PCCA Journal 3rd Quarter 2010

The Official Publication of the Power & Communication Contractors Association 3rd Quarter 2010 Also Inside • Build America Bonds: An Innovative Tool for Municipal Financing • A Serious Hiring Approach • Round Two of Broadband Funding from Stimulus Bill Announced • Mid-Year Meeting Wrapup Improving Micro-Trenching The Vision Becomes Reality

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3rd Quarter 2010 President Kevin Mason ElectriCom, Inc. President-Elect Larry Libla W & L Constuction 1st Vice President Tommy Muse Aubrey Silvey Enterprises, Inc. 2nd Vice President Glen Amerine Amerine Utilities Construction, Inc. Treasurer Steve Sellenriek Sellenriek Construction Secretary Timothy D. Killoren North States Officer Directors Official Publication of the Power & Communication Contractors Association Board of Directors David Aubrey Okay Construction Tony Briggs Vermeer Manufacturing Ed Campbell Henkels & McCoy, Inc. James Dillahunty Henkels & McCoy, Inc. John Fluharty Mears Group, Inc. Herb Fluharty Mears Group, Inc. Matthew Gabrielse Gabe’s Construction Co., Inc. Jerrod Henschel Michels Corporation Dan Levac Preformed Line Products Todd Mix ElectriCom, Inc. Todd Myers Kenneth G. Myers Construction Robert Orr Sherman & Reilly, Inc. Larry Pribyl MP Nexlevel, LLC Brad Radichel Condux International Ron Tagliapietra Michels Corporation Matt Trawick Trawick Construction Co., Inc. Bryan Westerman MasTec, Inc. Publication Staff Publisher Timothy Wagner twagner@pccaweb.org Associate Publisher Cheryl Stratos stratosc@pccaweb.org Editor Michael Ancell mancell@pccaweb.org Advertising Sales Manager Victoria Geis vgeis@pccaweb.org Improving Micro-Trenching: The Vision Becomes Reality 18 By Kenneth W. Trawick One of the latest developments to stir up a buzz in fiber network deployments is micro-trenching. While narrow trenching is nothing new to the marketplace, micro-trenching refers to emerging technologies that allow trenches to be cut less than an inch wide and no more than 12 inches deep. The result is a faster, more efficient, less expensive way to install fi ber. A Championship Mid-Year at Torrey Pines 21 The 2010 PCCA Mid-Year Meeting at the fabulous Lodge at Torrey Pines featured education, networking, and lots of fun. PCCA members and their families heard from interesting speakers, enjoyed the La Jolla area, caught up with old friends, and made contacts that could prove beneficial for years to come. Build America Bonds: An Innovative Tool for Municipal Financing 27 By Rick Dutmer and Sabine Hoover Amidst today’s struggle for funding and financing there is a bright spot: the Build America Bond program—one of the success stories of the American Reinvestment and Recovery Act—which offers state and local governments a 35 percent subsidy on interest fees for taxable municipal bonds. Since its inception in March 2009, more than $100 billion of BABs have been sold, keeping many public projects afloat. There Is Always a Crazy Guy | By Stephen Spears 7 Human Resources 9 RDUP News 13 News Briefs 32 Safety News 37 PCCA Member News 38 Industry Calendar 42 Advertiser Index 42

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PCCA Journal|3rd Quarter 2010 7 Today, more than at any time in memory, bid openings have become an agonizing event. Classically, hard-bid publicly opened tenders have been submitted and read out loud. Proponents in the room who were not low bid (all but one) would walk out muttering, A) “How does that crazy guy think he’s going to make money at that price?” or B) “He’s going to lose his shirt,” or C) “He’s working at my cost.” Classically, that (winning?) company was leaving 3 to 5 percent on the table as margin between himself and his next lowest competitors. Recently, that dynamic has changed dramatically. The recession has brought with it a number of crazies who are multiplying faster than you can say “double-digit unemployment.” Those highly creative enterprises are now bidding at rates 20 to 30 percent below the prices of two years ago. Today, when the numbers are opened and read, the comments are more like, A) “What planet does he think he’s working on?” or B) “Which cartel is he laundering money for?” or C) “He isn’t as stupid as he looks; he’s brain dead!” Actually, it would be funny if it weren’t so terminally serious. In an industry where in normal times the very best companies end up with 5 percent pretax (PBIT), how in the world can 30 percent reduction in pricing rule? The simple answer is that it can’t and won’t. But relief is not around the corner. It would appear that widespread angst and suffering will be a short and midterm result of the market realities. Over the short haul, responsible companies will take hits basically induced by lack of work. Many of these companies will have to remodel their business and suffer those problems. In this period, new procedures, methods, equipment, and manpower retooling can and will take place. These will be coupled with their associated costs. At the midway point, many of the lowballers will be going out of business. At the same time, new and retooled competitors will be emerging. A consistently challenging work environment will prevail. In this period, some retooled entities will begin to feel comfortable in their new skin, others will choose to exit markets having been unsuccessful, and others will fail outright. Their bankers and bonding companies will then be dividing their assets. The future will then be substantially different. At the recent PCCA Mid-Year Meeting, an animated discussion of the ethics of this market in transition took place. My estimation is that predatory pricing, guerrilla techniques, loss leaders, low-balling, etc., as fueled by shrinking volumes of work available, are not unethical when driven by stupidity and desperation. Those who engage in these practices have their justifications (correct or not). The major question revolves around whether or not to join the fray. In conclusion, each of us must find our own way. We would all hope that our competitors would take the high road. However, that is not likely. What is more probable is that we must find a way to reshape ourselves to become more competitive, however painful that might be. We must recognize that survival mode probably doesn’t allow the profits of old. We also must recognize that our existing business models need to be streamlined or changed completely in order to compete going forward. Where obvious ethical violations are in play, we must police the system. Using substandard materials, employing illegal workers, and shortcutting specifications must be denounced energetically. Real ethical issues of overt dishonesty, bid rigging, and illegal behavior can be stopped fairly easily by whistle-blowing. Beyond that, the greater challenge—and a much more difficult task—is how we as individual companies can find survival and success. In my neighborhood, they have a saying: “Mentes y manos a la obra,” which literally translates to “Put your brains and back into it!” That, it seems, is the best way to capsulize what we must all do if we want to survive and thrive. Past PCCA President Stephen Spears is the president of Bonneville Construction in Hato Rey, P.R. There Is Always a Crazy Guy By Stephen Spears

