Arkansas HVACR NewsMagazine April 2018

Published by Arkansas HVACR Association

Arkansas’ First and OnlyHVACRNews Magazine

By Arkansans

For Arkansans

Table of Contents

Chapter Meeting Schedule

PG 3

Feature Article (Bill Ligon - Planning for Profit)

PG 6

Editorial & Opinion Governor’s Mansion

PG 12

Carbon Monoxide & Natural Gas – Ignorance, Carelessness, It Doesn’t Matter Deregulation Vortex Mania

PG 18

Business & Marketing Tips 7 Ways to Guarantee Customer Loyalty Tech News Bigger Not Better When It Comes To Cooling State, national, chapter news Geo Is Back

PG 29

PG 39

PG 19

Sanders Supply Celebrates 40 Years

PG 22 PG 24 pg 26

Man Could Get 10 Years for Selling Bootleg 22

EMC Vehicle Loss Control

Code, Regulation, Legislation Little Rock Decision on Duct Testing Postponed Till April Meeting

PG 35

Education News

PG 45

Training Programs

Premier Dealer Program

PG 49

Rebate Programs & Incentives

PG 37

Recipes, Eateries, Huntin’, Fishin’ & Fun Nana’s Key Lime Pie

PG 53

chapter meetings

Central Chapter 4 th Tuesday

February 27 March 27 April 24

6:00 Meal : 6:30 Program Location: Golden Corral

5001 Warden Rd North Little Rock

Hot Springs Chapter 1 st Thursday 6:00 Meal : 6:30 Program Location: Smokin’ in Style BBQ 2278 Albert Pike Hot Springs 501/767-9797

February 13 March 13 April 10

February 6 March 6

Ft. Smith Chapter 1 st Tuesday

5:30 Meal : 6:00 Program Location : Golden Corral 1801 S. Waldron Road Fort Smith 479/484-1040 North Central Chapter 4 th Thursday 6:00 Meal : 6:30 Program Location : Western Sizzlin’ 905 Hwy 62 – 65 North Harrison 870/741-1545

April 3 May 1

February 22 March 22 April 26 Meeting at ASU Mountain Home May 24

chapter meetings

North East Chapter 3 rd Tuesday

February 20 March 20 April 17

6:00 Meal : 6:30 Program Location : Western Sizzlin’ 2405 East Highland Jonesboro 870/ 336 - 4417

North West Chapter 2 nd Thursday

February 8 March 8 April 12

6:00 Meal : 6:30 Program Location: Golden Corral 2605 Pleasant Crossing Drive Rogers 479/986-9201 South Central/ Camden 1 st Thursday 6:00 Meal : 6:30 Program Location: Ouachita Partners for Economic Development 625 Adams Avenue Camden 870/ 836 - 9354 South West / Texarkana 3 rd Thursday 6:00 Meal : 6:30 Program Location: SW AR Electric Co-op 2904 E. 9 th Street Texarkana 501/487-8655

February 1 March 1 April 5

February 15 March 15 April 19 Call for meeting Location

S tate, National, Chapter News Feature Story

“Planning for Profit” Article by Bill Ligon If you own an HVAC company, you’re also running many businesses, which may include residential new construction; residential replacement; HVAC service; commercial service; commercial new construction; and duct cleaning. Ask yourself the following questions: 1. Do you know your sales in each department? 2. Do you know the “cost of sales” for each department? 3. Do you know the gross profit/gross margin percentage for each department? 4. Do you know your overhead expenses for each department? 5. Do you know your net profit for each department? If you answered yes to any of those questions, you may very well be a “Five Percenter.” The “Five Percenters” are those contractors who earn between 10% and 25% net profit before taxes. If you answered no to one or more of those questions, you may be running your company by the “seat of your pants” method. My guess is that 90% or more contractors do not departmentalize. That leaves about 10% or less in the entire HVAC industry that really know how to price correctly. We don’t departmentalize because, either we don’t know how or we don’t realize just how necessary departmentalization is when calculating your selling price.

Bill Ligon “Planning for Pro fit” 18 Years &

Still Relavent Today For those who remember the Heat Pump Association days, Bill Ligon is an icon of financial success. Bill’s “Planning for Profit” became the game plan for many who previously did not know the difference between margin and mark up. His teaching, along with others like John Collier and Stu Doctor, helped many companies not only survive but succeed. From tool belt to businessman was and still is a tough transition—from being behind at the supply house to taking advantage of the early pay discount. It is a transition that everyone faces but, without help, many don’t make. As an industry consultant, Bill developed Profit Forecaster, the HVAC service management software package, Up-Sell Solutions, a customized presentation manual, and “Planning for Profit”, a four part program to put a dealer on the track toward developing and managing a profitable business. The cool thing about Bill for Arkansans--he lives in Hot Springs Village so he is readily available without expensive travel. Bill is available at 888/320-9220. His web site is .

