IN THIS ISSUE
** GOVERNOR KEATING TO PROPOSED SALES TAX ON PROFESSIONAL SERVICES
** STATE BOARD APPROVES MANDATORY CONTINUING EDUCATION FOR ENGINEERS
** FLICKER NOMINATED AS ACEC CHAIRMAN
** IN MEMORY
** ACEC SUPPORTS WATER INFRASTRUCTURE BILL
** LIABILITY SURVEY RESPONSE DEADLINE EXTENDED
** FAST-GROWTH/HIGH-PROFIT FIRMS HAVE LOWER STAFF TURNOVER
** CROWELL TO RETIRE FROM DPIC
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GOVERNOR KEATING TO PROPOSED SALES TAX ON PROFESSIONAL SERVICES
The "Tax Reform" flag has been waiving over the Oklahoma State Capitol since the last legislative session and now it looks like some action could occur as early as January, 2002.
Imposing a 5.9% state sales tax on professional services is reported by The Daily Oklahoman in its December 4th edition to be a key part of a tax reform plan which Governor Frank Keating will announce on December 11th. The current state sales tax rate is 4.5%.
Sources tell The Daily Oklahoman that the Governor's revenue neutral plan would eliminate the state personal income tax, the state sales tax on groceries, and the franchise tax.
To replace the $2.7 billion loss in tax revenue from the proposed exemptions, reports say that the Governor will propose taxing a variety of professional services which are currently exempt from the state sales tax, including accounting, communications, construction, financial, entertainment, insurance, legal, real estate brokerage and other sectors.
Reportedly, the tax would not apply to services provided to out-of-state customers, government services, or services exempt under federal law. Service providers not being targeted for sales tax include advertising, agriculture, oil and gas, and health care and medical services.
The Oklahoma Legislature has been in special session since summer, but the special session is currently in recess. Sources say that the Governor wants this addressed by the special session in January and take it before the voters in a special election in March or April. Under Oklahoma law, tax increases must be approved by a vote of the people, unless a "super majority" of both houses of the legislature approve the increase.
While full details of the plan won't be released for a few days, we believe it is a safe assumption that engineers, architects, and land surveyors are included in the overall "construction" group which is slated to be taxed under the Governor's proposal.
From a political standpoint, it looks like the Governor has chosen the "taxed" and "not taxed" carefully, although there are some very strong groups singled out in the "taxed" group.
In the "taxed" group, the insurance, legal, and real estate groups can pose a strong challenge to the Governor's plan, with accountants, construction, and financials posing a bit of a lesser threat to the plan.
On the "not taxed" side of the ledger, the biggest winner is the advertising industry, but it is also the most obvious politically. In trying to advance the reform plan, the Governor certainly doesn't want every media outlet in the state opposing the plan on the front page and 6:00pm news. Keeping the exemption for agriculture keeps the farm lobby and many members of the Legislature at bay, and the oil and gas is already under the "gross production" tax. And, continuing the exemption for medical and health care services makes both political and moral sense.
All groups, including CECO, will be waiting impatiently for the Governor's exact plan to be officially released to see who really is and isn't impacted by the plan.
We will keep you advised, and if engineers, architects, and land surveyors fall into the "taxed" category, we will be calling all members for assistance in what could be a very interesting next 6 weeks.
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STATE BOARD APPROVES MANDATORY CONTINUING EDUCATION FOR ENGINEERS
Following a public hearing on Thursday, November 29th, the State Board of Registration for Professional Engineers and Land Surveyors adopted proposed rule changes including the implementation of mandatory continuing education for engineers.
Beginning with renewals in 2004, engineers will have to show at least 30 "professional development hours" during the previous two-year period to meet the requirements of the rules.
Adoption of the rules by the Board is just the first step in the implementation process. The Board must now submit the rules for review by the Legislature and the Governor, a process that will take several months. The effective date of the rules is expected in late April/early May, 2002.
In addition to the mandatory continuing education rules, there were many other rules which were revised by the Board's action. Some rule changes were adopted as originally proposed, while other rule changes were amended by the Board based on public comments and recommendations made at the public hearing.
The Board is in the process of incorporating the revisions into the original draft, and expects to have the final version posted on the Board's web site no later than Friday, December 14th.
