Gas taxes can't meet wear and tear on state's roads

A report from the American Petroleum Institute said that California has the highest state excise tax on gasoline of any state in the country, at 36 cents per gallon.  Compare this to Florida at 4 cpg; New York, 8.1 cpg; New Jersey at 10.5 cpg, or even the national average of 20.9 cpg, and you would probably think that California’s roads are the best in the nation.

They are not.

According to a study by the Federal Highway Administration, California has the fourth worst road conditions in the country (after the District of Columbia, New Jersey and Hawaii.)  A 2010 report by the Reason Foundation put California 48^th out of the 50 states (behind Alaska and Rhode Island) in quality of roads and bridges.

One reason that the high relative state gas tax doesn’t correlate with improved road quality is perhaps that the consumption of gas in the state has declined in each of the last three years.  Last year, California drivers consumed 14.5 billion gallons of gasoline, down from 14.6 billion gallons in 2011, according to California Board of Equalization. Clearly, the trend toward higher MPG, hybrid, zero emission and electric vehicles is driving – and will continue to drive -- consumption down.  But the fact is that Californians aren’t driving any less, and so wear and tear on our state’s roads is constant.   

Perhaps its time to rethink the way we finance our roads?  In addition to – or instead of -- a gas tax, perhaps a way to more equitably pay for wear and tear on our roads is to look at factors such as vehicle weight and miles travelled?

Good News for P3s: Investor allocations to infrastructure set to grow

 A report issued by global private equity advisor Altius Associates reportedly forecasts that institutional investors are set to increase their allocations to infrastructure funds from 1 percent to 5 percent of total assets over the next decade.  If such a prediction comes to pass, that’s good news for California infrastructure.

The press release announcing the report, which is only available to the firm’s clients, doesn’t get into actual dollar numbers, but a quick look at the state of California’s employee pension fund, one of the largest in the world, provides an interesting hypothetical example.

As of Jan 31, 2013, the $248.8 billion fund had invested $3.2 billion in infrastructure (which it groups as an asset class with forestry).  This represented a one percent allocation within its total investment portfolio.  If the Altius prediction is correct, CalPERS might reasonably be expected to invest at least that amount purely in infrastructure and to grow that allocation to more than $12 billion by 2023.  Not all of this money would be invested in the state but, in 2011, CalPERS did commit to invest $800 million over three years solely in California infrastructure. 

And CalPERS is not the only institutional investor eyeing California infrastructure.  The state has strong appeal for both domestic and foreign funds because of the size and strength of California’s economy. 

Of course, creating a robust P3 sector to handle investor demand and provide good projects for investment will be critical for the state’s ability to attract institutional investors as those allocations increase.

Zig meir das Geld

At a speech in Miami in April, President Obama returned to the topic of infrastructure development in the United States.  It’s a contentious debate that is frustrating to many of us because there seems to be widespread agreement that the U.S. needs updated infrastructure. 

Case in point:  our colleagues at ASCE recently released their updated Report card on U.S. Infrastructure.  This year’s grade, D+, is the worst since 2001.

As usual, what’s holding up investment and improvements in our roads, bridges, ports and other vital infrastructure is….money.  Who will pay?  The federal government, states and municipalities are still recovering from the economic downturn; funds are tight and, even if money can be found, the political climate is hardly conducive to incurring more debt at any level of government.

This is why one of the President’s proposals is particularly welcome:  eliminating the tax penalty currently levied on foreign pension funds investing in U.S. infrastructure. 

The U.S. is – has always been -- one of the most attractive markets for foreign investment in real estate.  And, recently, foreign pension funds have become increasingly attracted to investing in major U.S. infrastructure assets.  The reasons for this are many, but the combination of relative political and economic stability in the U.S. combined with the ability to put large allocations of dollars to work over long periods of time, typically 25 years or more, is attractive to large pension funds looking to match assets to the long term liabilities of their pensioners.  