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If you don’t learn your overhead by department, then you’ll be doomed forever to have the competition setting your price! You must know the overhead in each of those businesses. Importance of Gross Margin If you’re going to show a profit, your gross profit dollars must be larger than your overhead dollars. That’s Business 101. When you sell a job, you must have larger gross margin dollars than overhead dollars in that department. The gross margin percentage is the most important percentage in a business. Simply put, the gross margin must be larger than the overhead percentage or you’ll lose money! Therefore, if you know your overhead in each department, then all you have to do is generate enough gross margin to cover the overhead and any profit you want to make! How do you price a job? The three best methods are the divisor method, dual overhead, or labor only recovery method. The divisor method for this exercise, and from my experience, this method works very well in residential jobs 80 to 90% of the time. The dual overhead method is an alternative method that is a more accurate method, and is particularly important when you have a high direct labor cost to material cost. The labor only recovery method is used for the same reason. Whichever method you use, you must know your overhead by department. Departmentalization is the Key Because I didn’t departmentalize, I had no clue what my sales were, or which

department was making or losing money. Each time you make a sale, it should be coded as service, replacement, new construction, etc. You should also know cost per sale. That’s the equipment you buy, and everything that goes into installing the HVAC equipment. The overhead in a typical replacement department is between 30-40%. In a typical service department, the overhead is between 50-60%. If you don’t know your overhead by department, how can you calculate the correct selling price? How Direct Labor Method Works First, assign a percentage of the direct labor that each employee spends in each department. A direct labor employee is an employee that works to repair or replace equipment. For example: the service technician may spend 65% of his time doing service, 17.5% doing start-ups in new construction, and 17.5% installing replacements. You must repeat this exercise (assigning a percentage to departments) with all direct labor employees. Once this is done, each department will have a dollar value of direct labor. Divide total labor dollars in each department by total of all direct labor, for a percentage you can apply to all overhead items. There are a few exceptions, but it’s a simple, yet accurate way to departmentalize. Who Prices Your Jobs? The average net profit for our industry is, by some estimates, as low as 2.5%, or as high as 3.5%. The average salary

S tate, National, Chapter News Feature Story

How to Departmentalize The service technician may spend 65% of his time doing service, 10% doing start-ups, and 25% doing replacements. You must do this percentage estimate with all of your direct labor employees. 1. Add up all the annual direct labor dollars for each department. 2. Add up the total of all departments direct labor dollars. 3. Divide the total direct labor dollars into each department’s total. This will give you a department percentage of direct labor. 4. Multiply each overhead expense (rent, insurance, utilities, etc.) by the department percentage. (continued next page)

for contractor/owners is about $36,500 per year. It was recently reported that, among businesses doing about $750,000 per year, the owners’ salaries averaged $40,000 per year. To price a job correctly, you must know “cost of sales,” which includes equipment, materials, direct labor, subs, warranty reserve, and permits. (See Table 1). TABLE 1 If the cost of a sale is $3,906, and your replace-ment department overhead is 28%, and your desired net profit is 8%, use the divisor method: A. 28% + 8% = 36% B. 100% – 36% = 64% (your divisor) C. $3,906 = $6,103 (the correct selling price) Proof: Multiply correct selling price ($6,103) x overhead (28%) = $1,709 Cost of sales ($3,906) + overhead ($1,709) = ($5,615) Selling price ($6,103) – (cost + overhead) ($5,615) = Net Profit ($488) Net Profit ($488) / Selling price ($6,103) = ($488) or 8% The selling price covers both the overhead and the desired net profit. (The unknown in the equation is department overhead)

If you keep doing what you are doing, You’ll keep making the same money . Bill Ligon

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Example of Daily Tracking: Department overhead for the month: $5,000 Sales: (assume entire job completed within period) • Bob the Builder – $7,000 job @ 33% gross margin = $2,310 • Smith Construction – $6,000 job @ 25% gross margin = $1,500 • Grandy Construction – $3,000 job @ 38% gross margin = $1,140 • Total gross profit dollars earned for period = $4,950 • Condition of department at end of month for the period = $50 • The department is short by $50. To show a profit, you must earn enough gross profit dollars to exceed overhead dollars. In other words, the gross margin percentage must be greater than the overhead percentage.

How to Track Your Progress Daily 1. Forecast the department overhead dollars that will be spent for the entire month. 2. Record the gross margin dollars you expect to earn on each sale.

