protection is important and necessary. Review communications from your employer identifying hazardous duties, and ensure you are wearing the correct PPE, including eye protection, any time your work could lead to potential injury. KEEP IT CLEANAND FIT FORUSE – Keep your eye protection in good, clean working order. Maintain, repair, or replace dirty, scratched, or worn out eye protection equipment. Eyewash and lens cleaning stations should be accessible at all times. WEAR THE RIGHT PROTECTION FOR THE JOB – To help avoid serious injury, wearing the right protection for your job is imperative. Review information from your employer regarding your job duties, potential hazards, and correct equipment so you can help maintain a safe environment. Review the hazard analysis conducted by your employer, which will identify possible risks as well as steps on how to help maintain a safe environment. If an eye injury occurs on the job, it is necessary to take action immediately. Be aware of workplace first-aid procedures, policies, and the location of eyewash stations. Find the posted safety signs in your working areas, and stay alert for violations and errors in procedure. Where you have questions, ask your manager. Report hazards or incidents, and participate in the development of procedures. Eye safety is no joke, but injuries are largely preventable. Added caution and proper protection could help you avoid a sight-stealing injury, and keep you safe at work. MARCH/APRIL 2022 16
As a frequent traveler, I serve big and small companies in both rural and metropolitan regions. That’s what makes my job so much fun. There’s much variety and diversification in the work I do. Amidst the assortment of clients I work with, there remains one consistent factor: the good companies want to get better. Over the last 15 years, I have only been hired by the best companies. When I enter a new client’s facility for the first time, their optimism and effec- tiveness is unmistakable. “There’s some- thing special going on here,” I usually think to myself. And yes, there is some- thing special occurring there. It’s the secret sauce. I have found very few business models possess anything special in terms of products and services. The Secret Sauce, in my opinion, is the person at the helm. This is usually a com- pany owner who has learned from both successes and failures. These past expe- riences can result in the secret sauce’s blend of humility and self-confidence. It is through this person that employ- ees achieve outstanding synergy. What is synergy? It is the creation of a whole that is greater than the simple sum of its parts. A company owner with the secret sauce builds a strong team, leads by example, and establishes a culture of excellence. This culture is usually built upon four customer service principles: Communicate well with employees to clearly convey purpose and goals. Numer- ous changes in engineering designs, com- patibility, and manufacturing schedules must be quickly circulated to those who serve customers. Facts matter. This helps to minimize the half-truth phenomena in which someone always gets the wrong half. Strictly enforce a rule of fast follow- up with customers, regarding scheduling and parts delivery so that customers knowwhat you are doing for them. Main- taining persistent customer follow-up is a proactive success strategy. If customers are uncertain as to what is going on, they’ll phone you and ask. When this happens, your employees can become reactive and defensive, thus minimiz- ing their ability to control the event. Regarding follow up, there are two main positions: offense and defense. When customers phone you, they’re on the offense, and when you phone the customer, you’re on the offense. Maximize the latent technological and human assets in your customer service department. This enables employees to serve customers in a fast, accurate, and efficient manner. It is inefficient to use only a small percentage of your compa- ny’s desktop or tablet applications. There- fore, invest time in advanced training to maximize employee efficiency and pro- ductivity. The cost of training is always less than the cost of ignorance. Make the investment to educate employees. Enable and empower employees to quickly resolve tricky situations with a stable problem-solving infrastructure. The bestmanagers understand the two primary reasons as to why customers call for service: customers either have a problem, or a question. Therefore, instilling a customer- centric attitude among employees helps to keep the focus on where it belongs. Front line service employees should be part of a weekly role-playing session during which common questions and problems can be rehearsed and perfected. These four principles, while not exhaustive, are key secret sauce ingre- dients. Achieving a world-class service level does not have to be complicated and expensive. In fact, it’s much more afford- able than you think. Steve Coscia, CSP is an industry expert that helps HVACR companies make more money through increased customer retention, improved upselling, and reduced job stress. The Secret Sauce Service Savvy By Steve Coscia “A company owner with the secret sauce builds a strong team, leads by example, and establishes a culture of excellence.” MARCH/APRIL 2022 18
