Montana Home Experts - Fall 2021

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FA L L 2 0 21

A MAGAZINE FOR MBIA MEMBERS

TREASURE STATE BUILDERS:

Playing a Poor Hand Well INDUSTRY NEWS + SkillsUSA Montana + Legislative Wrap-Up + MBIA Earns $464K Safety Return + What’s Behind Inflated Construction Costs MEMBER NEWS + Executive Director Message + In Memoriam: Byron Roberts + Association Standouts + Mike Rocchio Retires


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MONTANA HOME

| FALL 2021

Experts “ When I brought home my first earnings and put it on the table in front of my mom, she started to cry—I was making more per hour than she was. That was the moment when I realized working in construction could be a good career.”

TOM STRINGHAM TREASURE STATE BUILDERS

04 From the President, Allen Ream 07 From the Executive Director, Steve Snezek “Our members here in Montana are telling us that this is the ‘perfect storm’ of increased demand, reduced supply, and higher costs. Lots, lumber, and labor have all gone up in price, and this is leading to increased final pricing.” STEVE SNEZEK MBIA EXECUTIVE DIRECTOR

08 Treasure State Builders: Playing a Poor Hand Well 13 SkillsUSA Montana: An Active Participant Narrowing the Skills Gap 15 Legislative Wrap-Up: MBIA Achieves Major Policy Goals but Opportunities Still Lie Ahead 18 In Memoriam: Byron Roberts 18 MBIA Earns $464K Safety Return 21 Are We There Yet? What’s Behind Inflated Construction Costs and What Lies Ahead 22 Association Standouts 25 Mike Rocchio: Safety Isn’t Expensive; It’s Priceless MONTANA HOME EXPERTS

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WELCOME |

FROM THE PRESIDENT A PUBLICATION OF We can accomplish much this year for the industry and association! I am asking each Montana Building Industry Association (MBIA) member to contact a local non-member business and talk to them about the many benefits of membership and how they have access to benefits to build a better business.

1717 11th Ave / Helena, Montana 406.442.4479 www.montanabia.com

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By becoming a member, if they use Montana State Fund for their work comp, businesses can join the free GRIP program, which has the potential for them to receive money back. By becoming a member, businesses can receive discounts from 20 plus national companies. By becoming a member, businesses help support the fight at the Capitol on bills concerning the Home Building Industry— such as the bill on banning inclusionary zoning and the bill prohibiting state building codes from requiring mandatory fire sprinklers, that MBIA strongly supported and due to members’ robust and effective effort, the bills passed. MBIA also reviewed and took action on 70 plus other bills. By becoming a member, businesses have access to hundreds of educational webinars with NAHB—courses are live and on-demand to fit your schedule. With the current labor shortage in the trades, educating our youth and young adults with trades programs is more important than ever. MBIA is committed to supporting construction programs in our schools throughout the state with current successful programs and promoting the addition of new programs. I want to personally thank Steve Snezek for the work he has put forth as our executive director. Steve has been a valued proponent of our industry and association for the past several years. Steve has worked hard for MBIA during difficult and prosperous times. Thank you, Steve! Thank you, Rob Martin, for your service as president last year. Thank you to the entire MBIA board. Thank you to our long-time government affairs chair, Tom Murphy—you will be missed! We will continue to oppose added unnecessary government regulation. Regulatory costs already account for 25% of the cost of a new home, and those costs are on the rise. If the government increases regulatory compliance costs and causes costly delays for businesses, then the affordability crisis will get even worse. MBIA is actively engaged in helping maintain a building environment that is conducive to our members’ businesses. We are fighting for you so you can provide housing for montana’s hard-working families. As I tell my team at Montana Heritage Home Builders, we are helping people achieve the American dream! We are community builders! MBIA brings people from across the industry together to work on issues, including labor shortages, and ensures a business and regulatory environment that allows us to provide homes for the people of Montana. I want you to remember that you are a part of helping people achieve the American dream. I want you to take a moment and think about the purpose you, via the industry, are serving! Thank you for the honor of being your president this year. I look forward to this coming year and am excited for the future of our industry and association. Let’s work together to strengthen the industry and association! Let’s get to work! Thank you,

ALLEN REAM, CGB, CGP, GMB, MBIA PRESIDENT


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FROM THE EXECUTIVE DIRECTOR |

WE LIVE IN INTERESTING TIMES

By Steve Snezek MBIA Executive Director There is an ancient Chinese ‘curse’ that says, “May you live in interesting times.” I don’t think that we are cursed, but we are definitely living in interesting times. This past year, we have all had to navigate Covid challenges (illness, changing protocols, etc.), economic challenges (materials inflation, wage inflation, lack of labor, etc.) the legislative session, and of course the unbelievable

increase in housing demand that most of our areas have seen over the past 16 months. All of the above has had its impact on our office, not the least of which is navigating Covid, which has even affected our ability to get this magazine out in a timely fashion due to illnesses with our staff and families, printers, ad sales, and so on. But with all that said, we have had the most productive year in quite some time. Thanks to your efforts and great work by our General Counsel and Lobbyist Abby St. Lawrence, we were able to pass two major pieces of legislation that we have been working on for years: 1) A ban on mandatory fire sprinklers in residential building codes; and 2) A ban on inclusionary zoning. Please see the article on the legislative session in this magazine for more details. But our success has come with some public relations challenges. In a time when affordable housing is finally back on public officials’ radar, the ban on inclusionary zoning is being used by some to point the finger at home builders being the problem. While you and I know

that this is not true, we will continue to work to show that the real barriers to affordable housing are the Four Ls—lots, labor, lumber, and legislation/ litigation. As you also know, thanks to members Kim Chambers (MBIA’s State Representative to NAHB) and Abby St. Lawrence (General Counsel and Lobbyist), last year we were able to keep construction included as an essential service in the Covid lockdowns. This was not the case in many other states, but due to the aforementioned, we were able to do this. While this was technically a success last year, we are still reaping the positive effects of this today. I cannot imagine how difficult the Montana housing situation would be if you were not able to build for two months last year. The biggest challenge that MBIA faces going forward is membership. It seems counterintuitive that in a time when construction is booming, membership is holding steady at best. But that is the case. It is not unique to Montana, in that building industry associations across the country are facing the same issue. It is also not

unique to our industry–trade associations, in general, are facing membership challenges. We all need to be proactive in recruiting and retaining members as we go forward and explain the benefits of banding together to protect and promote our industry. Finally, as many of you know, I have decided to resign at the end of 2021. The past five years have been great for me, and hopefully for MBIA—but it is time for me to move on. It is not hyperbole for me to say that I love this Association, I love our members, and I love our issues. I have made many lifelong friends in my time here, and I know that MBIA has even greater days ahead. With the next legislative session scheduled to begin in 2023, I hope that this gives MBIA plenty of time to strategic plan and to hire the right individual. From the bottom of my heart, thank you for your support, your friendship, and your dedication to improving our great state. Also, please stay in touch! My private email is stevesnezek@gmail.com.