Funds from Australia, Canada, the United Kingdom and other areas of Europe are already investing heavily in infrastructure in other parts of the world.  But being able to invest on an equal footing with domestic funds in public private partnerships and other ventures would likely increase their interest in U.S. infrastructure because they could diversify the risk in their infrastructure portfolios.

The not-so Golden State

A new study by CBS Marketwatch shows the widening gap between the haves and have nots among California municipalities. 

Five cities within the state’s Central Valley – Sacramento, Stockton, Modesto, Fresno and Bakersfield – are big enough to be included among the nation’s 100 largest metro areas.  That’s the good news. 

The bad news:  all five also appear in the bottom 10 of Marketwatch’s Top Cities for Business Growth in 2012.   Also on that list, the city of Riverside, making California a dominant force in lack of business growth last year.  

Of course, San Jose (#4) and San Francisco (#7) counterbalance this somewhat by appearing in the top 10 (with Los Angeles and San Diego just outside).  But, still, six cities in the bottom 10?  What does that say about our state?

One thing the study does say is that cities that tend to do well in the overall analysis attract and retain people.  One thing that makes cities like San Francisco, San Jose and others on the top 10 list able to attract and retain population is having the infrastructure in place to create jobs and adequately support industries as they grow.  If our Central Valley cities are to make it out of the bottom 10 and provide the opportunity for business growth, they clearly need more resources for infrastructure building.  

New York State Embraces P3's

Wanna buy a bridge? No, but we’ll build it for you…

The Port Authority of New York and New Jersey is the latest public agency to see the wisdom of a public–private approach to major infrastructure projects. 

Last week, the Authority announced that the NYNJLink consortium -- led by Omaha-based Kiewit Corp and Australia’s Macquarie Group -- will design, build, finance and maintain a $1.5 billion cable-stayed bridge designed to replace the 84 year old Goethals Bridge linking New York’s Staten Island to Elizabeth, New Jersey and Interstate 95.

An article in the April 25 Wall Street Journal outline’s key elements of the structure of the deal which sees the Port Authority retain ownership and control of the new bridge while paying off its construction over a 35-year period.  NYNJLink will assume the construction risk over the first five years of the deal and then the day-to-day operational risk until the end of the 40-year contract.

Here’s another example of a design build/P3 deal making a lot of sense.  The Port Authority of NY/NJ operates all of the bridge crossings between New York and New Jersey as well as all the airports in the metro area.  It also owns and operates the bus terminal in New York, the PATH train system and is responsible for the World Trade Center redevelopment in Lower Manhattan.  The authority has an annual budget of more than $2.5 billion and is almost $20 billion in debt. 

Spreading the cost and risk, of what is the region’s largest public transportation project, over 40 years rather than five years of construction will be much easier on the pocketbook in both the short and long term.  In fact, in its 2011 budget report, the authority admitted that it could not afford the $1.5 billion cost of replacing the bridge.  How many similar situations do we currently have here in California? 

San Francisco Based T.Y. Lin International Wins Engineering Excellence Award

 T.Y. Lin International has received an Honor Award from the California Chapter American Council of Engineering Companies for their work on the Taijiang Bridge in Sanmin, Fujian Province, China.

 Completed in December 2010, the Taijiang Bridge in Sanming, Fujian Province, China was designed based on the concept of the partially cable-supported girder bridge. This design concept fully utilizes the capacity of both the cable-stayed system and the bridge girder, in contrast to the conventional design concept that neglects the capability of the girder in a cable-supported structure to carry global loads. This unique and aesthetically pleasing new signature cable-stayed bridge with a steel arch-shaped tower was constructed to provide a signature landmark for residents and visitors to admire. In addition, the Taijiang Bridge elevates travelers’ experience and enhances the unobstructed, 360o views of its beautiful Sanming environs.

 T.Y. Lin International has received an Honor Award from the California Chapter American Council of Engineering Companies for their work on the Rose Creek Bikeway and Pedestrian Bridge in San Diego.  

