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MARCH 2017
ECAMAGAZINE
OROVILLE’S IMPACTON STATE FLOODCONTROL
I NS I DEI NS I DE
ecasocal.org
E CA E VE NTE CA E VE NT
ECA Golf Mar. 20ECA Legal SeminarMar. 30
New 'Climate Change' Regs Coming on Water Projects
Emergency Work List Opportunities
No Damage for Delay Contract Clauses
ECA Safety Forum Resource
Page 10
1 on 1 with theECA Legal Committee &1 on 1 Angels v. Dodgers
ECA hosts its 15th annual Legal Seminar. The charge for this valuable seminar is $110 per person by Mar. 1, $125 thereafter. Please join us for an evening of interactive discussion where the
Legal Committee answers YOUR questions.
Thursday, Mar. 30, 2017, 4:30 pm – 7:00 pmGame starts at 7:00 pmYou do not need to stay for the game.At Angel Stadium, 2000 E. Gene Autry Way, Anaheim, CA 92806
The topics of discussion will include:
! YOUR questions
! YOUR concerns
! Contract provisions to include
! Contract provisions to avoid
! Legal updates
! Keys to Prompt Payment and More....
The Engineering Contractors’ Association presents
Attendee(s) @ $110 each by Mar. 1 _____
Attendee(s) @ $125 each after Mar. 1 _____
___ SPOT LIGHT Sponsor – $500 – Includes:
2 tickets, personal introduction at meeting, mention in all promotional materials
___ RECOGNITION Sponsor – $300 – Includes: 1 ticket, mention in all promotional materials
(Make checks payable to ECA or enter credit card information below.) Total: ___________________
Company/Organization:_________________________________________________________________
Street:_______________________________ City/Zip:_________________________________________
Phone:__________________________ Email:_______________________________________________
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Card billing address______________________________________ Card billing Zip Code____________
Signature _____________________________________________________
FAX Reservations to 714/937-5030Reserve Your Space Today!
714/937-5000 ! www.ecasocal.org ! ECA, 2190 S. Towne Ctr. Plc., #310, Anaheim, CA 92806
Fax form to ECA at (714) 937-5030 or call (714) 937-5000 for details. Or mail form with check to ECA,
2190 S. Towne Ctr. Pl., #310, Anaheim, CA 92806
Call 714/937-5000for reservations to
this seminar.
$110 per person
There will be no refunds given on cancellations less than 72 hours in advance. If you make reservations and
do not attend, ECA is still responsible for your reservation. Anyone who makes reservations and does not attend without canceling by the above referenced date shall be billed for the full amount.
SponsorshipsAvailable!
The only legal presentation where you’re a player. All
participating attorneys will answer questions, so
it is a chance for attendees to get free
legal advice. The team will provide insightful,
expert opinions on today's most important legal issues facing the construction industry.
Contractors and affiliates alike will benefit from
this unique opportunity to learn valuable legal information on a wide
range of topics.
4:30-7pm Program
AtAngel Stadium
2000 E. Gene Autry WayAnaheim, CA 92806
Law & Baseball
From inside Angel Stadium
For questions on legal topics to be presented please call
Anthony Niccoli, AALRR, at562/653-3200
Executive Officers President – Brandon Pensick Vice President – Toby Edinger
Vice President Infrastructure – Dave Sorem Secretary – James Black Treasurer – Alan Ludwig
Affiliate Chair – Elizabeth Torrez*
Guy Barker*Andrew Carlton*
Anna Carno*Barry Corea*
Eric DeCrescenzo*Aaron Dyer*
Garrett Francis* Gary Futral*
John GaviganDavid Graham*Kristion GrbavacMichael Grbavac
Warren Hennagin*Gerry McEwen*Steve MurowAnthony Niccoli*Dan J. Peterson*Lou Rendon*Garrett Richardson*Tim RivardScott Salandi*Scott Van DiestNic Waldenmayer*Andrew Waterbury*
March 2017, Vol. 53, No. 3
Directors
*Denotes Affiliate Member
Contents
ENGINEERING CONTRACTORS’ ASSOCIATION
ECA Magazine - Since 1976, your resource to news and useful information about ECA member services, contractors, manufacturers, and suppliers in southern California’s utility construction industry. Use it to help build your business future.
ECA
714/937-5000 · Fax 714/937-50302190 S. Towne Center Place, Ste. 310
Anaheim, CA 92806Email: [email protected]
www.ecasocal.org
ECA MAGAZINE (ISSN 0896-3169) serving Southern California construction, is published monthly at Anaheim, California, as the official publication of the Engineering Contractors’ Association. It is intended for the dissemination of news of Association activities as well as information to the general construction industry in such matters as labor relations, government relations, legislative direction and public relations. It is distributed throughout the 11-county Southern California area to contractors and suppliers with interests in sewer, pipeline, underground utilities, trenching, excavating and grading, tunnels, street and highway construction and related engineering construction. Mail subscription requests to ECA Magazine, 2190 S. Towne Centre Pl., Ste. 310., Anaheim, CA 92806. Subscription rates are $1 per issue or $10 per year (12 issues including Directory & Buyer’s Guide issue). There is no charge for ECA members or current advertisers. Graphic design and production by [email protected]. Lithographic printing by Meridian Litho, Tustin, CA.
Engineering Contractors’ Association
MAGAZINE
E C A M A G A Z I N E M A R C H 2 0 1 74
C e r r i t o s � F r e s n o � I r v i n e
P a s a d e n a � P l e a s a n t o n � R i v e r s i d e
S a c r a m e n t o � S a n D i e g o
Providing legal
services to
California’s
constructon
industry for
over 35 years.
