March 2006 BCGWA Newsletter President’s Address Thank you for having the confidence to choose me to serve as President of the BCGWA. I hope I can meet and exceed what you would expect from me as the spokesman for the groundwater industry in BC. I would like to thank Dave Mellis as the out going President for all of the work that he has put in over the last several years in leading this association to it’s rightful place as the principle voice of the Ground Water industry. We have begun to achieve the goals that inspired the creation of the BC Well Drillers Association over 35 years ago. Those goals included the creation of enforceable minimum standards for the construction and completion of wells, and requirements for training and qualification of drillers and contractors. Members of our association have been and continue to be instrumental in the evolution of the Ground Water Regulations. In fact we now have three of our Past Presidents sitting on the advisory board. Jim Fyfe, Bruce Ingimundson, and Dave Mellis. Thanks to all three for your continued commitment to this industry. I plan to continue along the path that has been laid out by my predecessors, and maintain an excellent working relationship with the government ministry responsible for groundwater, no matter how many times they change their name. I also plan to keep open lines of communication between the executive, the directors and the members of the BCGWA. Please feel free to contact your regional director or myself if you have any comments or concerns that you would like to bring forward during the coming months. One of the recurring themes at the convention March 2, 3, and 4th, was the lack of knowledge of the general public, and even of people working in the field about the new regulations. There was also concern about the apparent lack of enforcement of regulations. Please realize that this is a slow process, and that these regulations have only been in place for less than 5 months. Patience and persistence are both necessary. We all need to work in our communities to educate well users, and provide the leadership necessary to elevate the whole industry to the new high standards. We are the Professionals. All those in attendance at the convention saw the excellent brochures created by the MOE called “BC’s Groundwater Protection Regulation”. “What Private Well Owners Should Know”. I highly recommend that you get several hundred of these brochures, and make them available to customers and other businesses in your area. They are available to all through your local area Ground Water Protection Officer, Ministry of Environment. For those of you who missed the convention, you let a golden opportunity pass you by. It was very well attended by suppliers, contractors, and professionals, and there was a lot to learn for anyone with an open mind. There were good deals on equipment, contacts with new clients, and a healthy exchange of ideas. There were also a lot of laughs shared over a few drinks with some spectacular stories told. (All true says Jim Clark). We will be exploring some issues in the coming months, including the future of the trade of: “Water Well Driller”, which is under pressure due to the low number of apprentices entering the program, and the possibility of hiring an Executive Officer to help manage association business. Thanks to all who helped to make this convention a success, especially Joan Perry, and Gilles Wendling, and thanks to everyone who supports this association and this extremely important industry. Onward and downward, as they say in the drilling business. Best Regards to all. David Slade, BCGWA President Service Technician Wanted Minimum of 2 years experience required for Lower Mainland pump and water treatment business. Ability to troubleshoot on-the-site problems and make repairs and installations. Preference given to those with Level 2 or 1 Pump Technician Certification and/or Certified Water Specialists. Mechanical aptitude. Valid B.C. Driver’s license. Professional attitude and excellent customer service skills required. Competitive wages and benefits package. Fax resume to (604) 534-5522 or e.mail to pumps@shawbiz.ca. Membership Dues!! If you haven’t already done so, please double check and make sure that your membership dues are paid. The deadline is March 31st. We need your support. ***** B.C. Ground Water