Completed in April 2012, the 360’ clear‐span bridge fills a gap in the existing regional Class‐I bicycle network. The project is a vital link for cyclists and pedestrians, as it provides safe and convenient access between the beach communities to the west, to the residential and business districts to the north, east and south. The design of this cast‐in place prestressed cantilevered box girder bridge is unique to California and provided San Diego with a landmark structure.

 

Escondido’s Palomar Medical Center Wins Engineering Excellence Award

M-E Engineers, Inc. has received an Honor Award from the California Chapter American Council of Engineering Companies for their work on the Palomar Medical Center in Escondido. 

M-E Engineers performed full infrastructure master planning for the new complex and completed all mechanical/electrical/plumbing design services. The $956 million facility consists of an 11-story inpatient tower with 288 single patient rooms, an attached diagnostic and treatment center, and a power plant on 17 acres. A Green Guide for the Healthcare Pilot Project said the M0E Engineers design created for the Center produces significant energy and water savings, a sophisticated building management system, and a purposeful combination of the latest in modern technology with natural healing elements.

2013 ACEC California Engineering Excellence Awards

SACRAMENTO, CALIF. – December 5, 2012 – The American Council of Engineering Companies of California (ACEC California) has unveiled the 2013 recipients of its prestigious Engineering Excellence Awards.  In all, nineteen California firms representing twenty projects, nineteen in the state and one in China, were recognized. 

ACEC California’s annual Engineering Excellence Awards competition recognizes outstanding achievements in engineering and land surveying projects completed by California firms. Entries are accepted into one of 12 project categories: studies, research, and consulting engineering services; building/technology systems; structural systems; surveying and mapping technology; environmental; waste and storm water; water resources; transportation; special projects; small projects; energy; and industrial and manufacturing processes and facilities. 

Winners are awarded a Merit, Honor or the highest accolade, the Golden State Award. All Honor Award winners are eligible to win the Golden State Award, to be announced at this year’s awards dinner February 19 in Sacramento. In addition, the winning project’s photographic panels will be on display at the State Capitol, outside the Governor’s office, from February 18-22.

Honor Award winners are also eligible for consideration at the national level for the American Council of Engineering Companies’ highest award, the Grand Conceptor Award, to be unveiled in Washington, DC next April.

Honor Awards are granted to the following firms:

M-E Engineers of Culver City for its work on Palomar Medical Center West in Escondido

T.Y. Lin International, San Diego, for Rose Creek Bikeway and Pedestrian Bridge in San Diego

T.Y. Lin International, San Francisco, for Taijiang Bridge in Sanmin, Fujian Province, China

Penfield Smith Engineers for the Tepusquet Boundary Survey in Santa Maria, Calif.

SHN Consulting Engineers & Geologists, Inc. for the Remediation of Tuluwat Village: Phase 1, Indian Island, Humboldt Bay.

URS Corporation for the Los Vaqueros Reservoir Expansion in Brentwood, Calif.

Mark Thomas & Company, Inc. for the Isabel Avenue (SR 84)/I-580 Interchange in Livermore, Calif.

Walter P. Moore for the Atrium Operable Roof at the California Academy of Sciences at Golden Gate Park, San Francisco, Calif.

Burns & McDonnell Engineering Co., Inc. for the Sunrise Powerlink project in San Diego.

Merit Awards are given to:

Degenkolb Engineers for its research on Environmental and Financial Impact Seismic Analysis (EnvISA)

RRM Design Group for Pinnacles National Monument - West Side Entrance in Paicines, Calif.

CDM Smith for City of Stockton Delta Water Supply in Stockton, Calif.

CH2M HILL Engineers for Advanced Water Purification Facility in Oxnard, Calif.

Mead & Hunt for St. Helena Comprehensive Flood Protection in St. Helena, Calif.

AECOM Technology for Hageman Road/BNSF Railroad Grade Separation in Bakersfield, Calif.

HDR Engineering Inc. for Magnolia Avenue Grade Separation in Riverside, Calif.

Leighton Consulting, Inc. for its work on the Bay Model Visitor’s Center in Sausalito, Calif.

RBF Consulting, a Michael Baker Company, for the National Oceanic and Atmospheric Administration (NOAA) La Jolla Laboratory Consolidation Replacement in La Jolla, Calif.