�Contracts & Bids
�Construction Claims
�Labor & Employment
�Real Property
Thomas W. Kovacich, Partner 12800 Center Court Drive, Suite 300
Cerritos, California 90703 (562) 653-3200 � [email protected]
Committees
Affiliate CommitteeElizabeth Torrez, United Rentals Trench Safety
DIG Award CommitteeAnthony Niccoli, AALRR
Safety ForumDavid Graham, Traffic Management Inc.
Brad Oien, Murrow CM
Labor CommitteeScott Van Diest, Van Diest Bros.
Legal CommitteeAnthony Niccoli, AALRR
Government Affairs CommitteeDave Sorem, Mike Bubalo Const.
Membership CommitteeAndrew Waterbury, TSIB
Political Action CommitteeScott Salandi, Patriot Risk
Scholarship CommitteeGerry McEwen,
GMGS Insurance Services, Inc.·
John Simpson, EditorEmail: [email protected] · Ph. 562/708-4601
P.O. Box 3384, Idyllwild, CA 92549 Industry Advancement Advocate– Bill Davis
Administrative StaffExecutive Director – Wes MayOffice Manager – Shelia Voss
Administrative Assistant – Jessica Moreno
President’s Message6Brandon Pensick Ferreira Construction
Executive Direction 8
Wes May, ECA Executive Director
10 Government Affairs Dave Sorem, Chair
11 ECA Advertising
ECA Member News 13
· Association Events & Happenings
· Upcoming Activities
15 ECA Membership Application
17
Legal Grounds
20 Safety Forum
21
ECA Resources
19
Advertiser’s Index
www.ecasocal.org
E C A M A G A Z I N E 6 M A R C H 2 0 1 7
he State Water Resources Con-trol Board has just added a new
set of regulatory burdens to your water and sewer projects funded by the state revolving funds—which is most of our work these days.
The action came at the February 22nd water board meeting in Sacramento in the form of a ”Reso-lution adopting a comprehensive response to climate change,” which is an update to a much less comprehensive measure passed in 2007.The Kitchen Sink of Impacts
The resolution says “climate change” is to blame for a laun-dry list of “water quality impacts that include, but are not limited to:”
….dry periods and drought lowering stream flow and reduc-ing dilution of pollutant discharges, harmful algal blooms due to a combination of warm waters, reduced ability of warm water to hold dissolved oxygen, and nutrient pollution, more erosion and sedimentation caused by intense rainfall events, especially fol-lowing wildfire, and increased velocity of stream flow, potential sewer overflows due to more intense precipitation and in-creased storm water runoff, rising sea levels inundating low-lands, displacing wetlands, and altering tidal ranges, and in-creasing areas subject to saltwater intrusion into groundwater, and water pollution and increased absorption of carbon dioxide creating coastal zone “hotspots” of acidification and hypoxia.
Wow, what a list…just about everything from acne to ther-monuclear war.
This resolution sets out directives to State Water Board divi-sions, offices and recommendations to Regional Water Quality Control Boards, for actions to account for and “embed climate change into existing work,” both to “mitigate greenhouse gas emissions and to build resilience to the impacts of climate change,” according to the resolution.Impacts on Contractors
So here's the impact of the resolution on contractors: a lot of paperwork, include “tracking and reporting on actions to miti-gate greenhouse gases,” and potentially more direct dam-age—reducing hours on projects to reduce emissions or mak-ing specific equipment requirements to reduce greenhouse gases—none of which is in the current rules from the California Air Resources Board.
The directives in the resolution are guidelines and policies only and no specific regulation is created by the resolution. That will come down the regulatory road in a few months (and with the flooding issues that surfaced this winter, maybe later) and we will continue to try to slow the SWRBC staff down—by partic-ipating in their “process” through the Construction Industry Wa-ter Quality Council that ECA helped to found decades ago.
Whenever the final regulations become effective we will
keep you informed on the changes. D
President’s Message
By Brandon Pensick, ECA PresidentEmail: [email protected]
New ClimateChange Regs onWater Projects
T
Executive Direction
By Wes MayECA Executive DirectorEmail: [email protected]
E C A M A G A Z I N E 8 M A R C H 2 0 1 7
After the Deluge,Ready forThe Call
I t will stop raining this year and even now the silver linings of the
storm clouds that crossed Califor-nia this winter are coming into view.
Not to put too fine of a point on it, but there are many ways of looking at disaster. We deplore the human
costs of events like floods or earthquakes. We despair about the costs of replacing homes, businesses and infrastructure. We grumble about the time it takes to return everything to “nor-mal”—the state of being between disasters.
In the construction industry, particularly the heavy civil con-struction industry, we express concern about rain delays adding to completion times on our existing pro-jects.
But, many of the ECA's members mo-b i l i z e a n d make ready for the call from local and state officials to swing into action fixing the broken pieces of our communities, restoring water, sewer, electric and gas utilities as well as roads, bridges and stormwater systems.Being Prepared for Emergencies
These officials don't just go to the phone book and start call-ing contractors for help, they go to their “emergency work” lists for prepared contractors who can swing into action to help them recover from disaster. These lists are made up of companies who have the foresight to offer their services before emergen-cies arise, who are able to negotiate the paperwork required to demonstrate their ability and availability for this kind of work.
The payoff for this extra effort is the fact that most emer-gency work is performed on a cost plus 10 percent basis—far better compensation than the typical margin these days for most construction work.
