Date: July 31, 2006

Fundraising to Support Infrastructure Investment

AGC-San Diego’s PAC Fundraising Chair Tom Anderson, Bergelectric, expects to announce by the end of this week the successful conclusion of the first phase of AGC’s 2006 PAC fundraising effort.  The overall goal is to raise $250,000 that will be contributed to the numerous initiatives and bond measures on the November 7^th ballot.  Selected candidates that support infrastructure investment, including Governor Schwarzenegger, will also receive contributions.   The first phase involves 30 AGC members contributing $5000 each.  As of today, 26 contractors have contributed the $5000….the contractors are:

Bergelectric Corporation

Burch Construction Co., Inc.

Casper Company

C.E. Wylie Construction Company

douglas e. barnhart, inc.

Daley Corporation

Erickson-Hall Construction Co.

Erreca’s, Inc

J.R. Filanc Construction Company, Inc.

FCI Constructors, Inc.

Good & Roberts, Inc.

Herzog Contracting Corp.

Marathon Construction Corporation

Orion Construction Corp.

PCL Construction Services, Inc.

R.A. Burch Construction Co., Inc.

Reno Contracting, Inc.

Riha Construction Company

Roel Construction Co., Inc.

Sierra Pacific West, Inc.

Soltek Pacific

Sundt Construction, Inc.

T.B. Penick & Sons, Inc.

TC Construction Company, Inc.

Turner Construction Company

West Coast Air

We already have reported to you that the $37 billion state infrastructure package will be on the ballot.  Props 1A-1E are listed below, as well as some local measures that are expected to be on the ballot (the figures are approximate at this time):

Palomar College…..$674,000,000

San Diego Area Community College……$870,000,000

Sweetwater Union High School…..$640,000,000

Carlsbad Unified School District……$150,000,000

Santee Elementary School District…..$60,000,000

City of Vista ½ cent Sales Tax……$6,000,000 per year for 30 years for public facility and service improvements

Proposition 1B…….$19.9 Billion for Transportation

Proposition 1D……..$10.4 Billion for Schools

Proposition 1E…….$4.09 Billion for Levees

Proposition 1C…      $2.85 Billion for Housing

Proposition 1A…….Prop 42 Fix which directs approximately $1.5 Billion each year to transportation from the state sales tax on gasoline.

 

The votes on all of these measures will be close.   AGC is concerned that a number of them will fail if the public entities are not able to conduct a proper campaign…..the contributions AGC will be able to present at the end of this fundraising effort represents an important part of the fundraising goal for each campaign.

 

Phase two involves 100 AGC members contributing $1000 each.  AGC staff and PAC Fund members will be contacting members to contribute to this phase beginning this week.

 

Obviously, these candidates, bond measures, sales tax increases, and ballot initiatives are needed….the public’s investment in the infrastructure has been a fraction of what it should have been during the past twenty years. 

We have attached a pledge form…..please consider completing a form and faxing it to the AGC at 858.558-8444 (FAX).

Diesel Particulate Matter and The California Construction Industry

Editor’s Note:  As we mentioned last week, the AGC-San Diego Chapter’s Board of Directors has voted to join the Los Angeles based Construction Industry Air Quality Coalition (CIAQC) and to fund this membership with a $20,000 contribution.

CIAQC is heading the construction industry’s response to the California Air Resources Board’s efforts to “clean up” the diesel emissions caused by the construction industry. 

Please note that this whole situation is very difficult to understand. The following summary needs to be read very carefully by all AGC members that own equipment. This article is the best summary we have seen.

The California Air Resources Board (CARB) has determined that Diesel particulate Matter (PM) is responsible for 2000-2500 premature deaths each year and 3,600 hospital admissions.  In 1998, California determined that Diesel PM is a carcinogen (the only State to do so and therefore subject to control under CARB’s Air Toxic Control Measure (ATCM) authority.  It has also been estimated that 70% of known statewide air toxics risk is from diesel PM.  CARB has established a goal of reducing PM from all diesel fueled engines in California by 75% by year 2010, and by 85% by year 2020.  Construction related emissions are believed to be a significant percentage of the total PM emissions statewide.

