March 10, 2017

In Washington D.C., a new Administration with a Republican majority in Congress is in its second month seeking to implement a change in direction with new policies, new appointees, plenty of controversy, and, of course, tweeting. In Sacramento, the Brown Administration enters its final two years with Democratic majorities in both houses of the Legislature, relatively calm waters, and a list of still-unresolved issues.

While the philosophical and the political differences are as far apart as Sacramento and Washington D.C., many of the problems and issues are the same. Chief among these is repairing the nation’s and California’s crumbling infrastructure.

In Washington, President Trump has proposed a $1 trillion infrastructure program over 10 years, emphasizing transportation, energy, and water. Legislators have come up with alternative proposals.  The President recommends “public and private capital” as funding sources but has not offered specifics. That issue is now competing for attention with repealing and replacing the Affordable Care Act (ObamaCare) and the President’s proposal to increase military spending by $54 billion, cutting other programs, particularly EPA.

In California, the Governor and Legislative leaders have been proposing raising an additional $4 billion to $7 billion per year for transportation. Those proposals have been on the table for more than a year but no consensus has been reached. Meanwhile, congestion and potholes increase. The Oroville Dam problem serves as a reminder that transportation isn’t the only infrastructure need to be addressed.

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PECG has been active in these arenas. Last week, PECG leaders were in Washington D.C., participating in the annual American Association of State Highway and Transportation Officials (AASHTO) Washington Briefing and the Association of California Water Agencies Conference, meeting with key Members of Congress and Administration officials. PECG is also one of the leaders of the National Association of State Highway and Transportation Unions (NASHTU), consisting of PECG’s counterpart organizations in other states. NASHTU seeks additional transportation funding while opposing wasteful outsourcing of public engineering and related services.

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February 19-25 was Engineers Week in California and nationally. State Senator Anthony Cannella authored Senate Resolution 18, which recognizes the “unique knowledge and skill” of California’s 328,000 practicing engineers and “the contributions of engineering professionals to the betterment of humankind.” PECG President Robert Lumahan joined Senator Cannella and leaders of other organizations in the Senate Chamber to mark the adoption of the Resolution.

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The latest PECG Informer noted that PECG cosponsors Science and Engineering Fairs in Sacramento, Los Angeles, the Inland Empire, San Diego, Central California (Fresno), and Alameda. PECG members who are interested in serving as judges for high school and middle school projects or related activities should contact your PECG Section leaders to offer your assistance in helping students become more interested in seeking a career in engineering or a related profession.

February 22, 2017

It was little more than a week ago that the heavy rains and the damaged spillway filled the lake behind Oroville Dam. This necessitated using the emergency spillway for the first time in the dam’s 48-year history. Concerns about both spillways resulted in the evacuation of 200,000 residents in Oroville, Marysville, and other downstream communities.

In the ensuing days, the main spillway continues to function, despite the damage, the lake level has been lowered, and repairs are being made to the emergency spillway in case it needs to be used again. Evacuees returned to their homes after two nights.

This unfortunate event has once again focused public attention on the need to repair and upgrade our bridges, highways, dams, waterways, and other key infrastructure. Our compliments to the Engineers and other emergency personnel who worked around the clock on damage repair and emergency evacuation efforts.

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The monthly meeting with PECG leaders, Caltrans Director Malcolm Dougherty, and staff occurred last week. The Oroville Dam situation was at the top of the agenda. Other topics included increased transportation funding proposed by the Governor and legislative leadership; the potential impact on staffing needs; continuing NEPA federal environmental delegation to Caltrans; supervisory pay issues; and PECG’s California Bridge Building Competition, which involves high school and middle school students designing and building model bridges out of wood for cash prizes and the chance to move on to a national competition. PECG thanks Caltrans for their support and assistance with this event.

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CalPERS has reported that its projections for future earnings continue to drop due to low inflation and a change in their investment strategy. This could trigger the need for increased employer contributions in the future in order to ensure that the pension plan for state employees and other public agencies remains adequately funded and stable.

