Monthly Archives: July 2018

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Public Works Workers - Charter Cities

CIFAC is Keeping an Eye on Charter Cities

By Michelle Tucker, Executive Director. -

As of last year, there were 121 “charter cities” out of the 485 municipalities in California...and right now it looks like another two want to join that list-- City of Carson (Los Angeles County) and City of El Cerrito (Contra Costa County).

July 17th El Cerrito’s city council put the question on the ballot for the November general election. The real driving issue for the city is to be able to raise taxes on their own. In this case, the city wants to create a “real property transfer tax,” levying residents about $12 for every $1,000 on the price of any house sold in the city limits.Michelle Tucker, Executive Director

The really unusual part is that El Cerrito already receives half the money from the Contra Costa County “real property transfer tax.” There is no word yet on whether that arrangement will continue but you can be sure the county will not stop collecting this additional fee in El Cerrito whether the city of 25,400 enacts its charter proposal or not.

City officials say the additional taxes will go into the general fund, “to be used for improving city resources such as parks, after school programs and public safety,” according to news reports.

 

“An online survey offered to residents found 58 percent supported both the charter and tax, though the issues received only 33 percent and 43 percent respectively when surveyed separately,” according to the East Bay Times.

CIFAC has been monitoring the El Cerrito effort since it surfaced and we have received pledges from the city to continue to follow the Public Contract Code (PCC). We will stay on top of this issue.

Different Story in Carson

Carson is looking to abandon the PCC and create their own procurement requirements. This is obviously a concern to CIFAC. We have spoken to the city, strongly suggesting they adopt the California Uniform Construction Cost Accounting Act (CUCCA) and we sent formal letters with the same message.

At this point, we’re not sure what Carson is going to do on our issues, but, if they fail to adopt protections for the construct process we will likely oppose those actions. The charters we worked on with our network in the past that were defeated included Grover Beach and Arroyo Grande. We also were able to stop Porterville (who is already charter) from exempting the PCC.

The city has yet to adopt a charter but they have produced a 65-page draft and they plan to get it before the city council for approval August 7th. To get it on the November ballot the city must send the council resolution of approval by August 10th, the last day for local jurisdictions to file a resolution with the L.A. County Board of Supervisors requesting consolidation with the General Election.

Cities that adopt their charter may adopt their procedures for matters that are considered “municipal affairs,” which is an important phrase if actually undefined in the code. Almost every law suit involving city charter issues ends up with judges trying to decide what a “municipal affair” is. The California Constitution grants charter cities the power to “make and enforce all ordinances and resolutions concerning municipal affairs” (California Constitution Article XI, Section 5(a))—the “home rule” provision. Typical examples that have evolved in the Home Rule of municipal affairs since its passage in 1879, include the manner of conducting local elections and the city’s dealings with its municipal officers and employees, local taxes and sometimes construction matters including force account work.

The municipal affairs that CIFAC is concerned with is whether the city adopts a fair and open contracting process—follows the PCC, provides full complete plans, advertises for bids, awards projects to the lowest responsible bidder and makes sure the winning contractor performs as bid and meets prevailing wage requirements since all “municipal affairs” would involve tax payer money.

No promises except this—CIFAC always works for the benefit of the California construction industry to make sure those provisions stated above are adhered to.


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Top 10 Reasons Agencies Violate the PCC

Top 10 Reasons Agencies Violate the Public Contract Code

The Construction Industry Force Account Council (CIFAC) is a compliance organization that works to help private construction contractors get their legal, fair share of public work.

