October 4, 2017

David Miller has been elected to one of the two Member-at-Large seats (Position A) on the CalPERS Board of Administration. Miller, a state scientist who was endorsed by PECG, received 64% of the votes.

Michael Bilbrey, who was also endorsed by PECG, was the leading vote getter as he sought re-election to Position B. Because he received 41% of the vote but not a majority, he will face a runoff election next month.

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Friday, October 6, is the final date in the open enrollment period to make changes to your health benefit plan or coverage. Information and materials can be found on the CalPERS website.

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Governor Brown’s proposal to build twin tunnels under the Sacramento-San Joaquin Delta to improve water deliveries to the south has survived numerous legal and other challenges thus far. It now faces another hurdle – funding to finance the $17 billion project.

The concept has been that the water users south of the Delta would pay for the project to correspond to the volume of water they receive. However, the federal Bureau of Reclamation has proposed that some groups would be exempt based on agreements dating back to the 1930s and federal law exemptions for Wildlife Refuges. This led to a decision by the Board for Westlands Water District, the largest of all water agencies in the Central Valley, to vote 7 to 1 not to financially participate, based on a concern that their contribution would be double what they think their share should be. Whether an agreement can be reached to provide the funding in some manner remains to be seen.

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Several months ago, President Trump proposed that the federal government authorize $1 trillion over the next ten years to help fund the nation’s infrastructure. Approximately 20% of that would be federal funding, with the remainder being leveraged from other sources, using Public Private Partnerships (P3s) and other techniques. However, in late September at a meeting with a group of lawmakers, attendees reported that President Trump said that P3s are “more trouble than they’re worth” and it “didn’t work” when they were tried in Indiana, the Vice President’s home state. (This apparently was in reference to Interstate 69, a P3 project that went bankrupt, leaving Indiana with an unfinished project and a $500 million debt.)

The federal Department of Transportation is proposing a rule to eliminate regulations which serve as impediments to P3s. In addition to citing the need for cost comparisons and transparency, PECG’s response noted the comment from the President.

September 20, 2017

Ballots to elect two members of the CalPERS Board of Administration were mailed to all state employees and retirees over a one week period, beginning on September 1. If you have not received your ballot materials in the mail, call CalPERS at (916) 795-3007.

This year, for the first time, you can choose to vote online at www.calpersboardelections.com. You will have to utilize your Personal Identification Number (PIN) which is in the ballot package you received in the mail.

As a reminder, your PECG Board of Directors unanimously endorsed David Miller, a former state employee organization President, for Position A, and Michael Bilbrey, an incumbent running for re-election, for Position B. Both have demonstrated their commitment over many years to protecting the defined benefit pension plan, improving CalPERS investment performance, and ensuring affordable health care premiums.

The close of balloting for this important election is October 2.

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The open enrollment period for making any changes to your health care plan ends on October 6. An analysis of the premiums which will take effect in January for each of the health plans, including your out-of-pocket cost, is provided on this website at 2018 Health Plan Premiums.

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Current law requires the Division of Safety of Dams in the Department of Water Resources (DWR) to inspect more than 1,200 dams “from time to time”. AB 1270 by Assembly Member James Gallagher would require more rigorous inspection, either annually or semiannually, depending on the hazard potential.

The bill was approved by the Assembly and Senate Committees unanimously but ran out of time as the Legislature recessed last Friday for the remainder of the year. Thus, the bill, which PECG supports, is being held over until the Legislature returns in January.

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The monthly PECG and Caltrans meeting was held last week. The main issue was the status of hiring to fill hundreds of vacancies in engineering and other positions to achieve the expanded program resulting from Senate Bill 1. PECG has been working with Caltrans management to expedite the hiring process. Other topics included salaries for Senior Telecommunications Engineers and Party Chiefs, an office move for employees in the Division of Research, Innovation and Systems Information (DRISI), an issue with the elevators in the District 3 (Marysville) office, and the PECG/Caltrans joint sponsorship of the ongoing AASHTO program to provide teacher training modules for students on bridge design and other transportation engineering-related programs.

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Two years ago, an engineering professor at Virginia Tech, Marc Edwards, held a press conference to issue a warning of elevated levels of lead in water for homes in Flint, Michigan. This resulted in a nationally publicized story and increased attention on drinking water infrastructure.

Last week, on the second anniversary of the press conference, Edwards announced that the lead levels in Flint were now within federal guidelines. While the U.S. EPA’s lead and copper standards are met, he recommends that EPA establish a more stringent standard. He is also testing water samples, upon request, for other cities as well as individuals.

September 6, 2017

Whoops! to yesterday’s Weekly Update on CoBen, the combined employer contribution for health, dental, and vision care for supervisors and managers. We erroneously listed the state’s contribution for retirees, which is based on a different formula. Our apologies for any confusion this may have caused.

For supervisors and managers, the state’s current contribution is $643 for employee only, $1,248 for two-party, and $1,617 for family. On January 1, 2018, the state’s CoBen contribution will increase to $663/$1,281/$1,658 per month.

September 5, 2017

CalPERS has mailed ballots to all active and retired members to elect the two Member-at-Large positions on the CalPERS Board of Administration. Your PECG Board of Directors has unanimously endorsed David Miller for Position A and Michael Bilbrey for Position B for these two important Board seats.