In addition, special Merit Awards are granted for projects completed by two small firms; Nasland Engineering of San Diego and Auerbach Engineering of Tahoe City, Calif.  

Nasland is recognized for its civil engineering consulting services on the Charles David Keeling Apartments at UC San Diego in La Jolla, the first LEED Platinum student housing in the University of California system.  Auerbach is recognized for its consulting and civil engineering services on the Tahoe City Lakeside Trail, a multipurpose trail linking the commercial core of Tahoe City to the lake, the Truckee River and other points of interest.

State Bureaucracy: There They Go Again!

When the State’s voters recently approved Prop 30, they basically expressed their trust that the Governor and the Legislature will spend well the state’s new tax money. Unfortunately just two days after the election, a powerful state employees union (PECG representing Caltrans employees) renewed its efforts to expand its control over major transportation projects in California. PECG’s goal is to once again expand the state’s already large and inefficient transportation bureaucracy (some 20,000+ employees). Last Thursday, the Legislative Analyst’s Office issued its report on Public Private Partnerships (P3s). Almost immediately PECG issued a press release recycling PECG’s routine hyperbola about P3s being ‘wasteful’ and not in the interests of the taxpayer. PECG, as usual, totally ignored the many benefits of P3s—such as private investment in needed new infrastructure projects, speedy project delivery and transfer of risk from the taxpayers to private investors. Compared to California, most other states have made much greater use of and been much more successful at using P3s to deliver needed infrastructure. Just last month, the state of Texas--using private financing--opened the final segment of state highway 130, a new 41-mile toll road around the City of Austin. California already does a poor job of attracting private sector initiative and investments to deliver needed infrastructure. If PECG is now successful at erecting additional anti-P3 barriers, investors will be even less interested in investing here. That could retard efforts to deliver key infrastructure projects such as the state's high speed rail initiative, Sacramento Bay Delta Conveyance, transit and freeway improvements in Los Angeles, water delivery and treatment projects around the state, new HOT lanes in the Bay Area and many other badly needed, job creating, economically beneficial projects. So will PECG succeed in feathering its own nest? Or will our elected officials place the interest of the general public ahead of the self-interests of the Caltrans employees union? We shall see.

Gov. Brown’s veto of SB 975 sends the wrong message to small business

SACRAMENTO, CA – September 26, 2012 – The American Council of Engineering Companies, California (ACEC California) today expressed disappointment with Governor Jerry Brown’s veto of SB 975, authored by State Senator Roderick Wright (D-Los Angeles). Governor Brown vetoed the bill yesterday. The bill would avoid duplicate agency requirements that impose extra regulatoryhurdles, restrict competition and impose extra costs on consumers. For many decades the State of California through its professional licensing boards has rigorously evaluated, tested and held accountable engineers, surveyors, and architects. These professional Boards--housed under the Department ofConsumer Affairs (DCA)--set standards, administer exams, confirm applicants’ training and experience and enforce professional practice standards. Their primary, overriding mission is to protect the general public. The problem, which SB 975 addressed, is a growing practice among a variety of third-party state agencies, departments, and even local bodies of unilaterally imposing extra training classes and extra certificate requirements of questionable value on already licensed professionals. “California’s existing professional licensing system heavily regulates the practice of engineering, land surveying and architecture. Before obtaining a professional license, design professionals must typically complete years ofeducation in a nationally accredited university program, perform additional years of on the job training under the charge of a licensed professional and pass a rigorous multi-day professional exam,” said Paul Meyer, executive director of ACEC California. “Then after earning their license, design professionals must adhere to strict ethical, competence and practice standards or risk losing their license. So, allowing other agencies to require their own extra, duplicative certificates in order to practice makes little sense. SB 975 would simply have corrected that problem, and we are very disappointed with the Governor’s veto. Nonetheless we are pleased that Governor Brown in his veto message acknowledges the problem, and we will certainly work cooperatively with hisadministration to address the issue,” concluded Meyer.