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PCCA Journal|3rd Quarter 2010 9 The days of selecting and hiring candidates based on only a face-to-face interview are gone. Hiring practices are becoming more meticulous as organizations can utilize selection assessment and enhanced interview tools to make better decisions about new hires. According to a recent article in Forbes magazine: “Psychological scrutiny and rigorous simulations are fast becoming a requisite part of the interview process. Even the standard application-interview-résumé-and-reference-check formula has come under fire for being too soft and unreliable.” Forward-thinking companies, HR professionals, and business owners use a variety of resources to select the best candidate. Global HR Research approaches talent selection in new, exciting ways that combine the Multimodal Interview (MMI) with advanced backgroundscreening and drug-screening solutions. The MMI helps decision-makers understand the potential of each new candidate better prior to final selection. Prof. Dr. Heinz Schuler, director of scientific development for Global HR Research, developed the MMI (Schuler & Schmitt, 1987). The MMI addresses three complementary areas of candidate selection, characterized by specific diagnostic methods of personal psychology. 1. Constructs This area represents broad and stable cognitive and noncognitive traits that are typically assessed by psychological tests. Results are interpreted as signs for latent dimensions. Accordingly, these methods are characterized by (and developed in terms of) high construct validity and predict job performance based on dimensions that are relevant for a particular position. 2. Behavior Actual behavior in a diagnostic situation is regarded as typical and representative of a candidate’s future behavior outside the diagnostic situation. Methods such as work samples and assessment-center exercises predict job performance by assessing behavior that is routine and relevant for a position. As such, these methods are characterized by high content validity. 3. Biography and Background Finally, past behavior is assessed and analyzed. Methods such as biographical questionnaires or behavior description interviews are performed, based on a premise often attributed to Lord Byron: the best predictor of the future is the past. These methods are developed to maximize predictive validity. A Serious Hiring Approach Approach Industrial Candidate Selection in New Ways: Unify Talent Assessment, Screening, and Selection By Brandon G. Phillips and Prof. Dr. Heinz Schuler Human Resources Continued on page 10

PCCA Journal|3rd Quarter 2010 10 Global HR Research offers a new assessment named PRODUCTION, a new hybrid format that assesses the unique attributes of applicants for industrial positions. PRODUCTION integrates general mental ability (GMA) tests and work sample tests. GMA tests have been used for more than 100 years and are the most intensively investigated method of personnel selection. According to the Forbes article, AT&T was the first to put the practice into corporate use in the late 1950s. Today, two-thirds of 517 businesses surveyed by market research firm Aberdeen say they evaluate talent using a suite of behavioral, cognitive, critical, and psychological tests. By integrating selection assessments like PRODUCTION with face-to-face interviews, traditional background checks, and drug tests, you gain a clear advantage when it comes to selecting the right candidate for the job. Brandon Phillips is the CEO and president of Global HR Research, LLC, and Dr. Heinz Schuler is the company’s director of scientific development. PCCA member Global HR Research is an industry-leading pre-employment screening firm based in Bonita Springs, Fla. For more information, call (800) 790-1205 ext. 102 or go to www. globalhrresearch.com. References Schmidt, F. L. & Hunter, J. E. (1998). The validity and utility of selection methods in personnel psychology: Practical and theoretical implications of 85 years of research findings. Psychological Bulletin, 124, 262-274. Schmidt, F. L. & Hunter, J. E. (2004). General mental ability in the world of work: Occupational attainment and job performance. Journal of Personality and Social Psychology, 86, 162-173. Schmitt, N., & Mills, A. E. (2001). Traditional tests and job simulations: Minority and majority performance and test validities. Journal of Applied Psychology, 86, 451-458. Schuler, H., Mussel, P. & Schmidtborn, A. (2008). Crossing GMA and work samples: Hybrid tests as multimodal conceptualizations. Poster presented at the 23rd annual conference of the Society for Industrial and Organizational Psychology, San Francisco. Schuler, H., & Schmitt, N. (1987). Multimodale Messung in der Personalpsychologie [Multimodal assessment in personnel psychology]. Diagnostica, 33, 259-271. EECI10208-S01-01 BRON logo is a registered trademark of RWF Industries • Static or Vibratory • 84” (213 cm) Plow Depth • Left/Right Offset ADD-ONUTILITY PLOWS GET UNDERWAY Human Resources Continued from page 9

