December 30, 2016
Some employees who were enrolled in Blue Shield Net Value in 2016 will see that the State Controller’s Office did not deduct their health plan premium contribution from their December pay warrants (issued on January 1, 2017.) As Blue Shield Net Value is not offered in 2017, affected employees chose Blue Shield Access + or another plan.
The State Controller’s Office and CalPERS have confirmed that employees will not have a lapse in health coverage, despite the mix up. An accounts receivable will be established in January to collect the missed health premium contribution. Impacted employees can expect to be contacted by their departmental personnel staff. In essence, the result will be that the premium contribution that should have been deducted in December will be deducted later. However, if you have any problems with health coverage or the recoupment of the missed health plan premium contribution, please contact a PECG office.
Mileage reimbursement for personal vehicles on state business is based on the federal rate, which will be adjusted to 53.5 cents per mile effective January 1st.
December 19, 2016
Transportation funding at the federal and state levels, supervisory salary inequities, continuing delegation of federal NEPA (environmental) authority, a proposed program to provide federal funding directly to local agencies, office and area security in District 6 (Fresno), and potential expanded authorization for home storage permits were among the topics discussed at the recent monthly meeting between PECG leaders and Caltrans Director Malcolm Dougherty and his staff.
State employees are authorized a half day of Informal Time Off (ITO) during the holiday season. The four hours would be used on the business day before either December 25 or January 1 and it can be combined with four hours of vacation or annual leave for those taking a full day off. Employees required to work on those days or those who have already scheduled paid leave should use the ITO prior to June 30, 2017. The ITO is prorated for part time and intermittent employees.
President Obama has signed into law a massive water infrastructure bill which authorizes 30 new Army Corps of Engineers projects throughout the nation, plus some municipal infrastructure and other projects. A key but controversial provision included $150 million to assist Flint, Michigan with its water contamination issues.
For California, in authorizing more water to be pumped through the Sacramento Delta for agriculture, the bill pitted drought relief against environmental concerns. The bill also includes substantial funds for flood control and other projects along the American and Sacramento Rivers, West Sacramento, Lake Tahoe, Los Angeles, and the Salton Sea. California’s two Senators were split, with Senator Dianne Feinstein supporting the bill and outgoing Senator Barbara Boxer opposing it.
Outgoing California Senator Barbara Boxer has been Chair and Ranking Member (depending on which party held the majority in the Senate) on the Senate Environment and Public Works Committee for many years and is a strong advocate for transportation, water, and environmental needs. Though she is retiring, incoming California Senator Kamala Harris has just been appointed to serve on that Committee, ensuring that California’s voice will continue to be influential in those key areas.
Appointments to the Transportation and Infrastructure Committee in the House of Representatives have not yet been finalized. California House members filled eight of the 59 Committee positions in the previous Congress.
The PECG Board of Directors, Section Officers, and staff in the three PECG offices wish you and your families a Happy and Healthy Holiday Season and a Wonderful 2017!
December 8, 2016
The Monday, December 5 strike scheduled by SEIU Local 1000 for its nine state employee Bargaining Units was canceled after the union and CalHR reached agreement on a new Memorandum of Understanding (MOU) on Saturday. Their agreement includes 4% salary increases on July 1, 2017 and 2018 and a 3.5% raise on July 1, 2019, plus a $2,500 signing bonus and additional salary adjustments for some classifications. Employees will contribute a total of 3.5% of salary toward retirement health plan premiums in three stages beginning on July 1, 2018. The agreement runs through January 1, 2020. It must be ratified by the members and the Legislature.
This means that six of the state’s 21 Bargaining Units are still in contract negotiations. Employees in those unions (and in SEIU Local 1000 units) did not receive a salary increase this year.
The Unit 9 MOU runs through June 2018. Following salary increases this year and next July, the CalHR and PECG Bargaining Teams will undertake contract negotiations for the next Unit 9 MOU in the spring of 2018.
Public employee pensions continue in the news. Four years ago, the City of San Bernardino declared bankruptcy. A U.S. Bankruptcy Court has just approved the City’s plan to emerge from bankruptcy. The pension benefits for the City’s employees and retirees will not be affected.
Last month we reported on a Court of Appeal decision addressing which compensation items (such as callback pay and standby pay for local agencies) could be included in the calculation of compensation for retirement purposes. The decision also addressed a long-standing series of rulings by the Supreme Court and lower courts that public employee pensions cannot be reduced below the formula in place when the employees were hired. In other words, employees have a vested contractual right to those benefits. As the Appellate Court ruling called that principle into question, PECG and others urged the state Supreme Court to review the ruling and reaffirm its position.
The Supreme Court has agreed to review the case but will await an Appellate Court ruling in a different pension lawsuit, presumably so the high court could consider both cases at once.
December 1, 2016
Some PECG members have inquired regarding a potential strike by SEIU Local 1000 members on December 5. The PECG Bargaining Team has emailed information to all PECG members and fee payers.
The final counting of ballots in a close State Senate race has resulted in the election of the Democrat. As a result, the Democrats will have “super-majority” status in both the State Senate and Assembly next year, meaning that they hold at least two-thirds of the seats in each House. If they vote as a block, the Democrats will be able to pass all legislation, put constitutional amendments on the ballot, waive some procedural rules, and take other actions which might otherwise require some Republican support. However, in the past, super-majority status has not always resulted in passage of legislation favored by the leadership of the dominant party.
President-Elect Donald Trump has picked Elaine Chao to be the new federal Transportation Secretary for his Administration. Ms. Chao was Deputy Transportation Secretary under President George H.W. Bush, and Labor Secretary under President George W. Bush. She is married to Mitch McConnell, the Senate Majority Leader.
While most of the attention in Washington D.C. is focused on the incoming Trump Administration and various appointees, Congress is continuing to meet prior to the members elected in November taking office. Legislation which could still be approved during this so-called lame duck session includes a major water infrastructure bill to authorize a variety of federal projects in California and elsewhere. The bill will probably include funding for drinking water assistance to Flint, Michigan, which has been in the news for a number of months due to lead-contaminated drinking water. Unlike some previous versions, the bill does not currently include any mandates or incentives for outsourcing engineering and related services.
November 22, 2016
While PECG is continually involved in elections, outsourcing, staffing, pensions, infrastructure funding, budgets, and much more, it is worth noting at this time of Thanksgiving that lots of other issues get addressed and resolved on a regular basis. Involuntary transfers in Caltrans District 4 (Bay Area) were canceled when Caltrans and PECG worked together to identify and implement alternatives which precluded the need to force 200 PECG members to uproot and move their families and homes. Issues regarding the installation of GPS devices in vehicles at the State Compensation Insurance Fund (SCIF) were discussed and resolved. The Caltrans District 12 (Orange County) office was moved and numerous working condition issues were resolved to the satisfaction of the affected employees. When some travel reimbursement claims were being rejected because department managers were not aware that the increased lodging reimbursement in San Francisco and Marin Counties applied to Unit 9 employees, the Unit 9 MOUs on the PECG and CalHR websites were clarified so full reimbursement is no longer a problem. These are just a few examples of the kinds of concerns and issues which are raised and resolved, usually by PECG and management working together.
The Legislature has been trying to pass a transportation funding bill during this “lame duck” session – previous State Senators and Assembly Members remain in office until the newly-elected ones are sworn in. It now appears those efforts will not be successful. The Legislative leadership had agreed on an annual funding package of $5 billion (or more) but could not achieve the two-thirds super majority in each House to get approval of the measure. They will try again next year.
We previously reported that 70 of the 78 PECG-endorsed candidates in Senate and Assembly Districts were successful on November 8. For California Members of Congress, some of the races were too close to call until now. Ultimately, PECG-endorsed candidates were successful in 21 of 24 Congressional contests.
On behalf of the PECG Board of Directors and staff, we wish you a Happy Thanksgiving weekend!
November 10, 2016
As a result of Tuesday’s election, in Washington, the Republicans are in control of the Presidency and both Houses of Congress. In California, the Democrats remain in the majority in both houses of the Legislature, and Democrat Jerry Brown, who was not up for election, continues as Governor.
In the California Senate and Assembly, PECG endorsed candidates in 78 races and 70 of them were successful. The voters agreed with PECG’s positions on three state ballot measures. Two PECG members who ran for election in local offices were also successful.
Fourteen counties placed measures on the ballot to increase the sales tax to provide more funds for transportation. Six of these measures were approved – Los Angeles, Merced, Monterey, Santa Cruz, Stanislaus, and Santa Clara.
For more details on the election results, click here.
The existing incumbents in the state Legislature may be meeting this month. This is called a “lame duck” session, meaning those Legislators who will no longer hold office next year (due to retirement, term limits, or other reasons) remain in office through the end of this month. One of the major issues which has not been resolved is additional transportation funding. Legislative leaders and the Governor have made proposals to substantially increase transportation funding but agreement has not been reached on the amount or source of funds or how they will be spent. Whether the issue will be resolved this month or will be held over for the new Legislature in January remains to be seen.
