Finding Equitable Stormwater Funding

2015-11-24_Insider_01_lg (1)By Toby Fedder, PE, Woodard & Curran

Operational and capital costs associated with stormwater management seem to grow every year, driven higher by increasingly stringent permits, which mandate pollutant load reductions and require increased system resiliency. The costs of municipal separate storm sewer systems (MS4s) and combined system infrastructure can overwhelm even the most well prepared utilities. Unfortunately for today’s utility managers, the average utility ratepayer is unaware of the magnitude of these compliance costs and regularly pushes back against the rate increases that are needed to comply with the mandated improvements.

The prospect of funding these operations as well as combined sewer overflow (CSO) abatement purely through volumetric rates is leading some cities to conclude that a new financial model is needed to fund the increasing costs of stormwater management. Luckily, municipal administrators and utility managers have various funding solutions available to them for financing the necessary investments these systems require.

User fees and alternatives for capital investments

One way utilities have been tackling the issue of ensuring that their organizations have adequate funding is by instituting stormwater user fees. From the standpoint of gaining public buy-in for a new fee, it’s essential to develop a cost projection model that provides a clear picture of current and future operations costs and investment needs.  This allows utility managers to directly link the increasing regulatory burden to the idea of a new fee, tying the new costs directly to the fee.

The most common way to implement this user fee is to set rates based on a property’s amount of impervious area. This system distributes the cost of reducing MS4 & CSO pollution to users that contribute most to the problem; so a commercial property with a 15-space parking lot would pay more than a typical homeowner, using a formula that calculates rates according to square feet of impervious surface. Other systems use a flat rate for user fees, with residential properties being assigned one flat quarterly amount and all other properties being assigned a higher quarterly rate.

For communities where service fees for funding stormwater capital investments would be difficult to adopt, there are alternative strategies worth considering:

  • Many stormwater management programs have been funded through property taxes paid into a community’s general fund. For communities where stormwater management is considered a high priority, this could be a viable option. One downside to this strategy is that tax-exempt properties do not contribute to this fund, though many of them, like schools or governmental properties, could produce significant runoff.
  • Another strategy that circumvents the issue of business owners and residents shouldering costs for projects that don’t benefit them is creating a “special assessment district.” If only one geographic area is going to benefit from a specific stormwater investment, it can be funded by only charging a fee to properties within that area.
  • Grants or low-interest loans could also be possibilities for stormwater management in some states. The EPA Clean Water State Revolving Fundhas provided more than $4.5 billion to fund projects that include stormwater management efforts.

Implementing changes

The use of stormwater user fees is increasingly popular, but municipalities often have a poor understanding of the practical implications of the transition. In communities with enterprise-funded utilities, some of the costs (particularly CSO abatement costs) that will be covered by the new fee are currently covered in volumetric sewer rates, offering the possibility of sewer rate reductions.  Utilities should prioritize helping all customers understand that the goal is the equitable assignment of new costs to those receiving the benefits the utility provides.  A defensible financial model assists in this and can prevent homeowners and businesses from feeling that they’re carrying an undue financial burden for the investments needed to upgrade or maintain stormwater and combined sewer systems. Additionally, credits and exemptions can be offered to incentivize best management practices.

For systems that don’t adopt stormwater fees but still need to fund required upgrades, residents and businesses need to be informed about how their monthly bills will be changing. For instance, some cities have chosen to continue issuing a single bill for sewer services provided, but the bill includes two separate charges: a sewer charge—which pays for treating the sanitary sewage from the customer—and a stormwater service charge—which pays for managing runoff. These cities set up a website dedicated to explaining this new system, as well as distributing a fact sheet regarding the changes.

Whichever funding approach you decide to go with, a strong public outreach campaign is important in getting your plan approved by the necessary stakeholders. Property owners need to have a clear understanding of how better stormwater management is going to benefit them, and there are a number of ways municipal officials and utility managers can approach circulating that information. By assessing the practical implications of each decision, continually identifying beneficiaries of each investment, and allocating funds wisely, operators of MS4s and combined sewer systems alike can successfully finance the upgrades they need.