THE FUTURE OF THE HVACR INDUSTRY
By Katie Kuehner-Hebert 22 MARCH/APRIL 2022
Success(ion) A Contractor’s Guide to Planning for MARCH/APRIL 2022 23
o matter if you plan on passing your com- pany onto one of your children or if you sell or partner with an outside party, succession planning is paramount. Ryan Kletz is now in the early stages of his control of Classic Air’s One Hour Heating & Air Conditioning in Virginia Beach, Virginia, as his father, Todd, suc- ceeded the business to him this past summer. How- ever, the changeover is slightly different than what happens in most family-run businesses – the Kletz family has a private equity partner, Envest, based in Virginia Beach. Classic Air was started in 1979 by Todd and his brother-in-law, Alan Heckel, as a family-owned busi- ness. Alan retired about 15 years ago and sold his interest to Todd, and Ryan joined the company in 2008. “Over the years we would start talking about planning for the day and then other pressing matters would happen that had more urgency, and then those succession conversations would come and go,” Ryan says. “Retirement in my dad’s eyes sounded a lot better than it did in reality, particu- larly as it got closer.” Then Envest reached out to the Kletzes indicating an interest in a partnership, and seven years later in 2018 the deal was closed. The Kletz family still maintains a majority ownership in the company – an “essential” 75 percent to 25 percent split with the private equity company. Ryan is the controlling manager, and two brothers-in-law receive equity distributions from quarterly payouts. “Our partnership with the private equity firm came to be because we’ve been trying to expand via acquisition for quite some time,” Ryan says. “We would be close to the finish line on deals, but at the end of the day we couldn’t put it away – either it was overvalued or undervalued, and the acquisition didn’t come to be. That’s when we decided that if we wanted to grow at this substantial amount, we might want to look at outside partners.” Part of the Kletz family’s deal with the private equity firm involved developing a decision matrix. A board of directors was formed, in which the Kletzes have three directors and Envest has two. For many board decisions, only a simple majority vote is needed, while some decisions, like whether to make certain acquisitions, require a unanimous vote. “We got lucky in our partnership – we’ve run a successful operation for 42 years and so the private equity firm doesn’t want to get involved in the day- to-day minutia of the business, unless of course, we’d ever do something crazy, and then they would step in,” Ryan says. “We have a great relationship with them.” For HVACR contractors contemplating selling or partnering with an outside party, there’s plenty of opportunity, says Fred Silberstein, president of SF&P Advisors in Boca Raton, Florida. SF&P Advisors, which provides M&A consulting services for HVACR and plumbing contractors, com- pleted 46 transactions last year, totaling $740 million, and over 24 years, the firm has completed 333 transactions totaling $1.9 billion. Today, M&A deals are based more on private equity than in the publicly-traded sector, Silberstein says. There are 65 PE-backed strategic firms across the US, taking partnerships and operating within the trades. Some want a nationwide footprint, and some are staying within a specific geography. “Private equity likes the trades because they are highly fragmented, and end-users want to be (n) Fred Silberstein MARCH/APRIL 2022 24
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treated right and fairly, so there’s opportunity to gain share if the PE firms help contractors do that,” he says. “Moreover, contractors are recession-proof and pandemic proof as well.” ontractors should consider partnering with a PE firm, particularly because of the valu- ations, Silberstein says. Multiples are being paid in advance for the next eight years or more, and that becomes “pretty attractive” to sellers. “PE firms also want to help grow these businesses, maybe even faster than what the owner could do on their own,” he says. “By recapitalizing the business and taking on a partner, sellers professionalize their organizations and ability to make decisions without cash or working capital constraints prove to be invaluable.” PE firms can provide working capital for addi- tional acquisitions, as well as back-office operations technology, including financial systems, eliminating constraints on the business, Silberstein says. They will want contractors to focus on the right KPIs to successfully grow their business – more calls, more service, more vehicles, and more replacement. Inevi- tably, this will lead to increased profits which will help drive EBITDA and create value for both the buyer and seller, as typically sellers roll some of the equity into the new deal. When considering a potential partnership, the “worst thing” a contractor can do is to answer a “bird dog call” and do a deal with the first PE firm they talk to. “The market is so robust that they need someone in the corner to maximize deals,” he says. “By con- ducting a broad process, contractors have the best (c) “Moreover, contractors are recession-proof and pandemic proof as well.” MARCH/APRIL 2022 26
