Alan Smith: Plasterer, politician & humanitarian
By Marcelle Dibrell
Alan Smith is a man of many hats: he’s a pool-plastering contractor, a small-business owner, a materials researcher, a part-time politician, a humanitarian. And above all, he’s a Christian.
The way that Smith interprets his call to action as a Christian means that Smith is a very busy man. Indeed, he’s out there, helping to save the world, before a lot of us have had our morning coffee.
There’s a Biblical verse from Corinthians that might be a good axiom for Smith: “I worked harder than any of them, though it was not I, but the grace of God that is with me.”
Smith really is an “awe, shucks” kind of guy, who firmly believes that he has been blessed with both talent and time. It is his duty to give back.
And boy, is he busy, doing just that.
“I’m extremely ADD, which is good for me as a business man because I get to do fifty things at once,” Smith said.
Smith made his debut in the pool plastering business in 1974 working for DeMar Baron in the City of Orange, mixing plaster. Within two years, he had been promoted to foreman, and was running the crews that built new pools.
In the early ‘80s he obtained his contractor’s license and went into the re-plaster renovation market. At the time, most people were focused on new pool construction, but he had an idea that all of the pools built would have to be remodeled someday.
So in 1981, he started Alan Smith Pool Plastering, and began resurfacing, retiling and coping replacement, establishing a niche market in Southern California, slowly growing the business. His wife Teresa was his partner who worked at developing the financial office while Smith worked outside the office, making sales and managing his crew, pulling in more employees as they grew.
Right before the recession he changed his business model and went completely into pool renovation, plumbing, decks, pool equipment, electrical, BBQ and fire pits, thereby expanding the business to capture more of that market.
Since the down turn in the market beginning in 2007, the firm has increased its size by 50 percent and as of today has done more than 25,000 pool remodels.
Smith averages 500 to 800 renovations a year, and employs around 70 people. His current operation includes 30 trucks, including pickups, four plaster trucks, five tile crews, three demo crews, two plumbing trucks, an electrician's truck, and two or three utility vehicles.
He also has support staff, a great deal of equipment, and a 20,000-square-foot warehouse with outside storage.
He operates one of the larger renovation companies in the United States, but his official “day-job” is just one thing that occupies his time.
Along the way he became one of the charter members for the National Plasterers Council, (NPC) eventually becoming a board member. He chaired their research committee and helped start the Cal Poly San Louis Obispo research center and was on the advisory board there.
With the support of the NPC and much independent research, he learned about material sciences and water chemistry. Thereafter he helped to develop the current NPC recommended startup procedures for new plaster pools.
He has spent hundreds of hours learning the ins-and-outs of pool materials and how water interacts with various materials over time, but Smith has yet more fish to fry.
Smith also stands on the frontlines in Sacramento to combat the underground economy.
For him, the underground economy represents a huge barrier to running a profitable business in California. According to Smith, it is difficult to be a contractor in California. For years, he has been fighting what seems to be a losing battle in stemming the losses that legitimate companies incur as a result of the underground economy.
The problem starts with the numerous regulations that California imposes on small businesses and culminates in the state’s “broken down enforcement mechanism.”
These regulations have to do with labor, workers' compensation, overtime pay, payroll taxes, and environmental restrictions, to name a few.
According to Smith, the fact that there really isn’t a functional enforcement mechanism in place to ensure that businesses are operating in accordance with the law makes for an unlevel playing field for those companies that want to play by the rules.
Smith has a multitude of examples to illustrate the point.
For example, plenty of small businesses are paying their workers cash, under the table. They don’t pay overtime, they don’t have payroll taxes and they don’t pay the 25 percent or higher workers' comp rates. That works out to a significant savings for dishonest companies that are then able to undercut those companies that are playing fair.
Some businesses report workers as salaried when they are really hourly, or report workers as independent contractors when they are actually full-time employees.
“Added together, that’s like a 20-percent advantage in bidding over what I have,” Smith said.
In addition, issues to do with workers’ compensation have become the source of a big problem for the service sector.
Workers' comp lawsuits are common, and there’s a lot of fraud because of the way that the workers compensation laws are written. According to Smith, the employees will work for cash on the side while they are in the midst of a lawsuit, supposedly hurt. Meanwhile, insurance rates go up.
Some employers will pay their guys partial payment on the books and cash on the side to make up the difference for overtime or weekend work, and employees are not going to turn them in for workers comp because they like that cash deal.
And that’s not all. New environmental regulations, as part of the global warming initiative, include a car program that mandates that businesses must change out all diesel trucks to clean energy diesel trucks.
For Smith, with a big fleet of trucks, this is a huge financial burden, and he’s not just a little miffed.
“I have a full-time mechanic, and my trucks are very well maintained,” Smith said. “But I have to replace perfectly good trucks that are older with engines that are clean burning.”
And there are plenty of businesses that aren’t replacing their trucks and these are off the radar.
For honest businesses that are playing by the rules, this is quite a cost.
Smith says that the government goes after the larger guys first because there are so many laws and regulations that they can’t keep up with them. So they choose to enforce the laws with the larger companies to try to make a bigger statement, like "Oh, look who we got! We got this big guy."
And when they do go after the smaller businesses, there is very little penalty. “The penalty is slow to come, can be appealed, and when it’s paid, it’s not very big,” Smith said.
Smith believes that bigger companies cheat because all the little guys are cheating and they’ve got to cheat to compete. “It’s an unfortunate situation,” he said.
Smith has been involved in Sacramento with various trade organizations and lobbies seeking ways to enforce fairly the laws that are in place.