The 13-member Board is responsible for administering retirement benefits for 1.8 million current and retired state and local agency employees (and their beneficiaries) as well as the health benefits for most of them. PECG has worked closely with David Miller, former President of the California Association of Professional Scientists (CAPS), for many years. In 2005, David was a co-founder of Californians for Retirement Security (CRS), a coalition which includes PECG. CRS has been active in protecting the defined benefit plan, improving CalPERS investment performance, and ensuring high quality and affordable health care. David has been endorsed by more than a dozen organizations representing state and local public employees, as well as State Treasurer John Chiang and State Controller Betty Yee.

Michael Bilbrey, also endorsed by PECG, other public employee organizations, and the majority of CalPERS Board members, is seeking re-election. Michael has served well on the CalPERS Board over the past six years, as demonstrated by signatures from nearly 10,000 active and retired members supporting his re-election. Defending the current defined benefit plan and retirement security is Michael’s top priority.

How do you vote? For the first time, there are three ways to cast your ballot. Ballot materials were mailed to all CalPERS members on Friday in a bright blue envelope. To vote, follow the instructions and complete the ballot. You must sign your name in the proper spot and return it in the prepaid return envelope.

An alternative is to go to www.calpersboardelections.com and follow the instructions on the screen. You will need your Personal Identification Number (PIN) which is on the ballot card in the ballot package.

The third alternative is to call (800) 270-7146 and follow the instructions. You will also need your PIN for identification purposes.

Your vote is important! Though the voting deadline is October 2, PECG encourages you to vote now, whichever method you select. The CalPERS Board of Administration is important – it administers your retirement benefits and health plans – which is why PECG has endorsed David Miller for Position A and Michael Bilbrey for Position B.

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The open enrollment period for making changes to your health plan coverage begins on September 11 and continues through October 6. PECG Informer #5 included the new health plan premiums which take effect in January, as well as the state’s contribution and employee contribution for Unit 9. The new health plan premiums are listed on the PECG website here.

PECG-represented supervisors and managers are covered by CoBen which provides a combined employer contribution for health, dental, and vision care. The current monthly state contribution is $707 for employee only, $1,349 for two-party, and $1,727 for family.

On January 1, the state’s CoBen contribution will increase to $725/$1,377/$1,766 per month.

September 1, 2017

Your paystub probably reflected a deduction for something called CERBT. That stands for the California Employers’ Retiree Benefit Trust. The current Unit 9 Memorandum of Understanding (MOU), which included last year’s and this year’s pay raises, also included a provision to start prefunding retiree health care. For Unit 9 employees and their supervisors, it begins with a 0.5% of salary contribution effective July 1, 2017. This is less than the contribution for most other Bargaining Units and is matched with a state contribution. Its purpose is to reduce the “unfunded liability” for retiree health care which has received substantial negative public and media attention.

The contribution was supposed to begin with the July payroll (your August 1 paycheck), but the State Controller was unable to process the deduction in time. The actual deduction of 0.5% is based on “pensionable compensation” rather than total salary, so the actual amount deducted may differ slightly from 0.5% of your gross salary.

August 30, 2017

Cathrina Barros has been elected as PECG Corporate President Elect for the next year. Cathrina is a Senior Transportation Engineer in Caltrans Headquarters in Sacramento. The current President Elect, Sutida Bergquist, a Senior Sanitary Engineer with the Water Resources Control Board in Glendale, becomes President and the current President, Robert Lumahan, a Transportation Engineer in San Diego, becomes Past President.

Corporate Officers who were re-elected include Matt Hanson as Vice President-Collective Bargaining and Chair of the Bargaining Team; Steve Lee as Vice President-Supervisory and Chair of the Meet and Confer Team; Kristi Shelton, Vice President At Large and a member of the Bargaining Team; and Jane Pham, Corporate Secretary. Aaron Henkel, a Senior Transportation Engineer in San Luis Obispo, was elected as Treasurer.

All of the Officers will be installed on September 9 and will serve for one year.

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Construction on the Lake Oroville Dam Spillway is proceeding on or ahead of schedule with a goal of completing this year’s portion of the work on the main spillway by November 1. That is considered a “conservative date” because the main spillway has only been used prior to January 1 four times in 49 years.  Demolition, excavation, and preparation has been completed for the 2,270 feet of the main spillway that will be reconstructed this year. Placement of reinforced structural concrete is 25% complete. Construction of the emergency spillway, which was utilized for the first time this year, is scheduled to be finished in late December or early January. The remaining construction work, including the addition of structural concrete to the entire spillway, will be completed in 2018.

August 16, 2017

The California Public Employees Retirement System (CalPERS) has reported that the net return (earnings) on investments for the 12-month fiscal year ending on June 30 was 11.2%. The total funds now contain more than $323 billion. CalPERS had recently reduced its assumed earnings rate for the future from 7.5% to 7%, so the 11.2% actual return is certainly good news.

Several months ago, CalPERS decided to reduce its investments in private and public equity (such as the stock market), which earned 13.9% to 19.7% this year, and increase its “stable” investments, such as real estate, which earned 7.4%. Nationally, public employee pensions saw a median gain of 12.4%.