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furnace must have combustion air. They also know that encapsulating a crawl or attic space shuts off required combustion air. Before we go further, I suppose we should consider what happens when combustion air is reduced and the furnace is starved for air. After visiting with some of the most experienced people in our industry and the Eighth Edition, Refrigeration and Air Conditioning Technology by Tomczyk, Silberstein, Whitman, and Johnson, I came up with this answer. When a furnace is starved of air (oxygen), the flame begins to die back because it lacks sufficient oxygen. For a gas furnace to burn properly it needs 2 ft 3 oxygen per 1 ft 3 natural gas. Since air is about 21% oxygen, it actually takes 10 ft 3 air per 1 ft 3 natural gas for perfect combustion. In perfect combustion, natural gas is only about 9% of the mixture. There is a range but for the purposes of this conversation we’ll use 9%. When the unit is starved of air and the gas mixture reaches 15%, it won’t burn. As the mixture reaches 15% it will produce carbon monoxide and soot. The mixture is too rich. It should be noted that in normal combustion and ventilation the natural gas to air ratio is more normally 1 to 16. As you can see, air is super important to the proper operation of a furnace. We have established 1. the need for proper combustion air; 2. encapsulating a space where a furnace is located greatly

Governor’s Mansion

Carbon Monoxide? Natural Gas? Everyone Makes Mistakes

Ignorance, Carelessness

It Doesn’t Matter

Our Association has been promoting the need for licensing and continuing education for years. I won’t bore you with the history but a recent event reinforces the fact that the HVACR industry serves the public with products and services that relate to health and safety of the public. In this case, the “public” was the Governor. As part of a remodel, a new 80% gas furnace was installed in the crawl space and the crawl space was encapsulated. The crawl space was encapsulated to defend against a rat and mice problem. (This is important to note because the decision to encapsulate was not made with regard for energy efficiency and stopping cold winter air or humid summer air. Had it been, perhaps the relationship between the furnace and stopping air flow would have been considered.) Anyone in the HVACR industry that is keeping up with code and building practices knows that a

reduces the available and necessary combustion air. Now we should ask, “Why did anyone participate in a furnace install where there would be insufficient combustion air?” Well, ignorance and carelessness are two options. As one that suffers from IC (ignorance and carelessness), I do not want to appear to cast stones. Our purpose is not to name names, cast blame, or to embarrass anyone. Our purpose is always about education and protecting the health and safety of the public. With that in mind, let’s again ask the question, “Why did this happen?” Here are a few scenarios. 1. The HVAC contractor did not know that the crawl space would be encapsulated. 2. The HVAC contractor did not know that encapsulating a crawl space would reduce the necessary combustion air for the furnace. 3. The crawl space encapsulator did not know that a furnace would be installed in the crawl space. 4. The crawl space encapsulator did not know that encapsulating a crawl space would reduce the necessary combustion air for the furnace. 5. The designer / engineer / remodeler / construction contractor did not know the inter-relationship between encapsulation and combustion air. 6. The designer / engineer / remodeler / construction contractor did not convey the necessary information to the HVAC contractor.

You can check the box that you think is the most likely reason for this mistake. Frankly, I think you can check more than one. Regardless of where you think the ignorance or carelessness needs to be assigned, the result is the same. Oh yes, what was the result? Well, after the installation of the furnace and the crawl space encapsulation, the Governor smelled gas. He called the appropriate folks who called the appropriate folks and they determined there was indeed a problem; however, they could not find a gas leak. (Just a note—don’t you like the way I am going out of my way not to name names; i.e., appropriate folks called appropriate folks?) Anyway, two different and credible companies checked for gas leaks and could not find one. So, how did the Governor smell gas? Here it gets a little complicated and some of the following is the result of educated guesses / assumptions. 1. The unit was being starved of air because of the crawl space encapsulation. 2. The flame was burning rich so not all the gas was being consumed. (This is important because, if the gas was consumed, the added ordorants which make natural gas smell would have been consumed.) 3. The exhaust pipe was B-vent but was connected to the furnace with flex pipe snaking around the unit to get to the solid B-vent.