To do this, we investigate California public agencies (hundreds of them) and their projects (thousands of them) to ensure compliance with state bidding laws. In the 40-years of our efforts, there are some common assumptions (excuses) from agencies that we have come across that we would like to share.Michelle Tucker, Executive Director

  1. Force Account Labor is free: Agencies who use internal staff to perform construction work have reasoned that because they already have staff on their payroll, that the labor to do the work is at no cost.
  2. Splitting a project into multiple parts equals separate projects: A project may be competitively bid in multiple pieces, but it is the aggregate value that determines the type of bidding required. A project may not be split to avoid exceeding the bid threshold.
  3. Labor costs exclusively determine a project value: The total value of a project includes the cost of equipment, labor, and materials.
  4. Advertising is not required: It is rarely allowed to dispense with advertising and only under special conditions. Most agencies must advertise projects online, in newspapers, trade journals and by posting their bid notices in public places for at least two weeks before the bid due date.
  5. Using Change Orders for any contractual change: A change order may be issued for unforeseen conditions but may not be used for the addition of work that was not in the original project scope.
  6. A contract was not necessary; we’ve worked with this contractor before: Although a sign of trust and respect, handshake deals are not permissible! Public agencies must execute a written agreement to ensure protections for both parties.
  7. Soliciting bids without plans and specifications: This is allowed, but only under certain situations, such as a design-build project or for informally bid projects under the California Uniform Construction Cost Accounting Act. Written plans and specifications ensure you get the project you bid.
  8. Failing to provide documents upon a Public Records Request: Government Code ensures agencies provide public records upon a request and provide a written response within a ten-day period upon receipt of that request.
  9. Awarding a contract without proper due diligence: There are many complexities to a bid that must be reviewed to ensure compliance with the project plans and specifications. You must ensure the contractor is properly licensed, bonded and experienced to perform the work.
  10. Allowing subcontractor substitutions without proper notification to the listed subcontractor in the bid package: Subcontractors listing in a bid happens for a reason; it is a contractual agreement to perform the work. There are allowances for substitutions, but you must follow the proper procedures first before approving any subcontractor changes.

These Top Ten force account violations aren’t the only things we work on, but they usually provide what we call “a good start,” when CIFAC begins investigating complaints.

Let us hear from you if you have any questions about projects in your area so that we can go to work for you.


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2017 CIFAC Year in Review Banner

2017 President’s Message

By Dave A. Thomas, President, CIFAC. -

As CIFAC’s President, I saw 2017 as a year of change, progress and success. Turning work around, building our team and holding the line on force account limits were all goals well realized.Dave A Thomas, President, CIFAC

In the spring, CIFAC moved our headquarters to a more centralized location from Martinez to Fairfield. The new office at Martin Plaza is west of Highway 80 at the Waterman/Travis AFB Parkway exit. Midway between the San Francisco Bay Area and Sacramento, the location gives easy access to our industry partners coming from either direction. We invite you to drop in anytime at 2420 Martin Road, Suite 250, Fairfield, CA 94534.

Halfway through the year, our longtime Executive Director Cathryn Hilliard retired after 20 years of service and our new Executive Director and former Regional Compliance Manager Michelle Tucker quickly stepped into the position.

Beginning July 1, Michelle traveled all over the State meeting with our partners and lining up mutual goals and objectives to advance job creation. She also hired two new Regional Compliance Managers, Justin Bochmann to cover her former Central California territory and Tony Morelli for the Southwestern quarter of the State. There were other notable changes in industry leadership at the end of 2017 as we said goodbye and thanks to Tom Holsman at AGC, Jim Reed at CCC and Mando Esparza at SCDCL.

In 2017, SB 1, the Road Repair and Accountability Act of 2017, together with various regional and local bond measures passed and authorized more than $100 billion in funds for public works; there was a clear directive from our Executive Committee and myself to expand CIFAC services at the local level. The White House Council of Economic Advisors says that for every $1 billion spent, 13,000 jobs are generated. We are working closely with our industry partners at the local level to make sure that the work is bid to the private sector.

CIFAC’s Commitment to our members and supporters:

  • Coordinating on mutual goals that support the industry
  • Supporting their events and activities
  • Getting results in record time

In 2018, there will be big improvements to our Facebook and email pages. Look for your photos as our Regional Compliance Managers (RCMs) are now supporting member activities and posting more photos of events on our cifac.org website, Facebook and via email.