If your company isn't already on the emergency list with your local government, we can help. ECA, with its emphasis on local government activities, is uniquely positioned to help our mem-bers navigate the intricacies of getting contractors prepared for emergency work applications. We know officials at hundreds of cities, counties, water districts and other local government folks and knowing who to talk to about these opportunities.
And, if you missed the boat for this deluge, there will always be another one coming. The U.S. Geological Service says that California is especially prone to disaster. Earthquakes, while not predicable, are a common occurrence in our state and floods are a regular problem as well. As the Boy Scouts remind us, we
must always “Be Prepared.” D
C
Brown to RaidWater Bonds forFlood Control
E C A M A G A Z I N E 10 M A R C H 2 0 1 7
Construction Law: Construction Disputes Both Public And Private Payment Disputes - Including: Mechanics’ Liens Stop Notice Claims and Bond Claims Licensure Issues Bid Protest Issues Construction Defect Litigation Surety and Insurance Disputes
Business and Corporate Law: General Business Litigation Contract Drafting and Interpretation Business Formation
24031 El Toro Rd., Suite 210, Laguna Hills, CA 92653 www.carnoconstructionlaw.com (949) 540-0320
Carno Law Group’s Practice Focuses On The Following Areas:
alifornia Governor Jerry Brown announced plans late
last month to raid the water bond funds approved by voters in No-vember 2014 to “improve flood pro-tection” following the storms this winter, but not to fix the flood dam-
aged Oroville dam in Butte County.The Democratic Governor's plan announced at a press con-
ference February 24th, would spend $50 million from the gen-eral fund and “re-purpose” $387 million from the $7.5-billion wa-ter bond. Proposition 1 was sold to voters as a way to build NEW storage dams and improve aging water system infrastructure. Flood control wasn't a hot item in the public relations run up to the election.
The cost of repairing Oroville Dam's spillways will be paid for by the customers of the 20 water districts that depend on the dam as one of their primary storage facilities, according to the
state Department of Finance. The plan is very sketchy about how the bond raid money will be used for specific projects.Money Not the Problem
California voters have passed eight water bonds since 2000 and there were $11.8 billion in unsold “natural resources” bonds as of the end of 2016, including $7.4 billion from Proposition 1. The Governor's budget proposes almost $1.3 billion in natural resources bond sales through December 2017. The state also is spending $634 million, left over from Proposition 1E and Propo-sition 84 (both passed in 2006) bond money, for flood control over the next two years.
Brown also is asking the federal government to streamline the environmental regulatory review to make repairs to the 770-foot earthen dam. During the last round of federal licensing for the dam in 2005 environmental groups and local officials called
By Dave Sorem, P.E.ECA Government Affairs Chairmanemail: [email protected]
Government Affairs
(Continued on page 19.)
Oroville Dam spillway repairs.
Engineering Contractors’ Association
Start 2017 Right, Join usMonday, March 20, 2017!
Or call 714/937-5000.Mail to ECA
2190 S. Towne Ctr. Pl., #310Anaheim, CA 92806
ECA will tee off its March Golf Tournament at the magnificent Trump National Golf Course in Palos Verdes on Monday, March 2020, 2017! Don’t miss ECA’s first golf outing of the year. Check-in begins at 10:00 a.m. with tournament tee off at 12 noon. Featuring Foursome Team Scramble play on this magnificent course you can win Cash Prizes, Drawing Gifts & Closest-to-the-Pin Prizes.
Fax Reservations to 714-937-5030
At Trump National Golf Course1 Trump National Dr., Rancho Palos Verdes
ECAMarchGolf
There will be no refunds for cancellations less than 7 days in advance. If you make reservations and do not attend, ECA is still responsible for your reservation. Anyone who makes reservations and does not attend without canceling by the above referenced date shall be billed for the full amount.
Name(s):________________________________________________________________________________________
Company/Organization:___________________________________________________________________________
Street:____________________________________ City/Zip:______________________________________________
Phone:____________________________________ Email:_______________________________________________
___MasterCard ___Visa ___AmEx Card #_____________________________________________ Exp:________
Name on Card __________________________________________________________ CVV Code________________
Card billing address____________________________________________ Card billing Zip Code________________
Signature _____________________________________________________
Please reserve ___ golfers & dinners at $325 per person $______________________
Please reserve ___ foursomes at $1,300 $______________________
Please reserve ___ dinner(s) only at $75 $______________________
Please include us as Tee Sponsors at $150 $______________________
Please include us as Prize Sponsors at $200 $______________________
Please include us as “Guess Your Distance” Sponsors at $250 $______________________
Please include us as Closest to the Pin Sponsors at $250 $______________________
Please include us as Hole-In-One Sponsors at $1,000 $______________________
Please include us as Lunch Sponsors at $500 $______________________
Please include us as Dinner Sponsors at $1,000 $______________________
Please include us as Beverage Sponsors at $500 $______________________
Please include us as Trophy Sponsors at $500 $______________________
Total $______________________
The history of the Shea family of companies began modestly enough in 1881 when company founder John F. Shea established a small plumbing business in Portland, Oregon. From those humble beginnings, his sons and their sons after them built the J.F. Shea Company into one of the largest privately held home builders in the nation.
At the core of this family network of influential companies is J.F. Shea Construction, Inc. – one of today’s largest and most respected civil contractors in the nation. The construction company’s legacy of milestone achievements include the building of the Golden Gate Bridge, Hoover Dam, and San Francisco’s Bay Area Rapid Transit (BART) system.