4. Due to friction and restriction in the vent pipe, some of the fumes were not expelled but spilled out of the furnace. 5. The return air was very leaky because the installing contractor did not seal the connections. 6. Fumes spilled from the furnace were sucked into the return air and then distributed into the office of the Governor—thus the smell of gas. OK, whether or not you buy this explanation is not the point. The point is that ignorance or carelessness created an unhealthy and potentially dangerous environment for our Governor. This is very important to him for very personal reasons; i.e., his health. It is important to our industry and the legislature because it illustrates the fact that the HVACR industry is involved in the health and safety of every home and business in Arkansas. Licensing and continuing education are important and should be required for those who desire to be in the HVACR business. I have heard some say, “It should be buyer beware!” OK, I don’t like people telling me what to do either but how many Governors or regular citizens must we put at risk and potentially kill before we realize that the HVACR industry must be regulated. A license says the person has some modicum of knowledge and experience that would allow them to

practice craft. Continuing education says that they are keeping current on code and health and safety issues which protect the public. This particular incident involves the Governor and therefore many will be interested; but, what about the family in Ft. Smith that almost died from carbon monoxide poisoning this winter. You may not know them and you may not think them as important as the Governor; but, they are even more important to their family and friends. Their story is one too often repeated across the state after a hail storm. The roofer disconnected the roof vent. The furnace fumes, carbon monoxide, dumped into the attic, entered the house and the family was two hours from being dead when the paramedics and fireman arrived. Many people think they have the flu when in reality they have early stages of CO poisoning. It is all too common. According to the EPA, unintentional CO poisonings are responsible for about 500 deaths and 15,000 visits to emergency rooms annually. Carbon monoxide (CO) is the most common cause of poisoning death in the United States? Perhaps people should just purchase a carbon monoxide detector rather that require licensing and continuing education of the HVACR industry. One thing is sure, everyone should have fire and carbon monoxide detectors throughout their home; however, the Carbon Monoxide Saftey Association says, the HVACR

“CO alarms are not designed for low- level CO monitoring and there have been questions about whether CO alarm standards are protective enough, especially for sensitive groups such as older adults.” When an Arkansan calls a HVACR dealer, they should have the confidence that they have the knowledge and experience to have earned a license, have maintained their knowledge though continuing education, and have a minimum of insurance should a problem occur. I can assure you that every consumer assumes that the state would not allow someone to be in business without these minimal requirements. We are currently in a wave of deregulation, much of which we can agree; however, that wave threatens to wash away the protection that Arkansans want and deserve. Most Arkansans want deregulation but they also want a heating and air conditioning contractor that is licensed, current in their knowledge, and insured. You see, education is the key to solving the Governor’s problem. Education is the key to preventing the problem that almost killed the Ft. Smith family. Education is the cheapest form of regulation. Education takes care of carelessness as well as ignorance. You see, when a person not only knows how to do something but also knows the possible risks of not doing it correctly, they’ll pay attention and do the job right. Our Association stands firmly behind legislation that protects the

health and safety of Arkansans. Fortunately, the Governor’s nose was working well and he alerted the appropriate people. The question is, should he have had to sound the alarm? If the install had been done correctly, if the designer, the encapsulator, and the HVAC contractor had been knowledgeable and working together, the Governor’s nose could have been on the blink and he still would have been safe. I just hope that the Governor’s nose works as well when odorous legislation makes its way toward his desk. I trust that he will sound the alarm then as well as he did when the gas fumes were making their way into his office. We must protect the health and safety of Arkansans

Political Nose

While we don’t have the authority on the state level to change federal policy, my fellow governors and I do have a duty to protect our states’ citizens, and we have a personal responsibility to act when we have the power to do so. Asa Hutchinson

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microturbines, small wind and combined heat and power were left to expire at the end of 2016. Since then it was an uphill fight, as GEO and its allies worked diligently for parity with the solar industry through bills in both the House and Senate. GEO’s message to legislators was ultimately heard: Congress shouldn’t be picking winners and losers when it comes to renewable energy and fairness in tax policy. “And now we have finally achieved parity with solar,” said Dougherty. Coalition partners included all of the “orphaned” clean energy technologies, and among others, the National Rural Electric Cooperative Association, the National Association of Homebuilders, and the Air Conditioning Contractors of America. In the days prior to passage, GEO joined a larger coalition of business, energy, transportation, real estate, and agriculture stakeholders who gathered forces to make their case for including tax extenders in the CR that passed the Senate and the House. GEO’s relentless campaign to regain GHP tax credits included several Executive Fly-Ins to Washington DC in 2017, plus GEO Board Members, staff and industry volunteers making hundreds of visits to House and Senate legislative offices. Grassroots efforts by GEO members and supporters included job site visits set up for key legislators to show them firsthand the value of GHPs and plead the industry’s case for tax credit parity with solar. “Achieving this critical milestone for our industry couldn’t have been accomplished without the positive and aggressive leadership of GEO staff, GEO