And he has good ideas about how enforcement could be accomplished.
One way is to look at the amount of materials purchased for a given job. There’s a simple relationship between the amount of materials used and the amount of labor needed to accomplish the job. For example, for every $1 of pool plastering materials, there’s $1.25 of labor. For every $1 of tile, there’s 75 cents of labor.
The Employment Development Department (EDD) actually already has this information for many of dishonest businesses, and has conducted audits that could have shut them down immediately. However, in what Smith humorously referred to as a “goat rodeo,” the EDD has an appeal process that can take 4 to 6 years, and is so backed up that blocks of appeals simply get dismissed.
So Smith has proposed an alternative solution. In the current system, a business has 90 days to report a worker on a payroll system. That’s 90 days that a dishonest business could be paying its workers cash, and then reports them later if they get busted.
So Smith proposed that when a worker is hired, he should be put on the employers insurance that day.
However, there was push back against this proposal, stemming from large contractors who say it’s too intrusive for the legal contractor to have to report new workers every day. They went on to involve the insurance lobbies and fought against the proposal so aggressively that the lobby-funded legislators gave up the fight.
Smith believes the system is designed for failure because there’s no political will to change it.
Citing a report from the University of California, Berkeley, Smith says that there’s approximately $200 billion of unreported payroll in the State of California annually.
He is pretty grim about future projections as well because he doesn’t think that the bureaucrats in Sacramento will be willing to put money into the enforcement side of the problem.
“I’m not a doom and gloom guy,” Smith said. “I’m actually an optimist, but I have to deal with reality in planning my business.”
Smith has been kept busy with his efforts in Sacramento because he puts a premium on honesty and ethical behavior.
He also believes that he has been blessed with a wonderful life, and out of his gratitude for his life, he pours his heart into helping others.
To that end he serves as chairman on the board of directors for Northrise University. Northrise is an accredited university in Zambia, Africa, where students can get an education in business, theology, communication technology, law and agriculture.
It is a Christian-centered university that seeks to transform the Zambian Nation through individual education whereby its students improve the lives of others, releasing the country from the gripping effects of poverty.
Smith is the head of the Northrise University Farm Committee.
The farm consists of 400 acres of the 640-acre campus and it helps support the sustainability model. The current production of chickens, vegetables, beef, and bananas feeds the students, staff and faculty. Also, Northrise has established lucrative contracts with local and regional customers such as supermarkets and restaurants. The farm reinvests a portion of profits to continue growing its operation. Recently it expanded its poultry and banana operations, and it is now raising and breeding beef cattle.
Smith got involved in the project through the university's president, Moffat Zimba, who, with his wife, Doreen, envisioned starting the Zambian University to help restore their country.
Zimba shared his vision of the Zambian University at the Grace Fellowship Church, where Smith attends.
Dr. Zimba asked Smith to help on the agricultural aspect of the plan, and Smith caught the vision.
“It just happened to be something my wife and I both thought would be a neat ministry to get involved with,” Smith said. “I get 10 times more out of it than I put into it.”
Smith doesn’t know anything about farming, but he’s good at developing things, and he got right on the project, making the trip to Sioux City, Iowa, to facilitate a partnership between Dordt College and Northrise.
Then, through his previous connections with Cal Poly San Louis Obispo, he developed an additional partnership between the two universities.
The three universities are working collaboratively to develop a School of Sustainable Agriculture, aimed at teaching organic and sustainable farming to local farmers to quadruple their output on the same amount of land.
Smith found a graduate student from Cal Poly who was actually a Kenyan national named Paul Menia who had started a business called Kenyan Corporate Farm Systems and was good at developing farms. They flew him to Zambia to see the property while they spent a couple weeks developing a game plan.
In Africa, Smith spent his time interviewing people with farming experience to make up a farm committee. So while he doesn’t know anything about farming, he knows how to identify good people and move forward on projects.
“I’m good at finding people who know more than I do and getting them involved,” he said.
After numerous trips to Dordt College, and seven trips to Africa over a two-year period, Smith has helped to facilitate sustainable farming at the Zambian University.
Smith believes that the location has all of the necessary natural resources to be big agricultural producers. “It’s like the San Joaquin Valley of Africa,” he said.
In addition, he’s helped to set up a test program sponsored by the YMCA, where they find African students from all sorts of backgrounds, and provide them with an education.
“We take students from the bush, suburbs, towns, and give them an opportunity to get an education,” Smith said.
But it’s not a free ride. Smith believes that a free education would lead to an entitlement mentality.
The students on sponsorship give back by working at the university such as in the cafeteria, in maintenance and janitorial jobs, or working in farm. Upon graduation, the students pay it forward by teaching what they have learned at the local YMCA in Zambia before going into community to leverage their talents.
Smith’s involvement and work on the African University stems from his gratitude for the blessings in his life.
He is a proud husband and father of three children, two of whom work in his business. He is the owner of one of the most successful remodeling companies in the U.S.
“In my heart, I just feel so grateful for what I have been given,” Smith said.
Lest it be misunderstood, however, for Smith, life has not been all sweetness and light.
In 2003, he battled with Stage 3 squamous cell carcinoma after he was given a 30-percent chance of survival.
More recently, he has twice undergone open-heart surgery for a birth defect.
But Smith has an interesting philosophy about his journey. He compares life to a connect-the-dots drawing that kids make.
“I think we just connect the dots that God puts in front of us,” he said. “Our personality, our character, our integrity — that’s what colors it in. Then in the end, we have this beautiful picture.”