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PCCA Journal|3rd Quarter 2010 13 Agriculture Secretary Tom Vilsack on July 7 announced that more than 54,000 customers in 20 states will benefit from electric infrastructure improvement projects funded with loan guarantees provided through USDA. USDA Rural Development’s Rural Utilities Service is providing funding that will build 4,342 miles of new distribution lines, improve 2,966 miles of existing distribution lines, build 260 miles of transmission lines, and upgrade 58 miles of exiting transmission lines. Altogether, the announced investments total $1.55 billion. Below is a complete list of borrowers. Funding of each loan guarantee recipient is contingent upon the recipient meeting the conditions of the loan agreement. Colorado Gunnison County Electric Association, Inc. - • $3,842,000 loan to build 41 miles of new distribution lines and make improvements to 11 miles of distribution lines. Sangre De Cristo Electric Association, Inc. - • $13,770,000 loan to build 216 miles of new distribution lines and make improvements to 57 miles of distribution lines. Colorado and Utah Empire Electric Association, Inc. - $42,174,000 loan • to build 87 miles of new distribution lines and make improvements to 76 miles of distribution lines. Georgia Planters Electric Membership Corporation - • $9,200,000 loan to build 78 miles of new distribution lines and make improvements to 269 miles of distribution line. Coweta-Fayette Electric Membership Corporation • - $38,211,000 loan to build 116 miles of new distribution lines and make improvement to 301 miles of distribution lines. Indiana Southern Indiana Rural Electric Membership Corpo- • ration - $15,000,000 loan to build 256 miles of new distribution lines and make improvements to 109 miles of distribution lines. Iowa Eastern Iowa Light and Power Cooperative - • $32,000,000 loan to build 112 miles of new distribution lines and make improvements to 233 miles of distribution lines. Franklin Rural Electric Cooperative - $4,050,000 loan • to build 30 miles of new distribution lines and make improvements to 166 miles of distribution lines. Iowa, Missouri, and Oklahoma Associated Electric Cooperative, Inc. - $490,000,000 • loan to finance a 540MW natural gas-fired combined cycle power generating unit. Kansas Rolling Hills Electric Cooperative, Inc. - $9,303,000 • loan to build 61 miles of new distribution lines and make improvements to 12 miles of distribution lines. Kentucky Inter-County Energy Cooperative Corporation - • $15,000,000 loan to build 182 miles of new distribuRDUP News Continued on page 14 Round Two of Broadband Funding from Stimulus Bill Announced Agriculture Secretary Tom Vilsack on August 4 announced the funding of 126 new Recovery Act broadband infrastructure projects that will create jobs and provide rural residents in 38 states and Native American tribal areas access to improved service. The announcement is part of the second round of USDA broadband funding through the Recovery Act. In all, $1.2 billion will be invested in the 126 broadband infrastructure projects through funding made available through the Recovery Act. An additional $117 million in private investment will be leveraged, bringing the total funds invested to $1.31 billion. By leveraging Recovery Act funding authorized by Congress, USDA has been able to provide loans and grants of $2.65 billion to construct 231 broadband projects in 45 states and one territory. The remaining authorized funds will allow an additional $1 billion in loans and grants by September 30, the USDA said. The Recovery Act provided USDA with a total of $2.5 billion to invest in expanding broadband access to rural America. A complete list of projects with short descriptions is at http://www. whitehouse.gov/sites/default/files/ rss_viewer/broadband_project_descriptions.pdf or by contacting Mike Ancell at PCCA, mancell@pccaweb. org or (703) 212-7734. USDA Announces Improvements to Rural Electric Infrastructure

PCCA Journal|3rd Quarter 2010 14 tion lines and make improvements to 248 miles of distribution lines. Louisiana and Mississippi Washington-St. Tammany Electric Cooperative, Inc. • - $55,050,000 loan to build 517 miles of new distribution lines and 17 miles of transmission lines and make improvements to 36 miles of distribution lines. Minnesota McLeod Cooperative Power Association - $15,995,000 • loan to build 34 miles of new distribution lines and make improvements to 99 miles of distribution lines. Brown County Rural Electrical Association - • $8,000,000 loan to build 64 miles of new distribution lines and make improvements to 65 miles of distribution lines. Agralite Electric Cooperative - $7,000,000 loan to • serve 198 new and existing consumers build 43 miles of new distribution lines and make improvements to 38 miles of distribution lines. Missouri Lewis County Rural Electric Cooperative Association • - $5,993,000 loan to serve 280 new consumers, 46 miles of new distribution lines and make improvements to 21 miles of distribution lines. Ozark Border Electric Cooperative - $43,483,000 loan • to build 260 miles of new distribution lines, acquire 16 miles of distribution lines, and make improvements to 194 miles of distribution lines. New York Otsego Electric Cooperative, Inc. - $4,773,000 loan • to build 34 miles of new distribution lines and make improvements to 36 miles of distribution lines. Oneida-Madison Electric Cooperative, Inc. - • $1,397,000 loan to build 4 miles of new distribution lines and make improvements to 11 miles of distribution lines. North Carolina Blue Ridge Electric Membership Corporation - • $60,000,000 loan to build 306 miles of new distribution lines and 1 mile of new transmission line and make improvements to 70 miles of distribution lines and 6 miles of transmission lines. Carteret-Craven Electric Membership Corporation - • $15,000,000 loan to build 174 miles of new distribution lines and 1 mile of transmission line and make improvements to 16 miles of distribution lines. Ohio North Central Electric Cooperative, Inc.- • $12,8000,000 loan to build 34 miles of new distribution lines and make improvements to 129 miles of distribution lines. Hancock-Wood Electric Cooperative, Inc. - • $17,500,000 loan to build 50 miles of new distribution lines and make improvements to 159 miles of distribution lines. Washington Electric Cooperative, Inc. - $10,000,000 • loan to build 36 miles of new distribution lines and make improvements to 78 miles of distribution lines. South Dakota Codington-Clark Electric Cooperative, Inc. - • $4,894,000 loan to build 90 miles of new distribution lines and make improvements to 22 miles of distribution lines. Cam-Wal Electric Cooperative, Inc. - $3,977,000 loan • to build 61 miles of new distribution lines and make improvements to 44 miles of distribution lines. Oahe Electric Cooperative, Inc. - $2,730,000 loan to • build 26 miles of new distribution lines and make improvements to 26 miles of distribution lines. South Dakota and Minnesota H-D Electric Cooperative, Inc. - $7,595,000 loan to • build 42 miles of new distribution lines and make improvements to 81 miles of distribution lines. Tennessee and Kentucky Tri-County Electric Membership Corporation- • $16,000,000 loan to build 212 miles of new distribution lines and make improvements to 59 miles of distribution lines. Texas Bartlett Electric Cooperative, Inc. - $13,156,000 loan • to build 40 miles of new distribution lines and make improvements to 47 miles of distribution lines. Medina Electric Cooperative, Inc. - $13,705,000 loan • to build 92 miles of new distribution lines and make improvements to 38 miles of distribution lines. Brazos Electric Power Cooperative, Inc. - • $438,937,000 to build 237 miles of new transmission lines and make improvements to 52 miles of transmission lines. Virginia Rappahannock Electric Cooperative - $79,197,000 • loan to build 879 miles of new distribution lines and 3 miles of transmission lines and make improvements to 161 miles of distribution lines. Rappahannock Electric Cooperative - $12,603,000 • loan for the construction of headquarters facilities. Virginia and Maryland A & N Electric Cooperative - $31,600,000 loan to • build 103 miles of new distribution lines and 1 mile of new transmission line and make improvements to 54 miles of distribution lines. RDUP News Continued from page 13

