Hot Topics of the Week: Roads, Diesel Emissions, and Water/Sewer Projects

If you are a road builder, rent, own or operate diesel off-road vehicles, or would like to bid on future water or sewer jobs in the City of San Diego pay close attention…what happened last week and what will happen in the coming weeks concerns you and the entire construction industry.

$2.8 Billion of Prop 1B Funds to be Allocated for Transportation Projects, but No One is Happy!

Last Tuesday, eight regional transportation agencies trekked to Sacramento in the hopes of convincing the California Transportation Commission (CTC) to up its proposed $2.8 billion allocation of Prop. 1B funds dedicated to corridor mobility improvements.  Representatives from the San Diego Association of Governments, Mayor Jerry Sanders, and other elected officials attended a special meeting of the CTC and told the CTC Board Members that they wanted more than the $304 million that had already been nominated for five “corridor” projects in San Diego (managed lane program on I-15 from Route 163 to Route 56, including construction on the Mira Mesa access ramp; I-5/805 North Coast Corridor, including Carroll Canyon Road Extension; and adding Southbound auxiliary lanes on I-805 from E Street to SR 54).  Unfortunately, they had company…the seven other transportation agencies, Los Angeles Mayor Antonio Villaraigosa, Assembly Speaker Fabian Nunez, and the Governor of California!

The San Diego region is competing with other regions throughout the state for the first $4.5 billion that is available from the recently passed Prop. 1B ($20 billion bond).  The CTC staff is recommending about $2.8 billion in this funding cycle, but they are recommending the remaining balance be programmed in 2008 for “later delivery” projects (two are in San Diego: I-5/Genesse Ave Interchange and I-805/HOV lanes from Palomar to SR-94).   The CTC Board will make its final decision at a meeting in Irvine this Wednesday.

It became clear during the daylong meeting that the proposal to release only a portion of the $4.5 billion initial disbursement of Prop. 1B funds was an unpopular one.  Voters clearly want to see traffic congestion relief.  Transportation agencies are waiting for the green light to move projects forward, and contactors stand ready to go.  Unfortunately, the CTC sees it differently and is withholding $1.7 billion because it doesn’t believe all the projects can start soon enough to ensure that the current cost projects are accurate.

The CTC was blind-sided by the opposition it received.  Even California’s Chief Executive, Governor Schwarzenegger, is not happy with his political appointees, stating in a letter sent to the CTC during the meeting: “CalTrans submitted a tightly focused list of critical transportation projects that meet the objectives of Prop. 1B’s Corridor Mobility Improvement program – to reduce congestion in key arteries of the State.  I strongly urge the Commission to reconsider the projects on the CalTrans list for funding in this initial round of programming”.

Rest assured, based on what happened last week, we can expect a full court press on the CTC Board Members to change their mind on Wednesday.  AGC will be sending a letter to the CTC, and will make a direct call to one of the Board Members, who happen to live in San Diego.  We will tell him to release the additional $1.7 million now so we can complete the projects promised to voters!

Industry “Tells it Like it Is” to the California Air Resources Board

Tuesday was a busy day as well in San Diego, as 180 contractors packed into the auditorium at the State Building in downtown San Diego for a workshop to tell the staff of the California Air Resources Board (CARB) to slow down on a proposal to reduce emissions from off-road diesel equipment.  The proposal: 10% of off-road diesel equipment will need to be replaced every year starting March 2010 (as early as March 2009 for fleets over 20,000 hp).  Fines will likely be as high as $27,000 per day per engine for non-compliance or a paperwork mistake.

Although AGC supports efforts to clean our air, these proposed regulations (which may be voted on by the CARB Board in May) are unachievable at this point, not economical, will limit competition, and will cost contractors and public agencies millions of dollars. 