J.F. SheaConstruction, Inc.
www.jfshea.com
(909) 595-4397 Fax (909) 444-4263P.O. Box 489, 667 Brea Canyon Road, Suite 30, Walnut, CA 91788-0489
(909) 595-4397 Fax (909) 444-4263P.O. Box 489, 667 Brea Canyon Road, Suite 30, Walnut, CA 91788-0489
General Contractors Lic. # 769989General Contractors Lic. # 769989
THE COORDINATED COMPANIESMaking Quality and Safety Our Priority
Coordinated Wire Rope & Rigging, Inc.1707 E. Anaheim St., Wilmington, CA 90744
!310/834-8535 www.coordinatedcompanies.com
E C A M A G A Z I N E 12 M A R C H 2 0 1 7
Your source for the highest quality, safest and most reliable
! Fabricated Rigging Products
! Safety & Fall Protection Gear
! Wire Rope Slings
! Rigging Hardware
! Synthetic Slings
! Lifting Products
! Chain Products
ECA Member News
For information regarding ECA events call
714/937-5000 or by fax at 714/937-5030
Email: [email protected]
Send news releases or other member information to: ECA Magazine,
2190 S. Towne Centre Place, Ste. 310,
Anaheim, CA 92806
Visit us on the web at: www.ecasocal.org
! ECA Board Meetings 1st Wednesday each month, ECA offices
! ECA Safety Forum Meets every 1st Wed., 11:00 a.m. ECA office, lunch provided.
2017ECA EventCalendar
E C A M A G A Z I N E M A R C H 2 0 1 713
ECA Celebrates 41stInstallation With Flair
C elebrating 41 years of service to the heavy
construction industry, ECA hosted its annual Installa-tion of Officers at the his-toric Langham Hotel in Pasa-dena on January 28. The ECA Executive Board, under the direction of new Presi-dent Brandon Pensick of Ferreira Construction, was sworn in for their term, be-fore a full house marking the momentous occasion.
ECA Legislative Analyst, Peter Mitchell, of the South-ern California Group, delivered an eloquent oath of office to the incoming ECA Board.
Toby Edinger of Murray Company assumed the office of ECA Vice President, James Black of Clark Construction Group is ECA’s Executive Secretary, Dave Sorem of Mike Bubalo Construction is the Vice President of Infra-structure Development, and Alan Ludwig of Pascal & Ludwig Constructors is the ECA’s Trea-surer.
Mitchell administered the oath to the 2017 ECA Directors: Guy Barker, Trench Plate Rental Co.; Andrew Carlton, Carlton & Alberola; Anna Carno, Carno Law Group; Barry Corea, Trench Shoring Co.; Eric DeCrescenzo, CalPortland; Aaron Dyer, Savala Equipment Co., Inc.; Garrett Francis, Fryman Management Inc.; Gary Futral, Gladding, McBean; John Gavigan, Vasilj, Inc.; David Graham, Traffic Management Inc.; Kristion Grbavac, GRBCON, Inc.; Michael Grbavac, Ramona Inc.; Warren Hennagin, Gelman LLP; Gerry McEwen, GMGS Insurance Services, Inc.; Steve Murow, Dirtonu/Murow Co.; Anthony Niccoli, AALRR; Dan J. Peterson, Dan J. Peterson Company; Garrett Richardson, Mission Clay Products; Tim Rivard, T.A.
Rivard Inc.; Scott Salandi, Patriot Risk & Insurance Services; Scott Van Diest, Van Diest Bros.; Nic Waldenmayer, HMWC CPAs & Business Advisors; Andrew Waterbury, TSIB.
The evening began with a lavish hosted reception as well as enter-tainment featuring the 15th Annual ECA Silent Auction. Dinner and program followed in the grand ballroom where ECA members and guests toasted the new board.
The ECA Safety Forum also presented honors to contractors in the following categories: 50,000-150,000 man hours to Pascal & Ludwig Constructors, Mike Bubalo Construction Co., Inc., Frontier-Kemper Constructors, Inc.; 150,000 man hours and over
! March 20 ECA Golf Tournament, Trump National Golf Course, Palos Verdes
! March 30 ECA Legal Seminar, Angel Stadium, Anaheim
! April 20 Spring Mixer, BLK Earth Sea Spirits, Huntington Beach
! May 13 Angels Baseball Game & Tailgate Party, ECA Office & Angel Stadium, Anaheim
! July 13-16 ECA Annual Convention
Above from left: ECA 2017 President, Brandon Pensick of Ferreira Construction takes the oath of office from Peter Mitchell of the Southern California Group with ECA Vice President Toby Edinger of Murray Co., and ECA Vice President of Infrastructure Development Dave Sorem of Bubalo Construction at ECA’s 41st Annual Installation of Officers.
Above from left: ECA 2017 Affiliate Chair Elizabeth Torrez of United Rentals Trench Safety with new ECA Board member Garrett Francis of Fryman Management.
to Murray Company. 2016 Personal/Crew Safety Award presented for outstanding achievement in safety went to Alcorn Fence Company and Pascal & Ludwig Con-structors.
Andrew Waterbury of TSIB was named ECA Affiliate of the Year and J.F. Shea Construction Inc. was named ECA Contractor of the Year.
Celebrating ECA Anniversaries for 40 or more years were Ameron International, Colich & Sons, Dorfman Construction Co., Inc., Gladding McBean, Mike Prlich & Sons, Inc., Pascal & Ludwig Constructors, Inc., and Trench Shoring Company. Celebrating 30-39 years were Ayala Boring, Inc., John Simpson, Kamine Law PC, MG Con-struction Co., Sullivan Curtis Monroe Ins. Services, T.A. Rivard Inc., Tomovich & Associates, and Trench Plate Rental Co.