2021 HOUSING MARKET STARTS MONTANA SINGLE FAMILY HOUSING STARTS 2021*

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189

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Playing a Poor H

A Unique Approach to Supply-C

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MOVERS+SHAKERS |

Hand Well

Chain Disruptions

By Courtney Oppel Feature Photos by Wandering Albatross Photography

Jack London once wrote, “Life is not always a matter of holding good cards, but sometimes, playing a poor hand well.” When the COVID-19 pandemic blindsided newly formed Treasure State Builders, owners Tom Stringham and Chad Strain found a creative solution to supply-chain disruptions and, in the process, stumbled upon a bonus side business. >

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| MOVERS+SHAKERS

At the beginning of 2020, Tom Stringham’s years of hard work appeared to be paying off in spades. He’d been elected president of MBIA for 2019–2020, had served as president of Bitterroot Builders Industry Association in 2015, had just earned the distinguished Montana’s Builder of the Year award, co-owned a successful interior design business with his wife, Angela, and was getting ready to launch another business, Treasure State Builders, with his good friend Chad Strain. Then, well, we all remember March of 2020… “We started just as COVID hit and we thought, ‘Oh, no!’” recalled Stringham. As they got their company up and running that fateful month, the two business partners had thought their biggest challenge would be the learning curve associated with the accounting side of their business. But when the pandemic came along, the supply-chain disruptions in particular threw them for another loop. “It seems like the shortage of construction products went in waves,” said Stringham. But instead of looking at what they lacked, they looked at what resources they had and came up with a unique 10

FALL 2021

solution. “Chad has a CDL, so we bought a semitruck to go get our own products. We can go to Seattle, Everett, Bozeman or other places to stock up on certain products as we need them, such as hardwood flooring, granite, masonry, and siding.” This creative approach to problem-solving also resulted in a side business that they hadn’t anticipated. Now they can transport products for other local businesses that have been impacted by shortages, as well. “Even our local lumber yards have asked us to pick up and deliver products for them from out of town. It’s also been a huge time savings to be able to get our own product.” Another unexpected perk of having their own semi has been the cost savings of being able to haul their own equipment, such as forklifts and backhoes, between work sites. Stringham, who has called the Bitterroot Valley home since he moved to Hamilton at the age of twelve, attributes his work ethic to several influences in his life. His mom, who still lives in Montana, “is really the reason for my success,” he said. As a single parent, Stringham’s mother demonstrated

the importance of working hard and lived out the Golden Rule—two principles that continue to guide Tom in his own life. In high school, he played football for Hamilton when they won back-to-back state championships. He later attended Montana Tech in Butte, where he played football for Coach Green. “Both coaches instilled in me a sense of hard work, accountability, and showing up on time.” “I also owe my predecessors a lot,” said Stringham, referring to his former employers at Schrock Construction and Beck Builders, both high-end builders based in the Bitterroot. But when asked who his greatest inspiration is now, Stringham’s answer comes without hesitation, “My wife. She has really helped me through everything. We’re a good team. She really makes us tick.” Stringham and his high school sweetheart-turned-wife of twenty years, Angela, are co-owners of an interior design business, Stringline Design. In the early 2000s, while he worked from their home in Reno for an architecture firm, and Angela homeschooled their two daughters, she


When asked who his greatest inspiration is now, Stringham’s answer comes without hesitation, “My wife. She has really helped me through everything. We’re a good team. She really makes us tick.” quickly picked up on the details of his projects and exhibited a natural talent for interior design. When they moved back to the Bitterroot in 2007, they started up Stringline Design. With their daughters now out of high school, they’re starting the school process all over again with their adopted son, who just turned five. Both Treasure State Builders and Stringline Design, which together design and build custom homes, have seen significant shifts in client requests in response to the pandemic. “More people are wanting two separate offices; the need for high-speed internet is more on people’s minds; there is more of a demand for in-law suites as families come together in response to rising costs; and designing for aging-in-place (zero entry, curbless showers, etc.) is becoming more prevalent.” Stringham credits the local and state building industry associations as “absolutely pivotal in keeping us going as essential workers. The time and effort that Executive Director Steve [Snezek] and our lobbyist, Abby [St. Lawrence], put in was amazing. “The other thing MBIA has done for

me and my wife is introducing us to the International Builders’ Show. The products we have found there and brought back to the valley give us the opportunity to be on the cutting edge of our competition. Also, MBIA not only provided us with contract templates when we started our business, but is willing to proof our contracts. That gives you more confidence going into a deal. By far, I’ve gotten my money back tenfold” from those member benefits, said Stringham. Another unadvertised perk of involvement with building industry associations has been the level of communication among members. “I really enjoy listening to other people in the industry, how they run their business. They’re very open and willing to share their mistakes, so you get to learn from other people’s mistakes.” Stringham credits his former boss at Schrock Construction, Willie Schrock, with prompting his involvement in the local building industry association. Witnessing the impact of the combined voice of several businesses on an issue affecting them was powerful. “At the time,” he recalled, “there were some issues locally with subdivisions

being approved. Just knowing we have that voice and that we have a lobbyist watching our backs meant a lot to me—otherwise we could get railroaded.” When asked about what legacy he’d like to leave, Stringham points to Chip Pigman, whom he calls “kind of the grandaddy of builders in the Bitterroot. I want to be known within my community like him and be able to bring back affordable housing in the Bitterroot Valley. My business partner [Chad] would enjoy that, as well.” Another issue Stringham has become involved with lately is encouraging youth to pursue the trades. “I worked for a builder right out of high school to help pay my way through college,” he said. “When I brought home my first earnings and put it on the table in front of my mom, she started to cry—I was making more per hour than she was. That was the moment when I realized working in construction could be a good career.” Stringham has told his story to students at local high schools and is encouraged to see local community colleges now offering options that will help youth enter the building trades. MONTANA HOME EXPERTS

