Monthly Archives: August 2018

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Legislative Alert CUCCAA Bid Threshold Banner

CUCCAA Bid Threshold Limits Raised for 2019

This month, Governor Brown signed AB 2249, the State Controller sponsored bill that raises the bid threshold limits for California Uniform (Public) Construction Cost Accounting Act (Act) participating public agencies commencing January 1, 2019 for public projects.Michelle Tucker, Executive Director
Here is the background of the bill, as reported by the State: The Public Contract Code specifies the procedures that public agencies must follow when they build public works projects, including limits on project costs. The Act was enacted in 1983 as an alternative to these general requirements by allowing increased bid limits as long as participating agencies follow uniform accounting standards and bidding procedures. A voluntary program that is available to all public entities in the State, the Act allows public projects costing $45,000 or less to be performed by the public agency’s force account, by negotiated contract, or by purchase order. Projects costing $175,000 or less can use informal bidding procedures set forth in the Act. Projects that cost more than $175,000 must be put out to bid under formal bidding procedures.
The California Uniform Construction Cost Accounting Commission (Commission) administers the Act and provides technical support to public agencies by prescribing uniform construction cost accounting procedures for agencies that opt in. The Commission also reviews public complaints and recommends audits when the criteria of the Act are not fulfilled. In addition, the Commission conducts meetings open to the public, provides a manual for use by public agencies who are signatory and maintains a Commission web page on the Controller's website. Commissioners also facilitate and participate in outreach and training to participating agencies, candidate agencies, and professional organizations.
The Act requires the Commission to review the force account and bid limits every five years to account changes in public construction costs. If the Commission recommends higher limits, the Controller promulgates the new limits and the Legislature amends the Act to reflect the adjusted amounts. This last occurred via AB 720 (Hall). The Commission on September 28, 2017, passed a resolution recommending that the Controller increase the bid limit to $60,000 from the previous $45,000 limit and to $200,000 from the previous $175,000 limit.
CIFAC monitors agencies to ensure they follow the Act’s requirements and has filed complaints against agencies that are found to be out of compliance.

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Fight to Save SB1 banner

The Fight to Save SB1

"Just when I thought I was out, they pull me back in!"

This signature line is spoken by Michael Corleone in Godfather III, but it could be used by the California heavy civil construction industry to express the frustration over the effort to repeal SB1, now known as The Road Repair and Accountability Act of 2017—a mouthful.

Last year, when the bill passed the legislature and was signed by the governor, the industry was told that, finally, the state would have a solid, stable source of funding for roads and bridges and public transit. Apparently opposition actually believed that $52 billion was going to pour out of the sky and one repeal petition got on the November 6th general election ballot as Proposition 6, the Voter Approval for Future Gas and Vehicle Taxes and 2017 Tax Repeal Initiative—another mouthful.

How We Got Here

The construction industry, which had been working for 16 long, sometime tough, years to come up with a formula that would actually get the money needed to keep our highways from turning back to gravel. It was a hard road, but we learned from the experiences on the trip.

The industry spent millions to convince voters to pass Prop. 42, the Traffic Congestion Improvement Act. It was just a place holder for a more permanent answer, but Prop. 42 provided that, from 2003–04 through 2007–08, gasoline sales tax revenues were to only used for state and local transportation purposes, allocated under the Transportation Congestion Relief Program begun in 2000.

Then, during the Schwarzenegger administration the industry was tapped for more millions to support Prop. 1B to provide for the issuance of $19.6 billion in state bonds for roads and bridges in 2006. That measure passed and saved the highway and heavy construction industry in California from total destruction in the aftermath of the 2008 economic collapse.

By the time the Brown administration took over, bonds were odoriferous in Sacramento, so the industry worked to build consensus support in the legislature, a law that became known as “the gas tax swap.” It was supposed to take sales taxes off motor fuel and replace them with an increase in motor fuel taxes and be “revenue neutral” so the voters wouldn’t take any notice at all. The only real problem with the gas tax swap was that it was indexed to grow with inflation—but only to the price of oil—which tanked in 2014 and remains as half the cost today that it was then.

SB1 is the answer to that problem. It is based on a solid foundation—a user pays approach—and is indexed to the cost of living in the state that will help keep pace with inflation and provide a good start on repairing our neglected infrastructure.

Polling Looks Bad but its Early

Polls on the measure say 53 percent of the voters want to do away with the tax increase, particularly the much-hated motor vehicle registration fees, which cost Gray Davis his job as governor.

This vote will come in a non-presidential election year, which means that the voters most motivated will be the ones that show up. It also means that less than 30 percent of the voters will likely decide the outcome. The industry is, once again, being called on by the Governor’s office to raise millions to get the right message out and get as many SB1 supporters to the polls as possible.

A growing coalition of industry trade associations and trade unions are working to stop Prop. 6 in November. CIFAC joins our industry supporters in support of this effort.

We started this with a quote from the Godfather and we are going to end it with a short but strong line from Shakespeare that makes the case for where our industry finds itself...once more:

“Once more unto the breach, dear friends, once more!”—From Henry V, Act 3, Scene 1