Association Convention and Trade Show We hope you were one of the lucky ones that attended the convention this year. The Langley Coast Hotel & Convention Centre turned out to be a perfect location. We had the largest turnout we have ever had with close to 180 in attendence. The convention started on Wednesday March 1st by holding the Level 1 & 2 Pump Installers Certification Course given by Dave Mellis of PSI Pump Systems Inc. There was a very good response to this course. It was wonderful to see members of the Association arriving for the meet & greet in the evening. Many people only see each other at this event and it’s always fun to catch up on their year. Many friendships have been formed over the years and the convention is a great way to get reacquainted and to socialize with new attendees. Meetings were held on the morning of March 2nd and the afternoon of March 3rd. Again, thanks to Gilles Wendling, we had many wonderful speakers. Our keynote speaker was Bill Woessner from the Montana University who spoke about the occurrence and persistence of Sewage-source Pharmaceuticals in Shallow Groundwater. We had many speakers from the Ministry of Environment and other speakers were from Droycon, Ground Force Systems Inc., EBA Engineering Consultants Ltd., Cantest and the BC Safety Authority. All agreed it was an excellent and informative agenda. Many thanks to Gilles Wendling for organizing the program and to Scott Schillereff and Thierry Carriou for assisting him. The CGWA exams were held and a total of 20 people challenged the exams. 2 for the Driller exam, 5 for the Class 1 and 13 for the Class 11 pump installers. The Trade Show took place from the afternoon of March 2nd to noon of March 3rd. We had 20 booths that seemed to be handling a lot of traffic. Dinner was held in the Trade Show area with “some” entertainment. (No, that wasn’t my husbands long lost cousin from England). Thank you to all of the booths that displayed at the convention. We appreciate your support. · Andrew Sheret Limited · Angus Flexible Pipelines · Atlas Manufacturing · Cantest Ltd. · CGWA · Cubex Limited · Emco Corporation · Extreme Products & Drilling Supplies Inc. · Foremost Industries · Langley Welding & Machine Shop Ltd. · Marwyn Sales & Supplies Ltd. · Ministry of Environment · PSI Pump Systems Inc. · RST Instruments Ltd. · Sphere Drilling Supplies · Thiessen Team · Tundra Sales Inc. · Van Isle Water Services Ltd. · Variperm Canada Ltd. · Westcoast Drilling Supplies Ltd. · Corestock Supply Ltd. for their donation to the Wine and Cheese evening Friday night was our banquet and dance. After a delicious buffet dinner, we listened and danced to the music of the “Night Train Revue”. It was an excellent evening and it was fun to hear some of the old songs from the 60’s and 70’s. Our AGM was held the following morning. (A copy of the minutes is attached). The following is a list of the newly elected executives and directors for the upcoming year: Executive: Chairman & President: David Slade Vice President: Scott Schillereff Secretary: Max Schibli Treasurer: Bruce Ingimundson Directors: Cariboo: Peter Epp Kootenay’s: Harry Caldwell Okanagan: Remi Allard Fraser Valley: Jim Clark Vancouver Island: Paul Anderson M&S Rep: Sheridan Gaudet Prof & Tech: Gilles Wendling CGWA: Jim Fyfe Past President: Dave Mellis The vote to add three new divisions to our constitution was passed and the following people were voted in: Geotechnical/Environmental: Bill Tuytel Well Driller: Doug Unrau Pump Installer: Mike Lamont We had a very successful convention and for those that missed it, hopefully you will mark your calendars for next year and plan to attend. Remember, it is always the first weekend in March. ***** Regional Meetings An Okanagan Regional meeting was held in Penticton on December 7, 2005. Contractors reported that they were extremely busy. A televised media event on well tagging with the MOE in the spring of 2005 was a success. The new regulations were discussed and provided feedback to the government. There is a sense among contractors that enforcement of the new regulations is lacking and they would like a more formal process developed. Scott Schillereff, Okanagan Regional Director Note: Scott is also the BCGWA representative to the Water Stewardship Council of the Okanagan Basin Water Board. An informal meeting for drillers was held