Article originally published on July 29, 2015, 

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The Right Equation for Responsible Development: Spotlight on The Hyatt Place Portland, Old Port

01 Plaque photo Hyatt ND7A0816In the fifth of a 7-part series exclusive to the Maine Real Estate Insider, we’ll provide an up-close look at the most notable commercial development projects of the past year that are helping to fuel Maine’s economy in terms of investment and job creation.  MEREDA is proud to recognize responsible development based upon criteria including environmental sustainability, economic impact, energy efficiency, social impact and job creation.  Please join with us in celebrating The Hyatt Place Portland, Old Port.  A conversation with developer, East Brown Cow.

MEREDA: Describe the building and project.

East Brown Cow:  The Hyatt Place Portland Old Port , located at 433 Fore Street in the heart of the Old Port, stands seven stories high, is comprised of 130 rooms, and features an indoor pool, meeting room, exercise gym, café, restaurant and cocktail lounge.  A carved out corner retail space, located at 443 Fore Street, is the home of Evo, a Mediterranean restaurant and lounge that opened in the summer of 2015.

MEREDA:  What was the impetus for this project? 

East Brown Cow:  The impetus of the project was to take advantage of a baron surface parking lot that had been traditionally a dark underutilized piece of land, and make it a vibrant streetscape that complimented the surrounding buildings with activity 24 hours a day versus the 9-5 business hours of the other office/retail buildings around it.

MEREDA:  That sounds like quite a process.  How long were you in the planning stages before construction started?

East Brown Cow:  Conceptual planning began in the summer of 2012. City site approvals occurred in November 2012.  Groundbreaking occurred in February of 2013.  However, design and finalization of documents/plans continued right into fall of 2013.  So, two very full years!

MEREDA:  Tell us about the most challenging aspect of getting this project completed. 

East Brown Cow:  The biggest challenge was the difficulty with the City process trying to get approved a more modern sophisticated architectural building because it was something very different from the traditional historic design of the downtown area.  Zoning requirements, even with no zoning changes requested, and historic review requirements drastically impacted the design of the building and ultimately costs.  Although infill projects are traditionally trumpeted by any City, Portland included, they do come with restrictions of tight sites to work in, difficult logistics, and the need to have flexibility of the municipality to waive certain conditions to keep such a project feasible.

MEREDA:  Something unexpected you learned along the way was….

East Brown Cow:  Contending with a franchise was very different than expected.  The expectation was that a franchise would want to maintain highest quality, but we learned that there was resistance to any change from protocol, even if the requested change was for higher quality or more efficiency than prototypical design standards.  But East Brown Cow ultimately prevailed on pushing some changes regarding local flair (art) and efficiencies in mechanical systems which complement the brand stated focus on modern efficiencies.

MEREDA:  Now that it’s complete, what feature of the project do you think makes it the most notable?  

East Brown Cow:  The building does an excellent job of integrating the hotel guests/activity into the street fabric and vice-versa – the energy of the occupants and the streetscape are transparent in both directions. Clearly, the large curtain wall on the first floor all the way to the corner “Crinkle Wall”.

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MEREDA’s Morning Menu – Our Lakes, Our Future: Preserving Shorefront Value

BreakfastLogoMaine lakes are not only beautiful, they are a surprisingly powerful economic engine — generating more than $3.5 billion in annual spending, providing more jobs than any single Maine employer, fueling countless local businesses, supplying drinking water to half our residents, and contributing to the municipal tax revenues that fund essential services in many Maine towns.  Our clean, clear lakes support a cornucopia of goods, from limitless four-season recreation to vital wildlife habitat, aesthetic enjoyment, and a quality of life most other states can only envy.

We have long depended on them, but our lakes are not immune from the serious water quality problems plaguing people around the world today. Here at home we have seen nuisance algae blooms and murky depths on some lakes ruin the fun for everyone, and we’ve learned that it’s both costly and very difficult to undo this kind of damage.

The good news is that we have in hand a proven way to help prevent these dreaded outcomes on developed lakes: it’s a program called LakeSmart.  Under the direction of the Maine Lakes Society, LakeSmart’s non-regulatory, user-friendly approach delivers individually designed, site-specific landscaping recommendations to lakefront property owners to keep lake waters clean and healthy.   In this way, it enables lake communities to take the future of lakes into their own hands. Maine businesses, most particularly the realtors, developers, landscapers and nurserymen who deal with homeowners and their plans everyday, have a big role to play in this groundbreaking effort.

