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• The Hot Topic This Summer Was Transportation…Possible Funding Action This Fall?
• IN PERSON - How Creekside Springs Dealt with Hiring Challenges
• Very Interesting Electricity News from Florida
• Ready or Not Here it Comes! Corporate Transparency Act (CTA) - Beneficial Ownership Information (BOI) Reporting Requirement
• VOTE November 5^th – ELECTIONS 2024
• General Assembly Update - Headcount & Schedule
• Your MBA VOTER GUIDE is Here!
• PA SITES Program Opened October 1, 2024

PA SITES Program Opened October 1, 2024

“…Harrisburg, PA –…“The $400 million secured by Governor Shapiro for the PA SITES program provides funding to develop more high-quality, pad ready sites for companies looking to expand in Pennsylvania or establish new operations here,” said Secretary Rick Siger. “Our investments through this crucial program will bring sites to market faster by funding better transportation access, utility connections, and other site preparation activities. PA SITES will help Pennsylvania compete for even more transformational economic development projects, which create resources to invest back into our citizens and our communities.”

General Assembly Update

Head Count - PA General Assembly as of 10/7/2024

·       PA Senate: 28 Republicans and 22 Democrats

·       PA House: 102 Democrats and 101 republicans

PA General Assembly Fall Schedule

Following are remaining session days for the 2023-24 General Assembly PA House and PA Senate: 

October & November

Senate - 21, 22, 23 13, 14

House - Same

There are many meetings and hearings, but most important business will be put off until the new session in January 2025.

The Hot Topic This Summer Was Transportation…Possible Funding Action This Fall?

The PA House Transportation committee traveled around the state and hosted numerous hearings. The Informational meetings covered “Moving PA Forward by Investing in Roads, Bridges, and Transit.” 

“The biggest issue that remains unresolved is the question of whether the state will provide a designated funding stream for mass transit or provide the state's public transportation systems with any increased funding at all. Gov. Josh Shapiro sought $280 million for mass transit in his budget proposal as part of his mass transit funding proposal. Shapiro has proposed earmarking 1.75 percent of state sales tax revenue for mass transit. The state budget included $80.5 million for both mass transit and roads and bridge repairs.”

… “General Assembly has six voting days left before Election Day, what, if anything, can they get done?,” Capitolwire.com- Under the Dome, 10/7/2024

Very Interesting Electricity News from Florida

Editor’s Note: I wonder where PA will land with Governor Shapiro’s PRESS (Pennsylvania Reliable Energy Sustainability Standard) legislation? PRESS requires Pennsylvania to get 50% of its electricity from a diverse range of energy resources by 2035, including 35% from the clean energy sources of today and the future like solar, wind, small modular reactors, and fusion, 10% from sustainable sources like large hydropower and battery storage, and 5% from ultra-low emission forms of natural gas and other alternative fuels. 

In 2022 over 50% of Pennsylvania’s electricity was generated using natural gas and 11.5% was generated by coal.

“Miami Electricity rates in U.S. states have diverged sharply in recent decades. In 2004 residential electricity in the five most expensive states was only twice as expensive on average as in the five most affordable states. Today it is 160% more expensive.

What explains the difference? State policies. Eight of the 10 most costly states have enacted renewable portfolio standards, “net zero” carbon- emission mandates, and regional cap-and-trade schemes. All eight are controlled by Democrats…

…Florida relies on natural gas for 75% of its electricity, more than any other large state. That’s remarkable because of the five largest states, the other four—California, New York, Pennsylvania, and Texas—all have significant natural-gas reserves… Yet compared with Florida, residential electricity is 27% more expensive in Pennsylvania, 60% more expensive in New York and 137% more expensive in California…” 

…“How Florida Keeps Electricity Plentiful and Rates Low,” Wall Street Journal, October 5, 2024

Ready or Not Here it Comes! Corporate Transparency Act (CTA) Beneficial Ownership Information (BOI) Reporting Requirement

The Hill has covered this several times over the past 18 months.