E C A M A G A Z I N E M A R C H 2 0 1 714
At Our Last Meeting
ECA 2017 Directors from left: Andrew Waterbury, Gary Futral, Steve Murow, Garrett Richardson, Kristion Grbavac, David Graham, John Gavigan, Barry Corea, Elizabeth Torrez, Scott Salandi, Eric DeCrescenzo, Anthony Niccoli, Garrett Francis, Brandon Pensick, Gerry McEwen, Dave Sorem, Alan Ludwig, Garrett Francis, Dan Peterson, Jim Black, Toby Edinger, Scott VanDiest, Aaron Dyer and Nic Waldenmayer. ECA Legislative Analyst Pete Mitchell at podium, administers the ECA oath of office.
Above: Recipients of the ECA Safety Awards representing Alcorn Fence Company (left), and Pascal & Ludwig Constructors (right) with ECA Safety Chair David Graham (center).
Left from left: Garrett and Bethani Richardson, Kat and Dan Huckabay, Kristion and Hanna Stokes.
Below from left: Barney Kamine, ECA Legal Counsel Emeritus and ECA Director Gerry McEwen of Garrett Mosier Griffith & Sistrunk.
Thank You Sponsors!
Platinum Sponsors – Ferreira Construction, Trench Plate
Rental Co., Trench Shoring Co., United Rentals Trench Safety
Bar & WineSponsors – Guzman Grading & Paving Corp.,
Patriot Risk & Insurance Services
Gold Sponsors – Adamson & McGoldrick, Carno Law Group,
Catalina Pacific Concrete, LECET Southwest, Laborers Local
300, Murray Company
Silver Sponsors – Atkinson, Andelson, Loya, Ruud & Romo,
Traffic Management Inc.
Bronze Sponsors – Citizens Business Bank, Frazer, LLP, Savala
Equipment Rentals, CliftonLarsonAllen, Hunt Ortmann Palffy
Nieves Darling & Mah, Inc.
Supporting Sponsors – Dan J. Peterson Vulcan Materials Co.
Thanks again to the Installation Committee for their work on this wonderful event under the direction of chairperson Elizabeth Torrez of United Rentals Trench Safety.
The PAC Silent Auction netted over $14,000 for the evening under the direction of committee chairperson Nic Waldenmayer, HMWC CPAs and Business Advisors, and Gerry McEwen, GMGS. D
Industry News
Natural Gas Drives Up Prices
E C A M A G A Z I N E 15 M A R C H 2 0 1 7
Construction material costs jumped at the fastest year-over-year rate according to a report issued by the U.S. Bureau of Labor Statistics (BLS) released in mid-February.
Construction input prices collectively rose by one percent on a monthly basis and 3.8 percent on a year-over-year basis, according to analysis of the BLS data by Associated Builders and Contractors. Nonresidential input prices rose 0.9 percent for the month and are up 4 percent year over year.
The rise in input prices is largely attributable to natural gas prices, which expanded 23.6 percent for the month and are up 81.8 percent year over year. Crude petroleum prices slipped 5.5 percent for the month, but are up 77.5 percent for the year.
“Despite a still-strong U.S. dollar, input prices have contin-ued to rise in recent weeks,” said Anirban Basu, ABC chief econ-omist. “There are a number of factors at work, including some evidence that global demand for various materials has begun to firm, including in China.”
Chinese economic growth was solid last year and ended 2016 on a strong note. There are also indications that U.S. eco-nomic growth is set to accelerate due in part to an expected pickup in business investment based on anticipation of an im-proved business climate out of Washington, D.C.
“While demand has been firming, certain suppliers have been taking active steps to suppress supply,” said Basu. “OPEC reached an agreement late last year to curb output, helping to bring oil prices above $50/barrel, where they have remained. Concerns regarding trade wars and tariffs may have also helped to push commodity prices higher.
Judge Rules $57M RepaymentIn a late January decision a Los Angeles Superior Court
judge ruled that the City of Glendale had violated the state con-stitution in 2013 when it illegally raised utility rates and trans-ferred funds from the utility company without voter approval.
The court ordered the city to repay almost $57 million to resi-dents as well as return over $1.7 million of illegally transferred funds back to Glendale Water and Power utility fund and out of the city's general fund.
If the decision by Judge James C. Chalfant is sustained through the inevitable appeals process it could open the door to similar actions across the state, seriously disrupting the reve-nue flows through local utilities, which could lead to a slowdown in pending water, sewer and other utility projects.
The case started when a group of Glendale businessmen started challenging the city council over its rate increases for electricity. The group, called the Glendale Coalition for Better Government, was persistent in questioning the Council about rate hikes in 2013 which led a frustrated then-Mayor, Dave Weaver, to strike back, saying: “We've been over this before if you don't like it — sue.”
So they did, February 25, 2014, claiming that the city was, among other things, violating the provisions of Proposition 26, (passed, November 2, 2010), which requires the government to take tax increases to the people and get a two-thirds majority support to be enacted, rather than disguising them as utility rates which are then shoveled into the city's general fund for non-utility purposes.
In its lawsuit, the Coalition accused the city of “illegally si-phoning off Glendale Water & Power (GWP) revenues to pay for things unconnected with supplying ratepayers with electric-ity or water.” The Coalition also alleged the city had illegally transferred funds to “maintain lavish and unsustainable bene-fits and retirement to city employees at the expense of Glendale Utility rate payers.”
