California Department of General Services reconsiders DVBE (Disabled Veterens Business Enterprise) Construction Incentive Program
By Jim Ryan
AGC Executive Vice President

A few weeks ago, AGC’s Monday Morning Quarterback published an article concerning the California Department of General Services (DGS) intention to require all public entities bidding construction projects in California to utilize a DVBE incentive system.  The incentive system would have allowed the public entity to “credit” the second bidder on a project with an amount that was designed to require public entities to bypass the low bidder in certain situations when the low bidder was unable to subcontract 3% of the bid amount to DVBE firms. 

The 3% goal has been part of the state’s bidding program for a number of years.  However, to comply bidders were required to complete a good faith effort.  The incentive program would have required 3% of the total project bid to be subcontracted to DVBE firms or the “bid credit” would kick in.  This program would have allowed the public entity to reduce the bids of those achieving the project’s DVBE goal when comparing their bid to the low bid.  This entire program was a result of a law passed in 2005, SB 115, which required the DGS to create an incentive for contractor’s to better utilize DVBE bids.  The law left it to DGS to figure out the details of the incentive program.

The problem with the program was that the industry was not consulted.  AGC was concerned that the structure of this program would have compromised the competitive bid system, and there was a real possibility that “sham” DVBE firms would have been created which would have hurt the legitimate DVBE firms.  AGC met with DGS in early December.  Last week, we were notified that the incentive program has been “taken off the table”, and DGS will be calling a meeting with the DVBE community and the industry to create an incentive program that is better suited to the DVBE community and to the industry.

AGC strongly supports utilizing DVBE’s on projects.  However, the original incentive program simply would not have worked. 

Stay tuned.  

 

Governor Sets Ambitious Agenda
By Dave Ackerman, AGC’s Legislative Advocate 

There will never be a dull moment with Arnold Schwarzenegger around… 

Fresh off a rousing inaugural on January 5, followed by the State of the State address and State Budget unveiling last week, Governor Schwarzenegger seems only slowed down by the crutches he must use as the result of a freak ski accident over the Christmas holidays.  During major addresses at each of these events, the Governor has given every legislator something to like and to dislike.  The Governor has challenged the Legislature to continue to work with him in a bipartisan manner.  This challenge clearly positions him in the political center.

California’s Future - Governor Schwarzenegger’s global view is that much needs to be done to prepare California for the future – a future in which he says California will experience a 30% population increase over the next twenty years.

The Governor is saying that the preparation for California’s future must begin now, and he is setting his sights on several major areas:

·         First, by proposing a major health care insurance reform, the Governor jumped right in the middle of the employer community, consumers, and the healthcare industry.  He is proposing that all stakeholders pay part of the cost of providing insurance to all Californian’s, including children of illegal immigrants. Mixed reviews indicate considerable debate will take place on this issue.

·         Prison reform and new prison construction top the public safety agenda.  Rebuffed by the Legislature last year, the Governor is re-energized to craft a reform package to avoid federal courts from taking over the system and mandating expenditure of state dollars without any state control.

·         The second stage of infrastructure financing is back with the Governor calling for $43 billion in additional bond authority to construct prisons, water storage facilities, additional school classrooms, and more highways.  He says these facilities are necessary to maintain a robust economy and lifestyle for the millions of more residents that will be living in California.

The Governor’s second term agenda is bold, but this is nothing new to anyone who has watched Sacramento and Governor Schwarzenegger over the last three years.

Governor Unveils Budget Proposal - Last week, the Governor unveiled the 2007-2008 State Budget, which included a big surprise.  The deficit that has plagued California and contributed to the recall of former Governor Gray Davis is gone – at least by the Governor’s definition.  The Governor has presented a balanced budget that contains a “zero net operating deficit,” and proposes to pay off the deficit reduction bonds 14 years early…

On the transportation front, the State budget is good news for AGC highway contractors.

The transportation budget proposed by the governor keeps faith with the voters’ approval of Propositions 1A and 1B from last November.  With the exception of a few funding shifts involving the Public Transit Account (PTA) and a recommendation to indefinitely postpone the $9.8 billion bond measure to start construction on High Speed Rail, the transportation budget puts California back on the move.

·         For 2007-2008, the budget proposes spending $16.8 billion on transportation. Combined with local revenues, $23.8 billion will be available for transportation projects and programs in 2007-2008.

·         Per the voters’ wishes, Proposition 42 is funded at $1.47 billion.  $83 million in prior Prop. 42 loans are being repaid.

·         $2.8 billion in Proposition 1B funds will be authorized next year.

·         An additional $523 million will be allocated immediately for projects that are ready to go to bid.

·         $200 million in Indian gaming tribal compact revenues are being deposited in the Highway Account for this year and next year to pay back loans made from Proposition 42 two years ago.