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possible chance for the best possible out- come. This way they will have multiple suitors bidding which increases leverage and ultimately the outcome.” The highest offer isn’t always the best offer – “chemistry matters,” Silberstein says. Contractors should also determine what the cadence is with working with their new partner and what expectations of growth looks like, what the PE partner expects of them, what they expect of the partner – is the growth plan realistic? When preparing their business for a possible partnership, contractors should have their books in order, making sure they are GAAP-compliant, considering that deals are “really driven by numbers,” he says. Contractors should also build their service contract base and control costs as they become more mature, Silberstein says. As an example, a company that is in the growth phase would spend a higher percentage of revenue on marketing expenses compared to a company that was more established or in the mature business cycle phase. “Contractors should also have a suc- cession plan of who will run the business, as having a strong general manager mat- ters,” he says. “Finally, contractors should have some kind of back-office system in place – pushing a ton of paper is ineffi- cient, and makes it hard for PE firms to interface with their back-office.” obert Champe on Jan. 1 took over the role of president of Shearer Heating A/C & Refrigeration Inc. in Washington, Penn- sylvania, while his father Bob Champe remains the CEO. In high school, Robert also attended the Western Area Career & Technology Center, a vocational-techni- cal school in Canonsburg, Pennsylvania. He went on to complete the HVAC bach- elor program at the Pennsylvania College of Technology in Williamsport and then worked in all aspects of the business at Shearer, from being a laborer, to doing maintenance, to budgeting, sales and marketing. For the last several years, Robert has worked with a business coach to learn “the business side” of running the company. His father Bob knew that when the time was right, the mantle would be passed – and that time was this year. “He’s earned it. He’s good at it – he’s learned a lot and he knows what he’s (r) “ Contractors should also have a succession plan of who will run the business, as having a strong general manager matters.” MARCH/APRIL 2022 28
doing, so the time was right,” he says. “We’ve talked about it for a number of months, maybe years, and for my wife, Denise, and I, we felt that he was ready.” Bob will remain at the company for another 10 years, working 25 hours a week, helping Robert on whatever he needs. Bob will also be conducting some sales and running more of the commercial projects, including on site. “Robert’s now free to make his own decisions, but if something costs a lot of money, we both talk,” Bob says. “I’ve never been a real control freak – I like to have stuff done correctly, but we all learn by our mistakes.” For a bit, the two had a rough time of it together – Robert quit four times and Bob had to beg him to come back. But after that the two began to have “an understanding” and Robert has since stayed. “When I saw I had a career opportunity in the company and knew if I worked hard enough and showed that I could learn what it takes to be in a leadership role in the company, that the possibility of future ownership was in the cards,” Robert says. “I knew I had to be a sponge, learn how to manage issues, take care of our customers and employees.” arlier, Robert had quit because when working with his father, sometimes it was ‘my way or the highway,’ and he couldn’t take it. But the two finally came to an agree- ment on how Robert should be treated if Bob still wanted him around and make the company grow. “We just had to learn each other’s dynamics,” Robert says. “Now, it’s not just all business with us – we have a family dinner night once a week every Wednesday and we don’t mention business.” It’s hard working with family, he says. “You just have to speak up and say what you want,” Robert says. “As a child sometimes, you just let them lead the way, but in business you need to show them you have your own ideas and input too. You can learn a lot from each other, and being brought up in the business you have your ideas on how you would handle things when you get to make the decisions.” Before Robert officially took the reins, he kept a diary of sorts in his iPad under the notes section, jot- ting down differences he would like to see if he were the owner. “Now I get to refer back to them and make the changes I believed that needed to be done,” he says. (e) “ When I saw I had a career opportunity in the company and knew if I worked hard enough and showed that I could learn what it takes to be in a leadership role in the company, that the possibility of future ownership was in the cards.” MARCH/APRIL 2022 30