CIFAC’s new computer Investigations Tracking Program is in full use as of 2017 and gives RCMs field access to all the records so they immediately have the data they need to turn work around, as speed is essential at the front end of projects to get them out to bid.

Northern and Southern California investigation highlights include CIFAC’s influencing the City of Carson in Southern California to use proper bidding for a $5.1 million storm drain and storm capture management system. Discrepancies on their website made the process highly questionable.

In Northern California, CIFAC influenced the City of Colma to bid its $10 million Town Hall Renovation Project. The project was awarded to a Carpenter signatory contractor, using signatory subcontractors.

The City of Stockton was influenced to rebid a $600,000 District-wide plumbing contract after improper procedures were used during the initial bid phase and was awarded to an unlicensed contractor.

For years, the City of Ukiah, the only city in the State to be sanctioned twice by the California Uniform Construction Cost Accounting Commission (CUCCAC), has been skirting the law. This time it was the installation of manhole covers throughout the City that were done so improperly that it earned Ukiah a Cal OSHA violation! Executive Director Tucker has been working for more than two years on the details with CIFAC Board member and Ukiah contractor Lee Howard. Howard and Tucker appeared before the City Council to warn them that this could be a third strike. When a jurisdiction gets a third strike, they lose the elevated $45,000 force account limit and it reverts back to $5,000.

For other examples of CIFAC victories, I refer you to the monthly progress reports. If you are not already on the list for these free monthly updates, please send your email address to snicholson@cifac.org.

Our legislative program is key to CIFAC’s successes. Eddie Bernacchi, our Sacramento legislative advocate, helped us deflect another slough of bills who tried to raise the force account levels of public agencies so they could keep much more work in-house. One of the most interesting in the last session was his work with the Golden Gate Bridge, Highway and Transportation District. SB 622 would have raised the limit for all construction projects from $5,000 to $100,000 (other than vessel repair which already had a $100,000 limit). CIFAC opposed the bill and after discussions among CIFAC members, a GGBHT District Board member, the District General Manager, and CIFAC Executive Director, Bernacchi was able to get that provision removed from the bill.

CIFAC staff joined the support team for SB 1, the Road Repair and Accountability Act of 2017. We participated in support rallies put on by Governor Brown in both Northern and Southern California.

SB 591 was signed into law, which successfully closed the loophole some districts were using to circumvent having to advertise and fairly award Lease-leaseback projects.

I am committed to having a full compliment of staff, “boots on the ground,” to make sure that every opportunity for getting work out to our contractors and union members is first and foremost. I feel confident that we will finally have the resources we need in the next year or two to improve business development opportunities, enhance existing CIFAC programs and launch a more aggressive electronic media program. All of this is about jobs for our members now and in the future.

Sincerely,

David Thomas

Download 2017 Annual Report (PDF)


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2017 By The Numbers Banner

2017 By the Numbers – 2018 The Year Ahead

NORTHERN TERRITORY INVESTIGATIONS

2017 Northern Territory Investigations Graph

SOUTHERN TERRITORY INVESTIGATIONS

2017 Southern Territory Investigations Graph
2018 A Year Ahead Banner

New staff promises more energy, fresh perspectives and a revitalized feel to CIFAC. Our focus has never been stronger and with the future addition of two more compliance managers, we will be able to turn more work around for the industry. Paramount to our success is ensuring that CIFAC has enough staff to pursue our mission of monitoring and enforcing the Public Contract Code.Michelle Tucker, Executive Director

Outreach efforts will be increased, with staff attending more meetings and industry related events. Facebook postings and website updates will be more frequent. The use of Constant Contact, an email marketing program will allow us to significantly increase our communications to our industry members, that include news articles, industry alerts, progress reports and other relevant news.