PCCA Journal|3rd Quarter 2010 15 On July 2, the Obama administration announced investment in 66 new Recovery Act broadband projects nationwide (37 in rural America) that the grantees say will not only directly create more than 5,000 jobs up front, but will also help spur economic development in some of the nation’s hardest-hit communities, creating jobs for years to come. The $780 million in grants and loans through the Departments of Commerce and Agriculture have been matched by more than $200 million in outside investment, for a total public-private investment of nearly $1 billion. The announcement begins the U.S. Department of Agriculture’s second round of broadband funding announcements through the American Recovery and Reinvestment Act. According to a National Economic Council analysis, overall Recovery Act investments in broadband are expected to create tens of thousands of jobs in the near term and expand economic development and job opportunities in communities that would otherwise be left behind in the new knowledge-based economy. Recovery Act broadband projects help bring down the cost of private investment, attract internet service providers to new areas, improve digital literacy among students and workers, and help create new opportunities in employment, education, and entrepreneurship by wiring homes and businesses. A complete list of recent Recovery Act broadband award recipients by state is below: Alaska Copper Valley Telephone Cooperative Incorporated; • McCarthy Microwave Shot: $2,613,975 loan and $2,613,975 grant. Extend terrestrial wireless broadband connectivity and allow the transition from a low-bandwidth capacity satellite link to high-capacity middle-mile service. Alabama National Telephone of Alabama, Inc.; Cherokee • Broadband Initiatives Project: $421,578 loan and $1,264,739 grant. Provide the infrastructure necessary for rural subscribers to access advanced high-speed broadband services with advanced DSL (ADSL2+) technology. Portable Fiber Optic Cable Placement THE GMP BREEZE CABLE BLOWING MACHINE Stand-alone, portable FTTx machine 0.1 to 0.315 in. (2.5 to 8.0 mm) cable dia. Speeds up to 164 ft./min.(50 m/min.) into pre-installed micro duct Optional blown fiber conversion available .043 to .063 in. (1.1 to 1.6 mm) Compatible with micro duct O.D. from 5.0 to 12.0 mm AC powered (also requires compressed air) +1.215.357.5500 • GMPtools.com MADE IN USA Society of Cable Telecommunication Engineers Deploys Both F.O. Cable & Micro Ducts THE GMP TORNADO CABLE BLOWING MACHINE 0.25 to 1.25 in. (6-32 mm) F.O. cable O.D. Speeds up to 300 ft./min. (90m/min.) into pre-installed duct 1-2.5 in. (25-63 mm) dia. Also places multiple micro ducts of various sizes Hydraulic Power Pack included (also requires compressed air) +1.215.357.5500 • GMPtools.com MADE IN USA Society of Cable Telecommunication Engineers Continued on page 16 Obama Announces Rural Broadband Projects