On January 27th, Judge Chalfant ruled:· The City of Glendale's rate increase adopted August 13,
2013, violated article XIII C of the California Constitution (Prop-osition 26).
· The City of Glendale has a Duty to Comply with the City Charter, article XI, Section 17, 20 and 22, which stipulates how rate-payer funds are to be use—“only for the repair, replace-ment, betterment and extensions of the plants and equipment of the waterworks or electric works,”
· The City is enjoined from applying the electric rates adopted on August 13, 2013, in the future based on the annual transfer required by Glendale City Charter section 22 of article XI without submitting to a vote of the electorate.
· Within 60 days of entry of judgment, the City shall begin to apply credits of $56,949,600 plus interest to the electric portion of the utility bills of active customers.
· Peremptory Writ of Mandate is issued for the return of mon-ies transferred from the Waterworks in the amount of $1,733,333.35
“The transfer cannot fairly be described as the cost of pro-viding electric service,” Judge Chalfant said in his decision. “Any contrary conclusion would defeat the purpose of Proposi-tion 26 by permitting a city to drain monies from its public utility as an alleged cost and then impose that cost on the utility's cus-tomers without a vote from the electorate.”
Many other cities use the same utility rate piggy bank ap-proach as well as adding on a Utility User's Tax (UUT), which increases as rates go up, then transferring those taxes into their general operating funds just as the city of Glendale did in this case. Refunding these UUT transfers would deeply impact city revenues across the state and force city officials to address lo-cal spending. D
E C A M A G A Z I N E M A R C H 2 0 1 716
E C A M A G A Z I N E 17 M A R C H 2 0 1 7
No Damage for DelayContract Clauses
Legal Grounds
onstruction contracts often have what are called "no-damage-for-delay" clauses. Here's an exam-
ple: "Apart from granting extensions of time for un-avoidable delays, no payment or allowance of any kind shall be made by way of compensation or damages on account of any hindrance or delay from any cause in the progress of the work or any portion thereof, whether such delay be avoidable or unavoidable."
For over 75 years California courts have refused to enforce such clauses when the delay was caused by an owner's breach of the contract (Milovich v. City of Los Angeles (1941) 42 CA2d 364; McGuire & Hester v. City and County of San Francisco (1952) 113 CA2d 186; Hensler v. City of Los Angeles (1954) 124 CA2d 71; Maurice L. Bein, Inc. v. Housing Authority of the City of Los Angeles (1958) 157 CA2d 670 [owner estopped from enforcing the clause]; D.A. Parrish & Sons v. County Sanitation District No. 4 of Santa Clara County (1959) 174 CA2d 406; Hawley v. Orange County Flood Control District (1963) 211 CA2d 708; Howard Contracting, Inc. v. G.A. MacDonald Con-struction Co., Inc.(1998) 71 CA4th 38, 50 ["Even before the adoption of section 7102, California courts generally held that "no damage for delay" clauses in public contracts did not apply to delays arising from a
breach of contract caused by the other party to the con-tract."]). Other jurisdictions have done the same, even refusing to enforce the clause for any delay caused by "active interference" in the contractor's work by the owner (C&C Plumbing and Heating, LLP v. Williams County, North Dakota (2014) 848 N.W.2d 709).
On the other hand, Califor-nia courts would enforce contract clauses barring damages for delay in addition to any compensation and time allowed under a properly issued change order (K&F
Construction v. Los Angeles Unified School District (1981) 123 CA3d 1063).
In 1984, the California legislature intervened by enacting Public Contract Code section 7102. It ex-panded and codified restrictions on no-damage-for delay clauses for state and local public works con-tracts and subcontracts. As amended in 1987, the statute says:
“Contract provisions in construction contracts of public agencies and subcontracts thereunder which limit the contractee's liability to an extension of time for delay for which the contractee is responsible and which delay is unreasonable under the circumstances involved, and not within the contemplation of the parties, shall not be construed to preclude the recov-ery of damages by the contractor or subcontractor.
“No public agency may require the waiver, alter-ation, or limitation of the applicability of this section. Any such waiver, alteration, or limitation is void. This section shall not be construed to void any provision in a construction contract which requires notice of de-lays, provides for arbitration or other procedure for settlement, or provides for liquidated damages."
Many contractors and claim consultants believe this statute totally wiped out no-damage-for-delay and limited-damage-for-delay clauses. It does not. First, the statute's scope is constrained by its language. Second, the statute does not apply to private works contracts. But note: even though the cases listed in the second paragraph of this article arose from public works contracts, the legal principle, that no-damage-for-delay clauses will not be enforced when the delay was caused by the owner's breach of the contract, should also apply to private works contracts where the no/limited damages for delay clause was forced upon the contractor on a take-it-or-leave-it basis (Civil Code section 1635 says "All contracts, whether public or private, are to be interpreted by the same rules, except as otherwise provided by this code.").
The first paragraph of Public Contract Code section 7102 says that the statute applies to contract provision "which limit the [owner's] liability to an extension of time for delay for which the [owner] is responsible." That language could have been read to limit the statute to only NO-damage-for-delay clauses, thereby permit-ting any LIMITED-damage-for-delay clause. However, the second paragraph of the statute bars public agen-cies from requiring "the waiver, alteration, or limitation of the applicability of the section [and says] [a]ny such waiver, alteration or limitation is void." Construing those two paragraphs together, Howard Contracting, Inc. v. G.A. MacDonald Construction Co., Inc.(1998) 71 CA4th 38, held that the statute also barred limited-damage-for-delay clauses like those in the Standard Specifications for Public Works Construction (Greenbook), sections 6-6.1 and 6-6.3.