After Secretary Hillary Clinton called him late Tuesday night to congratulate him on his victory, President-Elect Donald Trump discussed several policy issues in his speech. Among those was the need to “rebuild infrastructure”. This followed his proposal two weeks ago to invest $1 trillion in infrastructure with an emphasis on transportation. Funding would consist of a combination of tax credits, increased tax revenue through business activity, private investments, borrowing, bonds, and other techniques. Although the Republican leadership in Congress has expressed the view that they just approved a multi-year transportation funding bill so the issue is not a top priority, President-Elect Trump’s proposal, if vigorously pursued, could reopen that issue.
November 1, 2016
PECG has asked the California Supreme Court to review a Court of Appeal decision which calls into question the long-standing principle that public employees have a vested contractual right to their pension benefits. The Supreme Court has consistently ruled that any modification of pension rights which “result in disadvantage to employees must be accompanied by comparable new advantages.” The Appellate Court ruling would appear to substantially weaken this principle. Thus, PECG and several other public employee organizations and unions have asked the Supreme Court to review the decision and reaffirm its long-standing ruling.
The monthly PECG/Caltrans meeting was held last week. Issues included transportation funding, staffing, the District 4 (Bay Area) overstaffing issue (now resolved), supervisory pay, and security and other issues in District 6 (Fresno) and District 12 (Orange County). PECG representatives expressed appreciation to Caltrans management for resolving the overstaffing issue in District 4, precluding the need for involuntary transfers.
When PECG members retire, they receive several items, including a framed certificate and a laser-inscribed crystal cube, in appreciation of their years of dedicated state service and membership, as well as the opportunity to join PECG as a retired member. Thus, if you are retiring soon or know a PECG member who is, please notify the PECG office so we can convey our thanks and appreciation to the upcoming retiree.
Here is a final reminder to vote next Tuesday (November 8) if you have not already done so. PECG’s endorsement of legislative candidates and ballot measures can be accessed by clicking here.
October 19, 2016
Earlier this year, Caltrans announced that approximately 200 engineers in District 4 (Bay Area) would need to be involuntarily transferred to other Districts due to overstaffing “because of the completion of major Bay Area projects”. The Department as a whole was not overstaffed but there was a geographic imbalance.
In the months that followed, PECG and Caltrans worked together to develop and implement alternatives to the involuntary transfers. These included voluntary transfers, seasonal construction needs, “brokering” or shifting work between Districts, reducing outsourcing, and generating reimbursed work from local agencies.
As a result, Caltrans has announced that involuntary geographic transfers will not be required. PECG appreciates the efforts of Caltrans management to avoid the need for what would have been a very disruptive and expensive relocation process.
The Legislature adjourned for the year at the end of August with new MOUs or contracts in place and approved for 6 of the State’s 21 Bargaining Units, including PECG for Unit 9. For the other 15 Units, provisions of the previous MOUs remain in effect. Active negotiations between CalHR and the organizations representing those Bargaining Units are continuing in most cases, even though any resulting agreements could not be approved by the Legislature until after the first of the year. In most cases, the primary issues appear to be salary increases and the amount of the employee contributions to prefund retiree health plan premiums.
In a previous Weekly Update, it was reported that Blue Shield had terminated its contract with NorthBay Healthcare, meaning that affected employees would lose their primary care physicians unless they switch coverage to another plan, such as PERS Choice, which might have a contract with those physicians. Employees were not notified of this problem by Blue Shield until the open enrollment period for changing health plans had expired. PECG informed CalPERS, which had not been aware of the problem because it was not a party to the Blue Shield/NorthBay Healthcare agreement.
As a result, CalPERS agreed to extend the open enrollment period for two weeks for affected employees so they would have the time and the opportunity to contact their physicians and change their enrollment to a different CalPERS Health Plan if they choose to do so.
Now that absentee ballots have been mailed to voters and the election process is well underway, please be aware that PECG’s endorsements for legislative candidates and various ballot measures can be found on the PECG website by clicking here.
This year’s November 8 election ballot includes President, one of two California U.S. Senate seats, all Assembly Districts, half of the State Senate Districts, and a long list of statewide and local ballot measures.
PECG encourages all members and their families to vote in this important election. PECG-represented employees who volunteer to serve as a member of a Precinct Election Board may be granted paid time off with prior approval by the employee’s supervisor. See MOU Section 5.13.
Speaking of volunteers, PECG and many volunteer members are involved in a wide variety of activities to assist, educate, and encourage students to become interested and more proficient in engineering and related activities and careers. For years, many PECG Sections have sponsored Science and Engineering Fairs, with members volunteering as leaders and judges of students’ projects. In conjunction with the American Association of State Highway and Transportation Officials (AASHTO) and Caltrans, PECG is leading the effort to train teachers in conducting engineering-related education modules in their classrooms. For example, assisted by PECG member mentors, students will design and build scale bridge models for statewide and national competitions. The Academic Decathlon, Diversity Day, Habitat for Humanities, Trig Star Math Competition, and other projects also involve volunteer PECG members.
This week, working with the Sacramento County Office of Education, PECG and several mentors began working with students and teachers to design and construct facilities in the Folsom Zoo to enhance the living spaces of rescued and disabled animals. This event, like several others, received excellent local media and television coverage, enhancing the public image of state-employed engineers and PECG.
If you wish to become involved and volunteer your time for some of these projects, please contact your PECG Section leaders or the PECG Sacramento office. Be aware that Section 5.11 of the Unit 9 MOU authorizes State paid mentoring leave for approved activities if the employee provides an equal amount of their personal time.
October 7, 2016
The lodging reimbursement rate in San Francisco increased for Unit 9 employees from $150 to $250 and, in Marin County, from $90 to $110, effective September 13. Other lodging reimbursement rates listed in the Unit 9 MOU Section 7.1 remain unchanged.
Last week we reported that the Board for Professional Engineers, Land Surveyors and Geologists has reached an agreement with Caltrans to allow employees to assist the Board as Expert Consultants in preparing licensing exams on state time. The Board has also made similar arrangements with several other state departments. If you might be interested in participating, contact Carmen Jimenez at firstname.lastname@example.org for more information.
PECG endorsements of legislative candidates and state and local ballot measures for the November election are found on the PECG website by clicking here. If you don’t know your Assembly or Senate District, click on “Identify your legislators here” when you go to the endorsement page and, by entering your address or zip code, your representatives will be identified. The PECG-endorsed candidates are those who have demonstrated support for state-employed professionals and the projects and programs you work on.
Finally, we learned yesterday that BlueShield is terminating its contract with NorthBay Healthcare in the Fairfield-Vacaville area. Employees utilizing NorthBay Healthcare will not be able to keep their primary care physicians and may have to travel elsewhere for specialty care and hospitalization. The NorthBay Healthcare physicians may be available through another CalPERS plan, such as PERS Choice, but the open enrollment period for transferring from one plan to another ends today.
PECG immediately contacted the CalPERS Board of Administration and staff to request that the open enrollment period be extended for a month for affected employees so that they can have the option to choose another health plan provider if they wish.
September 30, 2016
Governor Brown has signed legislation which will implement a retirement savings plan for up to 7 million private sector workers in California. 2012 legislation created a California Secure Choice Retirement Savings Investment Board to study the feasibility of such a plan. This week, Governor Brown signed Senate Bill 1234 which creates a Savings Trust. Beginning in 2018, employees without a retirement plan will begin contributing 3% of their salary into the Trust, which would invest the money in low-risk and long-term investments. Over the years, the contributions will increase to 8% of salary, but the employees can increase, reduce, or opt out of the plan at any time. When the employee retires, he/she can take the money out or convert it to monthly income. The state will pay at least the initial costs of administering the program and investing the funds. No employer contribution is required.
Congress has passed a Continuing Resolution to continue to fund the federal government, once again pushing up against a deadline to avoid shutting it down. The final issue was an agreement to provide funding to assist Flint, Michigan in addressing their contaminated drinking water problem. The resolution only extends to December 9. Congress is now in recess but will return after the election to again address a crisis and deadline of their own making, authorizing funding to allow the federal government to continue to function into next year. Other issues could also be addressed during this so-called “lame duck” session during which the existing members of Congress will continue in office while new members elected in November will not take office until January.
One issue that did not get resolved prior to the Congressional recess is WRDA, the Water Resources Development Act to provide funding for Army Corps of Engineers projects. The House and Senate each passed a version which will be pursued when Congress returns in December. It is probable that the funding for Flint and perhaps other drinking water programs will be included in that bill.
There was a proposed amendment to require the Corps to request and accept bids from state and local agencies for “greater cost effectiveness”, but thus far, that amendment failed because it didn’t require that construction workers be paid prevailing rates on such projects.
Unlike most federal water legislation, this bill could provide funding for projects involving PECG members in several state agencies.