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WORKFORCE |

SkillsUSA Montana:

AN ACTIVE PARTICIPANT NARROWING THE SKILLS GAP By Mary Heller State Director, SkillsUSA Montana Unless you live under a rock, you know full well the crisis of workforce shortage in all the skilled trade industries. The building industry is certainly no exception to this problem. The lack of qualified workers is one of the largest struggles companies face across the state and nation. For the last eight years, I have been in the midst of this issue from the standpoint of trying to help all of the skilled trades build a quality workforce. For seven years, I was the Director of Career Center/Industry Relations at MSU-Northern in Havre, Montana. I worked with employers across the nation who came to that campus to recruit students trained in the trades programs that college offers. In all that time, the common message from these businesses were: 1) We simply do not have enough qualified workers in the pool to hire from, and 2) What do we need to do to get more into the pool? These discussions focused on a central problem we all know about: in general, any skilled trade industry is viewed as ‘dirty, blue collar’ work. Young kids, their parents, and the guidance counselors at the high schools, who play a key role in steering students down a career path, have absolutely no idea about the amazing opportunities in careers such as the building industry. Not only that, they also don’t realize that careers in this field can be obtained with a much smaller time and monetary investment than other careers that require high tuition costs for at least four years past high school. Included in these discussions was the frustration from companies that the days of working jointly with secondary schools is gone. There are a handful of communities in Montana where businesses have a wellworn path to the local high school, and those are great partnerships. Many others, however, find the doors closed to them. In my seven-year tenure at MSU-Northern, I was repeatedly asked, “What can we do to get into the high schools to change this ’bad’ view of our industry, pique the interest of these kids, and educate them about all the opportunities we offer?” My answer to that question is what I have been doing for the last year. Having a passion for the skilled trades, seeing the ever-growing skills gap, and knowing that more needs to be done in the secondary schools, I became the State Director for SkillsUSA Montana. Historically, SkillsUSA was known as VICA (Vocational Industrial Clubs of

SkillsUSA State Officers watching the House of Representatives work.

America). Some of you may remember this organization that was started in 1965 at the national level. Montana established our association in 1966, and schools across the state created their own chapters. Then, in 2002, the name was changed to SkillsUSA. So what, exactly, is SkillsUSA Montana and what do we do? SkillsUSA is a national association and a partnership of students, teachers, and industry working together to ensure America has a skilled workforce. At the state level, SkillsUSA Montana has the same vision. We are a 501(c)(3) Career and Technical Student Organization (CTSO) working integrally with the Career and Technical Education Division of the Montana Office of Public Instruction. There are over 50 chapters in the secondary and post-secondary institutions across the state. That means we have members from junior high school students to college-level students. Our focus is to prepare quality leaders in the trade, technical, and skilled service occupations. How do we do that? Our advisors are the shop teachers in Career and Technical Education and Industrial Technology using the SkillsUSA Framework curriculum that promotes three components in their classrooms: Technical Skills Grounded in Academics, Workplace Skills, and Personal Skills. Not only are technical skills, such as operating hand tools and abiding by required safety protocols, important, but so are skills such as teamwork, leadership, work ethic, responsibility, decision making, communication, and integrity. In fact, I’d venture to say that businesses seek these

employability skills in prospective employees over the technical skills. Potential employees who bring these ‘soft’ skills to a business at the beginning are much more easily trained because they see the value in having a learning attitude. Those employees then become more productive and promotable. That is our goal at SkillsUSA Montana. What can we do to help the building industry? We know that you need a voice in the public school system. The cultural mindset that your industry is a “dirty, blue-collar” career choice needs to change. We can help, starting at the junior high school level. Our mission is to help educate and inform the students, parents, and guidance counselors about all the amazing opportunities you have to offer. We also know that you demand not just a workforce, but a quality workforce. We can open the doors to Montana schools so you can work with our advisors. It is important for them to fully understand what your industry needs so they can then turn around and guide their students in the right direction–in your direction. In short, SkillsUSA Montana is the bridge connecting you to classrooms…and a future quality workforce…across the state.

Mary Heller is the State Director for SkillsUSA Montana. In March 2021, she was also appointed to the Montana Board of Public Education by Governor Greg Gianforte to be a voice for Career and Technical Education and Industrial Technology in Montana’s secondary schools. To become involved with SkillsUSA Montana, contact Mary at mary.heller@skillsusamontana.org or (406) 399-0640. MONTANA HOME EXPERTS

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LEGISLATIVE WRAP-UP |

MBIA ACHIEVES MAJOR POLICY GOALS, BUT OPPORTUNITIES STILL LIE AHEAD By Abby St. Lawrence MBIA General Counsel and Lobbyist

The 67th session of the Montana Legislature adjourned sine die on Legislative Day 80–April 25, 2021. It was a busy session with a record-breaking 1,313 introduced bills and another 2,054 bill draft requests that did not ultimately get introduced. Overall, MBIA had an exceptionally productive and successful session, taking active positions on 75 bills, meaning that MBIA provided live testimony and worked those bills in the halls of the Capitol. MBIA also monitored a total of 499 introduced and unintroduced bills. Of the bills MBIA took positions on, we had a winning record of nearly 81 percent, defeating harmful bills and getting some good bills signed into law that MBIA has worked on for a number of years—not a bad showing for an exceptionally busy session. For reference, the overall session had a success record of just under 54 percent. MBIA worked with a broad number of coalitions, depending on the issue, because the reality is that good legislation rarely passes and bad legislation rarely gets stopped by just one group acting alone. That coalition work began long before Day 1 of the session and will continue throughout the 2021-2022 interim. In fact, interim committees began meeting just days after sine die, as did regulatory agency advisory council to implement legislation passed by the 2021 session and already begin to look at legislation for the 2022 session. Finally, MBIA has already begun participation in a number of agency “listening sessions” that agencies have set up as part of Gov. Gianforte’s “red tape reduction initiative” to examine agency operation and regulation and identify which systems are working and which need to be revised. Gone are the days when we can start thinking about policy in the fall before a session and take a long break from policy considerations the summer after a session. Continuing progress on MBIA’s policy goals and prepping for next session starts now! The following is a brief overview of several of the top issues MBIA worked on this past session, as well as a preview of what we may be dealing with in the interim and towards next session. This does not cover every bill on which MBIA took a position or monitored, but it does hit some of the highlights. The home building industry covers a broad range of issues, from tax policy to local government and quite a bit in between, so to be effective, we must keep focus on where we can use

our voice most effectively. Based on guidance from MBIA leadership, the following are some of the biggest issues we tackled this session and some of the major topics we should expect to grapple with in the interim ahead.