GEO IS BACK Geothermal Heat Pump Tax Credits Reinstated

The U.S. geothermal heat pump (GHP) industry scored a victory for its workforce and their employers as federal legislation was passed to extend federal tax credits for residential and commercial installations of GHPs. The measure was included in the Continuing Resolution spending bill approved by Congress. The reinstated GHP tax credits are retroactive to Jan. 1, 2017, and extended to Jan. 1, 2022. The language also changes an important consideration for commercial GHP projects, making them eligible if commenced by Jan. 1, 2022 rather than placed in service. The reinstated GHP tax credits are retroactive to Jan. 1, 2017 , and extended to Jan. 1, 2022. “Today’s action by Congress finally fixes the inequity created two years ago when tax credits for solar installations were extended through 2021,” stated Geothermal Exchange Organization (GEO) President and CEO Doug Dougherty, “Credits for technologies including GHPs, fuels cells,

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manufacturers and members, our DC lobbying team—and the tireless efforts of my fellow board members during several Fly Ins to Washington during the past two years,” said GEO Board Chairman Joe Parsons (EarthLinked Technologies, Inc.). “Our hard-fought victory for the GHP industry helps ensure a bright future for our technology,” said Dougherty. “It will stem the loss of jobs we now face, provide more time to overcome market barriers, achieve economies of scale, and help spread the environmental and economic benefits of GHPs across America.” # # # # # # # GEO—the Geothermal Exchange Organization— is a non-profit 501(c)(6) trade association representing the interests of all businesses involved in the geothermal heat pump industry across the United States. GEO provides outreach to the industry, public and government about the economic, national security, and environmental benefits of geothermal heat pump systems for residential, institutional and commercial applications. For more information, visit . Phone: (888) 255-4436. Email: .

Unsure if geothermal should be part of your product line? Contact a factory or distributor rep. They can fill you in on the ups and downs, where to get training, where to get a loop contractor. Run the numbers and you may find that geothermal is a good mix for your motivated, high efficiency customer. 30% Tax Credit

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Sanders Supply, Inc. is a family-owned business in Hot Springs, celebrating an incredible 40 th anniversary this year! But their story really starts well before then. Ed B. Sanders opened an independent plumbing company in 1929. This evolved into Ed Sanders and Son Mechanical Contractors after his son, Billy E. Sanders, joined the company in the 1950s. In 1974, Ed retired and Bill took over ownership. Soon thereafter, Bill and his wife Charlotte founded Sanders Plumbing Supply, Inc. and opened their new location at 107 E. Belding. Today the same location boasts a premiere showroom for plumbing, lighting, hardware, and accessories as well as a wholesale store for contractors and plumbers.

Ed R. Sanders, Bill and Charlotte’s son, joined the company in 1986 after graduating from the University of Arkansas with a degree in accounting and receiving his CPA designation. Sanders’ first expansion was in 1987 with the opening of their Valley Street branch, specializing in Heil heating and air conditioning supplies. Presently the company includes eight more HVAC locations and a distribution center serving contractors in Hot Springs, Russellville, Benton, Fort Smith, Jonesboro, Batesville, Harrison, Springdale, North Little Rock, and surrounding areas. Stop in any location and wish them a happy 40 th anniversary and take advantage of that Outrageous Sanders Service. Whether your job is commercial or residential, see the folks at Sanders Supply, Inc. for all your HVAC needs!

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Man pleads guilty to illegal sales of R-22. Could get 10 years. By CITY NEWS SERVICE Orange County Register LOS ANGELES — A Garden Grove man pleaded guilty Wednesday to federal charges of illegally importing and selling a highly regulated chemical compound known as R-22 under the pretense that he was actually bringing into the United States a safe refrigerant that does not destroy the ozone layer. Mahmoud Alkabbani, 64, the owner of USA Car Parts , entered his plea in downtown Los Angeles to felony counts of conspiracy to defraud the United States and violating the Clean Air Act by improperly selling R-22 to an undercover agent. He faces up to 10 years behind bars at sentencing June 13, according to the U.S. Attorney’s Office. R-22 is chlorodifluoromethane, sometimes known as HCFC-22, a refrigerant gas and class II ozone- depleting substance. Pursuant to international treaty, the use of R-22 is being phased out around the world. In the United States, pursuant to the Clean Air Act, only parties with unexpended “consumption allowances” are allowed to import the chemical. According to federal prosecutors, Alkabbani entered into an agreement with a Chinese company to purchase 4,000 canisters of R-22, which was packaged in cylinders bearing counterfeit “Glacier” trademarks. The 2013 contract with the Chinese company listed the product as R-134a — which is not regulated by the Clean Air Act and does not deplete the ozone layer — but a second, secret agreement called