At one time, licensed state professional engineers, land surveyors, geologists, and geophysicists could volunteer to assist the Board for Professional Engineers, Land Surveyors and Geologists in preparing licensing exams. The employees could do so on their own time and were compensated. More recently, state employees have been prohibited from doing so because it was considered “double-dipping”.
The Board has now worked out an agreement with Caltrans to allow employees to assist the Board as Expert Consultants on state time at no additional compensation. The Board will reimburse Caltrans for the time and travel expenses. It is anticipated that those selected as Expert Consultants will work (and be compensated) between 20 and 40 hours per year.
For more information, contact Steve Hao at (916) 653-4370 or email at email@example.com.
September 14, 2016
Last year, PECG (representing Unit 9) and CAPS (Unit 10 scientists) reached agreement with CalHR and the Governor on new multi-year Memoranda of Understanding (MOUs). As a result, engineers and scientists were the only employees to receive 5% salary increases on July 1, 2016.
This year, CCPOA (Unit 6 prison guards), CASE (Unit 2 attorneys), and CSLEA (Unit 7 miscellaneous law enforcement) reached agreement on contracts which have now been approved by the Legislature. The contract for CAL FIRE Local 2881(Unit 8 firefighters) extends into 2017 but negotiations continue on a reopener on salaries. CAHP’s (Unit 5 highway patrol) current contract goes to 2018.
Representatives for the other 14 State Bargaining Units (including 9 Units represented by SEIU Local 1000) are continuing contract negotiations but did not reach agreement before the Legislature adjourned last month. Thus, their previous MOUs continue in effect.
PECG’s monthly meeting with Caltrans Director Malcolm Dougherty and his top management staff occurred this week. Main topics included the outlook for increased transportation funding, the status of the District 4 (Bay Area) overstaffing concern and potential mandatory transfers, the hiring of technicians to fill some vacant engineering positions, and the status of the District 12 (Orange County) office move. The Director also discussed several federal grants which have been awarded to Caltrans for various projects and the status of the pilot Road Charge program.
Caltrans recently received an additional $293 million from the federal government as part of the annual August redistribution of additional federal money. This was about double the amount anticipated and will include an additional $84 million for the SHOPP program.
September 1, 2016
The Legislature began its “final recess” this week after taking action on a wide variety of bills. One issue that remains unresolved is increased funding for transportation. The Senate and Assembly Transportation Chairs reached agreement on increased funding of about $7 billion per year but legislative approval requires 2/3rds in each House, which could not be achieved before the recess. It is possible that the Legislature will return after the November election to reconsider the matter or take it up again next year.
The Legislature and Governor reached agreement on spending $900 million in accumulated cap-and-trade revenue resulting from limits on greenhouse gas emissions. There’s nearly $500 million in additional accumulated funds still remaining to be allocated.
PECG supported AB 2800, which would establish a working group including Professional Engineers from State agencies and scientists from the UC/CSU system to develop data regarding projected climate change impacts on State infrastructure. PECG initially opposed a bill (SB 1085) which would require an examination of Engineers renewing their licenses but shifted to neutral when the bill was amended to specify only an online assessment of various administrative matters. Both bills passed and have gone to the Governor for his signature or veto.
PECG sponsored AB 320, which would have created a new Title Act for Environmental Engineers. It was opposed by the Board of Registration and did not pass. Other bills which didn’t make it included proposed legislation to reauthorize public-private-partnerships and a bill to transfer some Caltrans responsibilities to counties, both of which were opposed by PECG and were defeated.
Two dozen employees at the State Compensation Insurance Fund (SCIF) were recently transferred to the Unit 9 classification of Associate Safety Engineer from other State Bargaining Units. PECG had an initial meeting with SCIF management this week to discuss their proposal to install GPS devices in pool cars, similar to other departments, and other issues.
August 26, 2016
By now, PECG members and fee payers should have received in the mail the PECG Informer which lists the 2017 Premiums for the Health Plans and the State’s contribution, which is also posted on PECG’s website here. As described in thatInformer, the State’s calculation method, which actually would lower their contribution by a few dollars beginning in January, is being challenged by PECG as a violation of the MOU. It will eventually (probably after next January) be resolved through arbitration (a decision by a neutral third party). CalPERS is mailing information to all employees so you can consider whether you want to make changes to your coverage during the open enrollment period from September 12 through October 7.
For supervisors and managers, the monthly CoBen State contribution for single/two-party/family will be $643/$1,248/$1,617. This is similar to the current contribution and, again, could increase if PECG’s grievance for Unit 9 employees is successful. Finally, the State’s contribution to the 100%/90% formula for retirees will be $707/$1,349/$1,727 for 2017.
The Legislature adjourns August 31, meaning there is a currently a flurry of activity over taking action on a wide variety of bills. Bargaining Unit 2 (representing attorneys) has reached an agreement on a new MOU with CalHR, so they will be seeking legislative approval next week. SEIU Local 1000, representing nine State Bargaining Units, and a number of other Units have not reached agreement on new MOUs as this is written.
The legislative leadership has apparently agreed on a bill to increase funding for transportation, but thus far neither house of the Legislature has approved the measure. It would provide a level of funding higher than the Governor has proposed and does not include increased outsourcing or more public private partnerships. Several other bills of interest to PECG, including such topics as professional licensing and addressing the impacts of climate change, are still being considered or are headed to the Governor’s desk for his approval.
Speaking of outsourcing, the State of Utah completed a review of outsourcing transportation projects this month. They concluded that transportation department employees “can perform the work more cost-effectively” because outsourcing “can cost up to three times more than in-house staff”.
Also this month, the Federal government has decided to stop contracting with private prison companies because “time has shown that they (private prisons) compare poorly to our own (Federal) bureau facilities.” Thus, the Federal government will be “ultimately ending our use of privately operated prisons.”
The challenges to public employee pensions continue. California courts have ruled that a pension is “a form of deferred salary that the employee earns prior to it being paid following retirement.” Any reduction in the pension would have to be accompanied by a comparable increase or benefit.
This month, a California Court of Appeal has, in essence, ruled that the pension could be changed for existing employees for future service if the pension remains reasonable and substantial. While the ruling states it is intended to address pension spiking, the decision itself appears to be somewhat broader than that and will no doubt be appealed to the California Supreme Court for its review. PECG’s attorneys are analyzing the ruling now to recommend a course of action for PECG.
August 16, 2016
The ballots for the PECG Corporate Officer election have been tabulated. Congratulations to Sutida Bergquist, a Senior Sanitary Engineer with the Drinking Water Program at the Water Resources Control Board in Glendale, on her election as the Corporate President Elect. Sutida will be installed as President Elect at the Board of Directors meeting in September and will serve in that position for one year before becoming Corporate President for the following year. Current President Elect Robert Lumahan will become President in September and current President Mark Sheahan will become Past President.
Matt Hanson, a Transportation Engineer with Caltrans, was re-elected as Vice President for Collective Bargaining and Chair of the PECG Unit 9 Bargaining Team. Senior Transportation Engineer Steve Lee was elected as Vice President, Supervisory. Kristi Shelton, a Water Resource Control Engineer, will become Vice President At-Large, representing employees in agencies other than Caltrans.
The new Corporate Secretary will be Jane Pham, a Caltrans Transportation Engineer in San Bernardino.Keith Mack of Marysville, a Senior Transportation Engineer, will become Treasurer when the Officers are installed in September.
Thanks to all the PECG members who volunteered to be candidates for the Corporate and Section elections this year and a special thanks to all of the PECG members who took the time to cast your ballots to elect your PECG leaders for the next year.
August 12, 2016
In our last Weekly Update we described the disagreement between CalHR and PECG on the State’s contribution to Health Plan premiums in 2017. Essentially, CalHR concluded that, while Health Plan premiums are increasing next year, the State’s contribution should decrease, even though it is based on a percentage of the premiums. The State would change the Health Plans used in those calculations to justify their reduced contribution. PECG has filed a grievance, alleging a violation of the Unit 9 MOU as well as State law, which will be resolved in arbitration.
It now appears that CalPERS, in determining the state’s contribution to Health Plans for retirees on a 100%/90% formula, used the same procedure as CalHR in changing the plans used for the calculation. That is also being challenged.
Next week, PECG will be mailing members and fee payers the latest edition of the Informer which will include a more detailed description of what has occurred as well as the 2017 Health Plan premiums for each provider, the State’s contribution (based on their calculation, for the time being) and the employees’ out-of-pocket payment for each plan. If you wish to get an advance look, the Informer is on the PECG website, which is accessed by clicking here.
There will be an open enrollment period from September 12 to October 7. Employees can change their plans, add or drop dependents, or make other modifications to their coverage during that period.
The Legislature is back in town (Sacramento) and will remain in session through August 31. Issues and bills they are addressing include several proposals to substantially increase transportation funding; a PECG-sponsored bill to provide a license for Environmental Engineers; a bill to require an on-line assessment of Board regulations for license renewals; and a bill to establish a working group (including Registered Engineers in Caltrans, DWR, and other state agencies) to address the impact of climate change on infrastructure.