On the other hand, the statute only voids
By Bernard S. Kamine, ECA Legal Counsel Emeritus
(Continued on Page 18.)
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no/limited-damage-for-delay clauses when the "delay is [1] unreasonable under the circumstances involved, and [2] not within the contemplation of the parties." Any material owner breach of the contract which causes delay meets those requirements. So will other owner-caused delays that are unreasonable and not within the contemplation of the parties when the contract was signed. But there are lots of owner-caused delays which would not satisfy those criteria; for example, a delay resulting from a change order that does "not unreasonably alter the character of the work or unduly increase its cost" (Valley Construction Co. v. City of Calistoga (1948) 72 CA2d 839).
Given the above, how does the following clause, which appears in the contracts of one southern California local public agency, fair:
"No Damages for Reasonable Delay. The City's liability to Contractor for delays for which the City is responsible shall be limited to only an extension of time unless such delays were unreasonable under the circumstances. In no case shall the City be liable for any costs which are borne by the Contractor in the regular course of business, including, but not limited to, home office overhead and other ongoing costs. Damages caused by unreasonable City delay, includ-ing delays caused by items that are the responsibility of the City pursuant to Government Code section 4215, shall be based on actual costs only, no proportions or formulas shall be used to calculate any delay damages."
The first sentence actually may expand what the con-tractor could recover under Public Contract Code section 7102. Although it tracks the statute's "unreasonable under the circumstances involved" language, it omits the statute's second requirement that the delay be beyond the contem-plation of the parties at the time the contract was signed. However, the second sentence runs afoul of the statute. It tries to limit delay damages by excluding overhead. Under Howard Contracting, Inc. v. G.A. MacDonald Construction Co., Inc.(1998) 71 CA4th 38, that limitation is void. It also probably violates Civil Code section 3300, which estab-lishes the measure of damages for breach of contract to be "the amount which will compensate the party aggrieved for all the detriment proximately caused [by the breach], or which, in the ordinary course of things, would be likely to result therefrom." The same obtains for the 3d sentence, which seeks to bar recovery for overhead calculated using such generally recognized formulas as the one adopted in Eichleay Corp. (1960) ASBCA No. 5183, 60-2 BCA 2688. Use of that formula was recently expressly approved in California in JMR Construction Corp. v. Environmental Assessment & Remediation Management, Inc. (2015) 243 CA4th 571. Any attempt to prevent its use would appear to be an effort to limit delay damages.
In sum, regardless of what the language in the contract says, damages for delay can be recovered when those damages are caused by the owner's material breach of the contract, or, if it is a public works contract, when those dam-ages were caused by the owner and were both unreason-able under the circumstances and beyond the contemplation
of the parties at the time the contract was executed. D
E C A M A G A Z I N E 18 M A R C H 2 0 1 7
Carlton & Alberola’s Practice Focuses On The Following Areas:
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Legal Grounds (Continued from page 17.)
Government Affairs (Continued from page 10.)
E C A M A G A Z I N E M A R C H 2 0 1 719
Water Bonds for Flood Control for concrete armoring of the emergency spillway area that threatened to collapse during the recent storms, but they were ignored then and won't be heard now.Fed Help on the Way
On Valentine's Day, the Federal Emer-gency Management Agency (FEMA) an-nounced that federal disaster assistance had been made available to California to supplement recovery efforts in the areas affected by severe winter storms, flood-ing and mudslides from January 3 to Janu-ary 12, 2017.
Federal funding is available to state, tribal, eligible local governments and cer-tain private nonprofit organizations on a cost-sharing basis for emergency work and the repair or replacement of facilities damaged by severe winter storms, flood-ing, and mudslides in 33 northern and central California counties. Funding is also available on a cost-sharing basis for hazard mitigation measures statewide.
Timothy J. Scranton was been named as the federal coordinating officer for re-covery operations in the affected area. Scranton said additional designations “may be made at a later date if requested by the state and warranted by the results of further damage assessments.”Meanwhile, Back at the
Legislature
Senate President Pro Tem Kevin de León, who may be a candidate for gover-nor next year, is talking up a plan to pro-vide $500 million in competitive grants to local and regional agencies for flood pro-tection. The money would be added to the plan for a $3 billion parks and drought recovery bond that de León, D-Los An-geles, is seeking to place on the June
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Advertiser’s IndexAtkinson, Andelson, Loya, Ruud & Romo..............4Ayala Boring .......................................................22BC Traffic Specialist ............................................15The Blue Book......................................................8CalWest Surety ...................................................21Carlton & Alberola..............................................18Carno Law Group...............................................10Catalina Pacific Concrete ....................................21CliftonLarsonAllen ................................................7Coastline Equipment .............................Back CoverConco Pumping..................................................23Coordinated Companies.....................................12Donahugh Associates..........................................23E-Nor Traffic Contol ............................................23Garrett/Mosier/Griffith/Sistrunk Ins. Svcs., Inc. .....21Gill And Baldwin, P.C..........................................23Golden State Boring & Pipe Jacking, Inc. ............21HMWC CPAs & Business Advisors.........................6Inland Surety ......................................................22Kamine Law PC ..................................................19Charles King Company .......................................18Koppl Pipeline Service, Inc. ................................22LECET Southwest................................................16Mocon Corp.......................................................23Monteleone & McCrory, LLP...............................22National Ready Mixed Concrete Co....................16Oldcastle/Kristar .................................................22Pascal & Ludwig Constructors, Inc.......................21Patriot Risk & Insurance Services.........................22Penhall Company .................................................8Pure Effect, Inc. ..................................................22Sancon ...............................................................23J.F. Shea Construction, Inc.............................12, 22South Bay Foundry, Inc. ......................................22Sullivan Curtis Monroe Insurance Services ..........10Superior Gunite Company ..................................21TPR Traffic Solutions .............................................9Trench Plate Rental Co. ........................................3Trench Shoring Company......................................5Van Diest Bros. ...................................................21Video Fact ..........................................................21Williams Pipeline Contractors, Inc.......................22
2018 ballot.The scheme includes $300 million for
water and flood districts in the Central Valley to repair flood-control systems or build new ones. Another $100 million would go primarily to bolster Delta lev-ees, with the remaining $100 million aimed at projects to prevent damage from stormwater and mudslides.