Join MEREDA for breakfast on December 10 from 7:30 AM – 9:00 AM at the Portland Regency Hotel for a thought provoking conversation led by Maggie Shannon (Belgrade Regional Conservation Alliance and Belgrade Lakes Association) and Gail Rizzo (Designated Broker with Lakepoint Real Estate), and learn about trends in Maine lake health, new cross-sector initiatives to protect our lakes, and how a program called LakeSmart can help communities safeguard their freshwater resources.

About the Event:

December 10, 2015 – 7:30AM to 9:00AM

Portland Regency Hotel
20 Milk Street
Portland, ME

Buffet Breakfast:  7:30 – 8:00 AM
Program:  8:00 – 9:00 AM

Registering for this Event:

Member:  $45 pp  |  Non-Member:  $55 pp
Prices increase by $10 after December 4, 2015.

Payment is expected at the time of registration.

No refunds will be granted to anyone who registers, but fails to attend or who cancels after December 4, 2015.

Visit for more information and to register.

This MEREDA “Morning Menu” Breakfast Event is Sponsored by Eaton Peabody.

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The “Cap Rate”

By Mark L. Plourde, MAI, Maine Valuation Company

You may hear the term “Cap Rate” in discussions or articles involving commercial real estate. Even if you already have an understanding of what the term means, here is a little more insight from an appraiser’s perspective.

Simply put, a “Cap” Rate is used to convert income into value. To derive a Cap Rate directly from the market, all you have to do is take the stabilized net operating income (NOI) of the property at the time it sold, and divide that by the confirmed, cash equivalent sale price. The result is a “Cap Rate”. For those of you with a mathematical inclination, the formula is I ÷ V = R, where I is Income; V is Value (or Price); and R is the Rate.  Seems simple enough that anyone could do that math, so what’s the big deal?

But wait…you did stabilize the income didn’t you?  Stabilized Income means: “Income at that point in time when abnormalities in supply and demand or any additional transitory conditions cease to exist and the existing conditions are those expected to continue over the economic life of the property; projected income that is subject to change, but has been adjusted to reflect an equivalent, stable annual income.”[1] So, just where did you get that property income from?  Were you given actual signed leases to review? Is any of the rental income at above or below market rates? (how would you know?) Were there any significant variations in reported expense items over time?  Extraordinary events that impact the amount of income or expense should be questioned. Are you sure that the operating expenses provided to you are current and include all applicable charges for the property?

Some common problems include reliance on outdated expenses for Real Estate Taxes,  Insurance, and/or Utilities – to name but a few.  Perhaps even more common is the omission of any “Management” expense whatsoever.  Don’t kid yourself, properties don’t manage themselves. Even if you were willing to do such work for free, you are not being fair to the property value or to yourself if you omit such expense item. The same goes for the exclusion of “Replacement Reserves”.  These are to fund significant Capital expense items that arise at different points in time over a property’s economic life, and that are not part of typical Repairs and Maintenance. Ok, so let’s assume you have arrived at a stabilized level of NOI. Now, all you have to do is divide that by the confirmed, cash equivalent sale price to get the Cap Rate.

But wait…you did confirm the sale price didn’t you?  The actual price paid may not be what someone told you, or what was reported on the Declaration of Value form. This document is designed to state what the buyer and seller declare the value of the Real Estate only was in a given transaction. The price declared may be an allocation only and impacted by related tax implications, and thus not accurately reflect the total consideration paid. Oh yeah, did I mention there was also some owner-financing involved at below market rates and terms? The seller also gave the buyer a credit (refund) at the closing to help with some needed property repairs. You don’t suppose these had any impact on the price paid do you?

In closing, some market participants throw Cap Rates around like candy on Halloween. “That property traded at an 8% Cap”, or “I can’t believe that buyer paid a 6% Cap Rate for that property!” My point is this – whatever the reported Cap Rate appears to be on the surface, applying that Rate to the wrong income is also just as wrong. It also does not mean that all such properties should now trade at that exact same Cap Rate. In order to derive and/or apply a reliable Cap Rate from the market, one should take the time and effort to understand, verify, and stabilize the appropriate levels of both income and expense for the property to be valued.