Only four of the state’s 21 bargaining units (include PECG for Unit 9) have reached agreement on new contracts or MOUs for the coming years. The Legislature would have to approve contracts for other units (if agreement is reached by their unions and CalHR) before they adjourn for the year on August 31 or wait until January.
The monthly meeting between PECG and Caltrans occurred earlier this week. Topics included the workload and staffing for the Capital Outlay Support program in the current fiscal year; the status of the Road User Charge Pilot program; steps being taken to address the overstaffing in District 4 (Bay Area) to reduce or avoid mandatory transfers; and the upcoming office relocation in District 12 (Orange County).
Regarding Caltrans District 4, the overstaffing has been reduced from 200 excess Engineers to 80. Brokering work (assigning work from other Districts), obtaining reimbursed work from local agencies, and other efforts are achieving some success. PECG expressed concern that Caltrans is still awarding contracts for outsourcing in District 4 while planning to mandatorily transfer employees to other Districts and suggested some other Bay Area projects that District 4 Engineers could be working on.
The PECG Bargaining team met with CalHR and Caltrans this week to meet and confer on various aspects of the planned move of the District 12 office from Irvine to Santa Ana. Discussion topics included concerns regarding the proposed use of four-foot high partitions for most of the staff (but not top managers); and such issues such as parking, break rooms, quiet rooms, noise abatement, restrooms, copy machines, building security, storage space, and other concerns. Six-foot partitions are being replaced by new four-foot partitions, despite objections from employees and managers, while some of the existing six-foot partitions will be shipped to the Caltrans office in Fresno, which apparently finds the six-foot partitions to be acceptable.
The current lease is being terminated two years early so the office can move to a different location without providing space which would be needed for potential increases to staff in the future. The Governor (and both houses of the Legislature) have proposed considerably increased funding for transportation, half of which would go to Caltrans. If that occurs, the Caltrans Orange County office would not have space available to accommodate increased staffing which, of course, could be used as an excuse to contract out additional work.
July 29, 2016
The cost of Health Plan premiums is shared by employees and the state, based on a formula and the plan in which you are enrolled. The formula for Unit 9 is called “85/80”, meaning the State pays 85% of the premium for the employee, based on the weighted average of the premiums of the four plans with the greatest enrollment, and 80% of the additional premium for dependents. If the employee enrolls in a plan for which the premium is higher than the State’s contribution, the employee pays the difference.
This is usually a fairly straightforward calculation. However, for 2017, one of the top four plans, Blue Shield Net Value, will be discontinued. Employees currently in Net Value will be enrolled in Blue Shield Access + (with the “exact same benefits”, according to Blue Shield) unless they choose otherwise during the open enrollment period, which goes from September 12 through October 7.
CalHR has calculated a State contribution for 2017 less than the current contribution, even though all of the premiums will increase. This was the result of CalHR deciding to delete the Net Value plan from their calculations and add the fifth most used plan (with lower premiums) to the equation.
PECG believes this violates the Unit 9 MOU. After meeting with CalHR and being unable to resolve the issue, PECG has filed a grievance at the fourth level (CalHR) challenging that calculation. If the grievance is not resolved at that level, it will proceed to arbitration. (Click here to see the grievance.)
Meanwhile, PECG will soon send you an Informer listing all of the plans, the change in premiums for 2017, the State’s contribution as proposed by CalHR, and the out-of-pocket difference the employee would pay. If PECG’s grievance is successful, the state’s contribution would increase and your out-of-pocket payment would decrease, but that is unlikely to be resolved prior to the open enrollment period. All of this will be explained more fully in the upcoming Informer.
The lodging reimbursement rate for Alameda, San Mateo, and Santa Clara Counties for Unit 9 employees increased to $140 on July 1. CalHR has issued a memorandum authorizing those increases for supervisors and managers, plus an increase from $150 to $250 in San Francisco, effective July 1. This added increase (for San Francisco) may be applicable to Unit 9 employees represented by PECG due to a provision in the Unit 9 MOU. We will notify you if and when that occurs.
Although not as exciting and entertaining as the U.S. Presidential election, the election for PECG Corporate and Section Officers is also underway. If you have not yet voted for your PECG Corporate Officers for next year, your ballot must be mailed and postmarked no later than August 10. If you didn’t receive a ballot or misplaced it, please call the PECG office at (916) 446-0400 no later than August 4 to get a replacement ballot mailed to you.
July 19, 2016
Agenda items for the monthly meeting between PECG and Caltrans management included staffing and outsourcing, the District 4 (Bay Area) overstaffing issues, potential salary increases for Career Executive Assignments, participation in the California State Transportation Innovation Council, access cards and I.D.’s for employees on leave in District 3 (Marysville), and the upcoming office move in District 12 (Orange County).
Workload in District 4 has decreased due to the completion of major toll bridge and other projects in that area. The number of engineering employees currently scheduled for involuntary transfers has been reduced to 100 but is still a problem. “Brokered” work from other Districts, reduced outsourcing, additional reimbursed work from local agencies, hiring freezes, and transfer opportunities to other Districts are among the elements of the plan to solve the problem. PECG will continue to work with Caltrans management to preclude involuntary geographic transfers of PECG-represented employees.
CalPERS has reported that its investment assets have now exceeded $300 billion but grew only 0.6% during the past 12-month period, with poor performance in the stock market (particularly the international market) offsetting gains elsewhere. The projected return on investments in future years is now lower than had been predicted, but the state and other employers are also saving money due to the effect of pension reform legislation which increased employee contributions and reduced benefits for recent and future hires.
The election process is underway for PECG Corporate Officers as well as Officers in many of the PECG Sections. The Corporate ballots were mailed to the homes of members on July 11, so contact the PECG office if you have not yet received your Corporate ballot.
July 6, 2016
“The California Air Resources Board first identified irregularities in VW diesel-fuel emissions tests in 2014” which ultimately led to Californians receiving “a large portion of the $14.7 billion settlement the automaker announced on Tuesday to resolve claims that it misled customers and lied to regulators for years,” according to media coverage of the settlement. Attorney General Kamala Harris reported that Volkswagen manipulated its diesel vehicles to produce false results when undergoing emissions testing, allowing vehicles to appear to meet emission standards while continuing to release pollutants at a higher level.
ARB Chair Mary Nichols said the agreement “recognizes the crucial contribution the dogged engineers in CARB’s testing lab played in exposing the illegal device in the first place”.
Congratulations to all of the PECG members and other ARB staff for their roles in exposing these illegal activities, protecting air quality, and recovering billions of dollars to support environmental programs and compensate those who purchased the defective vehicles.
On March 29 the U.S. Supreme Court deadlocked 4 to 4 on reviewing a lawsuit challenging whether public employee unions could charge fair share fees to nonmembers. The Court normally includes nine justices but the February death of Justice Antonin Scalia led to a deadlock on this and numerous other cases. This left in place a lower court ruling authorizing the continued use of fair share fees.
Those who filed the suit which challenged the fees asked the Supreme Court to re-hear the case when they begin their next term in October. The Court declined to do so, meaning that any future challenge to fair share fees would have to be resolved through a different case working its way up through the judicial system.
Last week we reported that Governor Brown signed the new State Budget for the fiscal year which began on July 1. It includes funding for a 5% salary increase for PECG-represented employees in Unit 9, supervisors, and managers on July 1.
The voter-approved “rainy day fund” required a $1.3 billion deposit from the new Budget, which also directed an additional $2 billion for that purpose plus $1.75 billion to the Special Fund for Economic Uncertainties. The Governor demonstrated his satisfaction with the Budget agreement he worked out with the Legislature by not using his “blue pencil” authority to reduce any expenditure items, a budget-cutting device that Governors typically use to reduce some expenditures.
A Superior Court Judge ruled that a comprehensive management plan developed by the Delta Stewardship Council is no longer valid. There were numerous lawsuits challenging the plan and the Governor’s proposal for building tunnels under the Sacramento-San Joaquin Delta. The Judge dismissed most of the challenges but found the plan did not “include quantified or otherwise measurable targets associated with achieving reduced Delta reliance” for the State’s water supply. The State plans to appeal the ruling, but whether this will delay the project, and for how long, is uncertain.
June 27, 2016
Today, Governor Brown signed the State Budget for the fiscal year beginning on July 1. It includes funding for a 5% salary increase for PECG-represented employees (Unit 9, supervisors and managers) effective July 1.
Thus far, six of the state’s 21 Bargaining Units have reached agreement with the Governor on new contracts or MOU’s with salary raises ranging from 3% to 5% on July 1. The other 15 bargaining Units are in contract negotiations with, thus far, no agreement on salary increases this year.