Public funding for projects is at an all-time high, along with unprecedented man-hour projections from our partners. This presents new challenges as we continue to see an influx of public works projects and work feverishly to monitor the awarding agencies for compliance. The passage of the Road Repair Accountability Act or SB1 will bring millions of dollars to agencies for road construction, reconstruction and maintenance projects. CIFAC intends on diligently monitoring these agencies and their projects to ensure compliance with the Public Contract Code.

Along with increased public funding, means more agencies will try to self-perform work or pursue legislation to increase their bid threshold. CIFAC’s Executive Director or Legislative Advocate continuously monitor and analyze new legislation and changing conditions for their effect on industry priorities.

Our contribution to the public works construction industry is significant and we strive to increase those numbers as the year unfolds.


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California Senate Chamber

CIFAC LEGISLATIVE REPORT – 2017 Session Wrap-up

SACRAMENTO – The California Legislature wrapped up the 2017 legislative session on October 15th which was the deadline for Governor Brown to sign or veto legislation.

This year CIFAC championed legislation (AB 1019) to ensure proper funding and staffing for the California Uniform Public Construction Cost Accounting Commission which oversees the California Uniform Public Construction Cost Accounting Act and the public agencies who are subject to it. Unfortunately, despite support for the measure from public agencies and the construction industry, both labor and management, the measure was vetoed by Governor Brown. In his veto message the Governor sited that the State Controller should have the authority to allocate resources to commissions under his office. The veto of AB 1019 was disappointing, we will need to regroup and consult with the State Controller’s Office on next steps to ensure proper staffing of the California Uniform Public Construction Cost Accounting Commission.Eddie Bernacchi, Politico Group

Outside of the veto of AB 1019, CIFAC had another very successful legislative year. The biggest industry win came with the passage of SB 1, securing $5.2 billion annually for state and local transportation infrastructure. The passage of SB 1 positions CIFAC in an important role, to ensure the proper use and contracting out of those new funds.

We also brought home a victory in the area of further limiting the unfair use of lease-leaseback school construction procurement, which should save CIFAC staff time when monitoring and investigating these types of projects.

In addition, and as always, CIFAC took the leading role in defending force account limits.

Enclosed is a list of the key bills CIFAC took positions on in 2017 and the outcome.

LEGISLATION CIFAC SUPPORTED

AB 1019 – California Uniform Public Construction Cost Accounting Act. Commission Funding: Would have guaranteed staffing of the Act’s administrators, the California Uniform Public Construction Cost Accounting Commission, by the State Controller’s Office. This would have ensured that audits of public agencies who are out of compliance with the Act were performed timely.CIFAC Likes icon

Status: Dead – Vetoed by Governor

GOVERNOR'S VETO MESSAGE:

To the Members of the California State Assembly:

I am returning Assembly Bill 1019 without my signature.

This bill requires the State Controller's Office to make staff available to support the California Uniform Construction Cost Accounting Commission.

The need for this bill is unclear. I am confident that the State Controller's Office is more than capable of dedicating the necessary staff to support the Commission and its work without the mandate called for in this bill.

Sincerely,
Edmund G. Brown Jr.

SB 1 - Transportation Funding: In April of 2017, the California State legislature passed and Governor Brown signed into law SB 1, the Road Repair & Accountability Act.

SB 1 will provide approximately $5.2 billion annually for California roads, highways and transit systems. Half the money will be for state transportation and half for local roads. The revenue collection will begin November 2017.

The money will be allocated as follows and totals $52.4 billion: (10-year outlook)

State investment programs (50%)

  • Fix-it-First Highways $15 billion
  • Bridge and Culvert Repair $4 billion
  • Trade Corridor Investments $3 billion
  • Solutions for Congested Commute Corridors $2.5 billion
  • Parks Funding for Ag, Off-Highway Vehicle & Boating $800 million
  • STIP (State Share) $275 million
  • Freeway Service Patrol $250 million
  • California Public Universities Transportation Research $70 million

Local/Regional investment programs (50%)