AFFORDABLE HOUSING

As Montana becomes a more desirable location, housing costs have become a huge topic of interest for policy makers. As NAHB has long discussed, there is a difference between ‘affordable housing’ and ‘housing affordability.’ ‘Housing affordability’ takes into consideration a broad range of factors, including the Four Ls—lumber, labor, lot availability, and laws. When local governments and policy makers speak about ‘affordable housing,’ they tend to talk about making housing available to lower income families and, unfortunately, also tend to simplify the factors that drive housing prices. MBIA advocacy prioritizes educating policy makers on the wide array of issues that impact housing prices—subdivision review efficiency and regulation, materials prices, labor availability, tax policy, and so many other statutory and regulatory actions. In fact, just about all testimony MBIA offered this session traced the policy under discussion back to the impacts on housing prices. There is no one silver bullet, but incremental steps will make a difference. While MBIA’s policy work overall is always guided by housing affordability, this legislative session, MBIA had a major achievement on the topic that we have worked on for years— inclusionary zoning. HB 259 sponsored by House Majority Leader Sue Vinton (R-Lockwood) prohibits local governments from requiring properties to be set aside for sale at specific price points either by ordinance or as a condition of subdivision approval. Across the country, inclusionary zoning has failed to produce any marked positive increase in long-term affordable housing

for working families, and the few municipalities in Montana that have implemented the concept have produced the same results (or lack thereof, as the case may be). When policymakers talk about ‘inclusionary zoning,’ the concept means different things to different people. HB 259 was tightly drafted to specifically address the unworkable market manipulation of artificially depressing sales prices on a portion of homes, which only results in the costs passing along to other homeowners. Incentives for construction of affordable housing such an infrastructure allowances, expedited or priority review, and tax credits remain available, as do several other creative and wholistic solutions to housing costs. However, HB 259 did end the policy of placing the entire burden of solving a societal dilemma (high housing costs) on a single industry that actually is one of the few industries already actively engaged in solving the issue (home builders). Given the vehement opposition from the Cities of Missoula, Bozeman, and Whitefish to HB 259, MBIA fully anticipates challenges from municipalities who want to continue to utilize property price restrictions as a ‘solution’ to affordable housing. Currently, a frontal legal challenge to the bill itself is unlikely. However, we have already heard rumblings of local governments trying to find ways around the prohibition of HB 259, and MBIA will work closely with our local affiliates to address those challenges. With the strong and clear language Rep. Vinton guided through the process, MBIA and our members are well-poised for long-term success. In addition to MBIA’s priority legislation, we worked with a large coalition of other interest groups and lawmakers, headed up by the Montana Housing Coalition, to advocate for a number of bills on funding and tax policy for affordable housing that followed up on work from the 2019 session and the 2019-2020 interim. Unfortunately, a more conservative approach to the budget did not bode well for these bills. HB 21 carried by Rep. Geraldine Custer (R-Forsyth) would have reauthorized CONTINUED ON PAGE 19

MONTANA HOME EXPERTS

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| LEGISLATIVE WRAP-UP continued HB 16 from the 2019 session to provide loans from the coal trust for multifamily housing projects. HB 21 died in Senate Finance and Claims. SB 117 sponsored by Sen. Tom Jacobson (D-Great Falls) would have provided additional opportunities through the Housing Montana Fund, while HB 397 from Rep. Josh Kassmier (R-Fort Benton) reintroduced SB 18, which failed in the 2019 session, and attempted to establish workforce housing tax credits. SB 117 died in Senate Business and Labor, while HB 397 made it to the governor’s desk, but Gov, Gianforte vetoed it. As of this writing, a veto override vote is pending on HB 397.

SUBDIVISION REGULATION AND LOCAL GOVERNMENT OPERATION

MBIA consistently makes sure to include impacts of redundant review at the state and local level, subdivision regulations that don’t serve any true purpose for protecting public health and safety, and the long delays in subdivision approval in the discussion of housing price impacts. As builders and developers know all too well, regulatory impacts don’t often get

factored into the public policy discussions on housing affordability, but have a major impact on housing costs. Consequently, MBIA has long worked on subdivision reform, which made some headway this session and will continue to be a focal point for interim work. MBIA worked the entire 2019-2020 interim with representatives from Realtors, planners, and local governments to introduce SB 44 with Sen. John Esp (R-Big Timber) to reform sanitation in subdivision review. MBIA and the Realtors also worked together with Sen. Esp to bring forward SB 161, which qualified some subdivisions for expedited review. Both bills have since become law. MBIA also advocated for two bills from Sen. Steve Fitzpatrick (R-Great Falls) to improve zoning and subdivision review. SB 135 allows county commissions to hold hearings on appeals from local zoning boards on a de novo basis, meaning that the county commission will have the option to look at all evidence and testimony provided to the zoning board and make an independent evaluation. SB 211 revises the agricultural land mitigation criteria in the local government subdivision review process to protect active agricultural production, but prevent the use of this criteria to extract additional open space from developers. Gov. Gianforte signed

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both bills into law. MBIA took active positions on about 20 bills related to zoning, subdivision review, and land use, and we had success on all but four—a great track record. However, our work continues. MBIA and the Realtors have initiated a working group with local governments and planners as well as several key legislators to look at a major revision to the subdivision review code for the 2023 session. That working group has its organizational meeting scheduled for July 1st. In addition, MBIA will actively participate in the Local Government Interim Committee, which meets for the first time on July 13th to set its work plan for the next 18 months.