Each year, PECG and CalHR (representing the Governor) jointly prepare a salary survey showing the lag, if any, for PECG-represented employees compared to engineers’ salaries in other public agencies in California. It appears the current salary lag ranges between 5.8% and 6.5%, pending any last minute adjustments from survey data. The lag will be eliminated with the 5% raise on July 1, 2016, followed by another 2% salary increase on July 1, 2017. Inflation, as measured by the Consumer Price Index (CPI) for all Urban Consumers, has been 1.0% over the last 12 months.
Contract negotiations between PECG and CalHR will resume in the spring of 2018.
The Governor and Legislative leaders have issued “Principles for Reform of the California Public Utilities Commission”. While emphasizing accountability, transparency, and oversight of the Commission, the proposal would also relocate some PUC responsibilities to departments within the California State Transportation Agency. PECG leaders and affected members are analyzing the proposal, which was issued today.
PECG and the National Association of State Highway and Transportation Unions (NASHTU), which was co-founded by PECG and contains 38 affiliates in 20 states, has submitted recommended policies to be considered by the Democratic National Convention Platform Committee. Recommendations include increasing transportation funding, requiring construction inspection of transportation projects by inspectors employed by public agencies, and conducting a cost comparison when outsourcing engineering or related services is being considered. PECG and NASHTU will be in contact with Platform Committee members to follow up on these recommendations.
June 17, 2016
On Wednesday, the Legislature passed a 2016-17 State Budget which complied with the June 15 Constitutional deadline. It includes funding authorization for the 5% July 1, 2016 salary increase for Unit 9 employees and PECG-represented supervisors and managers, as well as enough money to fund the state’s share of medical premium increases to take effect in January. The Budget maintains the “90/10” split which provides that 90 percent of the workload for the Caltrans’ Capital Outlay Support program will be accomplished by state-employed engineering and related staff and 10% will be outsourced. The Budget reflects an annual cost of $234,000 for a private consultant compared to $119,000 for Caltrans staff. The plan now goes to the Governor for his signature (and potential “blue pencil” funding reductions on specific items) by the end of this month.
The current legislative Special Session called last year by the Governor on transportation will continue. The session is to develop “permanent and sustainable funding” to “maintain and repair the state’s transportation and other critical infrastructure”. There are various proposals to raise additional transportation funding through increasing the gas tax as well as higher registration and licensing fees and other potential sources of funding.
In addition to administering the pension system for the State and many California local agencies, the California Public Employees Retirement System (CalPERS) also negotiates health plan premiums with the various providers. CalPERS has just announced completion of those negotiations, which reflect smaller premium increases than last year, which will take effect in January 2017. While rate increases vary between providers, the average PPO premium (PERS Choice, PERSCare, etc.) will increase 3.76% while HMO (such as Kaiser and Blue Shield) premiums will rise by 4.14%. (In January 2016, the increases were 10.8% and 7.2%.)
The state’s contribution for PECG-represented employees is based on a percentage of the weighted average premium of the four plans with the highest enrollment. As soon as those calculations are completed, a PECG Informer will list, for each plan, the premiums which will take effect in January; the state’s contribution; and the employee out-of-pocket cost, to assist you in determining if you wish to change your health plan provider. There will be an open enrollment period from September 12 to October 7 for those who wish to change coverage.
June 8, 2016
The monthly meeting of PECG leaders and Caltrans Director Malcolm Dougherty and his staff was held last week. Topics included potential involuntary transfers of PECG-represented employees from District 4 (Oakland) to other districts; proposed reductions in Caltrans staff in the upcoming State Budget if additional transportation funding is not approved; outsourcing of engineering and related services; the cost of Caltrans performing reimbursed work for other agencies on State Highways; the upcoming move of the Caltrans District 12 (Orange County) office; and a semi-confusing District 3 (Marysville) memo regarding turning in ID and access cards for employees going on leave. Of particular concern is the Department’s State Budget proposal to continue to outsource nearly 1,000 engineering and related positions by reducing staff (through attrition) by 158 positions next year while potentially involuntarily relocating employees from District 4.
PECG endorsed 53 candidates for Assembly and 10 State Senate candidates in the June 7 primary election. All but two of those were successful in qualifying for the November election ballot.
It is anticipated that the Legislature will pass the 2016-17 State Budget Bill by the June 15 deadline. It will then go to the Governor for his signature (and potential “blue pencil” funding reductions on specific items) later this month.
In other legislative activity, Assembly Bill 320, sponsored by PECG to create a license for Environmental Engineers, is still working its way through the legislative process. It is being opposed by the Board of Registration.
SB 1141 proposed to turn over all of the state highway functions in two unspecified counties to the local agencies. That bill, which PECG opposed, was defeated. AB 2742 would extend authorization for Public Private Partnership (P3) projects. Sponsored by ACEC, representing private engineering firms, it is opposed by PECG and the Brown Administration and has been held in Committee.
May 24, 2016
You only have a few more days to apply to cash out some of your accumulated vacation or annual leave. Requests to do so must be submitted in writing before the end of May. Unit 9 employees and their supervisors may cash out up to 80 hours except for Caltrans (40 hours) and the Public Utilities Commission and Governor’s Office of Emergency Services, which are not participating. See Section 5.19 of the new Unit 9 Memorandum of Understanding (MOU).
A couple of other deadlines are coming up. Unit 9 employees are authorized up to 16 hours per fiscal year for Professional Leave, which is requested and approved in the same manner as vacation and annual leave. (MOU Section 5.15). Also, licensed Unit 9 employees can be reimbursed for Professional Society and Organization Dues up to $100 per fiscal year. (MOU Section 3.3.b.).
Each year, CalPERS negotiates health plan premium rates with the various health benefit providers, such as Blue Shield and Kaiser, along with establishing rates for its own plans (PERSCare, PERS Choice and PERS Select). The premiums for each of the plans for next year (beginning in January 2017) will be announced by CalPERS in mid-June. There will be an open enrollment period from September 12 through October 7 to allow employees to make changes in their health plan coverage if they wish to do so.
May 13, 2016
Earlier today, the Governor released his State Budget “May Revise” which is an update to his January projections of revenue and expenditures for the upcoming fiscal year beginning in July. In his remarks, the Governor noted that “the budget over the next two years is in balance” and “assumes the continued expansion of the economy.” However, the Governor also warned of lower revenue forecasts and cautioned against additional spending obligations. Tax revenue forecasts for next fiscal year have been reduced by $1.9 billion based on lower than expected income tax receipts. The Governor suggests that if temporary tax increases are not renewed by the voters this November, there could be a shortfall of $4 billion by the 2019-20 fiscal year.
The Governor’s Budget proposal included, and the May Revise maintains, funds for a 5.0% salary increase on July 1, 2016for Unit 9 employees and their supervisors and managers. The May Revise adds funding for salary increases for correctional officers and state scientists and sets aside an additional $500 million to fund possible agreements with the 17 units still in negotiations.
The May Revise maintains the Governor’s transportation package that would provide $36 billion over the next ten years, including $16.2 billion to repair, maintain and operate the state highway system. If the Governor’s transportation package is not approved, Caltrans staffing would likely be reduced by 158 positions through attrition and the 90/10 staffing ratio of state employees and engineering consultants would remain intact. If the Governor’s package were adopted, Caltrans state staffing would likely increase by hundreds of positions. Unfortunately, the Governor also seeks to expand the use of consultants beyond the 90/10. PECG will continue to advocate for the effective use of transportation dollars as the Budget makes its way through the Legislature.
Late last week, Caltrans warned District 4 engineering employees and Division of Engineering Services (DES) employees of possible involuntary transfers because of overstaffing. While this is an initial step toward the possibility of involuntary transfers, it is the beginning of a long process.
PECG will work with Caltrans to address the geographic workload imbalance in a way that is least disruptive to affected employees – options include reducing any outsourcing of engineering work that could be performed by affected employees and continuing to broker work with other Districts.
The Air Resources Board was the last state department to announce participation in the Vacation/Annual Leave Cash Out program. All PECG represented ARB employees will be permitted to cash-out up to 80 hours of leave.
May 3, 2016
For the past several years, employees in Bargaining Unit 9, represented by PECG, and a few other units have been eligible to cashout up to 20 hours of vacation and annual leave per year in departments which had funds available from their department budgets at the end of the fiscal year. Most departments participated.
The new Unit 9 MOU increases that cashout option this year to 80 hours. (Only PECG and CAPS, representing Units 9 and 10, negotiated that increase).
Once again, the cashout depends on each department determining that it has funds available for that purpose. CalHR has also authorized a cashout of up to 80 hours for all supervisors and managers, again depending on the availability of funds in each department.
Thus far, departments which will allow employees to participate up to the full 80 hour cashout include DWR, WRCB, DIR, DGS, DTSC, Conservation, the High-Speed Rail Authority, Parks and Recreation, CalFire, the Energy Commission, State Lands Commission, and Corrections. Caltrans will participate up to 40 hours. We are still awaiting the official word from ARB and several other departments, although employees may have received notices by now. Thus far, only the Public Utilities Commission and the Office of Emergency Services have refused to participate, citing a lack of available department funds.