For 2007-08, a portion of revenues that would have gone into the Public Transit Account will be used for other “transportation purposes”.  This shift in revenues is a major component in the Governor’s ability to “zero out” the overall net operating deficit for the State.  The PTA gets revenue from gasoline and diesel sales taxes, which have dramatically increased with the increase in fuel prices.  PTA revenues are used for both construction and operation for transit districts.  The Governor’s budget proposal, funds the PTA Account at $397 million, with the balance of just under $1 billion in revenues being allocated to school bus transportation, developmental disability transportation, and debt service for past transit general obligation bonds.  All of these costs would have otherwise been funded by the General Fund.  This issue will be the major point of contention as the Legislature begins their line-by-line review of the Governor’s transportation proposals.

The High Speed Rail Commission is being placed on “life support” because the fund level that now stands at $1.2 million – is a decrease of $13.2 million from the current year. The Governor plans to call for an indefinite deferral of the bond act vote, which is currently scheduled to be placed on the ballot in 2008.

 

“2007 Will be Year of Action” Says Mayor Sanders

San Diego Mayor Jerry Sanders attended AGC’s Annual meeting last month and emphasized his commitment to fixing San Diego’s fiscal crisis and rebuilding its crumbling infrastructure.  If last week’s State of the City Address is any indication, he might well be on his way to that goal…but it may take some time. 

“The problems of the past are so far reaching that they challenge our recovery”, stated Mayor Sanders.   “Although we instituted significant reforms and made considerable progress in 2006, the state of our city government remains unsatisfactory and continues to stand in sharp contrast with the community overall.”  2007 is going to be a busy year for Mayor Sanders as he tackles six areas he identified in his speech.

• Funding the city's deferred maintenance and capital improvements needs.

• Funding the storm water system to foster an environmentally healthy community.

• Complying with the Americans with Disabilities Act, to provide improved access for those with disabilities.

• Increasing General Fund reserves to a more prudent 8%.

• Making an actuarially responsible contribution to the pension debt, while working aggressively to reduce the unfunded liability.

• Funding retiree healthcare costs, while moving to reduce this liability.

We applaud the Mayor’s commitment to fix our infrastructure…but we continue to be concerned how long it has taken to review the overdue annual financial audits from 2003, 2004, 2005 and 2006.   The Mayor’s intention is to have the audits completed so the City can access the public bond market this summer.  How long have we been hearing that?  In the meantime, the audit delays continue to stall millions of dollars of water and sewer projects and increase the risk of decades-old pipelines bursting. 

AGC staff and members will be meeting with the City’s engineering staff in the coming weeks to discuss the expected “ramp up” of projects.  In addition, we will continue to follow the Mayor’s proposed water and sewer rate increase that is expected to finance approximately $600 million in critical capital improvement projects for the water system and $650 million in projects for the wastewater system.

There is much work ahead for City of San Diego contractors…the question is when….stay tuned.

 

Proposed Storm Water Permit Changes to Impact Agencies, Developers, Contractors, Restaurants, and Cemeteries!

Last month, we expected the California Regional Water Quality Control Board, San Diego Region, to implement dramatic changes to the current San Diego County Municipal Storm Water Permit (Permit) at a public hearing that was scheduled.  Due to a lack of a quorum, the hearing was postponed until Wednesday, January 24.

The changes to the Permit will significantly increase inspection requirements on local public agencies and will make it more difficult for developers/contractors to comply with water treatment requirements.  They also will put new regulations on such diverse facilities as grocery stores, animal facilities (riding stables, veterinarians, etc.), golf courses, building supply stores, restaurants, gas stations, cemeteries, and individual residences.

Some of the proposed changes in the construction component of the Permit include detaining large quantities of water on-site (hydro modification), building and operating chemical treatment plants for storm water at construction sites (advanced treatment), and new grading limitations.  These changes are expensive, untested, and may unintentionally impair water quality.

The changes to the Permit (and corresponding Fact Sheet/Technical Report/Comments/Responses) are available at:
http://www.waterboards.ca.gov/sandiego/programs/sd_stormwater.html.

AGC wrote a letter in October to the Regional Board expressing our opposition to the proposed changes.  We made it known that current storm water regulations have resulted in increased costs for public agencies, and the new proposals will further increase those costs due to the compliance measures and increased inspection requirements.  Some estimates of the costs to the County and the Cities to implement the unfunded mandates run as high as $250 million over the next five years.

The State Water Resources Control Board is now considering a statewide permit to regulate storm water runoff that is expected to be issued for public comment in February or March.  If the San Diego Regional Board acts this month, its new permit could potentially conflict with the state permit. It is imperative that the local board wait for the state to issue its permit.

A coalition of the construction/building industry, public agencies, and other stakeholders continues to oppose the proposed changes to the regional permit, and coalition members will be in attendance at the January 24 hearing.  The hearing will be held at the San Diego Regional Water Quality Control Board, 9174 Sky Park Court, Suite 100,  San Diego, CA   92123-4340.  If you would like to attend/make comments, please contact Brad Barnum at 858-558-7444, ext. 103. 

 

WEBLINK
Interested in having a weblink on the AGC’s website? It is only $60 /year to have your company’s website linked directly on AGC’s website and listed under “Member Listings.”  Start off 2007 with an easy and simple way to get more “hits” on your website. – Please see attached form.