ACEC California Merit Award Winner: AECOM for the Harris Reservoir Replacement

AECOM was retained by California Water Service Company as the prime consultant to provide a design solution for a failing four million gallon prestressed concrete reservoir that was experiencing structural distress due to slope movement and expansion of the existing concrete. The final solution for the new reservoir consisted of a 50-foot-deep, buried, four million gallon structure that was constructed within the walls of the existing reservoir. AECOM’s innovative “tank within a tank” design provided the least community impact at the lowest cost. The Harris Reservoir Replacement project was completed on time, within budget and without a single interruption to service. As a further testament to the project’s success, the 18-month construction progressed without a single complaint from the neighboring community. The total cost of this project was $9.5 million, and total construction change orders were less than 0.5 percent of construction costs.

ACEC California Applauds Gov. Brown’s Delta Water Proposal

SACRAMENTO, CA – July 25, 2012 – The American Council of Engineering Companies, California (ACEC California) today commended Governor Jerry Brown for announcing a plan to make California’s water supply dramatically more safe and stable, while improving environmental quality. The Governor’s plan focuses on major improvements to the Sacramento and San Joaquin river delta, which is widely regarded as the hub of California’s water supply. “The Governor has today laid out a thoughtful and considered plan that balances California’s economic water needs with fish stock protection, water quality improvements and wetlands restoration,” said Paul Meyer, executive director of ACEC California. “The Governor’s proposal will not only confer once it is complete immense long-term economic and environmental benefits on California, in addition during its design and construction phase this major project will create thousands of quality jobs during a difficult economic time,” he added. “This is exactly the kind of large scale engineering challenge in which California engineering, surveying and environmental consulting firms excel, and our members look forward to the opportunity to help make the Governor’s vision a reality,” Meyer said. For more information on the Governor’s plan, which among other things will result in the restoration of 100,000 acres of floodplain and tidal habitat in the Sacramento River delta, visit: http://www.jerrybrown.org/water-plan-21st-century

ACEC California Congratulates Caltrans and San Francisco County for Accelerated Schedule and Innovation on Presidio Parkway Project Issues

he Board of Directors of the American Council of Engineering Companies, California (ACEC California) issued a Resolution this week congratulating and applauding Caltrans and the San Francisco County Transportation Authority (SFCTA) as the driving forces behind the successful $2 billion Presidio Parkway project, which is creating a dramatically safer southern approach to the Golden Gate Bridge in San Francisco. “Our board recognizes that both Caltrans and SFCTA chose an innovative path in approaching this tremendous engineering feat, and we applaud them for having the foresight and courage to employ California’s landmark public-private partnership (P3) law to finance the project, speed project delivery, ensure long term safety and maintenance and dramatically reduce financial risks to the general public,” said Paul Meyer, executive director of ACEC California. The Resolution, which was recently unanimously approved by the 60 member Board of Directors of ACEC California, also acknowledged the engineering and land surveying, construction management and other businesses, which created jobs in California and helped make the project a success.

ACEC California Welcomes Central Valley EIR for High Speed Rail

SACRAMENTO, CA – July 17, 2012 – The American Council of Engineering Companies, California (ACEC California) today welcomed the timely release of the Environmental Impact Report (EIR) covering the Fresno to Bakersfield section of the proposed high speed rail system and also encouraged Governor Jerry Brown to reintroduce his proposal aimed at protecting the rail project from delaying tactics caused by abuse of the CEQA process. “On July 6, through a historic vote, California legislators proved the state’s leadership and eagerness to move forward and create the first high-speed rail system in the nation. This week’s release of the EIR for the Fresno to Bakersfield section marks an important milestone in moving the project forward and creating a clear path towards improving California’s transportation infrastructure,” said Paul Meyer, executive director of ACEC California. Meyer added that even though the project is essential to the state’s futurelivelihood, the state is taking the necessary steps to make sure the vital project conforms to environmental requirements by following the EIR process to the letter. “We have full faith in the EIR process and we encourage Governor Brown to bring back his proposal to protect the high speed rail from frivolous litigation and abuses of the CEQA process by litigants seeking to slow down this vital project,” Meyer said. “The state’s business, labor, transportation and construction industries are poised to get to work, especially in the state’s Central Valley, which has unemployment rates as high as 15%. The huge number of jobs – 100,000 expected – will not only improve the lives of thousands of Californians and improve the economy now, but the tax revenues generated by new jobs will be help bolster California’s finances,” Meyer concluded.