PCCA Journal|3rd Quarter 2010 16 Arizona Hopi Telecommunications, Inc.; HTI Jeddito Mid- • dle Mile/Last Mile Project: $1,090,471 loan and $2,544,432 grant. Build infrastructure and provide necessary equipment to establish the fiber-optic connection between Hopi Telecommunications and the internet and provide a last-mile wireless (WiMax) broadband service to currently unserved premises San Carlos Apache Telecommunications Utility Inc.; • San Carlos Apache Telecommunications, Inc. - Broadband Offering: $5,244,585 loan and $5,244,585 grant. Provide fiber-to-the-premise services. Arkansas Northern Arkansas Telephone Company; Northern • Arkansas Broadband: $1,101,272 loan and $2,569,636 grant. Expand the provision of advanced fiber-to-thehome and advanced DSL (ADSL2+) services via a fiber-optic network with combined speeds exceeding 20 Mbps. Colorado Nunn Telephone Company; Nunn Rural Broadband • Project: $1,293,125 loan and $3,879,375 grant. Provide high-speed broadband service to rural residents and business using fiber-to-the-home technologies. Georgia Wilkes Telephone & Electric Company; Wilkes • Telephone Company Fiber-to-the-Home Build-Out: $33,678,779 loan and $14,433,762 grant. Provide a fiber-to-the-home wireline fiber-optic cable network configured in Passive Optical Network (PON) architecture and able to support speeds in excess of 20 Gbps. Darien Telephone Co., Inc.; Broadband Bridge to • Sapelo Island: $223,996 loan and $223,997 grant. Expand high-speed broadband service. Iowa The Farmers’ Telephone Company of Riceville, Iowa; • Farmers Telephone Company Fiber-to-the-Premises Overbuild: $9,367,926 loan, $9,367,927 grant and $4,683,963 private investment. Construct a fiber-tothe-premises network, allowing greater than 20Mbps broadband access. Grand River Mutual Telephone Corporation; Grand • River Mutual Fiber-to-the-Home Broadband Deployment Project - Service Area 4: $2,788,293 loan and $6,506,016 grant. Provide broadband service via a fiber-to-the-home network. Ellsworth Cooperative Telephone Association; • Ellsworth Fiber-to-the-Home Broadband Deployment Project: $1,580,609 loan and $3,688,087 grant. Provide high-speed internet service via a fiber-to-thehome network. Breda Telephone Corp.; Breda and Lidderdale Town • and Rural Fiber-to-the-Premises Overbuild: $783,572 loan, $1,828,337 grant and $2,611,909 private investment. Provide high-speed internet and video services. Iowa and Missouri Grand River Mutual Telephone Corporation; Grand • River Mutual Fiber-to-the-Home Broadband Deployment Project - Service Area 5: $6,081,258 loan and $14,189,603 grant. Provide broadband service. Illinois Shawnee Telephone Company; Shawnee’s Fiber- • to-the-Home Project: Focused Economic Revitalization & Sustainable Transformation of Southern IL: $6,249,989 loan, $1,102,940 grant and $1,000,000 private investment. Provide fiber-to-the-home network capable of 1 Gbps transmission speed. Kansas H & B Communications Inc.; FTTH - Rural Ellinwood • & Claflin, Kansas: $1,965,455 loan, $4,586,064 grant and $1,637,880 private investment. This fiber-to-thehome project will provide high-speed broadband in the underserved rural communities. J.B.N. Telephone Company, Inc.; JBN East Towns: • $1,000,568 loan and $2,323,576 grant. Construct fiber-to-the-premises throughout six towns. South Central Wireless Inc.; South Central Wireless • - Attica, Kansas Fiber-to-the-Premise: $560,000 loan, $557,621 grant and $575,973 private investment. Construct a fiber-to-the-premise infrastructure and offer voice and high-speed services. Kentucky Thacker-Grigsby Telephone Company, Incorporated; • Breathitt County Broadband: $2,222,542 loan and $5,185,932 grant. Provide a fiber-optic network capable of providing broadband internet access to end users, community anchor institutions, and public safety entities. Minnesota Federated Telephone Cooperative; Rural Appleton, • MN: $630,289 loan and $630,289 grant. Build a fiberto-the-premise system to deploy voice, video, and data services. Missouri Grand River Mutual Telephone Corporation; Grand • River Mutual Fiber-to-the-Home Broadband Deployment Project - Service Area 1: $3,418,682 loan and $7,976,924 grant. Provide broadband service via a fiber-to-the-home network. Northeast Missouri Rural Telephone Company; Green • City, MO Fiber-to-the-Premises: $3,595,810 loan RDUP News Continued from page 15

PCCA Journal|3rd Quarter 2010 17 and $3,595,810 grant. Provide greater than 20 Mbps broadband access. Montana Project Telephone Company; Scott St. Pryor Middle • Mile: $962,672 loan, $2,888,015 grant and $79,500 of private investment. Provide a fiber-optic network. Project Telephone Company; Crow Agency/ • Lodgegrass Fiber-to-the-Premise: $3,887,370 loan, $11,662,109 grant and $165,000 of private investment. Last mile project will provide fiber-to-thepremises where more than 50% of the locations do not currently have access to 5Mbs (up and down combined). Nevada Rural Telephone Company; North Fork, Tuscarora, • and Jarbidge Service Area Broadband Service Implementation: $728,700 loan and $1,700,300 grant. Extend advanced DSL (ADSL2+) high-speed broadband services. North Carolina French Broad Electric Membership Corp.; French • Broad Electric BPL Project: $621,492 loan $1,154,200 grant and $216,615 in private investment. Provide broadband internet access with fiber optics as the middle mile backhaul and broadband-over-power lines as the last mile medium. North Carolina and Tennessee Skyline Telephone Membership Corporation; High • Country Fiber: $8,695,588 loan and $20,289,706 grant. Expand fiber-to-the-home services via a fiber optic network with combined speeds exceeding 20 mbps. North Dakota Consolidated Enterprises, Inc.; CEI Broadband Infra- • structure Project: $5,782,361 loan $5,782,361 grant and $3,854,908 in private investment. A fiber-tothe-home expansion to CEI’s existing fixed wireless data system. Build out facilities to provide voice and video, as well as data services at speeds up to 100 Mbps. S R T Communications Inc.; Fiber-to-the-Premise for • the Rural North Dakota Community of Metigoshe: $2,214,758 loan, $2,214,758 grant and $2,200,000 in private investment. Fiber-to-the-premise project, utilizing fiber optic cable, will provide more than 20 Mbps broadband access to each household and business in the area, simultaneously. Oklahoma Pine Telephone Company, Inc.; Last Mile ILEC • Fiber-to-the-Home for Isolated Rural Southeastern Oklahoma/Choctaw Nation: a $15,081,959 loan and $15,081,958 grant. Provide a hybrid network including a fiber-to-the-home and fiber-to-the-node solution for existing service area. Wireless microwave backhaul is proposed in some extremely rugged portions of the network. South Dakota TrioTel Communications, Inc.; TrioTel Fiber-to-the- • Home Broadband Deployment Project: a $3,704,212 loan and $8,643,163 grant. Provide high-speed internet service via a fiber-to-the-home network. Venture Communications Cooperative; Cresbard, • Orient and Faulkton Exchanges: $2,614,957 loan, $2,614,956 grant and $1,743,305 in private investment. Provide needed broadband services and create the potential for increased business growth. Tennessee Twin Lakes Telephone Cooperative Corporation; • Twin Lakes Telephone Cooperative Corp.: Fiber to the Home Broadband Project: $16,076,833 loan and $16,076,834 grant. Fiber-to-the-premise project provides advanced broadband services to rural exchanges. Texas Blossom Telephone Company; Red River Broadband • Expansion Project: $833,303 loan, $1,944,373 grant and $814,000 of private investment. Provide middlemile connection to last-mile networks to provide affordable high-speed broadband services. Utah Central Utah Telephone, Inc.; Basin Broadband • Project: $620,724 loan and $1,862,070 grant. Enable installation of approximately 71 miles of middle-mile underground fiber optic cable and 60 miles of hybrid fiber/coax last-mile cable. West Virginia Hardy Telecommunications, Inc.; Hardy OneNet • Fiber to the Home Project: $9,494,483 loan and $22,153,791 grant. Build a fiber-to-the-home network. Wisconsin Marquette-Adams Telephone Cooperative, Inc.; • Broadband Edge Out Marquette-Adams Telephone Cooperative: $6,202,326 loan and $13,805,175 grant. Extend fiber optic service to unserved rural areas. Reedsburg Utility Commission, Inc; Reedsburg Utility • Commission Fiber Network Expansion: $5,239,168 grant and $2,303,357 in private investment. Extend an existing municipal fiber-to-the-premise network to surrounding rural area.