The implementation of mandatory continuing education will generate a lot of questions regarding what will count towards complying with the rulesmany of which are yet to be answered. To that end, the State Board is committed to make this as easy and understandable as possible. Prior to the implementation of the rule, the State Board will send to each registrant a guide which will outline the type of continuing education which will fulfill the requirements.
So, as the old saying goes, patience is a virtue. Be patient. Current registrants won't have to show compliance until the 2004 renewal period. More information will be forthcoming, and compliance will be relatively simple for most registrants.
And, be assured that any continuing education program offered by CECO and or ACEC will count towards meeting the State Board's requirements.
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FLICKER NOMINATED AS ACEC CHAIRMAN
Eric L. Flicker, Senior Vice President-Treasurer of Pennoni Associates Inc., Pennsylvania, has been nominated for ACEC Chairman for 2003-2004. He will serve as ACEC Chairman-Elect for the 2002-03 year.
Flicker is a past ACEC Senior Vice President and served as Director-at-Large of the Consulting Engineers Council of Pennsylvania. He also served as past Chairman of the Planning Cabinet, Business Management, and Environmental Committees and was President of HWAC. Flicker is an ACEC Fellow.
Others nominated for positions on the ACEC Executive Committee are: 2002-2004 Treasurer is Jeffrey M. Daggett, CEO of W&H Pacific (Washington state). Nominated for Vice Chairmen are: Ray Flemons, Senior Vice President of Bucher, Willis & Ratliff Corporation (Texas); Robert G. Macomber, President of Atwell-Hicks, Inc. (Michigan); and David L. Wright, President/Chairman of the Board, WCG, Inc. (Florida).
The new officers will take office at the conclusion of the ACEC Annual Convention, May 12-16, 2002, in Las Vegas.
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IN MEMORY
* AL MILLER
It is with great sadness that we report the passing of Albert J. Miller, P.E., Newport, Arkansas. Al died on Sunday evening, November 25th, from a severe respiratory infection, which apparently developed as a result of chemotherapy treatments he had undergone over the last year.
Al was very active in ACEC and NSPE during his professional career, actively serving on numerous committees in leadership positions. Last year he served as president of NSPE. Before that, Al served a two-year stint (1988-1990) as Vice President on the ACEC Executive Committee.
Anyone who attended either a joint Oklahoma/Arkansas Annual Convention or any recent ACEC Convention or Fall Conference knows that his presence was always felt. Al always had a joke or story, some good and some very corny. He will be best remembered for donning his beloved, bright red, Arkansas Razorback "hog hat" at the ACEC PAC auctions, or just about any other time he could find an "excuse" to "call the hogs"! Yes, he was funny, and his good will and brand of humor was infectious.
More importantly he was a loyal organization man and served both the consulting engineering profession and the engineering profession as a whole with a passion.
Al was a dear friend and he will be greatly missed. CECO extends our deepest sympathies to his wife, Lyn, and their entire family.
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* WILLIAM SHORT
It is also with deep sadness that we report the passing of William E. Short, P.E., Tulsa. CECO just learned of Mr. Short's passing which occurred on July 25, 2001. Mr. Short was CECO's fifth President, serving in that capacity in 1959-60.
CECO extends our deepest sympathies to his family.
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* MATT GEE
CECO was shocked last week to learn of the passing of Matt Gee, 42, who passed away on November 28th due to complications from open heart surgery.
Matt was a private practice attorney for the past 16 years, and for the past couple of years has served as the attorney for the State Board of Registration for Professional Engineers and Land Surveyors. Matt was energetic and intelligent, and through his work with the State Board served the engineering and land surveying professions well.
Matt is survived by his wife Melanie, their four children ranging in age from 11 to 2, along with his parents, a brother and sister, and grandmother.
Memorial contributions can be made to the Gee Family Scholarship Fund, 1600 Bank of Oklahoma Plaza, 201 Robert S. Kerr Ave, Oklahoma City, OK, 73102.
We offer our sincere sympathies to Melanie and the entire family.
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ACEC SUPPORTS WATER INFRASTRUCTURE BILL
House Science Committee Chair Sherwood Boehlert (R-NY), publicly thanked ACEC last week for our support of H.R.3178, the Water Infrastructure Security and Research Development Act of 2001, and its companion Senate legislation, S. 1593. At the press conference held after committee approval of the bill, Boehlert lauded ACEC as the "innovative thinkers and early joiners" needed to move the legislation ahead.
