Private snowplow companies see spike in profits, business

Joe Thibodeau of Corinna, a mechanic at Bruce's Tractor Sales in Old Town, adjusts the belt drive on a tractor front-mounted snowblower for a residential customer Friday morning, Feb. 25, 2011. Businesses like Bruce's Tractor Sales as well private snow removal compaines have benefited from the recent snowfall as municipalities and private customers seek their services.
Joe Thibodeau of Corinna, a mechanic at Bruce's Tractor Sales in Old Town, adjusts the belt drive on a tractor front-mounted snowblower for a residential customer Friday morning, Feb. 25, 2011. Businesses like Bruce's Tractor Sales as well private snow removal compaines have benefited from the recent snowfall as municipalities and private customers seek their services.
Posted Feb. 25, 2011, at 5:57 p.m.
Last modified Feb. 25, 2011, at 8:20 p.m.

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BANGOR, Maine — With winter comes snow, and as many in the state hunkered down for more of it on Friday, there were those preparing to work well into the night in order to ensure their customers could leave the driveway come morning.

They loaded sand and salt, affixed plows to their trucks and gassed up just like they do every time it snows. For those who make their living clearing driveways, parking lots, or any other space in need of a snowplow, Maine winters mean dollar signs.

“We make the lion’s share of our money in the winter,” said Mike Falvey, owner of Family Tree Landscaping on Stillwater Avenue in Bangor. “We pretty much spend the entire year getting ready for winter — there’s so much involved and there’s a lot at stake. It’s one thing if you don’t get a lawn mowed, but if you don’t get a driveway or a lot plowed, you’re going to have an angry customer.”

Falvey, whose company plows only big box stores such as Wal-Mart or Lowe’s, said his revenues have doubled this winter, but he added that the rising costs of gasoline have cut into his profits.  Still, he said all the demands for his company’s services have allowed him to hire more workers this winter and he estimated that one plow truck during a 10-hour shift has the ability to make $1,000 or more.

At JAMS Lawncare in Bangor, owner Andy Ryder said it’s been one of his busiest winters in years. As a result, Ryder said profits are up 30 percent and demand for services has been so high that his company is taking on roof-raking jobs, something Ryder says he doesn’t usually do. His company works on contracts and a per-storm basis, plowing for both residential and commercial customers.

Bruce Shirland, owner of Bruce’s Tractor Sales in Old Town, a company that repairs snowplow equipment, said he is servicing so many trucks that he also had to hire an extra part-time employee. And at C & J Snowplowing in Old Town, Christian Ouellette and his wife, Jamie, who are in their second year of business plowing both private residences and commercial property, said profits have increased at a “considerable rate.”

“We’ve been super busy. It seems like every time I turn around there’s another [snowstorm] coming,” said Christian Ouellette.  “I’m happy, though. I have no complaints.”

Meanwhile, with more than a month left to go before winter concludes, some municipalities in Maine are scrambling to shore up their snow removal budgets. Everything from the costs of salt and gasoline to the sheer amount of snow that has fallen this season is causing snow removal budgets to dwindle to the point of exhaustion.

What’s more, a study released last March by the American Highway Users Alliance that examined 16 states from the Northeast to the Midwest found that the indirect economic impacts of snowstorms and the closures they cause cost states millions of dollars a day in lost tax revenues. In addition, the study found that hourly workers were hurt the most, as well as the restaurant and retail industries.

In Maine, according to University of Maine economists, winter is both a boon and a drain on the economy.  For all the lost revenue caused by snow in some sectors, they say, others — such as the private snowplowing industry — directly benefit from it.

Because the companies that comprise the industry are privately owned and operated, economists say it is difficult to provide specific data on their profit margins. However, they do say that snow creates a unique opportunity for the companies that specialize in its removal.

“Obviously, when snow occurs, it benefits snow removal companies,” said James McConnon, an economist at the University of Maine. “All the snow we’ve seen increases the demand for these services, and redirects income that otherwise would have been saved without it.”

Another economist at UMaine, Jonathan Rubin, noted that much of the money being spent by the smaller municipalities in the state is going to private snow removal companies, as they often lack the resources to clear all of their roads.  He also said the industry helps to create jobs that otherwise would not exist.

“The money you see draining from a lot of these municipalities is going to private contractors hired to remove snow,” he said. “In this particular instance, the economy is kind of circular, with these private snow removal companies receiving a good deal of the wealth.”

In Hermon, Town Manager Clint Deschene said Rubin’s observation is a fair one. He said his town is paying a significant amount of the $611,725 it budgeted for road maintenance in 2010-2011 to a private contractor, TGP Enterprises LLC, to clear 60 miles of Hermon’s roads. According to Deschene, the town paid $211,975 for a contract with the company, a figure Deschene said does not include materials such as sand, salt and fuel, which cost an additional $128,000.

Several other snow removal companies in the Bangor area also said business and profits have been up this winter from last. However, many agreed that fuel was a major expense, replacing salt as the leading cost-driver, as the price of gasoline has steadily risen from where it was last year.

“In the big picture, winter is expected in Maine,” said Falvey. “This year, the snow removal industry is crankin’. When you’re pushing snow, you’re making money and spending money. That’s the way the economy seems to work around here.”

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