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As reported earlier, ballots to elect two of the thirteen members of the CalPERS Board of Administration will be mailed on September 1 to all state employees and retirees, as well as participating local agency employees. The PECG Board of Directors has unanimously endorsed David Miller for Position A. David is a state scientist and former President of the California Association of Professional Scientists (CAPS). He has also been endorsed by State Treasurer John Chiang, State Controller Betty Yee (both of them are members of the Board), and every public employee labor organization which has taken a position. PECG also has unanimously endorsed Michael Bilbrey for Position B. Michael is running for re-election and has done an excellent job in serving the interests of active and retired employees.

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Volkswagen will be paying an additional $154 million in penalties to California on top of the $1.3 billion previously required. This resulted from Volkswagen’s use of illegal “defeat devices” to bypass emissions control equipment in more than half a million of its vehicles nationally. After extensive testing by California Air Resources Board Engineers and Air Pollution Specialists (represented by PECG), the company finally admitted what it had done. Legal actions resulted in substantial fines and penalties for Volkswagen in California and throughout the nation.

August 4, 2017

In addition to receiving the 2% salary increase on July 1, PECG-represented employees and the state were supposed to start contributing 0.5% each to a fund to start prepaying retiree health plan premiums. However, the State Controller’s current system only allows them to process that deduction a month in arrears. This means that the August paycheck should reflect the 0.5% deduction for July. At some point in the future, it is likely they will fix the system so deductions, like pay increases, will be made on time.

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CalPERS has announced that the open enrollment period for making changes to your Health Benefit plan will run from September 11 through October 6. Members can add eligible family members, make changes to existing plans, or switch to a different CalPERS health plan. PECG Informer #5 listed all of the CalPERS health plans, their current and new premiums (as of next January), and the state and employee contribution for each. For more information, go to my.calpers.ca.gov. CalPERS announced that the average premium increase of 2.3% next year is the lowest in 20 years, but individual plan premiums vary considerably.

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The CalPERS Board of Administration consists of 13 members who administer all facets of the pension program and contract with health plan providers. The two Member-at-Large positions on the Board will be filled through election this year. All active and retired PERS members will be eligible to vote.

A ballot package will be mailed to all PERS members (including Unit 9, Supervisory, and Managerial employees) on September 1 with information and instructions on how to vote. The options include voting online, by telephone, or by paper ballot. Voting ends on October 2.

One of the seats, called Position A, is vacant because the incumbent is not running for re-election. PECG has endorsed David Miller, a state scientist and a former President of the California Association of Professional Scientists (CAPS), who has also been endorsed by State Treasurer John Chiang, State Controller Betty Yee, and numerous public employee labor organizations. PECG has also endorsed Michael Bilbrey for Position B. A former President of the California School Employees Association, Bilbrey has served well and is running for re-election.

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The monthly meeting between Caltrans Director Malcolm Dougherty and his staff and PECG leaders was held last week. The Director reported that $286 million of major maintenance projects are being advertised and $460 million of SHOPP projects will be accelerated and moved into the current fiscal year due to the increased funding from Senate Bill 1. This increase in fuel and vehicle taxes and fees will provide substantial, increased transportation funding this year and in the future.

Hiring employees to achieve this increased program has been slow, but Caltrans is seeking to fill more than 400 vacancies this year and may seek authority to add additional positions as required. Several thousand Capital Outlay Support (engineering and other) positions have been eliminated in recent years due to reductions in funding, so this is the first step in adding staff to achieve the increased program.

Other topics discussed at the meeting included pay increases for some supervisory classes which did not receive the full raises provided to others and some specific classification and promotional exam issues.

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Back in Washington, Congressional Committees are drafting early versions of a comprehensive infrastructure bill. PECG has provided the Senate Committee on Environment and Public Works with recommendations, including increasing the investment in infrastructure, addressing the shortfall of funding in the Highway Trust fund, requiring inspection by public engineers on federally-funded surface transportation projects, and conducting cost comparisons when consideration is being given to outsourcing engineering and related services.

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Finally, in addition to addressing these “big picture” issues, PECG continually represents individual employees with work-related problems. In one recent case, a department rescinded a scheduled layoff of a PECG-represented Unit 9 employee due to his “Super SROA status”. There is a unique provision in the Unit 9 MOU (Section 13.1.g) which requires any state department seeking to fill a vacancy to offer the position to a Unit 9 employee facing layoff if he or she meets the minimum qualifications for the vacancy. As a result of this provision, which is not included in the MOUs for other Bargaining Units, the affected employee was offered and accepted a position in another state department.

July 20, 2017

State employed supervisors and managers are enrolled in the Consolidated Benefits Program (CoBen). This provides a single state payment to cover some or all of the premium contributions for health, dental, and vision coverage.

For PECG-represented supervisors and managers, the state’s contribution is based on the 85%/80% formula for health premiums, the same as for Bargaining Unit 9 employees.

For 2018, the state’s CoBen monthly contribution will increase from $643 to $663 for single, from $1248 to $1,281 for two-party, and from $1617 to $1,658 for family coverage.

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The ballots for electing PECG Corporate Officers for next year have been mailed to the homes of all PECG members. If you have not received your ballot, that probably means the PECG Office does not have your current mailing address. To update your address so you can receive ballots, the PECG Informer, and other information and materials, please respond to this email with your current mailing address.

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Grant Davis has been appointed Department of Water Resources (DWR) Director by Governor Brown. Mr. Davis has been General Manager of the Sonoma County Water Agency since 2009. He succeeds Acting Director Bill Croyle, who retired last month. The appointment requires confirmation by the State Senate.