PCCA Journal|3rd Quarter 2010 18 Since its inception, the telecom industry has been fostered by innovation and adaptation. From the early days of stringing overhead telephone lines to today’s complex, multiservice underground networks, service providers have consistently worked to meet unwavering customer demand through efficient deployment practices. As telecom technologies advance, so must the methods by which they are installed and delivered to the end user. Increasingly, service providers rely on contractors to drive this process advancement. In a time of triple-play service offerings and 4G networks, service providers face a highly competitive marketplace. Add in the need to push fiber deeper into networks and to more homes with decreased capital expenditures and a struggling economy, and you are faced with a situation desperate for innovative ways to install fiber more efficiently, more economically, and with superior results. One of the latest developments to stir up a buzz in fiber network deployments is micro-trenching. And while narrow trenching is nothing new to the marketplace, micro-trenching refers to emerging technologies that allow trenches to be cut less than an inch wide and no more than 12 inches deep. The result is a faster, more efficient, less expensive way to install fiber. Whether a large telco, cable company, or government entity providing broadband services to their community, service providers benefit from this quick-moving deployment methodology. Permitting authorities are also drawn to micro-trenching because these sub-inch trenches are cut in existing rights-of-way and above existing utilities, thus avoiding utility service interruption and minimizing city street disruption. Streamlined permitting enables fiber deployments to begin right away and be completed faster and increases the likelihood for completion under tight time constraints. Challenges to Overcome As micro-trenching entered the market, however, not everyone was convinced that it was a magic fix for faster, cheaper, and better fiber deployments. Some believed that these shallow trenches didn’t protect fiber networks from water damage or compression from traffic. Others believed the networks were difficult to manage and prone to vandalism. And while these perceptions have been proven false, as with most emerging methodologies after initial application in the field, it was obvious that micro-trenching was not a perfect science—yet. The perfection of micro-trenching started to evolve as Dan Miller, vice president of telecom operations for Quanta Services, began incorporating micro-trenching applications into the company’s robust telecom service offerings. Miller envisioned a process that could cleanly cut and vacuum the sub-inch wide trench in one pass, reducing the manpower—and thus the budget—needed Improving Micro-Trenching The Vision Becomes Reality By Kenneth W. Trawick, President of Telecommunications Operations, Quanta Services

PCCA Journal|3rd Quarter 2010 19 for a job. He also knew that a better backfill material was needed to overcome the challenges of conventional micro-trenching solutions that were prone to shrinkage and consolidation as they harden, requiring more asphalt sealer to be used and increasing project costs. To solve the challenges of traditional micro-trench backfill, Quanta turned to Jeff Konczak, a cementitious chemist and founder of SuperGrout. Taking the exact specifications set by Quanta for its Q-Trench Solution, Konczak engineered an environmentally safe grout that when mixed with water becomes the consistency of chocolate milk. A two-worker crew then fills the trench using a simple mixer and wand. The fluidity of the grout allows it to surround the cable track without jeopardizing the integrity of the fiber conduit. Then, in less than 12 hours, the grout is structurally sound and the asphalt sealer can be applied. However, because there is no shrinkage with Micro Trench SuperGrout, the amount of asphalt sealer needed is significantly decreased, resulting in reduced cost per foot. Micro Trench SuperGrout, a product exclusive to Quanta Services’ Q-Trench Solution, also eliminates the common concern that fiber networks will become exposed in shallow trenches due to erosion and weathering. While Konczak’s grout is easier to remove than the roadways in which it will lie, it is immune to erosion and will keep fiber networks protected. Bringing the Solution to Market With Quanta’s experienced crews testing the Q-Trench Solution in markets across the United States, the pieces have all come together to form the complete solution that Quanta set out to develop for its customers. The Q-Trench Solution has proven to be the ultimate micro-trenching process by eliminating the fears associated with its predecessors while being the less expensive trenching option and is currently being used in markets such as Scottsdale, Ariz. With the Q-Trench Solution, crews can be reduced to one-third of the requirement for a traditional trenching product, project timelines are cut in half, and costs reduced by up to 75 percent compared to other solutions on the market. The bottom line for service providers and permitting authorities: Fiber deployments can move forward— even in a time that demands more efficient use of capital resources—quickly enough to qualify for broadband stimulus funding, fulfill continued customer demand, and meet aggressive deployment schedules. The result is a micro-trench solution performed in a manner that minimizes risk to other underground utilities and meets or exceeds high pavement integrity standards. For more information about the Q-Trench Solution, contact Ken Trawick, president of telecommunications operations for Quanta Services, at (713) 985-6466.