The Corporate Transparency Act’s BOI reporting requirements take effect January 1, 2024. Many small business owners are unaware of the new law and its requirements,

The CTA requires the submission of regular reports identifying the beneficial owners of businesses and other legal entities. The goal is to target shell companies used in illicit financial transactions, but the new law defines the targeted entities as those having 20 or fewer employees and under $5 million in revenue – which would capture nearly every small business in America.

The Financial Crimes Enforcement Network expects to receive more than 32 million separate reports in 2024, with an additional five to six million filings each year thereafter.

Frequently Asked Questions about the reporting requirement - Click here 

One Pager on BOI Reporting Filing Dates - Click here 

Small Entity Compliance Guide click here - Click here

U.S. Congress

Government Funding

Congress has left town to campaign, but they did fund the government for three months.

“Congressional leaders have struck a deal to keep the government open past a looming Sept. 30 deadline, after a previous effort to punt the funding fight into spring 2025 and attach a Trump-backed proof-of-citizenship voting bill failed.

The deal would keep the government funded through Dec. 20 to buy time to hash out a funding agreement for the rest of fiscal 2025.

The roughly three-month timeline is the preferred duration of Democrats and Republican defense hawks….”

…“What made the cut in Congress’s plan to avert a shutdown — and what didn’t,” THE HILL, 9/22/24

“Creekside Springs, LLC, is a vertically integrated manufacturer and contract packager of private label purified, distilled, spring and enhanced waters, produced in container sizes ranging from 235ml to 5 gallons.

THE ISSUE - SEVERE WORKFORCE CHURN

When I first met James Sas in November 2023, my takeaway was he had high employee turnover and desperately needed workers. That was the low point after several years of a hiring churn cycle. He realized Creekside, a contract packager of water-based products, “couldn’t do what he had always done. When the environment of increasing costs is all around, you grow through change or die.”

The hiring predicament in 2021-2023 to get 25 employees (full employment is around 100 employees) was to interview 400, hire 125, ultimately resulting in 25 new employees retained. The new employee churn made Creekside unstable and unable to operate efficiently as these new employees were being trained

Bottled water is a commodity product with low gross margin. If he could not get higher pricing and wages are increasing, he needed to increase volume with the same number of employees. That was an impossible task since Creekside had exhausted the entry level employment base. “Entry level workers with limited  skills and little experience wanted the higher wages but didn’t wanted to train to earn it.”

INNOVATION - AUTOMATION of PROCESSES

Creekside Springs innovated! They started automating in January 2024. They invested incrementally as profits allowed and oversaw the automation of the water infrastructure and most of the primary equipment. They hired third parties to do programming, electricians, welders, and other sub-contractors. The automation was very complicated but Sas noted the production lines were easy to understand.

“The investment cost in automation created better efficiencies than trying to hold onto new employees who are 50% efficient.” Put another way, it was much less expensive to invest in automation than to succumb to the churn of new employees. “If a line requires 14 employees and only 11 show up, that presents a problem.”

IMPORTANT RESULTS

Creekside reduced the need for FTEs by12-15% and they increased productivity by 30%; they are much more efficient.

Automation changes the works roles. The automated equipment requires oversight. They now require a better educated workforce. Workers serve as monitors of the equipment rather than the operators.

Automation is not without its challenges. There are new and different challenges downstream. It requires more space due to higher speeds. For instance, more space is needed between equipment since a 15-foot conveyor is now replaced by a 100-foot conveyor otherwise all production line items would stop and back up. Creekside needed more trailers, truck drivers, forklifts, and warehouse space. Due to supply chain issues, finished inventory requires 15% of warehouse space; raw materials require the other 85%. Previously it was the reverse. Now a majority of product is transported within 24-48 hours.

Yes, it all cost several million dollars and there are 4-5 months of automation to go but in the long term it pays off. They did borrow some money but Sas noted “The cost of borrowing capital, even at today’s high rates, was cheaper than hiring and training an unskilled workforce with churn.”

Congratulations Creekside for innovating and sharing your story.

Make your voice heard on November 5th. The time is now to learn about each candidate. The MBA is here to help you base your decision on solid facts - not just flyers, TV, ads, or what's trending on social media.

We have done our best to compile a neutral and fair document that focuses the candidates' stances on key issues that matter to businesses and employers.

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