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The Legislature has approved a bill to extend the authorization of the state’s Cap and Trade program, sending Assembly Bill 398 to the Governor for his signature. The program requires companies which emit greenhouse gases above an authorized level to reduce emissions or buy permits to offset the effects. The legislation was strongly supported by Governor Brown. Eight Republicans joined all but three Democrats in achieving the two-thirds vote of approval. Extending the Cap and Trade program to 2030 is intended to help achieve California’s goal of reducing greenhouse gas emissions to 40% below the 1990 levels.

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The $17 billion proposed project to construct twin tunnels under the Delta to convey water to the south continues to run into resistance from a variety of sources. While federal environmental regulations removed one potential obstacle, a meeting in Coalinga earlier this week highlighted the concerns and objections from some farmers and growers to the estimated increased cost. The project is expected to improve the reliability of water delivery but not necessarily increase the quantity. Water agencies are expected to decide in September whether they are willing to provide the funding for the project to continue.

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PECG members have access to a number of members-only discounts and other programs. One benefit which is available to everyone who is age 62 or older, not just PECG members, is a Senior Pass for access to hundreds of national parks and sites around the country. The cost of this lifetime Senior Pass will increase from $10 to $80 on August 28. For more information, click here.

July 7, 2017

Bargaining Unit 9 employees and all PECG-represented Supervisors and Managers received a 2% salary increase effective July 1. The provisions of the Unit 9 Memorandum of Understanding (MOU) contained a 5% pay increase last July and 2% this month, which was also applied to PECG’s Supervisors and Managers. Bargaining on a new MOU will be undertaken next spring to negotiate salary and benefit increases for next July and beyond. PECG’s Supervisory Meet and Confer team will also be meeting with CalHR, representing the Governor’s Office, on behalf of PECG-represented Supervisors and Managers.

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Ballots for the election of PECG Corporate Officers will be mailed to members’ homes on July 11. If you don’t receive your ballot, it may mean that we do not have your current mailing address. Please contact the PECG office to update that information. Several Sections will also be conducting elections of Section Officers in the coming weeks.

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Members and fee payers will also be receiving a PECG Informer later this month showing the premiums to take effect on January 1, 2018 for the various health plans. The State’s contribution and the employee’s out-of-pocket cost will also be presented to assist you in determining whether you wish to change your coverage or plan provider during the open enrollment period from September 11 to October 6.

June 29, 2017

The annual salary survey conducted jointly by CalHR and PECG has been completed. It shows the current salary lag (prior to the 2% salary increase that all PECG-represented employees will receive on July 1) is 3.5% for Range A/B; 5.3% for Journey/Range D/Associate; and 5.0% for Senior/Supervisor. The survey will be updated later this year prior to contract negotiations for a new MOU next spring. For more information on the survey, click here.

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Two federal agencies have released a report which concludes that the proposed twin tunnels under the Sacramento Delta “will not jeopardize or threaten endangered species, or adversely modify their critical habitat.” Governor Brown has been a strong proponent for the 35-mile twin tunnels to change the way in which water is conveyed through and beyond the Delta. As reported earlier, some of the largest water agencies are expected to decide in September whether they wish to fund the project, currently estimated to cost $17.1 billion.

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Increased hiring in Caltrans (due to the increased funding provided in Senate Bill 1) should also lead to promotional opportunities, at least as far as filling vacant Senior and higher level positions. Currently, promotional exams for Senior Transportation Engineer and Senior Bridge Engineer are offered on a continuous basis. The final filing date for the Senior Transportation Surveyor, Caltrans exam is July 7. The final filing date for the Senior Transportation Electrical Engineer (Specialist) and Senior Transportation Electrical Engineer (Supervisor) is July 18. Interested applicants should go to the Caltrans website or call (916) 227-7858 for more information.

June 23, 2017

CalPERS has completed negotiations with the various health plan providers to establish monthly premiums for next year. On average, premiums will increase by 2.3% beginning in January, but vary widely by provider. For example, Kaiser premiums will increase by 8.2% while Blue Shield Access+ premiums will drop by 9.4%, although they will still be higher than Kaiser. The premiums for all three PERS PPO plans – PERSCare, PERS Choice, and PERS Select – will drop in 2018.

The state’s share of the premiums for PECG-represented employees, based on a weighted average percentage of the four most utilized plans, are still being calculated. Once that figure is determined, PECG will publish all of the data, including your out of pocket cost, in an upcoming Informer to assist you in determining whether you want to make any changes to your health plan choices during the open enrollment period from September 11 to October 6.

For those of you who want to get a sneak preview for what the rates will be in 2018, click here.

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A key decision point may be nearing for the Governor’s proposed controversial twin 40-foot diameter tunnels to convey water under the Sacramento Delta. The state’s largest water agencies have set a September deadline to determine whether they wish to pay for the project. The cost and who pays for it, the amount of water to be delivered, a variety of environmental impacts, and numerous other issues have been debated for years. The anticipated September decisions by the affected water agencies could be a major step in determining whether the project proceeds.

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The Legislature approved a $183 billion State Budget package and sent it to the Governor for his approval by the end of the month. While the Governor could “blue pencil” or reduce some items, the Budget bills were the result of negotiations, so major reductions are not anticipated.