Employees should be informed by their department regarding participation, along with a form to apply for the cashout, which must be submitted before the end of May. The cashout payments will occur in June and will reflect deductions of nearly 40% for Federal and State income tax withholding, FICA, and Medicare.
The Unit 9 MOU includes the 80 hour cashout option (based on available funds) for each of the next two fiscal years as well.
April 22, 2016
The current Memorandum of Understanding (MOU) for Unit 9 authorizes employees to cash out up to 80 hours of accumulated vacation or annual leave each year in departments that have funds available for that purpose. One other bargaining unit has now negotiated the same provision, representing an increase from 20 hours per year in previous years.
CalHR has now authorized departments to provide the same opportunity (up to 80 hours per year) for supervisors and managers, saying that “departments are encouraged” to allow employees to utilize that option. Departments are to notify employees by the end of April if they are participating in the program, employees would apply for cashout during May, and checks (with about 40% deductions for income tax withholding and other purposes) would be issued in June. PECG is encouraging departments to fully participate in this program.
On this 2016 Earth Day, more than 160 nations (including the United States and China) are signing the climate change agreement negotiated earlier this year to reduce greenhouse gas emissions. Once the agreement is signed, each individual nation must still ratify it. It is anticipated that President Obama will issue an Executive Order to implement ratification by the United States.
CalPERS has reported that the State’s contribution to the retirement plan for all state employees will increase by about $602 million next year to a total contribution of $5.4 billion. The CalPERS Board is also considering reinvesting in some industries, including the tobacco industry, from which it has divested over the years. CalPERS believes that such divestiture has cost the system $8 billion.
The High-Speed Rail Authority is considering a revised business plan for the $64 billion project. A decision has been made to build the initial link north from the Central Valley, rather than south to the Los Angeles area. The plan is expected to be revised to include a line up to Merced in the first segment. The Draft Plan will be voted on by the Authority’s Board next week and submitted to the Legislature by May 1. Meanwhile, the Legislature is considering bills which would increase legislative oversight of
April 13, 2016
PECG’s monthly meeting with Caltrans management occurred this week. Much of the discussion centered around potential increased transportation funding, depending on several current legislative proposals, and the resultant impact on staffing. Additional topics included other legislative proposals, long term assignments, home storage permits, and the potential vacation/annual leave cash out.
The new Unit 9 Memorandum of Understanding (MOU) provides that employees will be permitted to cash out up to 80 hours per year of accumulated vacation or annual leave if departments determine that they have funds available for that purpose. This is an increase from the 20 hour maximum in previous contracts. PECG is contacting each department employing PECG members to determine if that cash out will be authorized this year. PECG has urged CalHR to authorize the same 80 hours for supervisors and managers.
Departments will advise employees by the end of April whether the cash out will be available. If so, employees will submit a written request during May to their department. Employees who are interested in taking advantage of this cash out option should encourage their department to make it available.
PECG leaders met with Richard Moore, the Executive Officer for the Board of Professional Engineers, Land Surveyors, and Geologists regarding Senate Bill 1085 (Roth). This Board-sponsored bill would require all licensees who apply for renewal to take an examination (now amended to an “assessment”) which includes (but is not limited to) questions regarding knowledge of the laws, rules, and regulations. As explained by Mr. Moore, about 50,000 engineers, land surveyors, and geologists apply to renew their license every year. The Board processes about 50 violations each year for such activities as “failing to include all required elements in a written contract”, and “failing to sign and seal professional documents in the manner required by law.” These activities “did not rise to the level of warranting formal disciplinary action”, but the bill would authorize disciplinary action if the assessment is not completed within 60 days.
PECG questioned why all licensees should be required to take an exam every two years to deal with “non-practice related infractions” by 50 (0.1%) of the licensees, and why the Board should be authorized to impose disciplinary action when such authority does not currently exist.
PECG is opposed to SB 1085. Members who wish to express their views should call the Board at (916) 263-2284.
The Los Angeles Times has reported that State Senator John Moorlach, an outspoken critic of public employee pension plans, actually receives a government pension check of $83,827 per year in addition to his State Senator salary of more than $100,000. His explanation is: “I did it for public service.”
One of his critics is former San Jose Mayor Chuck Reed, who has unsuccessfully sponsored several state ballot measures to slash public employee pensions and medical coverage. He referred to Moorlach’s acceptance of a salary and pension paid by the taxpayers as “a form of double-dipping, which makes a lot of people angry.” Ironically, Reed receives a public pension of more than $30,000 per year for serving less than 15 years as a local agency politician.
April 1, 2016
CalPERS has informed us that Blue Shield has notified them that the Blue Shield NetValue HMO health plan will no longer be available in 2017. The good news is that the Blue Shield Access + Plan, with the same benefits and coverage and a broader network, will continue. The downside is that the Access + premiums are currently $6 (single) to $16 (family) more per month.
CalPERS is going into negotiation with all of the health plan providers for rates and coverages for 2017. Providing more alternatives to employees currently covered by Blue Shield NetValue will be one of their priorities. At this point, it appears that the worst case would be that those covered by NetValue would switch to Access + in 2017 with the same doctors and medical facilities but, perhaps, an increase in premiums. The best case could be that CalPERS will develop better options during negotiations with the providers in the next two months. As always, there will be an open enrollment period later this year to give you an opportunity to change providers or coverage once you know what the options and premiums will be. PECG will keep you informed as more information becomes available.
Following the death of Justice Scalia, the now 8-member U.S. Supreme Court deadlocked 4 to 4 on the lawsuit challenging whether public employee unions could continue to charge fair share fees to nonmembers in the bargaining units they represent. The Court of Appeals had ruled earlier to uphold the previous Supreme Court decision, which had been in place for 40 years, that nonmembers could be charged a fair share fee for representation (but not political) activities. The Supreme Court’s one-sentence ruling that “The judgment is affirmed by an equally divided Court” means the lower court ruling, Supreme Court precedent, and fair share fees remain unchanged.
California’s High-Speed Rail project continues to have scheduling and cost difficulties. Now well behind schedule, cost overruns and change orders were major topics at a recent legislative hearing. The prime contractor on the first $1 billion segment has estimated there will be more than $50 million in change orders, plus another $100 million because the project has been delayed. Some “construction industry experts” say that changes could exceed $400 million.
In addition, the Rail Authority set aside a $160 million contingency fund for overruns on utility work. HSRA staff recently projected that cost could double. Major relocation of a one-mile section of a local road in Fresno is expected to be another major cost addition.
March 25, 2016
Two weeks ago, we reported that a Sacramento Superior Court Judge refused to issue an order stopping the High-Speed Rail project based on allegations in a lawsuit that challenged whether the project still conformed with the voter approved 2008 ballot measure. This week, an initiative to divert High-Speed Rail funds to water storage and other projects was abandoned by its proponents due to the high cost of gathering the signatures to qualify the measure for the November ballot.
A measure which has qualified for the November ballot would require state voter approval before revenue bonds could be issued for projects for which the bond amount would exceed $2 billion. Although aimed at the Governor’s proposal to build two tunnels to carry water under the Sacramento Delta to the Central Valley and south, it could affect High-Speed Rail and other projects.
Based on a poll this month by the Public Policy Institute of California (PPIC), there is general support for funding a variety of programs, including infrastructure projects. 92% feel that it is important (62% very important) to spend more money on highway maintenance; 80% feel the higher education system is very important; 80% feel it’s important to build tunnels “in” the Delta (54% very important); and 52% favor the High-Speed Rail system. To provide the funding, 61% favor extending the Proposition 30 temporary income tax increase (for those earning over $250,000) for another 12 years.
The Air Resources Board facility in El Monte is scheduled to be relocated by 2020. The question is – where will it go? The two finalists were UC Riverside and the Cal Poly Pomona campus. The decision included heavy lobbying by businesses, universities, politicians, and many others. On behalf of 268 PECG members in the El Monte facility, PECG advocated moving to Cal Poly Pomona, which is much closer to El Monte. Moving to Riverside would mean many employees would have to relocate and the expense reimbursement alone (by the State) would cost about $8 million. Although ARB staff supported PECG’s recommendation, in the end the Board decided to move the facility to UC Riverside. As the move is not expected to occur until 2020, PECG will be working with the Board and the Administration to insure minimal impact on employees, including telecommute, alternate work schedules, transfer opportunities, and appropriate expense reimbursement.
Last week we reported that the Board for Professional Engineers, Land Surveyors and Geologists is sponsoring legislation (Senate Bill 1085) which would require all licensees to take an additional exam on the Board’s rules and regulations when renewing their licenses. Members were encouraged to call the Board at (916) 263-2284 to express your views. In addition to requiring a new additional exam every two years on rules and regulations, the bill would authorize disciplinary actions against licensees.