The Construction Industry Air Coalition (CIAQC) has been keenly aware of the concern over PM and visible emissions from construction equipment for many years.  The public has also expressed a desire for cleaner burning, heavy duty, off-road construction equipment working in their neighborhoods.  As a result of that interest and the availability of Carl Moyer funding for re-powering older construction engines, CIAQC has been encouraging construction companies to pursue an aggressive engine re-powering program. The equipment most suitable for re-power includes scrapers, haul trucks, bulldozers, loaders, water pulls, water trucks, excavators, motor graders and trucks that transport cranes.

Since 2001, a number of companies in the South Coast and San Diego Districts have re-powered 722 machines at a cost of $60 million. Carl Moyer provided $48.1 million with remaining $12 million being provided by the machine owners. 

The cost of re-powering a single engine averages about $300 per horsepower.  This means a duel engine, 1000-hp scraper will cost $300,000 to re-power with Tier 2 engines.

CIAQC is now working with CARB to develop an Off-Road Equipment Rule to achieve the goal of reducing PM statewide by 85% in the year 2020.  There are four ways to achieve this goal: new engine standards for newly manufactured equipment; cleaner diesel fuel, retrofitting existing engines with emission control devices and re-powering older machines with new low-emitting engines.  The new engine standards for newly manufactured equipment and new fuel standards have been already adopted and agreed to by the engine manufacturers.  New ultra-low sulfur fuel was mandated for California beginning in June of 2006.

Research and development is underway to build filters and catalysts called Verified Diesel Emission Control Systems (VDECS), which can be added to existing engines.  Finally, for long lasting heavy duty off-road equipment the option of re-powering with new engines rather than rebuilding an old engine can be economically feasible.

CARB estimates that there are approximately 150,000 pieces of heavy-duty off-road construction equipment in California.  CIAQC believes the number may actually exceed 200,000.  Based on a sampling of a cross-section of construction forms, CIAQC believes that approximately 55% of these Tier 0 engines (unregulated), 40% are Tier 1, with about 7% Tier 3 and less than 1% Tier 4. The Tier 0 equipment represents about 70% of the total statewide emissions.

Most of this heavy duty off-road construction equipment is built to last dozens of years resulting in a slow turnover and replacement with newer equipment.  It can also be very expensive with a new scraper costing in excess if $1,000,000 making accelerated turnover an unlikely alternative to achieve emissions reductions.  Unlike other industries, this equipment also serves as the asset base for most construction companies.  It is often used as collateral in financing the start-up of construction contracts.  Any regulation, which would require early retirement of the equipment by a certain date, or a prohibition on resale, would reduce the value of the equipment and severely impact company finances and borrowing ability.

In order to achieve the emission reduction goals established by CARB, 77% of all Tier 0 equipment (approx. 75,000 engines) would have to be re-powered to Tier 3 by 2010 and 90% by 2020.  Nearly all of this equipment will also require after-treatment (retrofitting) with VDECS in order to meet the 2020 goal.  The cost of retrofitting with a certified VDECS device is approximately $35 per horsepower, or $17,500 for a 500-hp engine. CIAQC believes the cost to achieve those targets by re-powering and retrofitting would be $13.9 billion by 2010 and $16.6 billion by 2020.

It appears unlikely that most existing equipment can be re-powered with Tier 3 engines due to the sophistication of the technology and the need to integrate the transmission and hydraulic systems with the engine. If a Tier 2 re-power issued instead, a level 3 VDECS must also be used in order to meet the year 2020 standard.

There are currently no VDECS available for retrofitting heavy-duty off-road construction equipment and no certainty they will ever be available for many engine families.  The process for certification by CARB is lengthy and costly and some engine families may simply not be large enough to warrant the investment in producing an effective VDECS.  Those engines would be unable to meet the new standards even if they are the newest engines available.

There are not enough new engines available, or the capacity to build them, to re-power the existing engines and meet the goal. Most new engines are used in the production of new equipment and the equipment manufacturers are interested in selling new equipment, not new engines.  Finally, there is simply not $16 billion available from the construction industry to fund the program.

Given these facts, CIAQC has proposed several alternatives for consideration by CARB.  Following the success of the Carl Moyer program, CIAQC has offered a “fleet averaging” formula that would provide an incentive to every contractor to achieve emission reduction as quickly as possible.  A fleet average would allow contractors to operate older specialty equipment by reducing emissions form other equipment ahead of schedule.  A project based calculation would also accommodate the needs of smaller and minority owned contractors who may be unable to meet vigorous compliance schedules.