The Budget includes a 2% salary increase on July 1 for all PECG-represented employees (Unit 9 and related Supervisors) and funding for the state’s share of anticipated health plan premium increases in January. In addition to funding the state’s $5.8 billion contribution to CalPERS for state employee pensions, the Governor also proposed, and the Legislature agreed, to include an additional $6 billion to help reduce the unfunded pension liability in the future.

The Budget includes authorization for hiring more than 400 Caltrans engineers and other employees to fill vacancies in the Capital Outlay Support (COS) program. This was the result of the Legislature’s approval of an increase in fuel and vehicle taxes to fund improvements to transportation infrastructure. New positions are also authorized at the Water Resources Control Board.

PECG members at the Division of the State Architect (DSA) review and approve plans for public school projects for conformance with structural, fire/life safety, and accessibility building requirements. The maximum allowable fee has been less than 1% of the project cost and has not changed since 1981. As that funding level is now inadequate to support DSA’s function, the Budget authorizes an increase in the cap.

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The monthly meeting between Caltrans management and PECG occurred last week. In addition to hiring and staffing increases, discussion topics included federal reimbursement for storm damage and other activities; the Senior Transportation Electrical Engineer exam; Caltrans’ participation in the AB 2800 working group which addresses the projected impact of climate change on state infrastructure engineering; and the success of the California middle school team in taking second place at the National AASHTO Bridge Building Competition. The California team was the winner in the PECG-sponsored California Model Bridge Building competition earlier this year. To view a video, click here.

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You are receiving these Weekly Update emails, but are you also getting information PECG is mailing to your home address? PECG’s latest Informer newsletter, #3 dated June 2017, was mailed to you (members and fee payers) last Friday. It featured “Storm damage and SB 1” as the lead article. Two upcoming Informers will include detailed information on the 2018 health plan premiums, including the new rates and your out-of-pocket cost, plus PECG election information and a ballot so you can vote for next year’s Corporate Officers.

If you have not yet received that Informer #3 which was mailed to your home address, that means we don’t have your current home address. Please email us with your mailing address so we can send this and other useful information to you.

June 9, 2017

The Unit 9 Memorandum of Understanding (MOU) contains a variety of benefits. While some are provided automatically, a few require employees to request them.

One of these is professional leave (MOU Section 5.15). Each fiscal year, a Unit 9 employee can request 16 hours for professional growth activity “at the employee’s discretion”, which “shall be requested and approved in the same manner as vacation/annual leave.” However, the professional leave is not accumulated from year to year, so if it is not utilized by June 30, it will be lost.

Licensed employees are reimbursed up to $100 per fiscal year for dues paid to a job-related professional society or organization (MOU Section 3.3). Also, in addition to the listed eleven holidays per year, the MOU (Article 9.1) provides that employees are entitled to one additional personal holiday per fiscal year.

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The Legislative Analyst has published an “overview” of Senate Bill 1, the recently approved measure to increase transportation funding by $5.2 billion per year. Our previous Weekly Updates have discussed various aspects of the measure and PECG’s involvement in identifying and assisting job applicants to fill the hundreds of vacancies in the Caltrans engineering program.

In prior years, the Analyst has recommended taking a meat cleaver to Caltrans Capital Outlay Support (COS) staff, slashing it by as much as 3,500 positions without substantiating rationale. This latest report scales back that approach by simply stating that “our office in the past has recommended having Caltrans operate more efficiently” by reducing its COS staff.

The Analyst also discussed proposed Assembly Constitutional Amendment 5 which will be placed on the June 2018 ballot. It would require that the increased funding from SB 1 be restricted to specified transportation purposes. This addresses a concern that the additional transportation funds might be utilized for other purposes.

May 19, 2017

Preliminary health plan premium rates for 2018 have been released. These are not final but are the result of negotiations so far between CalPERS and the health plan providers.

In 2017, the Kaiser premiums were virtually unchanged from the previous year. The 2018 rates are expected to increase about 8%. Blue Shield Access+ premiums increased this year and are projected to drop back by about 7.5% to the 2016 rates. Even with those changes, Kaiser premiums in 2018 will still be less than Blue Shield. Again, these rates are preliminary and will not be finalized until June.

The premiums for PERS Choice and PERS Select will vary by about 1%, while PERSCare premiums will drop

Regarding coverage, several plans will expand to additional counties and there will be no withdrawals or reductions in service. In 2018, Western Health Advantage will be added, available in some Bay Area and Northern California counties.

Once the data is finalized, PECG will provide members with the new rates, employee contributions for each plan, changes from the current year, and other information. There will be an open enrollment period in the fall so employees can have the opportunity to make changes to their coverage prior to the new rates going into effect in January.

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If you wish to cash out any of your unused vacation or annual leave, you must do so by submitting a written request to your Department before the end of May. Caltrans is allowing up to 40 hours of cashout and most other Departments are permitting up to 80 hours. For those who make the request, cashout payments by the State will be made in June.


Caltrans had notified employees that they must utilize any personal leave resulting from the PLP 2011 program prior to using vacation or annual leave. While this may be true for most employees, it does not apply to Unit 9 employees represented by PECG due to MOU Section 5.14. Caltrans has acknowledged the misinterpretation. Thus, if you wish to use vacation and retain PLP 2011 time you may do so, although PLP 2011 time must be used (not cashed out) before leaving state service.