HR 3178 aims to support research into ways of protecting the nation's water supply systems. The legislation allows the Environmental Protection Agency (EPA) to provide grants (totaling $12 million per year) to help public and private entities to conduct research and development projects aimed at preventing, detecting, or responding to physical and cyber-based threats to water supply and wastewater treatment systems.
Boehlert predicting quick passage of both House and Senate versions, called HR 3178 a "first step" in a long process of upgrading water infrastructure systems.
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LIABILITY SURVEY RESPONSE DEADLINE EXTENDED
ACEC has extended the response deadline for the Professional Liability Survey until December 15, 2001. Please take a moment to fill out your response to this important information.
You may print out the survey from ACEC's webpage (http://www.acec.org/programs/lsurvey.pdf) and return it to the following address: American Council of Engineering Companies, 1015 15th Street, NW, Suite 802, Washington, DC 20005, Fax: 202.898.0068
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FAST-GROWTH/HIGH-PROFIT FIRMS HAVE LOWER STAFF TURNOVER
Not only do the fast-growth and high-profit firms profiled for ZweigWhite's 2002 SUCCESSFUL FIRM SURVEY OF A/E/P & ENVIRONMENTAL CONSULTING FIRMS have the highest growth and profit rates in the industry, but they're also doing better than their "average" counterparts at keeping employee turnover down. Data in the report show turnover at these successful firms is significantly lower than industry averages. Survey results also show this is clearly no fluke- fast-growth and high-profit firms are taking the necessary steps to ensure high staff retention.
The survey defines "fast-growth firms" as those having an average annual growth of revenue and staff of 20% or more for the past three years and "high-profit firms" as those having a profit of 15% or more of net service revenue for the past three years. According to the data, fast-growth and high-profit firms each spend a median of $5,000 on each new hire, compared with $4,000 for the overall sample. This amount includes labor, travel, advertisements, search firms, relocation, training, and more.
Along with investing more in employees, firms with higher growth and profitability are also more likely than their average counterparts to allow employees to work flexible hours. At the typical fast-growth or high-profit firm, 30% of employees are currently working flexible hours, compared with only 25% at all firms.
Furthermore, successful firms also offer better insurance- close to half of fast-growth firms and nearly that many high-profit firms pay the medical insurance premium for the employee in its entirety, more often than average firms. In addition, fast-growth and high-profit firms more often pay the entire dental insurance premium for the employee.
These factors- spending on training, flexible hours, and insurance- all lead firms toward low turnover. Survey results show fast-growth firms have a median turnover rate of 14.8%, and high-profit firms have a median turnover rate of 12.6%. At 16.7%, average firms had the highest median turnover. These statistics give an added basis for labeling some firms "successful" aside from their growth and profitability.
Mark Zweig, president and CEO of ZweigWhite, says, "The data clearly shows that successful firms do things differently from everyone else. That's where the opportunity is in this business. Successful firms are successful for a reason, they're taking care of their employees and growing and profiting because of it."
The 2002 SUCCESSFUL FIRM SURVEY OF A/E/P & ENVIRONMENTAL CONSULTING FIRMS is available from the publisher for $345, plus $4 shipping and handling. Contact ZweigWhite, P.O. Box 8325, One Apple Hill Drive, Natick, MA 01760, tel: 508-651-1559, fax: 508-653-6522, e-mail info@zweigwhite.com or visit our web site at www.zweigwhite.com/store/svscf.
ZweigWhite, the leading source of management consulting, information, and education for the design and construction industry, is based in Natick, MA, with offices in Oakland, CA; Washington, DC; & Overland Park, KS
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CROWELL TO RETIRE FROM DPIC
A long time friend of the design community will be "hanging up the old rate book" on December 31st. Richard Crowell, Vice President of DPIC, is going to retire from a career of serving the engineering and architectural community.
Dick had his own independent agency in southern California for many years prior to joining DPIC. Since joining DPIC, he has been the companies main representative with ACEC, serving on numerous ACEC committees, task groups, and special interest group. He has been a trusted advisor to member firms as well as to state member organizations, and his contributions to the well being of the consulting engineering profession are countless.
From a personal standpoint, I've been lucky enough to serve on a couple of different ACEC committees with Dick, and have enjoyed his wisdom, passion for the industry, and his friendship.
Our best wishes to Dick, and our sincere thanks for his service and friendship!
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