for the Chinese company to actually sell R-22 to Alkabbani, prosecutors said. In September 2013, Alkabbani offered R-22 for sale on eBay and subsequently made an agreement to sell four cylinders to an undercover agent for $330 each — more than 10 times the amount he had paid for the substance, according to the U.S. Attorney’s Office. During a meeting with the undercover agent, the defendant said he could supply as much R-22 as the buyer wanted with just a few days’ notice. Alkabbani was charged last summer in a nine-count indictment with conspiracy, five counts of passing false and fraudulent papers through a customhouse, and one count each of making false statements, smuggling, and violating the Clean Air Act by improperly selling R-22 to an undercover agent. Article from OC Register guilty-to-illegal-sales-of-ozone-depleting-refrigerant/ A Deal Gone Bad!!

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Loss Control

Sometimes the dangers to your organization’s vehicles are obvious; a deer runs across the road in front of you, or you need to drive through an overhead with low clearance on the way into worksite. But some hazards are not so easy to spot. Here are five less- obvious fleet risks that contractors deal with. Poorly Managed Personal Use In many organizations that specialize in contract-type work, company trucks are assigned to employees like superintendents and foremen because they spend a lot of time driving from site to site on company business. This is a nice perk for the employee; but if not managed appropriately, this can quickly become a headache for the employer. • Make sure employees understand that their company truck is not a gift. It is an asset of the organization and should be treated as such. • Establish clear boundaries and expectations for the use of company vehicles. Consider creating a personal use policy that outlines what activities are allowed (traveling to and from job sites, running business related errands) and which are prohibited (using a company-owned truck to help a buddy move, going on a family vacation). Other things to address Insights forContractors 5 Surprising Things That Put Your Fleet at Risk

include seat belt use and operating the vehicle under the influence of alcohol, medications and other substance that might impair driving ability. • Enforce the rules once you’ve set them. It is a good idea to think in advance about consequences for violations, and it’s always god to check with legal counsel to make sure your policies are in-line with state and federal regulations. Driving During Off Hours Your jobs start early, and employees may be traveling several house from their homes to get there. If they’re behind the wheel of a company vehicle during the very early hours of the morning or late at night , they face additional hazards that are less common during daytime driving. • Fight fatigue that can make employees less alert. The peak period for sleepiness behind the wheel is midnight – 6 a.m., so encourage employees to avoid driving during these times whenever possible. • Spend extra time prepping vehicles that are often driven in the dark. Realign headlights to make

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Confusion about the Rules In larger organizations, it’s common for confusion to occur between the people that manage drivers and fleet vehicles. The person in charge of safety might think a certain set of driver selection criteria are being followed, but the human resources area may be using completely different guidelines when they actually do the hiring. As a best practice, get together at least annually (more is better) with HR, safety/loss control and your fleet manager. Make sure everyone is on the same page about your fleet safety program and who is cleared to drive company vehicles. This is also a great time to update your driver list. Distracted Driving Distracted drivers put themselves, your vehicles, and the general public at risk. To minimize distraction, band the use of electronics (tablets, phone, etc.) while behind the wheel of a company vehicle. Creating a distracted driving policy, and asking employees to acknowledge it, is a good way to ensure employee awareness. Find More Online • Does Your Fleet Safety Program Contain These Six Components? • Driver and Fleet Safety Resources • Safety Program Templates – Fleet Safety Article provided by EMC Insurance

sure they are illuminating the right part of the road and regularly check that headlights, directional signals and taillights are working. • Watch for animal hazards , because deer and other kinds of wildlife are especially active around dawn and dusk. Careless Driver Selection Employees’ poor driving behaviors can put your company (and your company’s reputation) at risk. Make sure you don’t hand the keys to just anybody. We’ve got a full list of recommended driver qualifications criteria, but these points are especially key: • A valid driver’s license is a must- have for anyone driving one of your vehicles. Make sure they have one. • A clean motor vehicle record (MVR), because past behavior is the best indictor or future behavior. • A clean drug/alcohol test , especially if your company’s vehicles are considered commercial vehicles by the DOT. • For heavy trucks and trucks pulling trailers , the drivers needs to have the appropriate commercial drivers’ license. Need a hand making sure your drives have got the right stuff? Consider subscribing to a driver monitoring service that will run initial MVRs and send alerts when a driver receives a violation. EMC Insurance policyholders can get discounted driver monitoring services from SuperVision .