WATER

MBIA has long prioritized water use and, specifically, exempt wells, in our policy work. MBIA initiated conversation with both Gov. Gianforte, Lt. Gov. Juras, and their staff on the issue throughout the campaign and the transition process. This included several meetings with the incoming director of the Montana Department of Natural Resources and Conservation and

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the new director of the Water Resources Division at the department, which MBIA scheduled at the request of Lt. Gov. Juras. During these meetings, MBIA provided specific detailed background for the administration staff new to Montana on the water-related issues important to home builders, as well as suggestions for immediate internal changes that don’t require either new legislation or rulemaking, but could make a huge positive difference for all water users. Although MBIA reached out early and often to Gov. Gianforte’s policy and natural resources staff to discuss action on exempt wells, MBIA made the ultimate decision not to pursue a bill this session on the topic. Factors in this decision included the unavoidable delay in getting a bill put forward because we didn’t want to introduce a bill without the administration’s support and the administration not feeling it was in a position to make a commitment so early in their tenure. However, the governor did host a meeting during the session with many of the typical stakeholders to familiarize himself with the issue and to request that the stakeholders work together in the coming interim, which MBIA has been committed to since the beginning. Even though the session itself was relatively quiet on the introduced bill front, plenty of discussion on water issues did take place. In addition to the direct conversations with members of the administration, MBIA and several other organizations worked with Sen. Greg Hertz (R-Polson) to initiate discussions on statutory change on exempt wells, which discussions will continue through the interim. MBIA also received and accepted an invitation to attend a DNRC listening session on new water demands as a panelist on June 23rd. DNRC has stated that they intend the June 23rd session as only the first of many as all administrative agencies work towards assembling their own proposals for ‘red tape reduction’ this biennium. Of course, MBIA will also actively monitor the activities of the Water Policy Interim Committee and provide comment where appropriate, all with an eye towards bringing a positive solution in the 2023 legislature.

WORKERS’ COMPENSATION

MBIA has consistently monitored workers compensation legislation, a perennial hot topic in the Legislature, and has taken positions where needed. MBIA stays in regular and close communication with the Montana State Fund on all workers compensation legislation, a relationship that both groups value. This session saw a series of four bills brought forward at the behest of Victory Insurance that would have decimated the Montana

State Fund: HB 511 through 514. Rep. Steve Gunderson (R-Libby) sponsored HB 511 while Rep. Mark Noland (R-Bigfork) sponsored the remaining three bills. MBIA worked with a diverse coalition of industries to soundly defeat all four bills in House Business and Labor. However, expect to see these attempted assaults on the Montana State Fund to reappear for some time to come.

FIRE SPRINKLERS

MBIA members with long memories will likely recall the many slogs through the mud over mandatory fire sprinklers over the years. Happily, the 2021 session ended with a significant victory on this issue. SB 178, sponsored by Sen. Chris Friedel (R-Billings), became law before the end of the session with support from MBIA and Realtors. SB 178 prohibits state building codes from requiring mandatory fire sprinklers. The state building code commission has already issued the proposed rule amendment necessary to implement SB 178, and MBIA will submit supportive comments by the June 25th deadline. Special thanks to all the MBIA members who reached out to the governor’s office to push this bill over the finish line and obtain the governor’s signature.

SKILLED LABOR EDUCATION, PROMOTION, AND REGULATION

Every home builder knows that good houses need good labor, which remains hard to come by in today’s employment market. Rep. Llew Jones (R-Conrad) carried the Montana Trades Education Credit (M-TEC) at the request of the governor’s office to create a tax credit for employers who pay for employee education in the trades. MBIA supported the bill with members providing first-hand testimony on the need for more skilled tradespersons. The bill successfully passed through both chambers and became law in April.

TAX AND CORPORATE POLICY

MBIA always keeps a watchful eye on tax policy, although the specific issues vary from session to session. The legislature often talks about the business equipment tax, which affects nearly every MBIA member, the 2021 session saw the first chip at that tax in quite a while. HB 303 sponsored by Rep. Kassmier set out the governor’s BIG (Business Investment

Grows) Jobs Act. HB 303 increased the business equipment tax exemption threshold to $200,000. MBIA supported HB 303, which became law shortly after sine die.

WHAT’S ON THE HORIZON

As interim committees formulate and begin to execute their work plans for the 2021-2022 interim, MBIA will monitor the activities of all the interim committees, rulemaking proposals from the administrative agencies, other major policy proposals from the executive branch, and statewide litigation that may have a policy impact to keep you informed throughout the 2021-2022 interim. Already, we are watching litigation impacting water permitting, labor, and planning laws and a number of regulatory proposals from both state agencies and advisory councils. Just because the legislature isn’t meeting every day doesn’t mean there’s not plenty of government action happening that impacts the home building industry in Montana. In addition, as mentioned above, MBIA has already taken the lead in several other work groups made up of legislators and other advocacy organizations to develop legislation for next year aimed at positively impacting the driving factors in home affordability. This is for the benefit of home builders, home buyers, and homeowners. I want to thank MBIA for continuing to trust me as your ears and your voice in the state government on a daily basis. Thank you also to all the individual members who took the time to write, call, and meet with their legislators and even make the trek to Helena, especially in this particularly odd pandemic session. Legislators need to hear from the folks back home directly impacted by the bills they write and vote on—both thanks for when the impact is positive and being held accountable when the legislation negatively impacts business. Particular thanks goes to the MBIA legislative committee, who provided input on bill positions and took time out of their own work to get on a call every week and discuss the bills. Between interim committees, rulemaking, and general bureaucracy, not to mention court cases that impact the home building industry, having a full-time policy presence is vital to the continued success of our industry. The work doesn’t stop when the Legislature leaves town. Steve and I are in constant conversation about how we can make better use of MBIA’s commitment to policy advocacy by having a contracted lobbyist/legal counsel as part of the team. I look forward to receiving input from all of you as we form the strategic plan for the biennium ahead. Thank you to each of you for all you do. We are stronger together. MONTANA HOME EXPERTS

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BYRON ROBERTS June 1, 1940–September 22, 2021