February 14, 2017

The Sunday night mandatory evacuation of 200,000 people in the area below Oroville Dam, including Marysville and other communities, has been lifted as of 1:00 p.m. today (Tuesday) and residents are free to return to their homes. Butte County Sheriff Kory Honea said “it is safe to reduce the order to an evacuation warning” which means that residents must remain vigilant “in case the situation changes”.

Damage to the main spillway from the dam after a series of heavy storms resulted in reduced outflows and filling of the lake to capacity. This necessitated opening the emergency spillway for the first time in the 48 year history of the structure. The area below the emergency spillway was unpaved, causing concerns that the spillway itself could be undermined. That triggered the evacuation order on Sunday evening.

By Tuesday afternoon, clear skies resulted in reduced flow into the lake behind the dam. Increasing outflow to 100,000 cubic feet per second gradually dropped the water level from 901 feet to 889 feet, eliminating the need to utilize the emergency spillway.

Governor Jerry Brown had declared an emergency, seeking federal assistance. In praising the Department of Water Resources, he said “we have to depend on the professionals and the engineers. They tell us what we need, and then we do it.” Acting DWR Director Bill Croyle said “our goal is to remove as much water from the reservoir as possible so we don’t have to use” the emergency spillway, which is currently being strengthened by placing large rocks into the eroded area. Meanwhile, DWR observed “there is no further erosion of the (main) spillway” and “clear water is coming out because it’s hitting bedrock.” DWR’s goal is to reduce the lake level to 850 feet by this weekend.

PECG commends the DWR Engineers and other personnel who responded and worked around the clock to address this emergency situation, as well as Caltrans personnel who facilitated the evacuation Sunday night.

The Caltrans District 3 Marysville office was closed on Monday and Tuesday and affected employees were provided with paid Administrative Time Off (ATO). Caltrans has informed PECG that employees are expected to return to work on Wednesday but “management will certainly consider employee requests to take additional time off on a case by case basis.”

February 7, 2017

PECG’s annual Legislative Day and Reception at the State Capitol occurred earlier this week. Several dozen PECG leaders and members came to Sacramento to meet with their State Senators, Assembly Members and staff during the day, and then join them for a PECG-sponsored evening reception (co-hosted by CAPS, representing State scientists) under the Capitol Rotunda. PECG urged legislative support on several issues, including additional funding to repair and improve California’s infrastructure.

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Chunks of concrete washed out from the 3,000-foot-long Oroville Dam spillway, resulting in plumes of water shooting up in the air, a crater more than 200 feet long, and a reduction in water release from the second-largest reservoir in California. Outflow has been reduced and periodically shut down as DWR Engineers analyze and inspect the damage and develop solutions.

Due to continuing rainfall and runoff in the area, the lake is currently 87% full and rising. Continued release of water is expected to further erode the lower portion of the spillway, but acting DWR Director Bill Croyle says “we do not believe there’s an imminent danger to the dam, or the flood control… gates that we operate, or the public.” An emergency spillway and additional releases of water from downstream reservoirs are among alternatives being analyzed.

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Two weeks ago we reported that the President has recommended $1 trillion to be spent over the next ten years on infrastructure projects throughout the country, but less than 1% of that funding would be for projects in California. The Governor’s office has responded to a request from the National Governors Association by proposing a list of 51 California projects which would cost more than $100 billion. The project list seeks federal funding for state highway, water conveyance (including California Water Fix), High-Speed Rail/light rail/transit, flood control, water recycling, and energy storage projects throughout California.

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In addition to major legislation such as the State Budget, there are thousands of bills that are considered by the Legislature each year dealing with a variety of topics. One example is the current federal delegation of NEPA (National Environmental Policy Act) authority to Caltrans. For nearly ten years, Caltrans has been delegated the authority to assume federal responsibility to streamline the environmental review and approval process, resulting in substantial time and cost savings. California is one of five states which has received that delegation.

One of the requirements is that California periodically enact legislation which waives sovereign immunity, meaning that the State would have to defend itself in court against lawsuits or claims challenging the Caltrans-approved NEPA document.

Last year, the bill to provide that waiver became part of another bill which did not pass. Therefore, Assembly Bill 28, by Assembly Transportation Committee Chair Jim Frazier, has been introduced and is on the “fast track” to get approval before March 31. Otherwise, many projects could be delayed.