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Bigger is Definitely NOT Better When it Comes to Cooling (By Eugene Silberstein, M.S., CMHE, BEAP: article furnished by Esco Institute and HVAC Excellence, Howard Wise, EVP) Many of us have been raised with the mentality that more is good and bigger is better. When referring to many things in life, these ideals may have some relevance, but when dealing with others, more definitely equates to less. Maybe we want to live in a bigger house. Back in the era of the growing housing market, construction companies were building larger and larger homes and average families were snatching them up, since it was, especially before the real estate crash of 2008, a simple matter to obtain a mortgage, Quiet often, nothing more than a handshake… No tax returns, no bank account, no problem! Since the houses were being sold, the builders build more. It was indeed a vicious cycle. But larger homes have costs associated with them. Increased repair costs, increased maintenance costs, higher property and school taxes, and increased utility costs all take their toll over time. When it comes to the selection of cooling equipment, bigger is

definitely not better. So why do so many contractors insist on selling their customers oversized air conditioning equipment? Let me take you back to a conversation I had with my father back in the mid 1980s, when everybody, more or less, had a lot of money to spend. While learning this industry, I often bombarded my old man with questions about our industry in a never-ending quest for every possible answer to every possible question. It was after a meeting with a potential client, that I approached him with a question that, to this day, affects the way I teach HVAC/R. At the meeting, the client specifically asked us to provide him with an air conditioning system that would keep the house at 70°F, even on the hottest day of the year. My father was quick to respond with a confident, “Sure thing, we can do that, no problem!”. Needless to say, we were awarded the job and now we had to deliver. My question to my father was simple and to the point. “How are we going to do that?” My father’s response was even more simple, direct and to the point. “We’re going to install an air conditioning system that will be big enough to cool the whole neighborhood if the customer leaves

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his doors open! I don’t want them calling me up in the middle of August complaining that the house is too warm.” What was evolving seemed to be a fight between my old man and the customer, although the customer did not even know that battle lines have been drawn. My father was a very intelligent man and I was thoroughly confused with the ease with which he threw all common sense and system design knowledge out the double pane, low emissivity, window. Even properly sized systems are, for the most part, oversized. In Long Island, New York, where we lived at the time, we typically design our air conditioning systems to operate at an 85°F outside ambient temperature. What happens when the outside temperature is lower than 85°F? Well, the heat gain of the structure decreases and the capacity of the air conditioning equipment increases. So, our air conditioning system has the ability to provide more cooling when our house actually needs less. If we size our air conditioning equipment using industry accepted guidelines, we should be able to use the results of these calculations to size our equipment. What many contractors do is use the results of their

calculations as a guideline. If the calculated results indicate that a three-ton air conditioning system is needed, a four-ton system is often installed. Why? “We want to make certain that we did it right… Besides, we don’t want the customer calling us up in the middle of August complaining that the house is too warm, do we?” In the real world, we simply cannot continue to size air conditioning equipment for the one or two days in the summer that put a real strain on the equipment. We need to be confident with the results of our calculations. If we aren’t, why calculate in the first place? So, what are the effects of oversized air conditioning equipment? Where do we start? Let’s take a look: • Larger air conditioning equipment costs the customer more to purchase • Larger air conditioning equipment moves more air, so a larger air distribution system is required. This, by the way, also costs more money • The installation costs are higher because of larger field- installed refrigerant lines, larger pads, larger ductwork, etc.

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including raw materials and energy By properly sizing air conditioning equipment, customers and contractors alike will benefit. From the customer’s standpoint the benefits of a properly sized system include: • Lower system costs, both from the first-cost standpoint and from the operating cost standpoint • More even conditioning of the occupied space • More comfortable living conditions as a result of more even and effective humidity control From the standpoint of the contractor, a number of benefits can be realized: • Happier customers • More happier customers as a result of word-of-mouth advertising • Fewer callbacks on properly operating/sized systems • Less chance of mold-related litigation • Did I mention more customers? Check Out Utility Rebates Page 37

• Larger air conditioning systems use larger compressors and blower motors, so they use more electrical power to operate • Electrical installation costs are higher because more electrical power requires that larger conductors be run to the unit location • Larger cooling equipment will cool the space faster. This results in more frequent system starts and stops, increasing the system’s power consumption • Larger cooling equipment will cool the space faster. This results in more system off- time, decreasing the dehumidification effect that air conditioning systems have on the occupied space • Decreased dehumidification leads to higher relative humidity in the occupied space. This leads to an increase in the possibility of mold growth in the space • Mold growth in the space puts you, the contractor, at increased risk of litigation as a result of mold-related illness • Larger equipment costs more to manufacture, to keep in inventory and to ship • The manufacturing of larger equipment requires the use of more natural resources,

An important way to distinguish your company from all the other “me too” HVAC dealers is to have the best employees that can be trusted in the homes of your clients / customers. More important than cool air or warm air is the peace of mind in knowing that one’s belongings and family are safe. A tech that has passed a background check and has a company photo ID demonstrates professionalism and trustworthiness to the client / customer. Employee background checks are also important for the dealer. The dealer can manage their liability and their insurance costs by making sure that their employees have passed a background check, a drug screening test, and a driving record search. A member of the Arkansas HVACR Association can have that peace of mind by using the endorsed service, CourtHouse Concepts. Their prices are affordable and their reputation is great. Association members that are already using CoutHouse Concepts have given them a glowing recommendation. Be sure to identify yourself as a member of the Association to get a 10% discount.

