CSAC Bulletin Article

Housing, Land Use and Transportation 08/19/2011

Public Works Administration

SB 293 (Padilla) – Oppose 
As Amended on August 15, 2011

SB 293, by Senator Alex Padilla, would cap retention on a public works project at five percent. Current law requires retentions of at least five percent on public works projects, with the flexibility for public agencies to utilize the most appropriate retention, case-by-case, to protect taxpayers, ratepayers and Californians who depend upon core local services.

A five percent retention cap imposes a one-size-fits-all policy and removes flexibility to appropriately manage risk on a project-by-project basis. Local agencies must accept the lowest responsible bidder when awarding contracts. The flexibility provided in existing law allows agencies to do a project risk assessment and determine retention provisions that are appropriate to the level of risk assessed for a project.

Prohibiting retention over 5% is bad policy at the worst possible time. During this difficult economic and budgetary time, public agencies, taxpayers and ratepayers cannot afford failures on the part of contractors. Furthermore, in this climate, contractors faced with difficult financial decisions are more likely to abandon a project when he or she deems the remaining work to be unprofitable. 

Supporters assert that this bill is in response to the downturn in the economy; however, this is the eighth attempt to enact this legislative proposal, the first of which dates back to 1996. We do not believe that this legislation is in response to the hard economic times, rather a solution in search of a problem. Furthermore, local agencies have been equally hurt from the downturn in the economy, slashing budgets and staff, and operating in extremely fiscally constrained environments.

Existing law affords contractors an interest-bearing escrow account for all retention proceeds. Current law provides contractors the ability to establish escrow accounts that allow retention proceeds to gain interest payments for the contractor while providing adequate assurance to the public agency that the project will be completed. Additionally, local agencies commonly reduce retention to 5% at the half-way point of project completion, if adequate progress is being made and the contractor is acting in good faith. SB 293 would thwart the ability of local agencies to properly ensure projects are completed. 

SB 293 was referred to the suspense file by the Assembly Appropriations Committee on August 17 and the Committee will hear suspense items on August 25.


AB 345 (Atkins) – Support
As Amended on June 29, 2011

AB 345, by Assembly Member Toni Atkins, would codify in statute a long-standing advisory committee, the California Uniform Traffic Control Devices Committee (CTCDC), created by the California Department of Transportation (Caltrans). The measure would also add two additional representatives to the CTCDC representing non-motorized users of the road, selected from the Caltrans Active Transportation and Livable Communities Advisory Group (ATLC).

CSAC, with two representatives on the CTCDC since 1968, is an active participant working to ensure local government input into Caltrans decisions’ regarding rules and regulations prescribing uniform standards and specifications for all official traffic control devices in California. Counties serve an important role on this committee as we are subject to and oversee implementation of changes to standards resulting from developing science and new technology. We remain important governmental partners as owners and operators of 38 percent of the state’s road mileage. 

CSAC supports the goals of AB 345 – to expand the membership on the CTCDC to ensure that all users of the roadway system impacted by decisions regarding traffic control device standards are represented. We believe the ATLC Advisory Group is a good resource from which to appoint the non-motorized representatives to the CTCDC. 

AB 345 was scheduled for a hearing in the Senate Appropriations Committee on August 15, however it was sent to the Senate Floor for a vote without a hearing as it was determined to not have a significant effect on state costs or a reduction in state revenues. 

AB 650 (Blumenfield) – Support
As Amended on August 15, 2011

AB 650, by Assembly Member Bob Blumenfield, would create, until March 30, 2013, the Blue Ribbon Task Force (Task Force) on Public Transportation for the 21st Century. The Task Force, a 12-member body appointed by the Senate Rules Committee and the Speaker of the Assembly, would be required to submit a written report to the Governor and Legislature by September 30, 2012 that shall include, among other things, specific findings and recommendations relating to the current state of California’s transit system, the level and types of transit needed to meet economic, equity, public health, and sustainability goals, the estimated cost of creating the needed transit systems, potential funding sources, and recommendations for future actions resulting from these findings. 

AB 650 will provide valuable information and data to the Legislature and Governor regarding the current cost and demand for public transportation, including how to pay for it. Without this information, it will remain difficult for policy- and decision-makers to make vital funding decisions and support public transportation in the state. For these reasons, CSAC supports AB 650.

AB 650 was referred to the suspense file by the Senate Appropriations Committee on August 15. The Senate Appropriations Committee is set to meet August 25 to hear suspense bills. 

AB 892 (Carter) – Support
As Amended on July 13, 2011

AB 892, by Assembly Member Wilmer Amina Carter, would extend the State of California’s existing limited waiver of its sovereign immunity, which is necessary to allow the California Department of Transportation (Caltrans) to continue its assumptions of National Environmental Policy Act (NEPA) responsibilities under Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU). Specifically, the measure extends the limited waiver of sovereign immunity until January 1, 2017, or until a termination of the Memorandum of Understanding (MOU) between the California Department of Transportation and the Federal Highway Administration. 

Caltrans has been participating in the “Surface Transportation Project Delivery Pilot Program” (Pilot Program) under a MOU since July 1, 2007. To assume these federal responsibilities, Caltrans was required to accept the jurisdiction of the federal courts, necessitating the limited waiver of sovereign immunity. 

The Pilot Program is intended to streamline the process for approving transportation projects by allowing Caltrans to assume FHWA’s responsibility for approvals and consultations under NEPA and other federal laws while maintaining all federal environmental protections. The program requires Caltrans to comply with all FHWA NEPA regulations, environmental policies and formal guidance. Under the program, one layer of bureaucracy, related to FHWA’s review of environmental documents, is removed, decreasing the time required for environmental approvals. 

Based on the first 3.5 years of the Pilot Program, Caltrans has achieved a median time savings of 14 months in preparing and approving routine environmental documents, measured from when environmental studies begin until the final environmental document is signed. These time savings are based on almost 70 projects for which Caltrans independently made environmental approvals for both the draft and final environmental document under the Pilot Program. 

This legislation is a key element in helping Caltrans streamline the environmental review process for critical transportation projects. For these reasons, CSAC supports AB 892.

AB 892 was passed out of the Senate Appropriations Committee on August 15 and now awaits a vote by the entire Senate.

Indian Gaming 

AB 1417 (Hall) – Support
As Amended on June 22, 2011

AB 1417, by Assembly Member Isadore Hall, would appropriate $18.2 million from the Indian Gaming Special Distribution Fund (SDF) for grants to local governments to help off-set the impacts on infrastructure and public services from tribal gaming.

While the grants offered via the SDF program do not mitigate all of the affects Indian gaming has on California’s local communities, the funding is still very critical to local jurisdictions affected by gaming. Counties experience a myriad of costly impacts on local infrastructure and services ranging from transportation to wastewater to public safety. 

Additionally, these are special funds and have no impact of the State’s General Fund or budget. This appropriation will help local governments and Tribes put this dedicated revenue towards its intended purpose. These funds are even more vital during such difficult budget and economic times and could even stimulate some economic activity as a result of investing the money in infrastructure mitigation projects. 

AB 1417 was placed on the suspense file by the Senate Appropriations Committee on August 15. The Senate Appropriations Committee is set to meet August 25 to hear suspense bills. 

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