Since most contractors know the size of their 2000 fleets, each would be able to calculate their own baseline for purposes of establishing an 85% reduction target.  It would offer each contractor maximum flexibility in re-powering, retrofitting or replacing equipment to meet the goal.  The only way this goal will be achieved is if contractors are able to use actual emission levels, rather than the “certified” levels set by CARB which can be two to three times higher than actual levels.

Finally, CIAQC is skeptical that there will be enough VDECS available to meet the emission levels of this control measure which is heavily dependent on VDECS technology to achieve the 2020 85% reduction goal.  If the technology fails to develop, or manufacturers decline to make enough VDECS for all the engine families, the construction industry cannot be expected to meet the goal through accelerated fleet turnover.  Consideration needs to be included in the regulation to recognize that possibility.

The Construction Industry Air Quality Coalition (CIAQC), including AGC- San Diego, will be engaged in the effort to represent the construction industry as this process moves forwards. Final regulations could be in from the California Air Resources Board by December.

Questions? Contact Jim Ryan at 858-558-7444, ext 14 or jryan@agcsd.org.

U.S. Senate Passes $12 Billion Water Resources Reauthorization Bill

On July 20, the U.S. Senate passed a $12 billion reauthorization of Water Resources Development Act (WRDA), which would authorize funding for major navigation, flood control and environmental restoration projects carried out by the U.S. Army Corps of Engineers (USACE).

"This critical legislation will facilitate trade and commerce, and foster economic development," said AGC CEO Stephen E. Sandherr.  "We urge the House and Senate to work together to finalize this important bill to increase investment in our nation's waterways infrastructure."

WRDA reaffirms the government's pledge to authorize, modify, and improve projects, programs, and policies protecting the nation from floods and keeping waterways open to navigation. This critical legislation, which should pass every two years, is nearly six years overdue. The House passed its version of WRDA (H.R. 2864) in July, 2005.

Much of the Senate debate centered on "Corps Reform." The Senate approved an amendment offered by Senators Russ Feingold, D-Wis., and John McCain, R-Ariz., that would establish external independent reviews of all USACE projects that cost more than $40 million.

Sandherr added, "Congress must commit to infrastructure investment now to leave behind a legacy of economic security and opportunity for future generations. AGC looks forward to a productive conference so that we can have a WRDA that will finally set the nation back on the track of reaping substantial returns on investment." 

Basic Computer Skills Class

August 23, 2006 - 8:00 AM to 4:00 PM

We have had a number of people ask us to bring this class back for those of you that are having a little trouble getting to learn computers. John Cellini has done an excellent job for us teaching this class, along with a number of Microsoft courses we provide. John adjusts his instruction to the class experience, and works independently with those that need more hands-on instruction. See attached flyer for registration or register on line at www.agcsd.org.

AGC Affiliate Day – August 7^th 

We are pleased to announce that the 67^th Annual Affiliate Day Golf Tournament is sold out for golfers!!  We are looking to fill our last spot for a Hole Sponsor. Contact Rae Krushensky at 858.55.7444.ext. 11 or raek@agcsd.org.

 “iSqft Randy’s” Obscure factoid

Obscure Factoid:

The Maxwell House was a luxury hotel in Nashville, Tennessee known for its coffee.

 

 

 

AUGUST CLASSES

August 15-16- CQM

August 23 – Basic Computer Class – 8:00 AM

August 30 – CPR/First Aid – 8 AM

August 31- Supervisory Training Program- Session 1

AUGUST MEETINGS

August 2- Safety Committee Meeting at Roel at 7:00 AM

August 9 - AGC Toastmasters @ Roel 7 AM

August 17 – Specialty Contractors Council @ Adam’s Steakhouse

August 18- Affiliate Members Council- Location TBD

August 22 – HR Committee Meeting – Location TBD

August 23 – AGC Toastmasters @ Roel

 

 

Save The Date:

August 7 – Affiliate Day Golf Tournament – Singing Hills Country Club – SOLD OUT!

September 23– Aztec Football Tailgate and SkyShow

October 11-14^th – Joint Fall Conference with AGC of California in Palm Springs – details on website