On the crisp, moonlit, star-spangled early morning of September 22, 2021, we lost our wonderful husband, father, grandfather, and best friend. Byron Roberts passed away peacefully at home surrounded by his family at 81 years old after an 11-month battle with AML leukemia. He was born on June 1, 1940, in Miles City, Montana, and was the second child and first son of Byron and Irene Roberts. Byron possessed an unquenchable love for life. He embraced each day as a new opportunity to dream, to create, to achieve. His remarkable mind and deft hands produced beautifully-crafted, marvelous things that brought great joy to so many. Byron had the unique ability to see the deep beauty in rusty, dusty, tattered objects. He called it “patina.” An old Edison record player, the rusted remains of an antique car, a run-down Victorian house, it didn’t matter, his hands and mind would bring it back to life in delightful detail. Who else but Byron would put a little fake mouse hole complete with a little fake stuffed mouse in the baseboard of every house he restored? The dream that kept Byron fighting this past year was the hope of completing the restoration of his 1928 Chevrolet Landau Coupe and hearing the engine rumble to life. Family will complete that project. He was blessed to travel the world with his family and friends. He had the opportunity to sail to the Bahamas, tour through Europe, explore Egypt, enjoy Hawaii, and even spend time visiting Japan and Taiwan. Byron loved his overseas travels but truly found that hiking Montana trails and fishing Montana rivers were his favorite adventures, and his best place to relax, to reflect, to dream. His banjo was usually in tow as he shared his joyful voice and love of music with anyone who was ready to sing along. Byron went to Saint Helena grade school and graduated from Cathedral High School in Helena. He attended college at Carroll College for two years and was drafted into the Army at the age of 22. After two years of service, he continued his education at the College of Great Falls and graduated with a bachelor’s degree in psychology. He married the love of his life, Carla Kay Comes, on September 11, 1965 in Lewistown, Montana. Byron worked for the State of Montana in the Department of Economic Development, Transportation, and Commerce for 20 years, then started his own home construction business, B Roberts Homes, where he built and remodeled homes in the Helena for years. Byron then worked for the Small Business Administration (SBA) and ended his business career in his dream job as the Executive Director for the Montana Building Industry Association (MBIA). Byron was a member of the National Homebuilders Association as well as the local Helena and Great Falls Associations. He was a lifelong member and supporter of the Cathedral of St Helena. Byron is survived by his wife, Carla, his four children, their spouses and families: Leslie and Eric Sacco (Connor), Lynn and Craig Journey (Sarah and Addison), Jill Roberts and Mike Cloeren, and Steve and Kim Roberts (Alice and Eloise). His six brothers and sisters and their spouses, Mary Ann (Joe) Baumgardner, Dean (Helen) Roberts, Kathleen (Bob) Meyer, Bill (Peggy) Roberts, Dave (Joyce) Roberts, and Colleen (Mike) Casey, and the many nieces and nephews that he loved so much. Byron is preceded in death by his parents, Byron and Irene Roberts, and his little sister, Jean Marie. Vigil Services for Byron were held Monday, October 4th at 6:00 pm at Anderson Stevenson & Wilke Funeral Home at 3750 N Montana Ave in Helena. His funeral Mass was held on Tuesday October 5th at noon at the Cathedral of St. Helena. A luncheon reception followed at the Brondel Center of the Cathedral. In lieu of flowers, donations can be made in Byron’s memory to three charities: Prickly Pear Land Trust (pricklypearlt.org), Growing Friends of Helena (growingfriends.org), (LLS.org) and please donate blood to your local blood bank which made the last year of his life possible. Please visit www.aswfuneralhome.com to offer a condolence to the family or to share a memory of Byron. 18

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| GRIP

MBIA EARNS $464K SAFETY RETURN Group Program Sets Positive Example by Exhibiting Excellence in Workplace Safety

L to R: Brad Cozzie, Kim Pelo, Steve Snezek (MBIA), Amber Jellison, Laurence Hubbard (Photo courtesy of MSF)

Montana State Fund (MSF), the state’s largest workers’ compensation insurance company, presented the Montana Building Industry Association (MBIA) with a check in the amount of $464,095.21. The check is a retrospective return to policyholders who have participated in the group safety program and exhibited excellence in workplace safety efforts. Montana is amongst the highest in the nation in workplace accidents and fatalities and the construction and building industries are among the most high-risk. MSF President and CEO, Laurence Hubbard, had the following to say about the program: “MBIA’s group safety program has produced very positive results for Montana employers and workers over the last decade. These efforts should be applauded and hopefully lead others to the realization that safety truly does pay.” Steve Snezek, the Executive Director of MBIA, said “It has been a remarkable partnership working hand-in-hand with Montana State Fund to drive down accident frequency and rates among our members. The employers and workers do the hard part by emphasizing safety each day, but we could not be successful without a true team effort.” 313 MBIA group members will share the total return with the average check to policyholders amounting to nearly $1,500. The checks range from approximately $12 to more than $20,000 depending on policy size, premium paid and losses incurred.


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ARE WE THERE YET? What’s Behind Inflated Construction Costs and What Lies Ahead

by any number of factors, from bad weather to a shortage of drivers. Between offloading commodities and transporting them to their final destinations, warehouse space has been inadequate at times to handle the sudden influx of stock after months of insufficient supply.5 The collective impact of all of these pressures continues to be felt by every sector of the building industry, from lumber yard owners and contractors to tradespeople and interior designers. “Our members here in Montana are telling us that this is the ‘perfect storm’ of increased demand, reduced supply and higher costs,” said Steve Snezek, MBIA’s executive director. “Lots, lumber, and labor have all gone up in price, and this is leading to increased final pricing. While our members are exceedingly busy, because of increased costs, many are having to work harder and put in longer hours just to try to stay ahead.”

In the housing industry—whether you’re a builder, REALTOR®, tradesperson, investor, or homebuyer—history has shown there’s generally an exception to the rule, “What goes up must come down.” However, with the dizzyingly rapid ascent of construction prices this past year, it’s difficult to imagine the market remaining at the record highs we’ve witnessed. Thankfully, construction material prices are finally beginning to ease, in turn increasing builder confidence, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) released this past September. Whether we’ll ever see a return to “normal” remains to be seen.1

A LOOK AT THE NUMBERS

Lumber prices, which increased by a whopping 300% over the past year, with a sharp spike in May of 2021, finally began easing in June 2021, with some reports showing a 40% drop in lumber futures between May 7 and the end of June. The main factors believed to be behind this easing are cooling demand for new builds and remodels—especially as consumers respond to sticker shock by opting to wait things out—as well as a slow but steady increase in product availability as suppliers ramp up production.2 The price of steel, however, has continued to climb since October 2020, and now costs approximately double what it did this time last year. The primary reason for this increase, according to industry experts, is the laborintensive nature of steel production. Similar to nearly every industry across the globe, the steel industry has dealt with labor shortages that in turn affect plants’ ability to create more product. Turnaround time for orders in the U.S. are now two to three times longer than they were a year ago. Although steel prices are expected to soften eventually, don’t expect to see much of a difference in cost until spring of 2022. And even if you’re able to substitute some wood-based materials for projects that don’t require steel, the catch-22 is that the resulting higher demand for wood products will continue to slow price easing of lumber.3 However, despite an overall slowdown in the demand for new homes, in the West the regional HMI–which measures expectations of single-family home sales and prospective buyer traffic–has remained high relative to the rest of the U.S. as we continue to see an influx

By Courtney Oppel

IS THERE ANY RELIEF DOWN THE ROAD?

of “COVID refugees” moving away from areas most severely impacted by the pandemic. Between this demand and the combination of shortages plus inflated costs of lumber and other construction materials, building costs continue to keep affordable housing difficult (and in some places, impossible) to find in Montana. At one point, according to the NAHB, the average price of a new single-family home in the U.S. rose by $36,000.4 Anecdotal evidence from historically expensive areas in our state (we’re looking at you, Missoula, Whitefish, and Bozeman) attests to cost increases well in excess of that national figure.