A number or AGC members joined AGC’s Diesel Emissions Task Force (Scott Erreca, Erreca’s Inc; John Nelson, FCI Constructors; Steve Coker, TC Construction; Mike Carcioppolo, Hawthorne Equipment; Mike Furby, Marathon Construction; Mike Shaw, Perry and Shaw; John Daley, Jr., Daley Corporation) at the CARB workshop, which was designed to get construction industry input on the proposal.  This was the first of four scheduled workshops throughout the state.  The workshop lasted six hours, and it became quite clear that CARB’s proposal is way off base.

Comment after comment from industry representatives were focused on CARB’s proposals to implement the emission standards in the next few years (“we need more time”), to eliminate Carl Moyer funding (“current bonding, equipment funding practices will be in jeopardy”), and to retrofit/re-power/replace vehicles (“technology doesn’t exist at this point, too expensive”).  The costs to implement the proposals also came into question, as each speaker expressed concerns over CARB’s estimate of $2.7 - $3.3 billion. Industry has estimated the cost to be over $20 billion!

If this workshop is any indication, the CARB staff will have its hands full at the next three workshops (they appeared overwhelmed by the industry response!).  Rest assured, AGC, its Diesel Emissions Task Force, and the Construction Industry Air Quality Coalition (CIAQC) won’t let up.  In fact, there is a CIAQC meeting scheduled this week to discuss a gameplan for the coming weeks. 

It is expected that CARB will release its final staff report on April 6.  The CARB Board will then consider the proposals at its May 25 meeting in San Diego.  Until then, expect a lot of communication with the Governor Schwarzenegger-appointed CARB Board members (which includes our own County Supervisor, Ron Roberts).

City of San Diego Poised to Approve $1.2 Billion for Water and Sewer Improvements

Today at 2 PM, the San Diego City Council will consider proposed increases in sewer and water rates, which are needed to improve the City’s aging infrastructure.  If approved, the increases will help fund $1.2 billion of improvements to the water and wastewater systems, specifically rehab/replacement of deteriorating water pipelines and improvements to wastewater pump stations and replacement of miles of pipelines.

The costs for these improvements have been accumulating due to the City’s inability to access public finance markets over the past few years, which as all but stopped most of the City’s  capital improvement program.  The delay in completing the City’s financial audits has been the chief roadblock to accessing the public market.

AGC’s Board of Directors voted to support the rate increases earlier this month, and we have expressed that support to Mayor Sanders and each of the City Council Members.  On Friday, we called AGC members into “action” with an e-mail requesting a message of support to three specific Council Members:  Kevin Faulconer, Brian Maienschein, and Jim Madaffer.  We believe they need a little “push”.   There is still time before the 2 PM Council meeting, so here are the phone numbers, e-mail addresses again…

Faulconer:  619-236-6622; kevinfaulconer@sandiego.gov
Mainschein: 619-236-6655; bmaienschein@sandiego.gov
Madaffer: 619-236-6677; jmadaffer@sandiego.gov

Also, if you are interested in attending the Council meeting, it is being held at 202 “C” Street in downtown San Diego.  You can help communicate our message, “Support the Rate Increases and Get These Vital Infrastructure Projects Moving”.  AGC supports investing in our infrastructure and our elected officials should do the same!



Construction Project Management “The Certificate Course”   
January through December 2006 Class  

AGC San Diego Chapter Education Department would like to show its appreciation to the following Construction Project Management Students and their companies for the support received with this class.

There are 104 hours of classroom study over a 52 week period of time, facilitated by Paul Stout of Power Summit using a number of industry professionals to instruct appropriate sessions. We want not only to congratulate the students that took the time out of their busy schedule to continue their education process, but thank those companies that supported them in this venture.

We would also like to thank Palomar College for stepping up and working with the AGC San Diego Chapter Education Committee to certify this class.

Because of the huge support this class has been receiving we have ongoing classes running congruently. Mr. Stout has also offered those that couldn’t attend all the classes, to makeup prior classes missed. The student would be able to come to one of the other Construction Project Management classes within a one year period and for those classes missed, hours would be honored and the student be reissued a new certificate.