in the Kootenay region in January 2006. Contractors there reported being extremely busy. The Regional Director’s should arrange to hold a meeting for their area in the fall. This can be discussed closer to the date. ***** CGWA Report The Executives of the Canadian Ground Water Association Board of Directors met on October 26, 2005 in Charlottetown, Prince Edward Island, and on October 27, 2005 in Moncton, New Brunswick, to discuss current issues and agenda items for the full board meeting in May 2006, as well as the Biennial General Meeting also in May at Charlottetown. Discussed at these meetings included some of the following issues: · CanWell 2006 · Issues regarding the ground water association in Quebec · An update on Petro-Canada · A discussion on a suggested retail drilling price across Canada · Certification issues across Canada and in particular Britich Columbia · The National Silent Auction · Issues of interest to the Newfoundland and Labrador Ground Water Association · Magazine coverage for the CGWA Wayne MacRae Executive Director, CGWA Upcoming Events March 31-April 1, 2006 Saskatchewan Ground Water Association Convention Ph: 306-244-7551 April 6-8, 2006 Alberta Water Well Association Convention Capri Centre Red Deer, Alberta Ph: 780-386-2335 May 17-20, 2006 CanWell 2006 Convention Charlottetown, Prince Edward Island Don’t forget to mark your calendars for this Canadian Ground Water Convention! More information can be found on the CGWA website at www.cgwa.org. July 16-17, 2006 Ontario Ground Water Convention Ph: 519-245-7194 ***** Membership Changes New Members & Changes: Contractors: AJ Pumps Fax: 604-795-2561 e.mail: ajpumps@telus.net Heat Smart Geothermal Ltd. 3481 Playle Road Cranbrook, B. C. V1C 7B9 Rep: Ron Janzen Ph: 250-426-3312 Fax: 250-426-3307 Highlands Irrigation Ltd. 1105 S. Lakeside Drive Williams Lake, B. C. V2G 3A7 Rep: Dick Ford Ph: 250-392-2321 Fax: 250-392-2377 Independent Pump & Mechanical Ltd. 2249 Stowood Road Shawnigan Lake, B. C. V0R 2W5 Rep: Shane Black Ph: 250-743-3075 Fax: 250-743-3058 McCormick Heating & Plumbing Ltd. Box 735 Nelson, B.C. V1L 5R4 Rep: Stuart McCormick Ph: 250-354-4223 Fax: 250-354-1454 Nanaimo Pump & Motor (2005) Ltd. 156 Cliff Street Nanaimo, B. C. V9R 5E7 Rep: Kirk Domino Ph: 250-753-8042 Fax: 250-753-8042 Okanagan Geothermal Ltd. #36 Hwy 97 B Enderby, B. C. V0E 1V3 Rep: Jim Croken Ph: 250-833-6126 Fax: 250-838-0809 e.mail: jjcroken@telus.net Smithers Well Drilling Ltd. 4760 Nielsen Road Smithers, B. C. V0J 2N2 Rep: David Schroeder Ph: 250-847-4033 Fax: 250-847-4033 Uniwide Drilling Co. Ltd. 5755 Byrne Road Burnaby, B. C. V5J 3J1 Rep: Gary Yeo Ph: 604-321-2921 Ph: 604-321-2920 M&S Division: Aggressive Pump & Supply Inc. #102, 6592-176 Street Surrey, B. C. V3S 4G5 Ph: 604-574-4110 Fax: 604-574-4109 Prof & Tech Division: Cantest Ltd. Kelowna Regional Office 207 –451 Adams Road Kelowna, B. C. V1X 7R9 The new Rep is Glen Craig Ph: 250-765-7501 Fax: 250-765-7509 EBA Engineering Consultants Ltd. New Rep: Lee Ringham (Nanaimo) lringham@eba.ca Associate Members: Fred Cudlipp Terasen Waterworks (Supply) Inc. 3175 Turner Avenue Abbotsford, B. C. V2S 7T9 Ph: 604-850-0441 Fax: 604-557-4750 Mitch Forster Terasen Waterworks (Supply) Inc. 3175 Turner Avenue Abbotsford, B. C. V2S 7T9 Ph: 604-850-0441 Fax: 604-557-4750 Randolph Mann Terasen Waterworks (Supply) Inc. 3175 Turner Avenue Abbotsford, B. C. V2S 7T9 Ph: 604-850-0441 Fax: 604-557-4750 Merv Porteous Terasen Waterworks (Supply) Inc. 3175 Turner Avenue Abbotsford, B. C. V2S 7T9 Ph: 604-850-0441 Fax: 604-557-4750 Mike Reid Terasen Waterworks (Supply) Inc. 3175 Turner Avenue Abbotsford, B. C. V2S 7T9 Ph: 604-850-0441 Fax: 604-557-4750 Safety Standards Act Requirements For Electrical Installations The British Columbia Safety Authority, under the Safety Authority Act, implements the Safety Standards Act and regulations in the Province of British Columbia. The Safety Standards Act requires certain types of work, such as electrical work, to be regulated due to the inherent risks associated with them. Other technologies that are regulated include gas, boiler and pressure vessels, elevating devices, amusement rides and passenger ropeways, recreational railways, and industrial and commuter railways. A permit is required before regulated work is started. Permits are issued to licensed electrical contractors by the