Mark L. Plourde, MAI is the Managing Partner of Maine Valuation Company and a MEREDA member since 1997.  Maine Valuation Company provides unbiased professional opinions of value on commercial real estate along with appraisal review services throughout Maine.

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MEREDA Endorses Question 2 on Statewide Ballot, Opposes Question 2 in Portland

MEREDA Endorses Question 2 on Statewide Ballot

MEREDA supports Question 2 on the statewide ballot, theSenior Affordable Housing Bond. This bond would authorize the sale of $15 million in general obligation bonds, to be used in combination with more than $22 million in leveraged funds, for the construction of approximately 225 affordable, highly energy efficient homes for Maine’s seniors in strategic locations across the state.

MEREDA supports Question 2 on the statewide ballot because it will provide what Maine’s seniors and construction workers need now. Maine has the oldest population, and the 8th oldest housing stock, in the nation. This means that there is currently a shortage of nearly 9,000 units of affordable housing available to Maine’s seniors, a deficit that will nearly double by 2022.

By authorizing the Senior Affordable Housing Bond, Maine would both meet more of the demand for affordable, quality housing for its seniors, and also provide much needed construction sector jobs. If approved, the bond is expected to allow for the construction of an estimated 225 affordable senior homes statewide, with each project requiring between 150-200 Maine workers, including contractors, trades professionals, architects and engineers.

MEREDA supports Question 2 on the statewide ballot because the Senior Affordable Housing Bond will promote fair and responsible development, strengthen Maine’s economy, and ensure a safe housing future for Maine’s seniors.

MEREDA Opposes Question 2 in Portland

Question 2 on the City of Portland ballot proposes to change the city’s land-use ordinances. Though designed to stop the redevelopment of the Portland Co. site at 58 Fore St, the proposed ordinance would have far reaching negative implications.

“Question 2 will hurt Portland’s ability to attract new people and new investment, both of which are critical to the health of the city,” said Michael O’Reilly, president of MEREDA. “This ordinance is written to sound appealing, but hidden beneath that language are significant negative repercussions to Portland’s economy, heritage and waterfront access.”

Additionally, O’Reilly states that the proposed ordinance “goes too far. If it passes it will immediately block more than $200 million of economic activity, put at risk important historic buildings and reduce public access to Portland’s waterfront.”

MEREDA is committed to promoting fair and responsible development, and the organization has a strong interest in protecting the qualities that make Portland special. We believe Question 2 puts these values at risk, and we therefore oppose its passage.

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The Right Equation for Responsible Development: Spotlight on The Bay House Condominiums

 Bayhouse CondosIn the fourth of a 7-part series exclusive to the Maine Real Estate Insider, we’ll provide an up-close look at the most notable commercial development projects of the past year that are helping to fuel Maine’s economy in terms of investment and job creation.  MEREDA is proud to recognize responsible development based upon criteria including environmental sustainability, economic impact, energy efficiency, social impact and job creation.  Please join with us in celebrating The Bay House Condominiums.  A conversation with developer, Reger Dasco Properties.

MEREDA: Describe the building and project

Reger Dasco Properties:  The Bay House is the first contemporary condominium project to anchor Portland’s waterfront district, the centerpiece of the city’s most extensive revitalization in recent decades.  Inspired by Portland’s past and its emergence as one of America’s best small cities, The Bay House is at the center of a dynamic urban community.

The architecture was designed to complement the spirit of this historic neighborhood, and the project is comprised of 86 single-level residential units ranging in size from 850 square feet to 2200, and 6000 square feet of street-level retail/office space. There are 17 different floor plans and a variety of sophisticated options and amenities including gas fireplaces, custom kitchens, luxurious baths, private outdoor spaces, elevators and underground parking.  Adjacent to the bustling Old Port and the vibrant East End, the neighborhood is filled with gourmet restaurants and unique shops.

MEREDA:  What was the impetus for the project?

Reger Dasco Properties:  There was clearly pent-up demand for new housing stock on the Portland peninsula, especially from baby boomers nearing retirement who loved the idea of single-level low-maintenance homes and a walkable urban lifestyle.  The underground garage, landscaped courtyard and private deck space were especially alluring.

MEREDA:  That sounds like quite a process.  How long were you in the planning stages before construction started?