Tech Tip By David Bixby CODEWARS Press-Connect Fittings VS. Brazing for Refrigeration There has been a “code war” raging over eliminating the use of listed press-connect fittings for refrigeration currently allowed by the Uniform Mechanical Code (UMC). ACCA’s Codes Subcommittee has been diligently monitoring this develop- ment and speaking in support of the continued use of press connect fittings as a viable and safe option to brazing. Requirements for Refrigerant Connections For the last two editions (2018 & 2021), the UMC has allowed press-con- nect fittings for copper or copper alloy pipe joints, in addition to brazing and other approved methods. Such fittings are also required to comply with UL Standard 207, which requires laboratory tests to verify robustness under extreme operating conditions to ensure safe performance. Past Crusades Against Press-Connects for Refrigeration During the development of the 2018 and 2021 UMC editions there have been numerous requests submitted to IAPMO to delete press-connect fittings from the UMC’s list of acceptable options. These submittals have come from a single individual represent- ing a testing organization offering brazing testing and certification. Such activity has been supported by various California pipe trades including the United Association. All attempts to delete this option have been rejected by the UMC Technical Committee (TC), and appeals to the IAPMO Standards Council were also denied. Those opposed to allowing press-connects claim that such fittings may leak over time due to potential deteriora- tion of the elastomeric O-ring seal after several decades. However, to date there has been no evidence or field data presented, even anec- dotally, to suggest such fittings have a problem. ASHRAE Research Concludes PressConnects Are Safe There is accepted indus- try research which concludes that press-connect fittings are one of the most reliable methods for joining refrigerant piping. This conclusion is contained in ASHRAE Research Project (RP- 1808). The report concluded that press- connects were 400 percent tighter than the definition of a hermetically sealed joint per ISO Standard 14903. ACCA’s Position on Brazing vs. Press-Connects ACCA’s Codes Subcommittee has supported the UMC’s option of allowing listed pressconnect fittings for refrigeration, in addition to brazing. ManyHVAC professionals find the press connect fittings increase their company’s productivity. Additionally, in some situ- ations, brazing does not always represent a viable option due to several factors: Confined spaces without proper ventilation Lack of a “fire spotter” (cannot braze alone) Combustible construction or materials at the job site Locations where open-flames are prohibited It should be pointed out that listed press-connect fittings must be con- nected with a manufacturer-specified tool according to installation instructions. Just as with any product, improper installation can lead to failures, which is also the case if brazing is not properly conducted and verified by a trained qualified person. Press-Connect Opposition for A2L Refrigerants In preparation for the 2024 UMC edition, comprehensive coverage has been proposed for A2L “mildly flammable” refrig- erants for use in home comfort systems. As before, attempts are beingmade to only allow brazed joints. In response, ACCA and the HVACR industry are strongly opposed to elimination of press-connects, even for A2L refrigerants, citing the above ASHRAE research’s conclusions. May 2022 – The Next Battle ACCA anticipates that those opposed to press-connects will submit public comments to once again try to convince the UMC TC that such fittings should be elim- inated from the UMC. The TC will meet in May 2022 to review public comments submitted on its proposals and make their final recommendations for the 2024 UMC. We anticipate that the opponents will file an appeal with the IAPMO Stan- dards Council, who has the final say on approving what will appear in the 2024 edition. “It ain’t over ‘til it’s over,” to quote Yogi Berra. ACCA will issue field reports from the “front lines” after the aboveMay 2022meet- ing and beyond. If you have any questions or comments, please contact ACCA’s Man- ager of Codes & Standards at david.bixby@ acca.org. ACCA is fighting for you! David Bixby is ACCA’s Manager of Codes and Standards. He can be reached at david.bixby@acca.org or 703-575-4477. MARCH/APRIL 2022 32
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