PECG testified in Legislative hearings in support of the bill. It is anticipated that the bill will be passed by the Legislature and signed by the Governor in time to prevent project delays.

January 26, 2017

The Trump Administration has been in Office for only a week and already there is a lot going on. Amid a flurry of Executive Orders and nominations of candidates for Cabinet positions, the President has followed up on his earlier proposal for a trillion dollar infrastructure program over the next 10 years.

The National Governors’ Association had requested the states to provide projects to be nominated for the potential program. Meanwhile, a list of 50 such projects appears to have been issued by either the White House or the incoming transition team – there is some question (as this is written) if the list is authorized, issued prematurely, or not valid at all.

The original proposal from the Trump campaign, issued just prior to the November election, proposed $167 billion in federal corporate tax credits with additional funding coming from increased corporate and payroll tax revenue, along with Public Private Partnerships with revenue streams such as tolls on toll roads.

The new priority list of projects would cost $ 137.5 billion, half from “private investment”. Three of the projects are in California – the Cadiz Valley Water Conveyance Project ($250 million), the Huntington Beach Desalination Plant ($350 million), and Energy Storage and Grid Modernization at an unspecified cost.

This week, U.S. Senate Democrats issued their own trillion dollar federal infrastructure proposal. It specified the general areas for the expenditures over the next 10 years, such as reconstructing roads and bridges, rehabilitating water and sewer, addressing ports and waterways, etc., without specifying individual projects. Unlike the President’s proposal (or nonproposal), the Senate Democrats’ proposal would be funded by “closing tax loopholes used by corporations and super-wealthy individuals”, rather than offering tax credits to corporations and seeking private funding.

Meanwhile, the President has signed an Executive Order to proceed with construction of “the wall” along the southern border of the United States, including California. It is preliminarily estimated to cost around $20 billion. Congress has not (yet) authorized the funding. The President continues to insist that Mexico will either pay for the wall or in some form reimburse the United States for the cost. This morning, the President of Mexico cancelled his scheduled visit to meet with President Trump in Washington D.C.

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In his annual State of the State speech, Governor Brown has historically gone into some detail in laying out “a specific agenda for the year” for California, as a follow-up to his annual State Budget proposal. On Tuesday, after listing the accomplishments of his Administration over the last six years, he focused on “the broader context of our country and its challenges”. Citing the need for “truth, civility, (and) working together” while criticizing initial statements and actions of the incoming federal administration, he discussed four general topics.

  • “In California, immigrants are an integral part of who we are and what we’ve become… We will defend everybody who has come here for a better life.”
  • “Over five million (Californians) now enjoy” the benefits of the Affordable Care Act.
  • The science is clear on climate change and “the danger is real”. California has been a leader on renewable energy. “We cannot fall back and give in to the climate deniers.”
  • Infrastructure is a topic on which Sacramento and Washington can work together.

The Governor also talked about the importance of truth in a democracy; working with California Republicans; perseverance; and concluded with “California is not turning back. Not now, not ever.”

For the text of the Governor’s speech, click here.

January 18, 2017

Transportation funding continues to be a hot issue in Sacramento and Washington D.C. The Governor and the Chairs of the Transportation Committees in the Senate and Assembly have each proposed multi-billion dollar revenue plans for increasing transportation funding in California. Meanwhile, although multi-year federal transportation funding legislation was enacted in late 2015, President-Elect Trump has reopened the issue by proposing a ten-year trillion dollar infrastructure plan based on corporate tax credits, leveraging, private funds, and payroll taxes.

In Sacramento, the Chairs of both Transportation Committees (Senator Beall and Assembly Member Frazier) will continue in those positions, although the Committee members in the Assembly have not yet been selected.

In Washington, President-Elect Trump has nominated Elaine Chao to be the U.S. Secretary of Transportation. Ms. Chao was Secretary of Labor and Deputy Secretary of Transportation in the previous Bush Administrations and is married to the U.S. Senate Majority Leader.

