Great Time to Be a Contractor in Sioux Falls

May 14, 2007
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Sioux Falls HVAC contractors (from left); Mel Zimmer, Dale Schempp, Shade Essem, Mark Schempp, Steve Anderson, and Mark Lamb.

SIOUX FALLS, S.D. - While some parts of the United States struggle through economic slowdowns, job layoffs, and minimal new construction, there is one part of the country that is doing just fine, thank you. The community of Sioux Falls, S.D., has been experiencing steady growth in both its commercial and residential new construction markets, thanks to its growing medical and financial businesses.

Local HVAC contractors cited the nice tax breaks that new businesses are given, paving the way for many new businesses to move into the area.

All of this spells good news for Sioux Falls’ contractors who have enjoyed a steady workload throughout the busy and slow times of the year. Six of these contractors, members of the local Sioux Falls HVAC Association, met with The NEWS during a recent luncheon roundtable discussion.

“Sioux Falls has a great economy,” said Mark Lamb of Frisbee Plumbing, Heating, Air Conditioning & Electric. “We were not affected economically by 9/11, like other parts of the country.”

Without the cloud of economic woes, there may be other problems that contractors typically face, such as finding good help, right? Not so here.

The area is served by the local votech school, Southeast Technical Institute (STI) (see article on page 50), which has a well-established HVAC program, sending many graduates into the local HVAC community. A lot of the votech students work with Sioux Falls’ contractors while they are taking classes, getting hands-on experience. There are currently 27 first-year students in the program.

“Our association supports the school and the kids,” said Frisbee’s Mel Zimmer. Zimmer is also president of the Sioux Falls HVAC Association, which has more than 40 members. “We just gave $250 scholarships to four different students,” he added.

“I don’t think anyone has trouble getting good jobs in HVAC around here,” said Lamb. And it isn’t just the availability of good, young workers - it’s the mentality, too. “It is all about the Midwestern work ethic,” said Mark Schempp of Schempp Heating & A/C Inc. “These kids just provide a good value for us.”

With a healthy economy and a good source for young people interested in HVAC careers, any negative issues take a back seat. But some negativity does exist - barely.

RISES IN FUEL PRICES SPARK CHANGES

The rising cost of gasoline has forced many contractors across the United States to evaluate if and how they should pass these increases along to customers. Sioux Falls is not immune to this problem. “People are concerned about fuel costs,” said Shade Essem of Essem Refrigeration. “I have been adding a trip charge, usually two dollars. Most customers understand and don’t object to paying it.”

One option to fighting the higher fuel costs is to downsize trucks, but Schempp said that will never happen. He noted that if everyone adds a surcharge, “why not us?”

Lamb said his company’s solution to the rising fuel prices was to raise their hourly rates. With the business climate in Sioux Falls, that had no impact on Frisbee’s business.

Steve Anderson owns Anderson Heating & Cooling, a one-person business. He said he could afford to charge a little less than Frisbee, which employs 120 workers. But he added, “When I am busy, I can afford to push my rates right up there with Frisbee.”

One other concern for local contractors is, despite the healthy enrollment at STI, there has been a decline in overall enrollment at South Dakota’s only other votech school with an HVAC curriculum. The school faces the danger of closing because of declining enrollment.

“The problem is that schools are leaving it up to contractors to get the message out to young people about HVAC careers,” said Lamb. “The schools should be responsible, but ultimately, it becomes our job.”

SIOUX FALLS HVAC ASSOCIATION

While there are several examples of strong, local HVAC associations across the United States, many are affiliated with larger national organizations such as the Air Conditioning Contractors of America (ACCA) or the Plumbing-Heating-Cooling Contractors (PHCC) National Association. But the Sioux Falls HVAC Association stands alone and provides valuable assistance to its members.

Schempp’s brother, Dale, said, “The benefits include sharing problems that other members have had, learning about new products at our meetings, and understanding local inspection and code issues. We also show strong support for STI.”

The association, which was founded in 1991, participates in a lot of community events such as fall furnace fix-ups for seniors. The association is also a recent award winner in a national “Make a Difference Day” competition.

Zimmer said that some of the members are local suppliers who strongly support their contractor customers. “It pays to have a good relationship with our suppliers,” he said. Dale Schempp said that local suppliers have donated a lot of equipment to STI for its classes.

All told, the association is tight-knit across all of its contractor and supplier members. At a recent association meeting, two members were given savings bonds from the members, on the occasion of the birth of their children.

The group of contractors at the roundtable agreed that there is no reason to believe that the local economy will slow down anytime soon. Most are waiting for the summer months when things will really start hopping. “I’ve been a busy son-of-a-buck,” said Essem. “Sometimes it is hard just to keep up.”

“This time of year we do a lot of bid work,” said Anderson. “On the first warm day all heck will break loose.”

Publication date: 05/14/2007

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