Rather than accepting responsibility for sponsoring a bill which impacts its licensees, the Board has urged callers not to contact the Board. It would appear they don’t want to take the heat for the bill they are sponsoring. If you object to (or support) this bill to require an additional licensing exam every two years for those who already have a license, we continue to recommend that you call the Board at (916) 263-2284 and give them your opinion.
March 18, 2016
Last week’s Weekly Update referenced “proposed legislation to require an exam upon renewal of the Professional Engineer licenses” as a topic discussed in the monthly PECG/Caltrans meeting. A number of PECG members responded with objections to having to take another exam every two years when they renew their licenses.
The Board for Professional Engineers, Land Surveyors, and Geologists is sponsoring Senate Bill 1085 (Roth) which would require all licensees to take an examination on “state laws and the board’s rules and regulations relating to the practice of professional engineers when they renew their licenses.” The exam would include (but not necessarily be limited to) questions on those rules and regulations. “Failure to complete this examination shall constitute a cause for disciplinary action.”
PECG will oppose this proposed legislation. Members with concerns about requiring this additional examination to retain your license are encouraged to call the Board at (916) 263-2284.
A customized 2016 CalPERS Health Plan Statement and other open enrollment materials will be available online for all active and retired members on August 22. Letters are being mailed to all members describing the new online features and options. It is expected that the Health Plan open enrollment period (during which you can make changes to your Health Plan provider or other coverage) will begin around September 15, although a firm date has not yet been set.
If you wish to continue to receive the information by mail (as well as having it available online), you must notify CalPERS by July 1 by calling them, going online, or returning a postcard which is being included in their mailer to the members.
CalPERS has also announced that the increase in the Consumer Price Index (CPI-U) last year was 0.120%. While those who retired prior to 2005 will continue to receive a 2% cost of living adjustment(COLA) in their pension, those who retired after 2005 will not. This is because, under state law, if the CPI increases less than 1%, no adjustment is made but the increase is carried over for the calculation the following year. This affects approximately 45% of retirees.
If the pension drops below 75% of the original purchasing power upon retirement, an adjustment is made to bring it up to that level. This typically applies to those who have been retired for 25 years or more.
CCPOA, which represents the state’s Correctional Officers (prison guards) in Unit 6, has become the third of the state’s 21 bargaining units to reach agreement with Governor Brown on a new labor contract or MOU (following Unit 9, PECG, and Unit 10, CAPS). While full details are not yet available, the agreement provides three raises of 3% each, with the final raise occurring on July 1, 2018. (By comparison, PECG’s contract includes a 5% raise this year, 2% next year, and a potential 2018 raise to be negotiated that spring.) The Unit 6 contract also requires employees to pay 4% of their salary toward retiree health plan premiums (compared to 2% for Unit 9 by 2019). To take effect, the agreement will have to be ratified by Unit 6 members and the Legislature and Governor will have to approve funding in the Budget for the fiscal year beginning in July.
Susan Bransen has been selected to replace Will Kempton, who is retiring, as Executive Director of the California Transportation Commission (CTC). She had been serving as the Commission’s Chief Deputy Director. PECG congratulates Ms. Bransen and looks forward to continuing to work with her.
March 11, 2016
Funding, staffing, and projected workload were among the topics discussed at the monthly meeting of PECG leaders and Caltrans Director Malcolm Dougherty and his management staff this week. The federal government has approved a multi-year transportation authorization with a slight increase in funding to the states but the California Legislature continues to wrestle with three proposals to increase state funding. Meanwhile, the California Transportation Commission (CTC) has reduced funding for state highway projects due to declining revenue from the sales tax on gasoline. Caltrans Capital Outlay Support (engineering) staff could continue to be reduced through attrition or new hires could be authorized if an increased funding program is adopted. The Legislative Analyst has criticized the Governor’s proposal for putting too much emphasis on the SHOPP program and not enough on maintenance; the Bureau of State Audits is expected to issue a report on Caltrans next week; and a workgroup involving the Legislature, Caltrans, Finance, the Transportation Agency, LAO, and CTC has been meeting to try to reach a consensus on the proper methodology for determining Caltrans’ staffing needs.
Other topics at the PECG/Caltrans meeting included involvement in high-speed rail; extension of P3 authorization; overstaffing in District 4 (Bay Area); proposed legislation to require an exam upon renewal of the Professional Engineer licenses; expense reimbursement for long term assignments; and the upcoming Senior Bridge Engineer exam, which will probably be offered in May as a written promotional exam.
A Sacramento Superior Court Judge has rejected a lawsuit aimed at blocking continuing work on the California High-Speed Rail project in the Central valley. The plaintiffs allege that the project will not meet the requirements of the voter-approved ballot measure in 2008. The Judge concluded that the High-Speed Rail Authority “may be able to accomplish” the requirements in the future but “currently all that it is before the court is conjecture as to” what the request for using funds authorized by the Bond Act will consist of. Thus far, the case has bounced up and down between the Superior Court and the Court of Appeal.
Yet another public-private partnership (P3) project has failed. Just three years into its 50-year contract with the state of Texas to build and operate a 41-mile stretch of a state highway toll road, the consortium declared bankruptcy, which has increasingly been the practice in California and elsewhere. The toll road operator had even increased the speed limit to 85 miles per hour, the highest in the nation, to make an effort to encourage increased usage, but that didn’t work. Texas Governor Rick Perry announced at the ribbon cutting in 2012 that “this stretch of road holds a special place in our history”. That turned out to be true.
March 1, 2016
The California Association of Professional Scientists (CAPS), representing scientists in state Bargaining Unit 10, have reached agreement with the Governor on a new three-year MOU. Thus, employees in Unit 9 (PECG) and Unit 10 (CAPS) will receive 5% salary increases on July 1.
Highway Patrol Officers in Unit 5 will probably receive a salary increase based on a statutory formula. The other 18 state Bargaining Units are or soon will be in negotiations with the Governor’s Office. Most of the existing contracts for those Units run through July 1 and do not currently include a salary increase.
The High-Speed Rail Authority (HSRA) has now officially confirmed that they plan to run the first leg of the high-speed rail system from Bakersfield to San Jose, rather than to Southern California as previously proposed. In explaining why they no longer intend to build the segment to Southern California first, HSRA Chairman Dan Richard said “looking at the available funds, we just couldn’t get there.”
The Legislative Analyst has taken a look at the Governor’s proposal to increase fuel tax and vehicle registration fees to raise $3.6 billion per year for transportation. The Governor’s proposal would direct $1.4 billion of the increase to the State Highway Operation and Protection Program (SHOPP) which is “a program of capital projects to rehabilitate or reconstruct highways when they reach the end of their useful life.” The Analyst recommends that a greater portion of the new funds be directed toward maintenance, rather than the SHOPP. The Legislature is continuing to consider the Governor’s proposal, as well as bills from each of the Transportation Chairs, in an effort to reach consensus on generating additional funds for transportation. To see the LAO report, click here.
February 16, 2016
The sudden and unexpected death of Supreme Court Justice Antonin Scalia had an immediate impact on the Presidential election campaign but will also affect many cases currently before the U.S. Supreme Court. Nearly 40 years ago, the Court ruled that requiring non-member employees in a Bargaining Unit to pay a fair share fee to the representative organization does not violate the U.S. Constitution. Last summer, the Court agreed to review that issue in a lawsuit filed by several Orange County teachers.
The Court heard oral argument last month. Based on comments from the Supreme Court Justices and their history of decisions, it appeared to most observers that the Court would rule 5 to 4 (along party lines) to invalidate or at least modify the fair share fee authorization. Justice Scalia was expected to be one of the five votes. With his death, the Court could be deadlocked at 4 to 4 on this and many other cases before it. If that occurs, the lower Court ruling upholding fair share fees would stay in effect.
President Obama will nominate a successor to Justice Scalia, but Senate Republicans have vowed to block confirmation until a new President takes office in January 2017.
PECG leaders met with Caltrans Director Malcolm Dougherty and his management staff last week. Topics included proposed increases in transportation funding; staffing and hiring; use of tolling authority; new federal regulations on cost analysis for contracting for services; involvement in high-speed rail; and the recent Senior Transportation Surveyor exam results. The reduction in transportation funding due to reduced revenue from the excise (sales) tax on gasoline (due to lower gas prices) and the inability of the Legislature thus far to reach a consensus on increased funding could reduce workload as the California Transportation Commission recently cut the multi-year program by $754 million. District 4 (Bay Area) continues to be overstaffed and efforts are being made to place employees in openings in other Districts.
There are currently at least three transportation funding proposals being considered by the Legislature ‑‑ one each by the Governor and the Chairs of the Senate and Assembly Transportation Committees. They vary in the amount and method, but all would seek to substantially increase transportation funding on an ongoing basis, splitting the new revenue between the state and local agencies. The Governor’s proposal would mandate increased outsourcing by Caltrans, which PECG opposes.