WEAK LINKS IN THE SUPPLY CHAIN

What’s causing construction material shortages from beyond our shores? According to Anirban Basu, an economist with Associated Builders and Contractors (ABC), ports such as Los Angeles are backed up with container ships waiting in line to unload. And even once those supplies are on shore, transportation delays can be caused

According to an article published by the NAHB in August of 2021, there is a light at the end of the tunnel—and it’s not from an oncoming train. “While the demographics and interest for home buying remain solid, higher costs and material access issues have resulted in lower levels of home building and even put a hold on some new home sales,” said NAHB Chief Economist Robert Dietz. “While these supply-side limitations are holding back the market, our expectation is that production bottlenecks should ease over the coming months and the market should return to more normal conditions.”6 ABC’s Basu shared a similar outlook. “Hopefully, currently elevated prices will induce suppliers to increase output in the short term and capacity over the longer term,” said Basu. “While supply chain disruptions, input shortages, and high prices, which many contractors mentioned as factors affecting their backlog … are likely to persist into 2022, the laws of economics suggest that project owners and the contractors who work on their behalf will benefit from some price relief at some point next year.”7 Holding the course during challenging times can take you down some long, rough roads, but like any drive through our beautiful state, you’ll eventually get to a place where you can pull over, rest for a while, and revel in your destination.

“Builder Confidence Steadies as Material and Labor Challenges Persist,” NAHBnow.com, September 20, 2021; 2 Li, Yun. “Lumber prices dive more than 40% in June, biggest monthly drop on record,” CNBC.com, June 30, 2021; 3 Mixon, Lauren. “How has the pandemic impacted construction costs, delays?” WDTN News, September 28, 2021; 4 “Skyrocketing Lumber Prices Add Nearly $36,000 to the Price of a New Home,” NAHBnow.com, April 28, 2021; 5 Champlin, Caroline. “Ports are crowded as the holiday season approaches,” Marketplace Morning Report, September 3, 2021; 6 “Builder Confidence at 13-Month Low on Higher Material Costs, Home Prices,” NAHB.org, August 17, 2021; 7 “Monthly Construction Input Prices Inch Lower in August, But Are Still Elevated Year Over Year, Says ABC,” ABC.org, September 10, 2021.

1

MONTANA HOME EXPERTS

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| MBIA MEMBERS

INNOVATORS

Montana Building Industry Association

ASSOCIATION STANDOUTS VISIONARIES

TRAILBLAZERS

HAVE AN OUTSTANDING MEMBER TO NOMINATE?

Contact the MBIA office at 406.442.4479 or email sassion@montanabia.com

KATIE HANNING HBAGF EXECUTIVE OFFICER, 2020 NAHB Association Excellence Award Winner “What I love about this industry is that it still requires a hammer and a nail and a little bit of elbow grease. By God, we have a lot of hard-working people in our association, and they’re an inspiration.” Anyone who’s met Katie Hanning would never in a million years describe her as “suffering from delusions of grandeur.” When this Executive Officer of the Home Builders Association of Great Falls (HBAGF) won the Small Office Honor Award at the 2021 Association Management Conference in Minneapolis this past August, she was completely taken off guard. “The first words out of my mouth were, ‘Get out!’” recalled Hanning, laughing. “I didn’t even want to spend the association money to attend the conference, but everyone kept insisting I go—and that I take my husband, which I thought was weird.” Born and raised mainly in Great Falls, Hanning described herself as “a usual Montana kid. Like most Montanans, I 22

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worked through the ranks.” After earning a certificate in construction industry technology, she spent the majority of her career in that industry until thirteen years ago, when someone Hanning worked with suggested she apply for the position of Executive Officer with HBAGF. “I didn’t think I’d get it,” she admitted, “but I just ended up really hitting it off with the person who interviewed me. They could see I had a passion for the industry.” Thankfully for members of HBAGF, that passion has never waned. When asked what makes industry association membership so valuable, Hanning replied, “Hands-down, every member in our association wants us to fight the fight, to advocate for them at the local, state and federal levels to

protect them from overregulation. That’s something I do every day. Even just to have me available to answer calls when COVID hit and help ensure construction was considered an essential business [was critical]. That saved hundreds of Montana families from going under.” And what’s the most rewarding aspect of Hanning’s position? From day one, she’s appreciated the opportunity to promote the construction industry to future generations. “It’s been inspiring to watch our members that are seasoned veterans give of themselves and work with the next generation.” Someday, Hanning looks forward to being able to mentor and inspire her successor in much the same way. We’re quite positive she will.


LINDA REVENAUGH OUTGOING SWMBIA EXECUTIVE OFFICER, 2018 NAHB Association Excellence Award Winner “I didn’t want to be the one behind the podium. There were so many dedicated volunteers with great ideas that kept me energized and that made everything happen. There are just not enough hours in a day for one person to get everything done.” Although there were times Linda Revenaugh was the sole employee of the Southwest Montana Building Industry Association, the high regard she has for its members and staff is evident to all. For every single SWMBIA event or success story, she’ll quickly reel off (by memory) a list of individuals and organizations that worked alongside her. Nevertheless, she will acknowledge that she’s proud of her contributions to SWMBIA. And with twenty-three years under her belt, there are many. One of her most satisfying moments happened in 2005, when the city of Bozeman agreed to return $5 million in impact fees to those that had paid fees, as well as temporarily reduce fee levels. In 1999, the building association had joined other claimants to file what became a class-action lawsuit against the city, arguing Bozeman was overcharging builders and developers for impact fees. “That decision