Senator Bob Hertzberg, a Van Nuys Democrat who is leading the Senate over-sight committee hearings on what caused the situation in Oroville and the
state's response, said it is time for Califor-nia to find a new water strategy. When it comes to storage, he's said he was ex-cited about efforts to capture stormwater for reuse or to recharge groundwater aqui-fers—but didn't mention new dams.
Republicans and some Central Valley Democrats, frustrated by the State Water Resources Control Board's iron-fisted handling of irrigation deliveries, are push-ing for more surface storage projects but are still encountering resistance. Big city Democrats have made careers out of op-posing new reservoirs because of active opposition from environmental groups and aren't likely to change.
Another problem is the short attention spans in Sacramento, so when the rains stop, there is fear that attention to storage will disappear. While the voters approved $2.7 billion for new storage projects in the northern half of the state (nothing south Bakersfield) no new dams have emerged from the bureaucratic process. With all the trouble from the floods, state bureau-crats will push the new dams further into the future while they scramble to fix the
old ones. D
Oroville Dam spillway damage.
created a “Plan. Provide. Train.” webpage at www.osha.gov/stopfalls. The agency notes that fall-related deaths can be prevented by following three steps:
Plan: When it comes to construction work performed at height, employers need to think ahead. OSHA advises starting this process by first deciding ex-actly how the project will be completed, what tasks will be involved and what per-sonal protective equipment workers will need to complete the project. Make sure to include the cost of PPE for workers when estimating the cost of a project.
Provide: It's imperative that workers are provided with the proper fall protec-tion and tools, including harnesses, lad-ders, scaffolds and other safety gear. OSHA notes that some equipment, such as ladders and scaffolds, are appropri-ate for different jobs. Provide workers with the correct PPE for the specific task at hand, and ensure it is in good working condition.
Train: Although providing workers with appropriate fall protection is critical, they also must know how to use it. Train workers on the proper setup and safe use of equipment, and ensure they un-derstand why it is important to know how to use the PPE.
OSHA also promotes the idea of be-ing a role model for workers. “Lead by example,” the agency states. “Employ-ers, project managers and supervisors should follow the rules they are responsi-ble for enforcing.” D
Safety Forum
E C A M A G A Z I N E 20
I
Not a participant of the ECA Safety forum? Want to get involved? We meet on the 1st Wednesday of every month, 11:00 a.m. at the ECA offices. If you can’t make it in person please feel free to phone in. Our minutes and handouts are posted on our website. See you at the next meeting.
n an instant and without notice, an unsupported trench can give way
and a worker can be buried alive. “Even though small amounts of dirt may not seem treacherous, a single cubic yard of dirt can weigh more than 3,000 pounds, which can fatally crush or suf-focate workers,” NIOSH states.
OSHA notes that excavation and trenching are among the most hazard-ous construction operations, with cave-ins being “perhaps the most feared trenching hazard.”
Other hazards in this line of work in-clude falls, hazardous atmospheres and falling loads. From 2000 to 2009, 350 workers died in trenching or excavation cave-ins. How can employers help keep workers safe?Planning is paramount
NIOSH recommends that employers do the following before beginning a trenching or excavation project:
● Designate a trained competent per-son to check that all safety precautions are in place. In relation to trenching, OSHA defines a competent person as “an individual who is capable of identify-ing existing and predictable hazards or working conditions that are hazardous, unsanitary, or dangerous to workers, soil types and protective systems required, and who is authorized to take prompt cor-rective measures to eliminate these haz-ards and conditions.”
● Call 811 to ensure no utility lines are in the job area and to mark any existing lines.
● Locate safe places away from the
trench to place spoil piles and heavy equipment paths.
● Ask the competent person to deter-mine what kinds of protective systems will be needed for the job, and have the systems in place before workers are al-lowed on-site.
● Enforce the rule that workers who are younger than 18 are not allowed in the trench.
● Assign workers to the job only if they have been trained about hazards and work practices in a language – and at a literacy level – they understand.
● Have an emergency action plan in place that details steps to take in the event of a trench incident.
● Make sure workers know never to enter an unprotected trench.
● Teach workers to immediately exit a trench and call for the competent person if they find any evidence of problems with the protective trenching system.
Falls in construction: A deadly hazard
Between 2003 and 2013, falls were the leading cause of death in the con-struction industry, resulting in more than 3,500 fatalities, according to OSHA. Dur-ing that time, falls from roofs made up roughly 34 percent of the deaths – all of which were preventable.What should employers do?
As part of its nationwide campaign to raise awareness among workers and em-ployers about the hazards of falls from ladders, scaffolds and roofs, OSHA has
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