Some Central Valley landowners filed suit against the High Speed Rail Authority, alleging that the current plan does not comply with the requirements of the voter-approved ballot measure in 2008. Sacramento Superior Court Judge Michael Kenny had previously ruled for the landowners but the Appellate Court reversed his decision because it was premature. The case was back in Court before Judge Kenny last week. He has 90 days to issue a new ruling, which could be appealed.
In response to the ongoing Porter Ranch natural gas leak, the State has now issued emergency regulations for inspecting all gas wells in California. The Department of Conservation’s regulations require daily inspection, gas leak detection technology, ongoing verification, and regular testing and measurements.
February 4, 2016
PECG’s Annual Legislative Day at the Capitol was a success, with PECG leaders from throughout California converging in Sacramento to meet with 84 of the 120 State Senators, Assemblymembers, and Staff in their Capitol offices. Major topics included additional funding for transportation and other infrastructure, ending wasteful outsourcing of engineering and related professional services, and support for PECG-sponsored Assembly Bill 320 to establish a license for Environmental Engineers. The meetings were followed by a Reception in the Capitol Rotunda attended by dozens of legislators, their staff, agency and department managers, and members of Boards and Commissions. As always, the meetings and Reception were well attended and provided an opportunity to discuss important issues in both formal and informal settings.
After years of the media (and plenty of others) blaming Caltrans for everything from failed anchor rods to water leaks on the Bay Bridge, both issues appear to have been resolved without the media attention which had been directed toward the alleged problems.
Last summer, the Toll Bridge Seismic Safety Review Committee concluded that, regarding the 424 anchor rods in question, “there is no issue as far as seismic safety” because the anchor rods were “unnecessary” once the construction of the tower was completed.
All manner of proposals had been suggested to resolve the concerns about water leaking into various areas of the bridge. Then, last month, Caltrans engineer Ken Brown reported that they had purchased and applied industrial-grade caulk to the joints between the road surface and the guardrails at a total cost of less than $100,000. As a result, about 90% of the leaks have been eliminated and “in the last couple of storms, we have not seen any water coming” into the structure. He noted that “these bridges are not designed to be watertight.”
The high-speed rail project is encountering more significant problems. Variously estimated to cost between $32 billion and $98 billion to connect the Bay Area to southern California with high-speed trains through the Central Valley, the project is running well behind schedule, cost estimates are increasing, Congress has cut off additional federal funding, hoped-for private sector financing has not materialized, and polls have shown the public no longer supports the project. The Governor had given assurances that, after initial construction of segments in the Central Valley, the next leg would go to southern California, connecting all the way into Union Station in Los Angeles. The High-Speed Rail Authority has now announced that they are considering extending the initial segment from the Central Valley to San Jose, rather than southern California, which has generated considerable concern and opposition from the south. The reasons given include the higher cost and technical challenges of going south through the Tehachapi Mountains.
January 21, 2016
Governor Brown delivered his annual State of the State address on January 21. In keeping with his philosophy and his earlier State Budget proposal, he talked about building up the Rainy Day Fund for the State Budget, the profound uncertainty of the future, and the hazards of building State Budgets on an assumption of uninterrupted growth. He emphasized paying for commitments which have already been made rather than new programs.
One optimistic note or “bright spot” was water. Thanks to voter approval of the Water Bond, he said there is now a solid program to deal with the drought and talked about the need to recharge aquifers, manage groundwater, and invest in new technologies. “Water goes to the heart of what California is and what it has been over centuries.”
California’s deferred maintenance is estimated at $77 billion and “most of that is in our roads, highways, and bridges.” Since “we have no choice but to maintain our transportation infrastructure…sooner rather than later, we have to bite the bullet and enact new fees and taxes for this purpose. Ideology and politics stand in the way, but, one way or another, the roads must be fixed.”
Regarding pensions and retiree health benefits for state and university employees, he said “we have promised our workers these benefits in exchange for a career spent in serving the public” and “it is our moral obligation to” keep those promises. He referenced the $72 billion liability to pay for future retiree health benefits for which “we have set aside only a token amount”, an apparent reference to his bargaining table proposals to have employees and the state begin sharing the cost of prefunding those benefits.
For the text of the Governor’s speech, click here.
A “gadfly” is defined in Webster’s dictionary as “an intentionally annoying person who stimulates or provokes others by persistent irritating criticism.” Chuck Reed and Carl DeMaio once again filed proposed initiatives to weaken or destroy public employee pensions in California, then abandoned the effort when they could get no financial or other support. They have now officially dropped any attempt to gather signatures to qualify their anti-pension measures for the November 2016 ballot. They now threaten to refile and attempt to qualify a measure for 2018.
You may have received a notice from your department, mailed to your home, regarding forms that will be furnished to you to show that you have health plan coverage which satisfies the requirements of the federal Affordable Care Act (ACA). The material you received is for informational purposes only and you do not need to respond. You will probably receive Form 1095-C from the State Controller’s Office and Form 1095-B from your health plan provider to assist you in filing your 2015 federal income tax return to demonstrate that you had the required health coverage in 2015. CalHR recommends that if you have questions, you should contact your health coverage provider (Blue Shield, Kaiser, PERSChoice, etc.) or visit the federal website at www.irs.gov/aca.
January 13, 2016
Printed copies of the new Unit 9 Memorandum of Understanding (MOU) are now available. Simply click here to send us an email to make the request. The MOU is also posted on the PECG website.
The Legislative Analyst has provided his annual Overview of the Governor’s Budget. In essence, he agrees with Governor Brown’s “emphasis on reserves”.
The Governor would add $1.1 billion to the State’s Discretionary Reserve, doubling the current amount. He would also add the required $2.6 billion to the State’s Constitutional Rainy Day Fund, and an additional optional $2 billion. The total reserves of both funds would grow to $10.2 billion.
The Governor would allocate $2.6 billion (including $2.1 billion General Fund) for infrastructure. Most of it would be to renovate state office buildings but a portion of the remainder would be for state highways and local roads. The Governor (in proposed separate legislation) wants to raise $3.6 billion in Special Funds each year for additional transportation funding, which would include $1.5 billion to rehabilitate state highways, most of it going into the Caltrans SHOPP program.
Regarding the latter, the Governor’s Budget, without additional funding, would increase the Caltrans $10.5 billion annual budget by $2 million next year. As he would reduce the Capital Outlay Support (major engineering) program by $200 million (allocating more money to state operations and local assistance), the Department’s approximately 20,000 employees would be reduced by 114. This assumes that there will be no additional funding for transportation in the coming year.
You may recall that Chuck Reed and Carl DeMaio, two long-time public employee pension opponents, had filed two measures with the Secretary of State’s Office to be submitted to the voters in November if they are able to gather the 585,000 signatures of registered voters to qualify one of the measures. Either measure would slash funding for pensions and other retirement benefits for new hires.
They have 180 days to collect the signatures. More than one month has already gone by, and there has been no effort thus far to collect signatures.
On Monday, the U.S. Supreme Court heard oral arguments in a lawsuit filed by some teachers in Orange County, challenging the constitutionality of fair share fees. For nearly 40 years, the Courts have ruled that fair share fees are constitutional if permitted by state law and if feepayers are not obligated to support political causes they object to. However, the U.S. Supreme Court is more conservative than some of their predecessors, so such long-standing precedents could be changed.
It is anticipated that a ruling will be issued by June. The Court could rule that fair share fees continue to be constitutional, they could become unconstitutional, or the Court could rule somewhere in the middle. For example, the Court could more specifically define activities for which feepayers could be charged, change the procedures they use to object or opt out, or make some other change in the way fees are charged or collected.
In California, for state employees, fair share fees ‑‑ fees charged to non-members in a State Bargaining Unit for contract negotiations and other representation ‑‑ are permitted by state law if the State (the Governor) and the union/employee organization agree to do so. The Supreme Court ruling in June may or may not change that arrangement.
January 5, 2016
Happy New Year to you and your family! 2016 begins with the return of the Legislature to Sacramento. The Special Sessions in the fall on health care and transportation did not result in any new legislation so those issues remain unresolved. Water will also continue to be a major issue with the drought, El Niño, and measures before the Legislature and on the 2016 ballot. The Governor continues his support for twin tunnels to convey water through (or under) the Sacramento Delta.
The Governor will present his proposed Budget on Thursday (January 7) along with delivering his annual State of the State speech at a date and time which has not yet been firmed up. Revenue projections indicate billions of additional funds being available over the next 18 months (compared to earlier projections) and continuing growth in the Rainy Day Fund. This could make it more difficult to get approval for raising taxes and/or fees to generate additional funds for transportation and will impact efforts to continue the previously voter-approved temporary income tax increase.
Mileage reimbursement for personal vehicles on state business is based on the federal rate which went to 54 cents per mile in January.
Pacific Gas and Electric (PG&E) continues to be in trouble with the Public Utilities Commission. The PUC’s Office of Ratepayer Advocates has recommended a $163 million fine for PG&E’s “intentional misrepresentation” regarding the safety of 1,000 miles of natural gas pipelines. The Office’s role is to serve as an advocate for utility ratepayers.