Reger Dasco Properties:  The property had been the site of the iconic Village Café Restaurant and was acquired from the Reali family, the longtime owners and operators.  The project took root in 2006 and by 2007 the developers had completed the planning process and had opened a full -scale model unit and sales center in the heart of the Old Port.  This marketing concept was the first of its kind for the city of Portland and was well received by the community and by potential buyers.  Initial sales were brisk and by the fall of 2008, 40% of the units were under contract.

MEREDA:  Tell us about the most challenging aspect of getting this project completed

Reger Dasco Properties:  2008 saw the collapse of the credit markets just as construction on the Bay House was scheduled to commence.  The project was postponed and deposits returned to buyers.  By 2012 the market forces had shifted and construction and marketing for the project resumed.  Once again sales were handled by Town and Shore Associates and  it was immediately evident that the product the Bay House offered was in high demand. The first residents moved into their homes in January of 2014.

MEREDA:  Something unexpected you learned along the way?

Reger Dasco Properties:  Portland’s peninsula continues to attract both in-state and out-of-state buyers who are drawn to its combination of waterfront proximity, world class restaurants and historic architecture, but we did not expect the high demand for the spacious three bedroom units.  The lack of comparable sales in the size range made this demand hard to predict.

MEREDA:  Now that it is complete, what feature of the project do you think makes it the most notable?

Reger Dasco Properties:  The buildings pay tribute to Portland’s past, but emphasize today’s modern lifestyle, and that is a winning combination for the demographic seeking a downtown lifestyle.

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Do You Have a License For That? When You Need More Than A Handshake

By Charlie Katz-Leavy, Partner, Verrill Dana, LLP

If you own real estate, there may be an occasion when a neighbor, contractor, or someone else seeks a favor.  For example, someone may want to temporarily use or pass through your property.  When someone seeks to use your real estate for only a short period of time, you may think a simple handshake agreement is good enough.  In many or most cases, the handshake deal does not offer sufficient protection to the property owner.  In such an instance, a written license agreement may be the best option for the landowner.

The following is an example of what could happen without a license agreement:

Neighbor asks: “We will be renovating our building and surrounding property for the next two weeks.  Would it be ok if our employees park in your lot during this time period?”

Owner of Parking Lot answers: “No problem. Your people are welcome to park on the western side of our lot.” Hand shake ensues and the deal is made.

The following week, one of the neighbor’s employees slips and falls on a patch of ice when exiting her car.  The employee sues the property owner for failing to properly maintain the parking lot.  Regardless of whether the property owner is found liable for that employee’s injuries, the original “handshake” agreement has just become an unexpected lawsuit.  To avoid such a nightmare, the parking lot owner should have required the neighbor to enter into a written license agreement with certain landowner protections, such as an insurance and indemnity clause.

What is a license agreement?

In real estate, a license agreement is a voluntary grant of personal privilege that allows the user (“licensee”) to use the property of the landowner (“licensor”) subject to certain terms and conditions.  Black’s Law Dictionary defines a license as, “The permission by competent authority to do an act which without such permission, would be illegal“.

In general, licenses tend to be for shorter periods of time and are usually revocable, meaning the licensor can terminate the license upon notice to licensee.  The idea is that the licensee is using the property with permission and subject to certain terms.  The licensee may or may not compensate the licensor for its use depending on the deal reached by the parties.  Additionally, license agreements typically are much shorter than a lease and therefore less expensive to produce.

What are the benefits of a license agreement?

Generally, as a personal privilege, license agreements can be terminated at the will of the licensor.  Because license agreements are usually revocable, they typically are not recorded and therefore do not impair record title.

Another important consideration is that a license agreement typically includes terms to protect the landowner.  For example, a well drafted license agreement should contain insurance and indemnification clauses to protect the licensor from liability.  The license agreement should require the licensee to maintain liability insurance, and it should shift the risk of liability to the licensee by requiring the licensee to indemnify the licensor for any and all damages that occurred from its use of the real estate.

License agreements also provide licensees with a clear understanding of where and what they can do on the property of the Licensor. This clarity helps the parties avoid future disputes and costly litigation. It also protects the Licensee from a trespass or nuisance claims if the relationship with the Licensor goes south.

In the parking lot example, the licensee should have been required to maintain comprehensive liability insurance and to indemnify the parking lot owner from any and all claims made by any of its employees relating to their use of the lot.  If this had been done, the licensor would have been more protected from the risk of the injured employee.