The key U.S. Senate Committee for transportation is Environment and Public Works, formerly Chaired by Senator Barbara Boxer of California, who just retired. Newly-elected California Senator Kamala Harris has been appointed to that Committee. In the House of Representatives, California is well represented on the Transportation and Infrastructure Committee with nine members – Democrats Grace Napolitano, John Garamendi, Jared Huffman, Julia Brownley, Alan Lowenthal, and Mark DeSaulnier and Republicans Duncan Hunter, Jeff Denham, and Doug LaMalfa. PECG will be working with all of these elected officials as well as participating in coalitions of organizations seeking increased infrastructure investment.

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Last week, we reported on the Governor’s proposed State Budget for the next fiscal year beginning in July. This week, the Legislative Analyst issued his overview of the Governor’s proposal.

In summary, the Analyst believes the Governor’s estimate of state revenue from the income tax “is probably too low” so there will be more General Fund revenue than he projects. However, due to “new uncertainties” due to the potential for “reduced federal funding”, the Analyst recommends that the Legislature should budget to maintain or increase the projected $9.4 billion in the State’s “Rainy Day” and reserve funds recommended by the Governor.

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Last week PECG leaders met with Tom Howard, Executive Director of the State Water Resources Control Board, and his staff. Topics included classification, examination, and pay issues related to the use of two different engineering classification series within the Division of Drinking Water.

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The monthly meeting between PECG leaders and Caltrans Director Malcolm Dougherty and his staff occurred this week. Discussion topics included projected transportation funding, Caltrans staffing, a new federal regulation which authorizes a pilot project to provide direct transportation funding for local agencies by the federal government, educational programs supported by PECG and Caltrans, and some issues regarding supervisory pay, office safety, and a potential increase in the usage of home storage permits for those driving assigned state vehicles.

January 10, 2017

Governor Brown has issued his proposed 2017-18 State Budget which addresses state revenue and expenditures for the 12-month period beginning next July.

Anticipated revenue into the State’s General Fund (from income, sales, and corporation tax receipts) will be considerably higher than the current fiscal year, but less than what was projected last summer. Total expenditures will remain about the same and the State’s Rainy Day Fund will increase by over $1 billion to a total of nearly $8 billion. In his press conference, the Governor continually emphasized the need to hold down spending, predicting that California is overdue for an economic downturn after years of recovery from the Great Recession.

The Budget Proposal contains funding for employee compensation, including salary and benefit increases resulting from contract negotiations. (Twenty of the State’s 21 Bargaining Units have reached agreement on new MOUs). Funding includes implementing agreements on prefunding retiree health benefits, split equally between the state and employees. The fund will increase to about $1 billion by the end of the next fiscal year and will continue to grow. The State’s contribution to CalPERS for state employee pension costs will increase next year due in part to a reduction in assumed future investment earnings.

For more than a year, the Governor and Legislative leaders have been discussing (without reaching agreement on) increased transportation funding. The Budget Proposal includes the Governor’s proposed 10-year transportation plan for an additional $43 billion, funded primarily with increases in vehicle license fees and the gasoline and diesel excise tax. The biggest single item, $18 billion, is for “Caltrans to fund repairs and maintenance on the State Highway System.” The proposal also includes substantial funding for local road maintenance, the State Transportation Improvement Program (STIP), and “for Caltrans to fund projects along the state’s major trade corridors”.

The proposal would extend the now-expired authorization for Public Private Partnership transportation projects but does not otherwise address outsourcing and other contentious issues. Caltrans staffing for the next fiscal year will probably be covered in the Governor’s May Revise, which will update his January proposal based on the latest information to assist the Legislature in adopting the final budget.

His Budget proposal also addresses the continuing effects of the drought. It would provide additional funding for DWR, WRCB, and other state agencies on a variety of programs. The Governor noted that the State has utilized $3.4 billion in Cap and Trade funds resulting from auctioned reductions of emissions allowances. Recent auctions have not generated much revenue because, in his view, there was “legal uncertainty about Cap and Trade beyond 2020”. Thus, he proposed legislation to extend Cap and Trade authority. This could generate additional revenue to be used in part for his proposed transportation plan and for High-Speed Rail, public transit, affordable housing, and other purposes.

To access the 167-page summary of the Governor’s proposal, click here.