FMI Corporation is the premier investment banking and management consulting firm serving the worldwide engineering and construction industry. For more than 55 years, FMI has built a reputation for assisting our clients in the creation and realization of value in their firms. MERGERS & ACQUISITIONS | FINANCIAL ADVISORY SERVICES FMI is pleased to have served as an exclusive financial advisor in the following transactions: For more information, visit our website at www.fminet.com, or contact: W. Christopher Daum at 919.785.9264 / cdaum@fminet.com *Represented by FMI Riggs Distler & Company, Inc.* Cherry Hill, NJ has been acquired by Thirau, LLC a subsidiary of CVTech Group, Inc. Drummondville, Québec Engineering Associates, Inc.* and its affiliate EA Technical Services, Inc.* Alpharetta, GA were acquired by Quanta Services, Inc. Houston, Texas

PCCA Journal|3rd Quarter 2010 21 At a meeting that featured a triathlon champion as keynote speaker, it is fitting that the nearly 150 attendees hit a trifecta of their own at the PCCA Mid-Year Meeting in La Jolla, Calif., this summer: education, networking, and fun. Nobody swam, biked, or ran ridiculous distances, but PCCA members amassed plenty of information, insights, and contacts that will help them become champions in power and communication construction. The 2010 PCCA Mid-Year Meeting, July 7-10 at the fabulous Lodge at Torrey Pines, featured the aforementioned Ironman champion, Mark Allen, the always-informative Construction Industry Roundtable, a general session on ethics in construction, and a PCCA Young Construction Professionals program on decision-making skills. The Construction Industry Roundtable boasted a packed conference room, a lot of spirited discussion among association members, and a variety of relevant speakers, including David Villano, Assistant Administrator Telecommunications Program for the Rural Utilities Service; Dean Mischke from the Association of Communications Engineers; and Chris Daum and Mark Bridgers, construction economy experts from FMI. Villano told the PCCA audience that billions of dollars in the second round of federal stimulus funding will be announced before the end of the fiscal year. (See funding news on page 13.) Bridgers said the economy is getting better, “but it just doesn’t feel like it.” He said that non-building construction is the only construction sector showing growth, which means more competitors will be entering the markets. On the fun side of the ledger, the PCCA crew sailed on actual America’s Cup boats, surfed on the Pacific, perused the shops in downtown La Jolla, and of course played the PCCA Golf Tournament on the world-famous Torrey Pines course. And throughout the four days, whether attending to business or enjoying a cold beverage, PCCA members and their families caught up with old friends, enjoyed each others company, and made contacts that could prove beneficial for years to come. Hopefully the photos on the following pages will bring back joyous memories for those who attended and perhaps pique the interest of those unable to attend. We hope to see you all at the 2011 PCCA Convention, March 11-16 at the Ocean Reef Club on Key Largo, Fla. A Championship PCCA Mid-Year the fecta of ear MeetBrid econo Villano ence that b the second rou PCCA President Kevin Mason and his wife Debbie 2010 Mid-Year Meeting Lodge at Torrey Pines

Left, RUS’s David Villano discusses the second round of stimulus funding for broadband as Kevin Mason looks on. Above, paying rapt attention at the Construction Industry Roundtable are (from left) John Fluharty, Todd Mix, Bob Breeden, Steve Spears, and Ken Trawick. Enjoying the Welcome Reception are Mark and Marcie Smith and Larry and Karen Pribyl. Left, Andy Patron leads the session on ethics in construction. Below, Jeff Brown, Tate Johnson, and Gray Childs get innovative in the egg-drop challenge during the YCP program. Steve Pauk with Lori and Don Stephens From left, Jerrod and Toni Henschel, Heath Sellenriek, and Matt and Danielle Gabrielse At the Associates Meeting are David Pierce, Marty Meyers, Will LeBlanc, Brad Radichel, and Chris Daum. From left, Tommy Nix, Sheena and Jameson Ringger, and Troy Shoup Lorrie Levac and Nancy Killoren enjoy a cool summer evening. Matt Trawick, Craig Amerine, Ashley Weigand, Missy Amerine, and Jeff Brown

Right and below, PCCA President Kevin Mason welcomes members to the Opening General Session. Coquette Fluharty, Chris Fluharty, Cheryl Stratos, Bonnie Tagliapietra, and Kati Trawick Right and above, Mark Allen captivated the audience with tales from the grueling Ironman competition. All smiles (mostly) from the Bridger clan: Bryant, Mark, Catherine, and Malone. Tending to Board business are Herb Fluharty, Matt Trawick, Todd Mix, and Tony Briggs. Paul Rogers, James Henkels, and Paul Henkels, Jr. Marlene, D.J., Madison, and Dale Richardson Lyn Thulin, Herb Fluharty, Kevin Mason, and Greg Charney Jay and Robin Lee

PCCA Journal|3rd Quarter 2010 24 PCCA members spent an afternoon sailing on San Diego Bay in boats that once raced in the America’s Cup. Left, the Abracadabra cruises past the USS Midway. Middle, Jay Lee, Bob Breeden, Kevin Mason, and Todd Mix work the boat’s grinders while Kristen Mason, Denise Breeden, Debbie Mason, and Carol Charles enjoy the view and the breeze. Right, Ron Tagliapietra steers the Stars & Stripes toward the finish line while Bonnie wonders if he should stop and ask for directions. Though it will never be confused with the U.S. Open at Torrey Pines, the PCCA Golf Tournament was fun-filled and truly memorable. Clockwise from top left, Dan Levac and Mike Charles; Jim and Suzane Dillahunty, Colleen and Dave Moore; Kristin Briggs and Mandy Trawick; Matt Trawick, Tony Briggs, Bryan and Judy Westerman; Tommy and Brenda Muse, Glen and Pat Amerine; Tim Killoren, Will LeBlanc, Paula and Guy Fugal.