 

Welcome New Members
The AGC Board of Directors and the AGC Staff would like to welcome the following new members to the Association.
Remember….” It is Good Business to do Business with an AGC Member!”

Company	Type of Work	Contact	Phone	email
AOC Construction, Inc.	GC – Building	Robert Besta	619.226.0772
Cutting Edge Grading, Inc.	Excavating/Grading	B.J. Taylor	760.726.2832	cuttingedgegrading@myway.com
Paragon Schmid Bldg Products	Insulation	Richard Smith	909.946.4416	Richard.smith@mascocs.com
Regency Contracting, Inc.	Drywall/Plaster	Ed Blake	760.599.4459	regconrd@pacbell.net
Sky View Consultants	Construction Management	Terry Arnett	858.229.6791	cstempien@tsaci.com
Zondiros Corporation	Excavating/Grading	Tom Zondiros	310.320.2558	zondiros@sbcglobal.net

 

AGC Winter Conference… Feb 8 - 11^th, 2007

In 2002, the AGC held its’ first Winter Conference at the Hyatt Regency.  Located on Lake Tahoe’s tranquil North Shore and nestled in the High Sierra Mountains, the hotel offers a full service spa, a 24-hour casino and features a Grand Lodge ambiance with breathtaking views of the mountains and lake. 

In addition to these wonderful accommodations, Lake Tahoe offers the country’s largest concentration of snow covered slopes for the skiing and outdoor enthusiasts including Squaw Valley & Northstar Resorts.

With that, the AGC Meetings & Events Committee offers the following activities for the 2007 AGC Winter Conference:

      Opening Night Reception & Cocktail Party
      Ski Northstar-at-Tahoe
      Ski Squaw Valley
      Snowmobiling
      Ice Skating & Tubing   (Reserved on an individual basis)
      Apres Ski, Drinks & Appetizers
      Saturday Après Ski Buffet

Join us for this fun, networking opportunity. Complete the attached registration form and fax to Rae at (858) 558-8444.  You can also contact Rae with any questions at (858) 731-8157 or e-mail at raek@agcsd.org.

 

AGC Committee Sign-ups

If you would to join any of the AGC committees, please click on the following link, which will take you directly to the registration page on our website:  http://www.agcsd.org/aboutagc/committeevolunteer.php. 

If you have any questions or need additional information please contact Brad Barnum at 858-558-7444 (ext 103) or at bbarnum@agcsd.org.

 

Spanish OSHA 10 Hour- January 26th

In response to AGC members’ request, the AGC is offering the OSHA 10 hour in Spanish. This class is ideal for all employees that may have English as a second language, or are just able to learn in their native language. This is construction Spanish, not readily translated out of a book. Our instructor specializes in construction Spanish and this class is a must.  To register, click here: http://www.agcsd.org/calendar/registration.php?classType=safety&classID=80
(or see attached flyer)

 

 

January classes
Jan. 19 –OSHA 10- Hour – 7 AM- 5 PM at AGC
Jan. 23 – Microsoft Excel – 8 AM- 4 PM at AGC – see attached flyer
Jan. 24 – Fall Protection – 7:00 AM – 3:30 PM at AGC – see attached flyer
Jan. 24 – Prevailing Wage – 9:30 AM-12:30 PM at AGC – see attached flyer
Jan. 25 – Supervisory Training Program (STP) 12:30 PM – 5:00 PM at AGC see attached flyer
Jan. 25 - OSHA Record Keeping – Time: 9 AM – 11 AM at AGC see attached flyer
Jan. 26 – Spanish OSHA 10 Hour – 7 AM-5 PM at AGC – see attached flyer
Jan. 31 – CPR/First Aid – 8 AM-12 PM at AGC  see attached flyer

Register on Line
For Education classes click on the following link: http://www.agcsd.org/calendar/calendar.htm
For Safety Training classes click on the link: http://www.agcsd.org/calendar/safetytraining.htm

 

Save the Date - Feb 21, 2007
Fails Management Institute (FMI) presents:
“Understanding How to Lead and Develop the Next Generation” by Ron Magnus (see attached flyer)
 

Coming in March, 2007…
March 8 and March 9 – AGC of America and OSHA present “Focus Four Hazards in the Construction Industry” - Only 50 spots available each day. Go to website http://www.agcsd.org/calendar/safetytraining.htm for a registration.

 

January Meetings – Dates subject to change

January 16 – Human Resource Practices – 11:00 AM
January 17 – Public Building Liaison – 7 AM
January 19 – Caltrans – 8 AM
January 25 – Meetings & Events – 12:00 PM
January 31 – City of San Diego Liaison - 1:00 PM – postponed until Feb. 12th

 

Save The Dates: 
January 23, 2007 – Installation Dinner – Hilton La Jolla Torrey Pines
(Installation of Officers & Directors, AGC Membership Awards, Safety Awards, & Apprentice Graduations)  

February 8-11, 2007 – Winter Conference in Lake Tahoe