Market Trends: July 2001

MARIETTA, Ga. – The season is off to a good beginning, according to members of the Professional Lawn Care Association of America (PLCAA).

Approximately 52 percent of PLCAA members reported a successful season so far, citing good weather, better labor supply and fewer customer cancellations. "Some also stated that the economy is not as bad as they had anticipated and that they were able to raise prices for 2001 without much flak," explained Bob Andrews, PLCAA past president.

Respondents reported an average 15.8 percent sales growth rate, with 16 percent of that being new sales.

While most of the feedback was positive, 40 percent reported that this season’s growth was worse compared to last season’s growth, with 35 percent stating the season is better and 25 percent saying it’s comparable to last year.

When asked if they were doing anything different this year to boost sales, 64 percent said yes, listing sales improvement strategies, such as new services; more direct mail, telemarketing and add-on services; referral bonuses; more diverse advertising and improved customer contact.

HEALTH CARE NEWS
Benefit Barriers

WASHINGTON, D.C. – Small employers who don’t offer health insurance coverage identified affordability as a key obstacle, according to the Small Employer Health Benefits Survey.

Policymakers recognized that small firm employees are disproportionately uninsured – the survey said nearly one-third of workers at firms with 25 or fewer employees are uninsured. More than half of small employers who did not offer coverage – 53 percent – cited their inability to afford insurance as a key impediment. And more than one-third of survey respondents said another major reason they failed to offer coverage was because their employees could not afford it.

But those affordability problems may be compounded by misconceptions about the business value of offering health benefits, the availability of tax deductions for both employers and workers, and recent regulatory changes by the state and federal governments that have restructured the small employer health insurance market.

A majority of small employers – 80 percent – did not realize that virtually all states require insurers to spread the claims cost of small employers with sick employees across their larger pool of small firms through the use of rating restrictions. More than 65 percent did not realize there are regulatory limits to how much insurers can charge employers with healthy workers compared to employers with sick workers.

Fifty-seven percent of small employers were unaware that their contributions toward employee health coverage were 100-percent tax deductible, and 48 percent did not realize that their workers cannot deduct their health insurance premiums when they purchase coverage on their own.

The survey also reported figures from small employers who successfully offer health benefits. Approximately 78 percent said that offering health benefits has a positive impact on employee recruitment, 75 percent said that it improves employee retention, attitude and performance, and 58 percent stated that offering a plan has an impact on lowering absenteeism.

REGIONAL OUTLOOK
N.Y. Judge Orders Final Neighbor Notification Ruling

LONG ISLAND, N.Y. – Judge Stephen Bucaria upheld his original judgment in favor of the lawn care industry when he recently handed down his final ruling in the Nassau County neighbor notification law case.

"After hearing all the arguments again, he stuck to his guns," explained Fred Eisenbud, an attorney representing the industry coalition fighting the law.

John Zaher, spokesman for the Nassau County Executive’s Office, said the county attorney’s office is reviewing the decision to determine if it is appropriate to appeal.

Despite the win in Nassau County, the coalition was dealt a blow when Justice Ralph Costello ruled one day earlier to let the law stand in Suffolk County. The judge in Westchester County had previously issued the same decision.

Eisenbud said the coalition will appeal Suffolk and Westchester counties’ decisions.

The state pesticide notification law was passed in August 2000 and applies only in counties that adopt it. State lawmakers included a provision stating that the law must be adopted "as is," barring counties from making modifications. To date, Suffolk, Nassau, Westchester and Albany counties have adopted the law and legal challenges are pending in three of the four counties.

"We haven’t filed in Albany yet," Eisenbud stated, "but we will shortly."

The industry coalition is moving forward with these lawsuits because those counties did not complete an environmental impact study in compliance with the State Environmental Quality Review Act (SEQRA), which requires such a study before notification-type legislation. The counties’ attorneys, however, are arguing that because the counties were forced to adopt the law "as is," no impact study was necessary.

But, the coalition refutes that argument, saying that where there is discretion, SEQRA requirements must be followed.

Eisenbud explained that he is hopeful for a win in Albany County because the legislature adopted the law one month after the deadline date for it to take effect on March 1.

"By any common sense reading of the law, it shouldn’t have gone into effect until January 2002," he asserted. "There’s language that says any law passed after Jan. 1 goes into effect the following January. But they’re treating it as being in effect now."

In addition to that discrepancy, Eisenbud explained that Albany County has a sunset provision on its books that requires the measure to be readopted before Dec. 31 or the county’s neighbor notification law will expire.

"If they’re wrong [about the language of the law], and they don’t readopt it, they’ve accomplished nothing," he declared.

In Suffolk County, Eisenbud hopes to win on appeal based on state law modifications. The state law requires written notification plus two alternative spraying dates, but in Suffolk County, the language was changed to require that the alternative spraying dates be consecutive business days.

Until cases are final, the law will stand in Westchester and Suffolk counties. Although the New York State Department of Environmental Conservation (DEC) is responsible for enforcing the law, Peter Constantakes, a DEC spokesman, said the department will depend heavily on local authorities to investigate complaints and issue violations. Violation of the law carries a penalty of a $10,000 fine and possible jail time.

Despite the complicated legal battle, Eisenbud said other counties in the state are discussing adopting the law.

MERGERS & ACQUISITIONS
Dow Closes Rohm & Haas Acquisition

INDIANAPOLIS – The Dow Chemical Co. completed the acquisition of Rohm & Haas’ agricultural business for approximately $1 billion, including working capital. The acquisition will be integrated into Dow AgroSciences, a Dow Chemical Co. subsidiary focused on turf and agriculture.

Under terms of the agreement, Dow AgroSciences acquired Rohm & Haas’ Agricultural Chemicals business, including fungicides, insecticides, herbicides, other product lines, trademarks and licenses to all agricultural uses of the Rohm & Haas biotechnology assets. With this acquisition, Dow AgroSciences’ annual sales are expected to grow to approximately $3 billion.

"This acquisition is consistent with our growth strategy of adding value through mergers, acquisitions and our own R&D efforts," said Charles Fischer, president and chief executive officer of Dow AgroSciences.

"As we re-shape our portfolio and focus on profitable growth, it is clear our ag chemicals business and employees will flourish more as part of a global firm with a stronger market presence," added Raj Gupta, Rohm & Haas Co.’s chairman and chief executive officer.

ON THE INTERIOR SIDE
Growth Initiative Launched

HERNDON, Va. – Exceeding its initial goal of $825,000 in 10 months, the Interior Industry Growth Initiative Task Force officially launched its Plants at Work growth plan.

A final donation of professional assistance in Web site design and other production assets valued at more than $100,000 by the Florida Nursery & Growers Association, kicked off the plan, which is a three-year, industry-wide promotion to boost interior contractors’ profitability and profile.

The promotion will include a direct mail campaign and a press conference to boost plant service value and grow the interior industry, said McRae Anderson, the Initiative’s marketing plan task force coordinator.