Changing Local Licensing Requirements

Mitch Hoy

Active Member
Location
Rochester
Hey guys, not on here often anymore. I hope everyone is having a great season.

My business is in its’ third year, we are doing pretty good. Mostly dealing with the growing pains of sizing up the operation to meet the demand now that we are established in our market.

We are booked out two months solid, but recently I have been capturing less than a third of my bids. Some of that is because people want it done tomorrow, but a lot of it I attribute to the fact that there are over 40 licensed “tree companies” in our city of a little over 100,000. Over the summer I have seen our capture rate plummet as prices have gone into the absolute basement. The only requirements for a license here is a set of carts for comp and liability. Here in Minnesota, these certs do not specify if they are an individual policy or a group policy. Long story short, the vast majority of these companies are paying less than $1500 in insurance a year and operating on ghost policies.
I brought this to the attention of the city forester recently after one of these companies (who has gotten some major city contracts in the last year) dumped a 200# log on the unprotected head of one of their ground guys, almost killing him. The owner operator went to the hospital with the worker and altered the story for reporting purposes. The forester had heard about the incident, said he was deeply concerned, and said he hadn’t realized about the ghost policy issue. Haven’t heard from him in over a month.
I guess what I am getting at is that these companies aren’t even charging enough to replace their trucks when they inevitably leave service. Good companies are having to charge pennies for seriously technical work because all of the bread and butter is being gobbled up by these uninsured hacks. I love climbing, but doing all the big dead stuff all the time gets old. I am afraid that for actual industry professionals, this is creating an incredibly stressful climate. We all know what stress does in this industry.
I know that the hacks will never go away, but there has to be a bar for entry into my local market. I am a CA, but one of few in town. Has anyone successfully changed local licensing requirements?
 

TCtreeswinger

Well-Known Member
Where are you in mn? Cause the cities is absolutely booming most companies are having incredibly profitable years even despite ash removals hacks and lack of employees
 
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Mitch Hoy

Active Member
Location
Rochester
I am in Rochester. There is a crazy amount of work here, but prices are 30-50% lower because there is no barrier for entry to the market. Up there, you need a CA#, as you know.
 

southsoundtree

Well-Known Member
Location
Olympia, WA
30% at regular prices, amongst a load of hacks at bottom of the barrel... Maybe that's ok.

I think it's not uncommon for new customers at 30%.


I'd give every customer a copy of my insurance, and explain what it should say to cover the homeowner against problems. Suggest they check coverage for all contractors.

In WA, if you fall out of compliance, it's online quickly through the department of Labor and Industries website.
 
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cerviarborist

Very stable member
Location
Florida, USA
It may help to backwards engineer the change you wish to see. Start off with: Who will pay the budget for people to enforce it? It seems as though the current regs aren't being enforced, so why would you think a new one would be?

You may do better for yourself by listing the things which set you in front of your lesser qualified and lesser insured competitors, and put your efforts into making sure that information gets out to the public.
 

Mitch Hoy

Active Member
Location
Rochester
All good suggestions, thanks

I think the largest issue may be the fact that the certs themselves are very vague as to the type of coverage; so vague that a comparison between a commercial and a ghost policy shows no difference besides coverage totals which are typically the same. I guess I couldn’t think of any way to vet coverage besides showing your yearly audit and your company’s return. I would imagine that cert format is governed by state legislation, if there is any. Not sure if I want to tilt that windmill.

I think I could make the case for CA requirement from the standpoint of the consumer. Most companies here rely on people’s stigma of seeing tree biology as mysterious. We are kind of a big small town. Anyways, they lionstail the heck out of everything and then blame the wind when the same trees lever themselves apart. Then they make bank on the emergency charges to take said trees out.
 

cerviarborist

Very stable member
Location
Florida, USA
The easiest way to vet a policy is to ask the binding agent to verify coverage. If the premiums haven't been paid since binding, they won't confirm coverage. Municipalities, homeowners and any other interested buyers of arboricultural services should contact their own fire/flood insurance underwriters for guidelines on what to require of contractors in the way of limits, being named as insured, and confirmation of coverage. That will pretty much make the fly by nights......fly.
 