authority having jurisdiction. A well pump installer can become an electrical contractor by naming a Field Safety Representative on an application, providing proof of a surety bond, and paying the appropriate license fee. The British Columbia Safety Authority offers a restricted class Field Safety Representative certificate called the WW (water well) certificate of qualification in order to accommodate those who install well pumps. The scope of work for this certificate authorizes the holder to perform regulated electrical work by installing branch circuit wiring from an enclosure containing overcurrent devices to the pump equipment. Application form and applicable information for the WW Field Safety Representative certificate of qualification examination and scope of work are available from our office closest to you. Please see our web site, www.safetyauthority.ca, for reference to the Act and regulations, contact information, and a list of our offices. Rick May Provincial Electrical Safety Manager British Columbia Safety Authority ***** Calling it Quits! After 25 years of being the owner/operator of Perry’s Well Drilling, Walter Perry has sold his equipment and is calling it quits. He has spent 35 years in the industry having worked for Buck Nelson of Pacific Water Wells for 10 years before starting his own company. Enjoy your retirement! You’ve earned it! Joan Perry ***** Advertising prices ¼ page ad - $25.00 ½ page ad - $45.00 full page ad - $90.00 ***** Price Costing for Profit – Working more could be putting you out of business The more you sell the more you earn, right? It seems simple enough. If you get more jobs, then you’ll automatically see more profit. Even if you’re working at a discounted price, the more wells you drill, pumps you install, and so on and so forth, the more money in the bank when it’s all said and done. Not necessarily. In fact, many water well contractors believe the more wells they drill, the better. But if you are pricing your services at discount price to get more work, you could be doing more harm than good to your bottom line. “The variable costs rise faster than the profit margin,” explains Gary Hix, CWD/PI, of Saguaro Well & Pump Co. in Tucson, Arizona. “The variable cost curve goes up as the number of jobs increase. “Variable costs are costs that are affected by your sales volume. Meaning, your costs actually increase as your number of jobs increase. For example, assume your crew completes X amount of wells or pump installations each week. If you triple that number, you may find you need to add more personnel to handle the increase in work – or even another rig or service truck. If you don’t increase your price to reflect the added employees or that new rig, you’re actually losing money on every job. “It’s important to price your services so you do continue to make a profit.” Says Ron McAfee, CDW/PI, of the Water Mechanic in Clover, South Carolina. “That’s the reason that anyone works at any job is to make a living. If I don’t price correctly, I’m not going to be making a reasonable living.” The Role of Variable Costs Another way to figure your costs of doing business is to add fixed and variable costs. Fixed costs are the costs that will stay the same no matter how many jobs you do or the size of jobs you do. Insurance, rent and licenses are all included in your fixed costs. Simply put, if you were to not drill a single well in any given year, you would still have to owe this amount. Again, variable costs are those that increased or decreased depending on how many jobs you complete. Labour, fuel, and materials are all variable costs. Like direct and indirect costs, if you add up the fixed and variable, you will find the total cost of doing business at that particular volume of work. So if the rate at which you complete jobs increases or decreases, your total price will fluctuate. Like adding your direct or indirect costs, you should mark up your price to reflect about a 40% gross profit margin. Determining Your Cost Per Foot One way to determine your cost per foot is to add up the direct costs and the indirect costs. Direct costs are direct labour, depreciation, casing (per foot), and the cost of any necessary permits per job. To figure out the direct cost of labour, you should add wages, payroll taxes, and fringe benefits. Next, divide this by the percentage of time