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Senate Bill 1, which authorizes $5.2 billion of additional transportation funding per year, was signed into law by the Governor in late April. In anticipation that Caltrans would need to fill hundreds of additional engineering and other positions in the coming months, PECG asked members to notify us of engineering graduates or others who might be interested in applying for these jobs. More than 700 members responded with names and contact information. As a result, PECG provided information to more than 1,300 potential job applicants regarding the process for applying for the jobs and getting on the hiring lists.

At the moment, it appears that substantial increases in staff will not occur immediately but hundreds of vacant Caltrans positions, plus ongoing attrition, will be filled with new hires. Additional authorization could occur in the coming months. Meanwhile, hundreds of new applicants are on the hiring lists, so there is no shortage of well-qualified candidates.

May 12, 2017

Each year in mid-May, the Governor issues his “May Revision” to the State Budget, which is an update to his January proposal for the 2017-18 fiscal year. Yesterday, Governor Brown proposed a $183 billion State Budget, including $124 billion in General Fund expenditures, for the upcoming fiscal year beginning in July. Projected revenues are $2.5 billion higher than he predicted in January but $3.3 billion below his Budget forecast from last year.

In his presentation, the Governor emphasized concerns regarding the future of the economy and potential substantial cuts in federal funding, such as Medicare and Medicaid.

In addition to the state’s scheduled $5.8 billion contribution to CalPERS for state employee pensions next year, the Governor is proposing an additional $6 billion supplemental payment to reduce the pension obligation in future years. Also, by the end of the 2017-18 fiscal year, the contributions from the state and the employees (shared equally) will build the Trust Fund for retiree health benefits to more than $1 billion, further reducing future unfunded liabilities.

Caltrans staffing is once again front and center, particularly in light of the recent passage of Senate Bill 1, which provides $5.2 billion per year to repair and improve freeways, highways, local roads, bridges, and other transportation. The funding is split evenly between the State and local agencies.

Prior to SB 1, Caltrans had anticipated that its engineering and related work, including Capital Outlay Support (COS), would be reduced (through attrition) by 243 positions in the upcoming fiscal year. In anticipation of that, 400 COS vacancies are unfilled. In light of the increased funding program, the Governor has proposed that those positions be reinstated and filled during the 2017-18 fiscal year. PECG has been working closely with Caltrans to identify and recruit applicants for those positions to ensure that hiring won’t be delayed due to a lack of qualified candidates.

PECG has encouraged Caltrans and the Administration to immediately begin filling the hundreds of additional positions that would be needed to accomplish this increased program. The Governor’s proposal does not include additional positions but Agency and Caltrans management stated that such authorization could be sought during the fiscal year. The latest Budget figures show that, for Capital Outlay Support, an outsourced consultant continues to cost twice as much as a Caltrans employee. PECG will oppose any increased outsourcing if new positions are authorized in the coming months.

For several other agencies and departments, staffing changes would be minor. The initial contract to repair the Oroville Dam will cost $275 million and at this point there is an open question regarding who will pay for it. The Governor’s Budget does not include funding at this time. It would authorize $387 million to accelerate flood control projects over the next two years and additional evaluation of older dams beyond the current visual evaluation process. The Governor has been very complimentary of the Department of Water Resources and its engineers. He noted in his proposal that DWR’s Division of Safety of Dams “is nationally recognized and inspects 1,250 public and private dams annually.”

Now that the Governor has released his Budget proposal, negotiations between his Office and the Legislature will get underway. It is expected that the State Budget for the 2017-18 fiscal year beginning July 1 will be approved by the June 15 deadline after going through the Legislative Committee process and approval of both the Senate and the Assembly.

May 8, 2017

Section 5.19 of the current Unit 9 Memorandum of Understanding (MOU) authorizes employees to cash out up to 80 hours of accumulated vacation or annual leave if their department has funds available to make the payments. Prior to May 1, each department notifies employees if the cashout will be available and, if so, how much, up to 80 hours. Each employee can then submit a written request during May if they wish to cash out a portion of the leave. Payment will be received in June.

This year, most departments are authorizing employees to cash out up to the full 80-hour limit. These include the Air Resources Board, the Department of Water Resources, the Water Resources Control Board, Department of General Services, CalEPA, Public Utilities Commission, DTSC, the Department of Conservation, and many others. Caltrans is authorizing up to 40 hours. The same authorization applies to supervisors and managers as well as bargaining unit employees.

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Governor Brown has signed Senate Bill 1 into law. The legislation authorizes $5.2 billion per year in additional funding for transportation. Half of the funding is allocated to Caltrans, primarily for the SHOPP to repair and improve freeways, highways, and bridges. PECG has been meeting with Caltrans to address staffing needs and to assist in the hiring of engineers, land surveyors, and others represented by PECG.

It didn’t take long for someone to challenge the measure, even though it received two-thirds approval in each house of the Legislature. Orange County Republican Assemblyman Travis Allen has filed a proposed initiative to ask California voters to disapprove the funding at the November 2018 election. As the first step, he must gather 365,880 signatures from registered voters to place the measure on the ballot.

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Work is underway on repairing the damage to the Oroville Dam spillway. An Independent Board of Consultants generally agrees with the approach recommended by the Department of Water Resources. The plan is to conduct a portion of the repair work prior to November 1, completing the project in 2018 after the next rainy season.