actually inspired similar legal changes throughout the U.S.,” said Revenaugh. Revenaugh has dedicated her entire professional career to SWMBIA. In 1998 she began as a part-time office manager but soon switched to full-time. Over the next several years, staff turnover at times left Revenaugh as the only employee. “I wore a lot of different hats,” she recalled. “At one point I was director of operations, then I was interim EO for probably three or four years” before being hired as the official executive officer. In 2018 she was awarded the National Small Office Executive Officer Award from NAHB. Given her decision to get her BA in political science at MSU in Bozeman, it’s not surprising that advocating on behalf of building industry professionals was one of Revenaugh’s greatest passions. “That advocacy was key, especially in partnership with the national association,

which represents over 600 or so local associations, as well as with MBIA. That’s where I could see how SWMBIA was acting as a catalyst for change, and really understand how all our grassroots efforts are connected to what can be accomplished at the national level.” She was also impressed with the caliber of the local and state building industry members she’s had the privilege of working with. “Those people are true leaders in their communities, and I consider many to be lifelong friends.” As for her future plans? “I see myself getting more involved in things that I haven’t had time to get involved with. Right now I’m just enjoying the heck out of having a little time to catch up on things,” especially spending time with her family, including her two daughters that are juniors in high school, her son who’s currently attending Gallatin College, and her and her husband Paul’s extended family.

406-961-6808 www.schrockinc.com

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RETIREMENT |

MIKE ROCCHIO: SAFETY ISN’T EXPENSIVE; IT’S PRICELESS

Looking back on the various careers Mike Rocchio has pursued throughout his life, his overarching calling is clear: teaching people how to stay safe. When MBIA had the opportunity to nominate someone for the 2021 Governor’s Achievement Award for Outstanding Workers’ Compensation Professional, outgoing Group Rewards Insurance Program (GRIP) Safety Specialist Rocchio was an obvious choice. And now, as he looks forward to his well-deserved retirement at the end of this year, we’d like to acknowledge not only his incredible contributions to MBIA, but his life of steadfast service to others. After graduating from college, this Minnesota native worked in the ore mining industry in his hometown of Hibbing until a recession forced layoffs. He then moved to Florida, where he used his bachelor’s degree in education to teach industrial arts to high school students for five years, while also serving as a reserve police officer. Moving back to Minnesota, he again worked for a couple of different mines while also volunteering as an EMT. “A guy I knew in the safety business said, ‘If you’re serious about working in safety, it doesn’t hurt to have an EMT certification on your resume.’” No stranger to hard work and long hours, Rocchio continued to volunteer as an EMT for twenty-five years. Eventually, Rocchio moved to Montana, where he and his wife, Kathy, have raised their three children and recently celebrated their fortieth anniversary. In 1989, he accepted a job as Safety Director at Montana Tunnels, an open-pit gold mine in Jefferson City. His main role was overseeing all

aspects of annual Mine Safety and Health Administration training for all employees. “My teaching background helped a lot there. I went from teaching kids to teaching adults,” said Rocchio. Additionally, he was directly involved with management in implementing early return-to-work programs, injury reporting, and modifying positions for crew. “I also ran the company ambulance. There weren’t a lot of accidents, but over fifteen years with that many people—up to 220 in the mine’s heyday—people do get hurt.” As a result of his work at Montana Tunnels, Rocchio was appointed by Governor Racicot to a committee that fleshed out the Montana Safety Culture Act (MSCA), which became law in the early 1990s. In 2005, Mike left the mine and joined the MBIA, where he has worked with thousands of Montana State Fund Workers’ Compensation policyholders to protect staff and fulfill the mission of the MSCA. Mike has spent the past sixteen years analyzing workers’ compensation data to help identify risks, providing safety training, and helping companies promote a culture of safety within their organizations

through MBIA’s Group Rewards Insurance Program. GRIP has saved over $6 million in retroactive premium returns to these Montana companies by not only maintaining, but vastly exceeding industry loss ratios. Even more impactful than the cost savings is the over 16,000 workers who have benefited from safety trainings and, as a result, continue to make it home safe every day to their families and loved ones. “In my opinion, one of the biggest benefits to MBIA members is the free training you can get through the GRIP program,” said Rocchio. “And the cost savings passed on to member companies gives them an incentive to keep their employees safe. Simply put, safety is profitable.” Contemplating his retirement, Rocchio is looking forward to having plenty of time for simple pleasures like ice fishing in the winter and growing tomatoes in the summer. Not one to slow down, he and his wife recently completed a seven-mile hike to Granite Park Lodge in Glacier National Park and look forward to exploring many other national parks together.

“ I really enjoy teaching and talking with people, and this job certainly gives me an opportunity to do that. And I never turn anyone down if they have any safety issues.”

MIKE ROCCHIO

MONTANA HOME EXPERTS

25


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Through the efforts of the Montana Building Industry Association (MBIA) and the Montana State Fund, a select insurance group of MBIA members has been created. The GRIP program is available to all MBIA members and has saved participating members more than $5.5 million over the past twelve years! FREE SAFETY TRAINING & CERTIFICATIONS Certify your employees for Forklift, Powder Actuated Tools, Scaffolding, and First Aid/CPR. Free monthly 1-hour OSHA compliant safety meetings on a variety of useful topics. Training is hands-on, very informative, and conducted in Through Through thethe efforts efforts of of thethe Montana Montana Building Building Industry Industry nine local association cities. Association Association (MBIA) (MBIA) and and thethe Montana Montana State State Fund, Fund, a a select select insurance insurance group group of of MBIA MBIA members members hashas been been created. created. The The GRIP GRIP program program is available is available to to all all MBIA MBIA FREE and ONSITE members membersand hashassaved savedparticipating participatingmembers members CONSULTATION TRAINING more more than than $5.5 $5.5 million million over over the the past past twelve twelve years! years!

Site specific training needs and inspection of your worksite for Tools, Certify Certify your your employees employees for for forklift, forklift, Powder Powder Actuated Actuated Tools, hazards and/or any potential scaffolding scaffolding andand First First Aid/CPR. Aid/CPR. Free Free monthly monthly 1-hour 1-hour OSHA OSHA compliant compliant safety safety meetings meetings on on a variety a variety of useful of useful topics. topics. OSHA violations. Training Training is hands-on, is hands-on, very very informative informative andand is conducted is conducted

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