When is a license agreement not enough?

A license agreement is merely a contract and does not transfer a real property interest. In contrast, an easement is an irrevocable interest in land of potentially perpetual duration.  Therefore, someone who is going to make a substantial investment in property owned by another should seek an easement or long-term lease rather than a license.

If you have any questions about leases, license agreements, easements, or other real estate issues, please contact Charlie Katz-Leavy of Verrill Dana LLP.

Original article posted in the August 30 – September 12, 2013 edition of the Mid Atlantic Real Estate Journal 

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MEREDA’s Morning Menu Event – Creating in Maine: the “State of Manufacturing” and a Site-Selection/Plant Development Case Study

BreakfastLogoDid you know there are over 1,800 manufacturers in Maine employing over 55,000 people with an average salary of $54,000/year? The impact of manufacturing in our state currently and in years past is undeniable. The Maine Real Estate & Development Association (MEREDA), in partnership with the Manufacturers Association of Maine (MAMe), will present the state of the industry outlining both the highlights and challenges the sector faces. Our featured speakers will be Derek Volk, the President/Owner of Volk Packaging and Bill Dubay, the CEO for Baxter Brewing Company.

Derek Volk is also the current volunteer chairman of the board of directors for MAMe. He will present the “State of Manufacturing” complete with updated statistics and demographics impacting the industry. Bill Dubay, will present a case study based on his experience as General Manager for Curran Food Company. In 2014 he led a site-selection, relocation and facility development project for Curran’s. He will speak to that experience as well as offer up some valuable lessons learned through the process.

The industrial real estate market has seen 21 consecutive quarters of decreased vacancy rates. As a result, there is a critical space crunch in Southern Maine. Manufacturers, in particular, have strict infrastructure needs such as power, clean water & sewer, highway access, and efficient energy requirements. The search for physical space can be challenging and time consuming.

Join the Maine Real Estate & Development Association (MEREDA) for breakfast on November 5, 2015 from 7:30 – 9:00 AM at Franklin Fueling Systems in Saco to learn how the real estate development community can help support Maine’s vital manufacturing sector.

About the Event:

November 5, 2015 – 7:30AM to 9:00AM

Franklin Fueling Systems
34 Spring Hill Road
Saco, ME
Buffet Breakfast:  7:30 – 8:00 AM
Program:  8:00 – 9:00 AM

Registering for this Event:

Member:  $45 pp  |  Non-Member:  $55 pp
Prices increase by $10 after October 29th.

Payment is expected at the time of registration.

No refunds will be granted to anyone who registers, but fails to attend or who cancels after October 29, 2015.

Visit for more information and to register.

This MEREDA “Morning Menu” Breakfast Event is Sponsored by Biddeford Savings.


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Emerging workplace challenges: age, weight and drugs

By Tony Payne, VP/Business Development, Clark Insurance

Maine once led the nation in the cost of workers’ compensation insurance but reforms and hard work have changed all that. Since 1992, costs have been cut in half. The two most important changes were reducing the number of work-related injuries and removing costly conflicts from the claim management process.

In addition, lost time injuries have dropped precipitously contributing to more than $180 million in dividends paid back to the customers of Maine Employers’ Mutual Insurance Company (MEMIC), the state’s largest and leading workers’ compensation insurer. So, what worries a workers’ compensation insurance executive?

At the annual meeting of the Maine Insurance Agents Association (MIAA), independent agents were updated on the trends within the property/casualty segment by John Leonard, president and CEO of MEMIC.

Despite dramatic improvements depicted in Leonard’s slide presentation, a myriad of factors are conspiring to impact the long term cost of workers’ compensation insurance for employers in the state and in much of the nation.

Let’s start with incomes. Wages are part of the calculation for workers’ compensation premiums. However, Americans’ wages have remained relatively unchanged for nearly 15 years. Until there is a labor shortage, wages likely will simply track with inflation which has hardly budged since before the Great Recession. But while wages have been steady, the cost of medical care has continued to rise. In fact, since 1993 the cost of workers’ compensation medical costs have gone from 49% of claims dollars paid to 59%. Conversely, replacement wages paid for those recovering from injuries have dropped from 51% of the claims paid to 41%. Now, hold that thought and read on.