April 21, 2017

The previous Weekly Update reported that Caltrans will be hiring hundreds of engineers and other employees to achieve the expanded program resulting from new legislation which will raise $5.2 billion per year for transportation, split equally between the state and local agencies. PECG has been meeting with Caltrans management to assist Caltrans in identifying and recruiting highly qualified candidates for Unit 9 and other classifications in the Department. PECG asked members and fee payers to let us know if they are aware of engineers or related professionals and college seniors who would be interested in applying for these newly available jobs.

More than 400 PECG members responded with one or more names and contact information for potential candidates! PECG has created a 5-step guide to assist those who are interested in navigating their way through the exam process and applying for available positions. The response by so many members is deeply appreciated as we seek to ensure that Caltrans will have a broad pool of highly qualified candidates to fill the available positions to achieve the expanded program. PECG will be contacting all of the potentially interested applicants to assist them.

If you are aware of anyone who might be interested in working for Caltrans – an engineer or related professional, college senior, recent graduate, or experienced practitioner – please respond to this email. Please include the potential applicant’s email address so we can provide them with the information they’ll need to apply.

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MOU Section 5.19 provides for cashing out accrued vacation/annual leave at the option of each employee. Each department can authorize up to 80 hours to be cashed out each year if funds are available. By the end of April, departments will announce whether they will participate and how many hours will be available for cashout. Employees can submit written requests during May. Thus, departments should be announcing by the end of next week how many hours will be available for employees to cash out if they wish to do so.

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The Department of Water Resources has awarded a contract to Kiewit Infrastructure West Co. to conduct repairs on Oroville Dam’s spillways. Due to the need to begin work immediately so that the spillway will be operable when the rainy season begins next November 1, the contractor will complete the design as well as the construction. Kiewit’s bid of $275 million was well in excess of the Engineer’s Estimate of $232 million but was accepted by the Department and work began immediately. Complete recovery or replacement of the spillways is expected to be undertaken after this initial work is completed.

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The monthly PECG/Caltrans meeting was conducted this week. The main topic was the joint effort to identify and recruit well-qualified candidates for the hiring program. Other issues included a vacation/annual leave cashout; inequity salary increases for Party Chiefs and Senior Telecommunications Engineers; Caltrans’ role in the climate change working group authorized by AB 2800; and participation by Caltrans employees in assisting the Landscape Architects Technical Committee in preparing the next Landscape Architect examination.

April 17, 2017

In anticipation of a continuing reduction in staffing due to a declining workload, about 400 vacancies (half of them engineers) in Caltrans Capital Outlay Support (the primary engineering program) have remained unfilled as the fiscal year comes to an end in June. Legislative approval of the Governor’s proposal to increase transportation funding by $5.2 billion per year, split equally between the state and local agencies, has changed all of that. Instead of a declining workload, Caltrans needs to fill those vacancies and will add an additional 400 to 500 engineering and related positions in the upcoming fiscal year, plus replacing attrition and other factors. Thus, a substantial hiring program for engineers, surveyors, and others is underway, with positions becoming available in most Districts.

PECG met with top Caltrans management on Thursday as the first step in a joint effort to identify well qualified candidates to fill those positions in the coming months. The primary targets are college seniors and recent graduates, but the recruitment effort will go well beyond that. This is the first time in many years that the Department will be substantially increasing its professional staff to accomplish an expanded program and PECG will be assisting the Department in that effort.

If you are aware of an engineer, surveyor, or a related professional (including college seniors) who may be interested in coming to work for Caltrans, please respond to this email. PECG will assist them in applying for a position to begin or continue their professional career on an exciting and expanded Caltrans transportation program!

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Workers continue to repair the damage to the Oroville Dam, including the spillways, in advance of the next rainy season. In response to a request from Governor Brown, President Trump authorized $274 million in federal funds to repair damage to the spillway as part of $540 million authorized thus far by the federal government for storm damage repairs in California.

On Thursday, acting Department of Water Resources Director Bill Croyle discussed work on the emergency spillway and outlined the steps needed to repair, replace, and expand elements of the main spillway.

DWR has been preparing the preliminary design for that project. Three contractors have submitted bids to complete the design and make repairs. The bids ranged from $275 million to $344 million, well above DWR’s estimate of $220 million. The contractor selection is expected to be made shortly. The approval process by federal and other agencies is being expedited so that a substantial portion of the work can be completed by November 1.

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You may recall Chuck Reed and Carl DeMaio, who have been trying for years to place a measure on the ballot to decimate or destroy public employee pensions. DeMaio, a former San Diego politician and currently a talk radio host, is seeking to recall State Senator Josh Newman because he was one of the two-thirds majority in the Legislature voting to approve the $5.2 billion per year increase in transportation funding. DeMaio has stated that his real goal is to replace a Democrat (Newman) with a Republican to cut into the two-thirds supermajority the Democrats currently have in both houses of the Legislature.

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Two pension-related cases are headed to the State Supreme Court. One deals with whether changes to the law, regarding which items can be included in compensation when calculating retirement benefits, can be applied to existing employees as well as new hires. The other addresses whether employees can purchase additional service credits before retiring, even if there is no cost to the employer. A date (or dates) to hear the cases has not yet been set.

April 7, 2017

The Legislature has approved the proposal hammered out by Governor Brown and Legislative leaders to provide $5.2 billion more per year for transportation in California. Funded primarily by increasing the gas tax and adding an annual vehicle fee, the revenue will be split equally between the State and local agencies. Most of the money will be directed toward repairing and improving highways, roads, and bridges, with some of the money going to transit, trade corridors, bicycle, pedestrian, and boating facilities.