actually worked and divide that by the average number of feet drilled per hour. The depreciation is determined by dividing the cost of the rig by the estimated number of useful years and divided by the number of feet drilled per year. Finally, take the permit cost per job and divide that by the average depth of well. Add all the components of your direct cost and you get the total direct cost per foot. Indirect costs, also known as overhead, include all of your operating expenses. Repairs, indirect labour, payroll taxes on indirect labour, supplies and tools, insurance, utilities, advertising, gas and oil, depreciation expense (truck), rent, taxes, and all other expenses compromise the indirect costs. To find the total indirect cost per foot, divide your operating expenses by the total number of feet drilling per year. Again, the total cost per foot is the sum of the direct cost per foot and the indirect cost per foot. This should give you an average baseline cost. Your baseline cost is the sale price which you should not charge below. Once you determine your total cost, you should mark up your price to reflect your desired profit margin. A typical contractor should be making somewhere near 40% gross profit, Hix suggests. But your sale price should be routinely examined. Hix warns that variable costs can rise sharply and if your sale price falls below the fixed plus variable cost curve, you’re reaching into your own pocket to complete the job. “One of the biggest problems in pricing is most seem to get very lackadaisical about it. They kick back and say, ‘well, we did one very similar to that last year or six months ago’ and use the same estimate,” says Len Assante CWD/PI, of Plainfield Well Drilling Inc. in Martinsville, New Jersey. If there have been large increases in well casing, pumps, wire, and tanks in the past year, then the bottom line really starts to shrink or disappear. Skyrocketing fuel prices also affect your costs and it’s another area where contractors tend to shortchange themselves because they are reluctant to pass the costs on their customers. “That’s an item that’s difficult to factor into the pricing side because you say, ‘that’s a fixed expense, and it really isn’t,” Assante warns. “The price goes up and these big drilling machines suck up fuel at an incredible rate. My God, you can really end up dipping into your pocket if you don’t watch these things.” Price Cuts Plus More Jobs Doesn’t Equal More Profits Ok, so you’ve determined your baseline price but are you hesitant to mark up your prices by 40%? After all, the law of supply and demand dictates that as prices increase, demand decreases. So, in theory, one would think that if you cut your prices, demand would increase. Although that may be so, there’s more to consider. How much more work would be needed to make the same amount of profit? For example, say your baseline price is $70. If you charge your customer $100, you would make $30 on the sale, or 30% gross profit. Now, what happens when you cut your price? A price cut of 15% would mean you would need to work twice as much. Here’s why. If your baseline price is still $70 and you charge your customer $85, you’ll take home only $15 of that sale. In order to make the full 30% profit, you must complete two jobs for every one job you sell at $100. And if your variable costs rise significantly in order to cover the price cut, and you don’t increase your prices to reflect that additional expense, you’d have to work more than two times as much to make the same profit. Are you still hesitant to charge your customers what you are worth? McAfee says having the ability to sell your experience and quality is the key to winning bids at a higher price. “There are jobs I don’t get because I’m not the lowest price, but I don’t want to be the lowest price,” McAfee says. Assante agrees that higher prices don’t mean you won’t be able to compete against firms that charge less. In fact, he says he can’t remember the last time he was the lowest bid. “We’re sort of the high price spread (in our area),” Assante says. “We revel in that. We like people to say, ‘are you crazy?’ when we tell them a price because I think there are too many people in our industry, for whatever the reason, who feel they have to work cheaper than they’re really able.” “We believe in the quality of our work and quality doesn’t cost – it pays,” Assante adds. Finally, the last (but most certainly not least) thing to consider when tempted to do a job below your desired profit margin is opportunity lost. In other words, while your crew is out completing the less profitable job, you could miss out on a job that would pay you more. “A contractor once told me he didn’t lose any money on the job he didn’t take,” Hix recalls. “Meaning, it’s better to sit at home than take a job that is at a loss or marginal profit.” Reprinted from the Water Well Journal September 2005 ***** Upper Management A man is flying in a hot air balloon and realizes he is lost. He reduces height and spots a man down below. He lowers the balloon further and shouts: “Excuse me, can you tell me where I am?” The man below says: “Yes, you’re in a hot air balloon hovering 30 feet above this field.” “You must work in information Technology” says the balloonist. “I do,” replies the man. “How did you know?” “Well, says the balloonist, “everything you have told me is technically correct, but it’s of no use to anyone.” The man below says “You must be in Upper Management in some business.” “I am”, replies the balloonist, “but how did you know?” “Well”, says the man, “you don’t know where you are, or where you’re going, but you expect me to be able to help. You’re in the same position you were in before we met, but now it’s my fault. The Source – Ontario N/L ***** Census – 2006 Tuesday, May 16, 2006 is Census Day in Canada! Every five years Statistics Canada conducts a national Census of Population along with the Census of Agriculture. The next Census Day is Tuesday, May 16, 2006 Quick Census Facts for B.C. Did you know? In 2001, there were 3,907,738 people living in B.C. B.C. residents had the highest median age in Canada at 38.4 years. The national median was 37.6 years. The average number of people in married couple families was 3.1, the same as the national average. Immigrants represented about 26% of B.C.'s population at 1,009,815 people. 21% of British Columbians reported being of a visible minority group (836,445). The top four were Chinese (365,490), South Asian (210,295), Filipino (64,005), and Southeast Asian (34,970). Median total income of persons 15 years of age and over was $22,095 in B.C., the national average was $22,120. The median family income of $54.840 was lower than the Canadian median of $55,016. The average value of a privately owned dwelling was $230,645.s **** Registration of qualified well drillers and well pump installers As of March 1, 2006, 118 well drillers and 124 well pump installers have been registered. If you have not already done so, please submit your application for registration as qualified well drillers or qualified well pump installers. This is especially important for drillers or pump installers who do not have recognized certification and would be registered through grand-parenting because the grand-parenting provision will end October 31, 2006 (in 8 months). Thereafter, a driller or pump installer can only be registered if they have certification recognized by the GWPR. Registries and Applications for registration may be found on the Ministry of Environment's ground water web site at http://www.env.gov.bc.ca/wat/gws/index.html. Well Construction/Closure Report forms The new well construction/closure report forms are now available! The well construction/closure reports include new reporting requirements under the GWPR and are available, free of charge, from the Ministry. Please contact: Tammy Blair, (250) 387-0014 or Tammy.Blair@gov.bc.ca. Well Identification Plates Well identification plates are now required for new or altered wells. Please refer to the Frequently Asked Question (FAQ) on Well Identification link on the Ministry's website for further information. Well identifications are available, free of charge, from the Ministry. Please contact: Tammy Blair, (250) 387-0014 or Tammy.Blair@gov.bc.ca. Brochure for Private Well Owners The Ministry has recently developed and printed a brochure: B.C.'s Ground Water Protection Regulation - What Private Well Owners Should Know. This brochure can be used to raise customer awareness about the Regulation and the need to have a well constructed to the new standards. You can obtain these brochures, free of charge, by contacting the Ministry ground water staff in your area (see Table 1).