Buffett’s time bomb ticks louder in California

What Warren Buffett refers to as “the ticking time bomb”--the crisis in public sector pensions--is a constant and unrelenting threat to California taxpayers. What is clear is that, as many observers have noted (including Mr. Buffett), the status quo with public pensions is utterly unsustainable. California’s cost of public employee pay and benefits have increased 65 percent over the last 10 years. Experts estimate that the unfunded pension liability for California’s public employees runs into the hundreds of billions of dollars. CNN/Time commentator Fareed Zakaria makes a strong contribution to the whole debate here. We are all learning to do more with less; and that should include public sector workers. Voters’ understanding of the issue has simply skyrocketed. Hopefully, last month’s astonishing, landslide votes in San Jose and San Diego approving substantial public employee pension reform will trigger more real reform throughout the state.

ACEC California Supports CA Legislature’s Water Bond Decision (AB 1422)

SACRAMENTO, CA – July 6, 2012 – The American Council of Engineering Companies, California (ACEC California) today supported the California Legislature’s decision to postpone for two years a statewide vote on the proposed $11 billion water bond. Yesterday both the State Assembly and the State Senate voted to approve AB 1422, which pushes a decision originally scheduled for this November to the November 2014 ballot. “The need to improve the state’s water infrastructure is clearly there but, practically speaking, delaying the decision on whether to issue those bondsmakes complete sense in the current fiscal environment. We applaud the Assembly and Senate for their pragmatic, bipartisan approach this week and look forward to working with local and state officials and many other organizations over the next two years as we help to educate Californians on the need to dramatically improve California’s water supply,” said Paul Meyer, executive director of ACEC California.

ACEC California Honor Award Winner: URS Corporation for the I-5 Gateway

In late 2010, the Orange County Transportation Authority (OCTA), Caltrans, and the community of Buena Park celebrated the completion of the I-5 Gateway Project. The completed portion of the freeway within the two-mile project limits has resulted in a 12-lane facility with a carpool lane, four mixed-use lanes and an auxiliary lane in each direction of the I-5.

ACEC California Honor Award Winner: T.Y. Lin International for the Harbor Drive Pedestrian Bridge

• $27-million • 354-ft long • 34 Individual suspenders attached to the main cable support the 20 ft wide deck from the top of the railing at one edge of the deck only. • Owner: Centre City Development Corp., San Diego • General Contractor: Reyes Construction, National City • Construction Management/Lead Engineer: T.Y. Lin International, National City • Architect: Safdie Rabines Architects, San Diego • Civil Engineer: David Evans and Associates, San Diego Completed in March 2011, the bridge is a graceful single‐cable self‐anchored suspension bridge with a single inclined pylon and a curved deck suspended only along the inside edge. The pylon itself is inclined at a 60o angle and leans over the deck to support the single pair of suspension cables. As one of the longest self‐anchored, suspension bridges in the world, the iconic Harbor Drive Pedestrian Bridge serves as a southern gateway to downtown San Diego and fulfills the City’s 100‐year vision to link two of its important regional assets: Balboa Park and San Diego Bay.

ACEC California Honor Award Winner: SSFM International/Moffatt & Nichol Joint Venture for the Submarine Drive-In Magnetic Silencing Facility

The joint venture team of SSFM International/Moffatt & Nichol was contracted by U.S. Navy, NAVFAC Hawaii, to design a new non-magnetic concrete drive-in magnetic silencing facility (or a deperming or demagnetizing pier). This facility is part the U.S. Navy's long term mission planning and will support our naval forces, today and into the future. This project was delivered on time and on budget.