Maine’s aging workforce. On-the-job fatalities for workers over the age of 65 are about four times the number for workers age 25-34. That makes sense. However, the percentage of the workforce is Maine that is over 65 is high and growing quickly. For example, 7.6 percent of those 75 years or older currently are working. The size of that 75+ group is projected to exceed 10 percent by 2022 according to the U.S. Bureau of Labor Statistics. That’s a real challenge when it comes to workplace health. As people age, it often takes longer to recover and multiple medical conditions can complicate a timely return to work.

In addition, Leonard suggested that the workplace may have to be re-engineered to accommodate physical limitations of older workers. Most work-related injuries continue to be injuries to muscles and bones. Lifting, pushing, being struck by objects and falling are the common causes of claims. Older workers just don’t spring back from these events quite as fast.

Obesity. Obesity is a workplace safety issue for employers. Science indicates that weight and chronic disease are closely related. When diabetes and heart disease are added to the challenge of injury management, recovery can be longer and more complicated than expected. Though an employer can manage workers who work unsafely, no employer can easily direct employees to lose weight yet obesity is a contributing factor to injury costs. That makes cost management a significant challenge.

Opioids. Leonard also cited this class of drugs as a contributing factor to changes in workers’ compensation costs. Drug use and abuse continues to grow in Maine and around the country. According to the National Institute on Drug Abuse, “opioids are medications that relieve pain. They reduce the intensity of pain signals reaching the brain and affect those brain areas controlling emotion, which diminishes the effects of a painful stimulus. Medications that fall within this class include hydrocodone (e.g., Vicodin), oxycodone (e.g., OxyContin, Percocet), morphine (e.g., Kadian, Avinza), codeine, and related drugs. Hydrocodone products are the most commonly prescribed for a variety of painful conditions, including dental and injury-related pain.”

An alarming article in the Portland Press Herald  (4.13.15) indicated that a needle exchange program for drug addicts in Southern Maine has grown by 238 percent in just five years with nearly 565,000 needles exchanged in just the last year.

Plain and simple: drug abuse makes for an unsafe workplace which means employers need to be vigilant to symptoms and behaviors. Having a clear policy on drug use is a start but education and employee assistance can help prevent this destructive and harmful behavior.

The foundation of the social compact in workers’ compensation is that employers must provide a safe place of work. Employees, in turn, must perform their work safely. Today that includes accommodating aging workers, living healthy lives and never abusing drugs.

Article originally published in the Phoenix (April 13, 2015)

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MEREDA’s Morning Menu Event: Real Estate Partnerships: How to make money while keeping your investors, your bank and the IRS happy.

BreakfastLogoIn today’s complicated real estate market, rarely can one party bring all the resources needed to complete an ambitious real estate project. Whether it be capital, know-how or a below-market purchase option on a buildable lot in the East End, developers need partners! While partnerships present a great opportunity, they also have unique legal, tax and operating attributes that can ruin your longest friendship if not handled properly.

Who has operational control? When do the investors get paid? Will the bank accept this partnership structure? And why did the lawyers come up with this huge operating agreement? During this event, our legal and tax expert panelists will answer these questions and more as they review a series of sample cases to explore the do’s and don’ts of real estate partnerships. After the presentation, the audience will better understand how investors and project sponsors are compensated, important provisions to look for in the operating agreement, what bank lenders expect, and other unique tax and legal attributes of real estate partnerships.

Join the Maine Real Estate & Development Association (MEREDA) for breakfast on October 28 from 7:30 AM – 9:00 AM at the Portland Regency Hotel to hear from a panel that will discuss the legal and financial aspects of real estate partnerships. They’ll share examples ranging from two friends flipping houses for fun to seasoned developers collaborating on some of the largest or most notable projects in recent years.

Portland Regency Hotel
20 Milk Street
Portland, ME

Buffet Breakfast:  7:30 – 8:00 AM
Program:  8:00 – 9:00 AM

Registering for this Event:

Member:  $45 pp  |  Non-Member:  $55 pp  
Prices increase by $10 after October 22nd.

Payment is expected at the time of registration.   
No refunds will be granted to anyone who registers, but fails to attend or who cancels after October 22, 2015.

Visit for more information and to register.

This MEREDA “Morning Menu” Breakfast Event is Sponsored by Norway Savings Bank.


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