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Code, Regulation, & Legislation

duct blaster rough-in testing. The only cost would be any manuals and refreshments that the class may require. The Home Builder’s Association and the Realtor’s Association offered their facilities for the training. More in depth training for Rater Field Inspector is also available locally by Ron Hughes of HERS, Inc. Cost of the duct blaster equipment is approximately $2,600 which includes the Energy Conservatory Series B duct blaster with DG1000 manometer or about $2,300 for the Retrotec US341 with DM32 manometer. Self testing makes the process much simpler as the installing contractor can perform the test as part of the duct installation. Another advantage of self testing is that the installer can test for air leakage and balance the air flow before the sheet rock ceiling or attic insulation is installed. This ease of access to dampers can make the process much easier. While post-construction testing is permissible, testing at rough-in makes finding and sealing leaks much easier. This is especially true for ductwork between floors. Leaks between floors found during a post-construction test can result in hundreds of dollars of expense; i.e., tearing out and replacing ceiling sheet rock. The city still has to pass the ordinance and it won’t be presented until the February or March meeting. If the ordinance passes, implementation should begin sometime in the fall of 2018. The Association’s classes will be announced in early spring.

Little Rock New Residential Construction Duct Testing??

After months of conferring with realtors, home builders, Energy Raters, mortgage companies and the HVAC industry, the city of Little Rock is prepared to present a new ordinance that would require duct testing on new construction. According to Energy, 20 to 30 percent of the air that moves through a residential duct system is lost due to leaks, holes, and poorly connected ducts. The result is higher utility bills and difficulty keeping the house comfortable. The present Arkansas Energy Code calls for duct leakage not to exceed “x” per 100 ft 2 of conditioned floor area-- I. Test at Rough In A. Air handler present 6 cfm per 100 ft 2 B. Air handler not present 4 cfm per 100 ft 2 II. Test at Post-construction (air handler installed) A. Leakage to outdoors 8 cfm per 100 ft 2 B. Total leakage 12 cfm per 100 ft 2 The new ordinance does not change the permissible air leakage. It only requires that the duct be tested in new residential construction. The test can be done by a third party or the installing contractor; however, the testing person must be certified by RESNET, BPI, or the Arkansas HVACR Association. The Arkansas HVACR Association offered to conduct up to three training classes on

Rebate Programs & Incentives

Rebate Programs & Incentives

Contact Kirk Pierce @ 501-377-4646 Email :

Business & Marketing Tips

With the following tactics, you can position your company to develop deep customer retention and ongoing loyalty: 1. Have a mission and deliver on it Whether you like it or not, your business is not about you. Your business exists only because of your customers, so you have to communicate to them that you are focused on their needs and on the things that make them satisfied. This should be a major part of your efforts to brand your business, and almost half of small businesses believe that building brand awareness is a top marketing priority. That also means means it's getting more competitive to stand out from the crowd. To do it, however, you must establish a customer-focused vision for your business that emphasizes your commitment to trust and excellence o. Think about what customers like about you and your business and then translate that into a vision for what your business is all about. For example, customers probably love it when you make it a point to be on time and do follow up calls after a service visit. Not every provider does that, so that helps you stand out. But why they like that is what's especially important. When you're reliable, that means they can arrange their schedule around a visit and rest assured they'll still be able to pick their kids up from school on time. It means that they can get their own business back to normal quickly because you can fix issues that prevent

It takes a ton of effort to get customers, but small business owners know that the secret to building a business is keeping the customers you have. Consider that, on average, loyal customers are worth as much as 10x as much as their initial purchase or service fee, and it can cost 5x more to acquire a new customer than it does to keep one you already have. Being dependable, competitive with pricing, and delivering great customer service is no longer enough to create a sense of loyalty among your existing customers. Today's consumer is constantly weighing their different options and expecting vendors to cater to their unique needs. Businesses can use a variety of methods to maintain relationships with customers and continuously demonstrate their value. With the right mix of social media, marketing activities, and good old customer service, you can stand out from your competitors in the eyes of your customers and be their go- to vendor.

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