Mitch Hoy

Active Member
Location
Rochester
I think locally I will pitch raising licensing fees to raise a budget. Current fee here is $50. Lots of room to raise a budget there. Why not also collect fines through enforcement? The DNR impounds vehicles and watercraft that are out of compliance and fines the owners. Why wouldn’t we do the same to people who are trying to carelessly engage in an industry critical for infrastructure and the most dangerous urban job in the world? Not that I want to make the public my nemesis on the issue, but I feel that many homeowners are just as complicit. I get that the work is expensive, but I feel that people not being able to afford legal competitive rates is a greater societal issue, and I’m not running for office...
 

cerviarborist

Very stable member
Location
Florida, USA
I think locally I will pitch raising licensing fees to raise a budget. Current fee here is $50. Lots of room to raise a budget there. Why not also collect fines through enforcement? The DNR impounds vehicles and watercraft that are out of compliance and fines the owners. Why wouldn’t we do the same to people who are trying to carelessly engage in an industry critical for infrastructure and the most dangerous urban job in the world? Not that I want to make the public my nemesis on the issue, but I feel that many homeowners are just as complicit. I get that the work is expensive, but I feel that people not being able to afford legal competitive rates is a greater societal issue, and I’m not running for office...
People can afford to purchase whatever supports their priorities. If someone can afford to own a home, they can afford to maintain it, including contributory elements of their landscape, like trees. Next time somebody says they can't afford your rate, take a look around their property and see what they're putting their money into instead. You'll feel much better about your rate.
 

cerviarborist

Very stable member
Location
Florida, USA
Proposing someone salary be paid for by enforcing the regulations could potentially lead to people looking for issues to pay for their salary.
If code violations exist, and the citations are legally defensible in reference to municipal code, there's no problem. Revenue from citations would typically go into the municipality's general fund. It's not as though the city is paying a commission for citing violations.

The property appraiser is paid from county funds, as is the tax collector and there's no conflict there.
 

JaredDTS

Member
Location
Kill Devil Hills
Are they paid for by general state or local taxes or by finding violations and fining people for them? Just a consideration and assuming people are decent no need to worry.
 

cerviarborist

Very stable member
Location
Florida, USA
It follows the same municipal employment and compensation model as municipal police or sanitation departments. They're city employees. Revenues received from citations are deposited to revenue accounts owned by the city. No need to invent a solution looking for a problem. This needle has been threaded by thousands of municipalities already in order to protect their urban canopies, while providing transparency and accountability to their citizens.
 
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Tom Dunlap

Here from the beginning
Administrator
Your business will grow more by looking at ways to sell yourself. Set yourself apart from the riff raff.

Resist talking down the others. Talk yourself up.

There are ways to address bad work without mentioning the rest.

Rather than pointing out that 'they' don't have insurance have copies of your certs to give with an estimate.

Get your ISA Certification and let them know that you keep up on CEUs. Maybe share something new you learned at a workshop.

Be on time for estimates.
 

Reach

Well-Known Member
Location
Atglen, PA
Your business will grow more by looking at ways to sell yourself. Set yourself apart from the riff raff.

Resist talking down the others. Talk yourself up.

There are ways to address bad work without mentioning the rest.

Rather than pointing out that 'they' don't have insurance have copies of your certs to give with an estimate.

Get your ISA Certification and let them know that you keep up on CEUs. Maybe share something new you learned at a workshop.

Be on time for estimates.
All very good advice, especially giving out ins. certs. with each quote. We started doing that about a year ago, and it made a big difference in our conversion rate. We win projects where we are high bidder sometimes just because of our professionalism and our insurance certificates being attached to each quote has proven to be a big part of that.
 

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