  • Fix-it-First Local Roads $15 billion
  • Transit Capital and Operations $7.5 billion
  • Local Partnership Funds $2 billion
  • Active Transportation Program Bicycle and Pedestrian Investments $1 billion
  • STIP (Local Share) $825 million
  • Local Planning Grants $250 million

The money will be generated as follows and will total $52.4 billion: (10-year outlook)

  • Fuel Taxes:
  • Gas Excise $24.4 billion
  • Diesel Excise $7.3 billion
  • Diesel Sales $3.5 billion
  • Vehicle-Based Fees:
  • Value-Based Transportation Improvement Fee $16.3 billion
  • Zero Emissions Vehicles (ZEV) Fee Commencing in 2020 $200 million
  • One-Time Repayment of Transportation Loans
  • Repaying Outstanding Loans from the General Fund: $706 million

AB 591 – School Property: Lease: County Boards of Education: Closes a loophole some school districts were using to circumvent recently enacted laws that require that schools using the lease-leaseback project procurement method advertise for bids and establish a competitive selections process for awarding lease-leaseback contracts.

Status: Signed into law

SB 256 – Public Contracts: Criminal Offenses and Statute of Limitations: Would criminalize as misdemeanors certain violations of public contract law dealing with competitive bidding and would allow the commencement of the prosecution of those crimes and other, similar crimes within 3 years from the date of the offense.

Status: Held in Senate Appropriations Committee

SB 634 – Santa Clarita Valley Water Agency: Reorganizes Castaic Lake Water Agency and Newhall County Water District into the Santa Clarita Valley Water Agency and applies the requirements of the Public Contract Code to the new agency.

Status: Signed into law

LEGISLATION CIFAC OPPOSED

AB 636 – Local Streets and Roads: Expenditure Reports: Current law requires each city and county to submit to the Controller a complete report of expenditures for street and road purposes by October 1 of each year relative to the preceding fiscal year ending on June 30. This bill would instead require the report to be submitted to the Controller within 7 months after the close of the fiscal year adopted by a county, city, or city and county.CIFAC Dislikes icon

Status: Held in Senate Rules Committee

AB 1250 – Counties and Cities: Contracts for Services: Establishes specific standards for the use of services contracts by counties and cities. Beginning January 1, 2018, the bill would only allow a county or county agency, or a city or city agency, to contract for services currently or customarily performed by their current employees when specified conditions are met. Among other things, the bill would require the county or city to clearly demonstrate that the proposed contract will result in actual overall costs savings to the county or city and also to show that the contract does not cause the displacement of county or city workers. CIFAC opposed the bill and was able to secure amendments exempting construction, alteration, demolition, installation, repair, or maintenance work from the provisions of the measure.

Status: Held in Senate Appropriations Committee

SB 622 – Transportation District: Contracts: Requires a bridge and highway district to advertise for contracts for all vessel repair, maintenance, and alteration work if the estimated expenditure exceeds $1,000,000, and for all other construction, repair, maintenance, and alteration work, and all similar work, if the estimated expenditure exceeds $5,000, in at least one newspaper and one trade paper of general circulation. CIFAC opposed the bill as originally drafted which would have raised the force account limit on construction, repair and maintenance from $5,000 to $100,000. At our request that provision of the bill was removed.

Status: Signed into law

LEGISLATION CIFAC ACTIVELY MONITORED

AB 618 – Job Order Contracting: Community College Districts: Authorizes community college districts to enter into job order contracts, an alternative construction contracting agreement currently available to school districts, until January 1, 2022.

Status: Signed into law

SB 851 – Local Agency Projects: Extends the sunset date on the authority of counties to use construction manager at-risk contracting, extends construction manager at-risk contracting authority to the City of San Diego, and allows the Santa Clara Valley Water District to use the design-build procurement method.

Status: Signed into law

AB 1424 – University of California: Best Value Construction Contracting Program: Eliminates the sunset on the University of California's authority to use the best value procurement method for construction contracting.

Status: Signed into law