2011 PCCA Convention March 11 - 16 • Ocean Reef Club • Key Largo, Florida Keynote Speaker Dave Barry

PCCA Journal|3rd Quarter 2010 27 States across the country continue to struggle with a critical loss of revenue, making crippling cuts to programs and waiting precariously for an uptick in receipts and tax revenue. As the economy improves slowly, some have lamented a jobless recovery—a sign of a changed landscape. Plentiful funding is as much a memory as adequate water flow in the western states; at the federal level, the deficit is reaching increasingly staggering depths. Amidst this struggle for funding and financing there is a bright spot: the Build America Bond (BAB) program—one of the success stories of the American Reinvestment and Recovery Act (ARRA)—which offers state and local governments a 35 percent subsidy on interest fees for taxable municipal bonds. Since its inception in March 2009, more than $100 billion of BABs have been sold, keeping many public projects afloat. Speculators believe a two-year extension of the BAB program will pass the Senate, lowering the subsidy to 30 percent; many more agree that long-term solutions to state and local budgetary shortfalls will be found through new funding tools like BABs. For designers and contractors, the following discussion of the Build America Bonds program presents an opportunity to familiarize themselves with increasingly vital public financing mechanisms and to think about new ways of engineering funding solutions for projects. A New Bond to Revitalize Investment Build America Bonds are taxable bonds for which the U.S. Treasury Department pays a 35 percent direct subsidy on interest to the issuer to offset borrowing costs. The 35 percent subsidy on interest reaches investors in the form of tax credits or direct payments and provides a target efficient transfer of federal funds to state and local governments. For the BAB program to work, it was crucial that municipal borrowing costs were lowered to the point where they could offer competitive rates to buyers. A viable alternative to municipal tax-exempt bonds, the conditions for taxable BABs are slightly stricter, in that they can be used only for new capital improvements or projects. As a result, states and municipalities have used proceeds from the sale of BABs to supplement general construction funds or to jump start capital projects long on the back burner. (See Exhibit 1 below.) Favorable interest rates have attracted foreign investors, pension funds, and retirement accounts, entities that would otherwise not traditionally participate in the municipal bond market. Furthermore, long-term maturities of around eight to 30 years provide an alternative to the shorter maturities of tax-exempt bonds. Comprising 20.5 percent of the $2.8 trillion municipal bond market in 2010, according to Treasury figures, the popularity of the program is apparent. Build America Bonds: An Innovative Tool for Municipal Financing By Rick Dutmer and Sabine Hoover Continued on page 28

PCCA Journal|3rd Quarter 2010 28 The BABs provision within the March 2009 stimulus package has been credited by Reuters, among others, with breaking a freeze in the municipal bond market. Tax-exempt bond sales took a sharp dive at the end of 2008, and the availability of a new market—BABs— likely hastened a return to activity for that sector of the financial market. Government agencies like state transportation departments, municipal water authorities, and school boards have jumped on the funds, largely using them in combination with traditional tax-exempt bonds to attract a diverse cross-section of investors. In managing their budget allocations, state agencies continue to operate according to their predictable debt structure, in many cases choosing to sell taxable BABs. Speaking with FMI, Les Brodie, CFO, Oregon Department of Transportation, said, “For us it was logical to look at Build America Bonds for our long-term bonds. The 35 percent reimbursement was more attractive for the longer-term maturities and the tax exempts were more attractive for the shorter maturities.” Brodie noted that taxable and tax-exempt municipal bonds each have upsides and drawbacks. “Being able to do a hybrid of the two provided an opportunity for saving costs,” he said. BABS Support Infrastructure Needs Although there is no evidence that the BAB program has spurred dramatic growth in design and construction, the estimated $12 billion of savings through taxable bonds sales for local governments1 is proof that the program forestalled a worse decline. Considered a low-default risk in spite of states’ illiquidity, the bonds have easily attracted investors, with some of Wall Street’s biggest players buying up the municipal bonds. Speaking with FMI, Ken Simonson, chief economist for the Associated General Contractors of America, said he believes that without BABs, the construction industry “probably would have had a steep cutback and no easy way to make up the difference.” It is his hope that eventually, “states will start to issue more bonds and undertake more construction as a result of having this additional financial tool.” The BAB initiative has long been in the works. Jack Basso, director of program finance and management for the American Association of State Highway and Transportation Officials (AASHTO), recalls an effort five years ago to push a taxable bonds program through the Senate. “I see it as a long-term part of the solution...,” he said. “The bonds are clearly not the whole solution because the funding needs are so extensive. Without them though, we’ll just have one more big hole on top of the bigger hole we’re trying to fill.” Basso and AASHTO leadership are working with the U.S. Department of Transportation to advocate a continuation of the highway and transportation bill. In the proposed extension to the BAB provisions, which is due to expire on December 31, water and wastewater projects are exempt from the volume cap imposed on states. Given the massive infrastructure demands of the water and wastewater sectors, the legislation could prove vital. Roger Marumoto, treasurer of the Metropolitan Water District of Southern California (MWDSC), said that BABs have been used to supplement tax-exempt revenue bonds issued to finance Metropolitan’s construction projects. “We sell bonds to fund a myriad of projects. There could be literally anywhere from 50 to over 100 projects all going on at the same time,” he said. In recent years, the MWDSC has funded a $1 billion 36-mile pipeline. “We work really hard on doing a good job of estimating what our construction funding needs will be,” Marumoto said. “We also try to use the most efficient mechanism to fund our construction needs, and the BABs are a great tool, and they have provided savings.” Some municipalities will continue to be constrained by voters as to which funding initiatives they can Build America Bonds Continued from page 27

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