The Governor and Legislative leaders imposed a deadline of April 6 (yesterday) to act on the measure. It was passed by the Assembly and Senate late last night in the form of Senate Bill 1, which required a two-thirds vote in each House of the Legislature to be approved. The vote was primarily along party lines, with all but two Democrats voting yes and all but one Republican voting no, resulting in exactly two-thirds in each House. The bill was supported by labor organizations (including PECG), the construction industry, and the Chamber of Commerce, with opposition from some environmental and taxpayer organizations.

As Caltrans develops the program and projects to be achieved with the increased funding, PECG anticipates working closely with the Department to assist in recruiting and hiring the engineers and related professionals who will be needed to implement the program in the coming years.

PECG congratulates the Governor and the Legislature for approving the first significant transportation funding increase in nearly 25 years and thanks the PECG members who contacted their legislators to encourage an “aye” vote on Senate Bill 1.

March 30, 2017

Increased transportation funding for California took a step closer to reality yesterday when Governor Brown and Legislative leaders announced a plan to raise $52 billion over the next ten years “to fix our roads, freeways, and bridges” as well as addressing “transit and safety”. Speaking on the Capitol steps, the Governor, Senate President pro Tem, and Assembly Speaker detailed a plan to raise $5.2 billion per year primarily by raising the gas tax (to an inflation-adjusted level from the last time it was increased in 1994) and an annual fee on vehicles based on the value of the vehicle. Governor Brown estimates that the cost for most drivers will be “less than $10 a month.”

Initially, the Chamber of Commerce and several labor groups support the proposal and Republican legislators are opposed. The bill would require a two-thirds approval vote in both the Senate and Assembly, which would mean virtual unanimity among Democratic legislators.

About half of the funding would be used for repairing state highways, bridges and culverts, plus reducing congestion and improving trade corridors and intercity-transit. The other half would go to local agencies for road repairs, public transportation, and facilities for pedestrians and bicycles. The funding increase would be phased in, with less than $3 billion available in the upcoming fiscal year, then $5.2 billion per year thereafter.

In recent meetings with PECG leaders, Caltrans has indicated that staffing would continue its annual reduction (through attrition) if increased funding is not made available. A funding increase of this magnitude should reverse that trend, potentially adding hundreds of positions to the Capital Outlay Support (engineering) program during the first year and thereafter. While Legislative approval is not certain – a vote on the proposal is expected no later than April 6 – PECG will be meeting with Caltrans to establish and assist in achieving hiring goals to accomplish the work.

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Many counties and regional areas conduct Science and Engineering Fairs in the spring to encourage high school and middle school students to develop a wide range of projects. PECG is a cosponsor of many of these Fairs, providing members for the Fair Boards, judges for the competitions, and in some cases cash prizes for the best engineering projects, as well as financial support for the Fairs.

During the past week, PECG members were once again heavily involved in Fairs held in Sacramento, Los Angeles, Ventura, Riverside, and Orange County. The San Bernardino/Inyo/Mono Fair will be held next week. Many winners from these regional Fairs will be eligible to compete in the California Fair in late April.

A special thanks goes to PECG members throughout the State who volunteer their time to participate as judges or serve other functions at these Fairs to encourage students to consider a career in engineering or a related field. Please go to your PECG Section website to get more information on the local Fairs, projects, and winners in your area.

March 23, 2017

The Legislature and the Governor are continuing to work on a bill to provide additional transportation funding in California. The parties seem to be getting closer to agreeing on the amount which should be provided (around $5 billion per year), the best approach to raise the funds, how the money would be split between the State and local agencies, and the modes of transportation (highway, transit, etc.). The Governor and legislative leaders set April 6 as a goal for reaching agreement on the bill, which would require two-thirds approval of both the Assembly and the Senate.

If additional funding is not provided, Caltrans staff will continue to be reduced next year, with minimal hiring to offset attrition. Additional funding would, of course, increase Caltrans Capital Outlay Support (Engineering Program) staff for the first time in years.

Caltrans is working on $660 million worth of storm repair work, by far the largest number of projects (274 at present) and cost in many years. While federal emergency funding will be sought to reimburse the state, the required Congressional and Administration approval process could take years.

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These were among the topics discussed at the latest monthly meeting this week involving PECG leaders and Caltrans management. Other topics included NEPA delegation legislation (to have Caltrans continue to conduct environmental reviews on behalf of the federal government); salary inequity adjustments for Senior Telecommunications Engineers and Survey Party Chiefs; Caltrans’ role in participating in a working group involving scientists and state engineers to address climate change considerations for infrastructure; a correction to a Caltrans policy on the use of personal leave and vacation; and Caltrans support for employees assisting in preparing the state examination for Landscape Architects.

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The Brown Administration has prepared draft legislation which would amend several of the current civil service statutes. While the stated goals of the legislation are worthwhile, PECG is concerned about many of the provisions. These include requiring probationary periods of up to two years; requiring employees in a deep class to be subjected to a new probationary period when changing ranges; eliminating the rule of three ranks; and ending the current preference for using promotional lists rather than open lists (outside hiring) for filling vacancies. PECG will be meeting with CalHR and its parent Agency to address these concerns.

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The PECG pocket calendar lists March 26 and April 16 as Easter. Actually, there is only one Easter this year, and it is on April 16.

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.