CONSTRUCTOR
COVERING GENERAL BUILDING & GENERAL ENGINEERING CONSTRUCTION agcsd.org
THE MAGAZINE OF THE ASSOCIATED GENERAL CONTRACTORS OF AMERICA, SAN DIEGO CHAPTER, INC.
AGC MAKES EARLY POLITICAL ENDORSEMENTS FOR LOCAL RACES
2020
Plus... Know What’s Below. Call Before You Dig.
Transportation Outlook for Contractors
AGC Hosts 80th Affiliate Day Golf Event
2019 VOLUME 3
THE VOICE OF CONSTRUCTION
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AGC contents
SAN DIEGO
2019 Volume 3
The Associated General Contractors, San Diego Chapter, Inc. 6212 Ferris Square San Diego, CA 92121 Phone (858) 558-7444 Fax (858) 558-8444
@agcsandiego
www.agcsd.org
8 POLITICAL ACTION
AGC Makes Early Political Endorsements as the 2020 Elections Approach
10 ENGINEERING
Transportation Outlook for Contractors 2019-2020
14 NATIONAL NEWS
Eighty Percent of Contractors Report Difficulty Finding Qualified Craft Workers
18 APPRENTICESHIP PLAs – Fact or Fiction???
20 CLC
Hot Rods Showcased During AGC Summer Mixer
More Inside 12 Affiliate Golf
28 Blood Drive
16 EGCA Awards
30 Baseball Bash
22 Calendar
32 Safety
26 Day At The Races
THE VOICE OF CONSTRUCTION 4
AGCSD.ORG
AGC CONSTRUCTOR Magazine is published quarterly. The opinions and assertions contained herein are those of the authors. Reproduction, either whole or in part, is not permitted without the express consent of the publisher. Copyright 2019 by AGC-SD CONSTRUCTOR MAGAZINE. All rights reserved. Advertising rates are available upon request. Call (760) 466-7790. AGC-SD Constructor Magazine, AGC San Diego, or Contractor News and Views are not responsible for content in ads submitted by AGC-SD Constructor Magazine’s advertisers. Publisher: Sandy Caples Editor: Mike Caples Graphic Design: Jennifer Caples Flaharty
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POLITICAL ACTION AGC Makes Early Political Endorsements as the 2020 Elections Approach By Brad Barnum, Executive Vice President
W
ith the March 3, 2020 primary election just around the corner, it’s time to start rallying around candidates who support investing in the region’s infrastructure and understand the importance of fair and open competition. AGC’s Political Action Committee (PAC) has been quite busy this year interviewing candidates, and that will continue in the months ahead. However, it’s time to highlight three candidates who have earned AGC’s early endorsement: District 3 County Supervisor Kristin Gaspar; Poway Mayor Steve Vaus for District 1 County Supervisor; and June Cutter for 77th State Assembly.
in construction. Her comments at past SANDAG and County Board of Supervisors meetings about PLAs excluding 85% of the local workforce have been spot on! Steve Vaus
County Supervisor Gaspar
Mike Furby of Marathon Construction Corp., Thomas L. Brown of Sierra Pacific West, Inc., AGC President Steve Friar of Hensel Phelps and PAC Chair Bill Haithcock with Poway Mayor Steve Vaus. PAC Chair Bill Haithcock of Casper Company, Steve Stroder of Bergelectric, and Mark Dowsing of Orion Construction at PAC meeting with Supervisor Kristin Gaspar.
Supervisor Gaspar's commitment to infrastructure investment is clear, and her launch of the Building Better Roads Initiative was a breath of fresh air for the construction industry. AGC and other industry leaders are now working closely with the county to find solutions to regulatory issues, improve project productivity and industry efficiencies, and implement and evaluate five pilot projects that will test the use of innovative material and construction techniques. As far as fair and open competition is concerned, we have no doubt about her opposition to Project Labor Agreements (PLA). Just ask the Building Trades and IBEW, who have seen and heard first-hand her commitment to a level playing field 8
AGCSD.ORG
In the course of about 20 seconds during a June 26 PAC interview, it became apparent who AGC would support. When asked about his opposition to PLAs, and his commitment to fair and open competition, Poway Mayor Steve Vaus stared right into the eyes of the PAC member and said, "You can take that to the bank." The stare continued for about 10 seconds, the temperature dropped ten degrees, and it was so quiet you could hear a pin drop! We have heard this commitment for fair and open competition before from many candidates. Unfortunately, a number of them who are now elected officials have veered away from that promise. Mayor Vaus is a proven leader, and he is the Chair of the San Diego Association of Governments, where leadership is a must as they try to come up with a multi-billion dollar long-term transportation
plan. As far as leading County government, his answer: "Staff needs to find ways to say yes, rather than excuses to say no.” That is leadership! June Cutter
Thomas L. Brown with June Cutter.
With long-time Republican Assemblyman Brain Maienschein changing political parties mid-stream in his career, the time is now to find a candidate committed to the construction industry and business community as a whole. We have found that candidate in June Cutter! June started her legal career in 2002, working on construction defect matters, and developed a business litigation practice serving construction industry clients throughout Southern California. She continues her employment law practice as Senior Counsel for Reden & Reden, APC in Rancho Bernardo. June’s business background is important in this current economic climate. She is a strong supporter of fair and open competition, and she opposes PLAs.
What’s Next The political season is in full swing, and although the candidate filing deadline isn’t until later this fall, there are several high-profile races underway with well-known candidates already campaigning. Here is a sampling: • San Diego Mayor: Council Member Barbara Bry; State Assembly Member Todd Gloria • City Attorney: City Attorney Mara Elliott; Attorney Cory Briggs • District 1 County Board of Supervisors: State Senator Ben Hueso; Port Commissioner Rafael Castellanos; Southwestern College Trustee Nora Vargas • San Diego City Council - No incumbents are running in four San Diego City Council districts. Republican Scott Sherman, and Republican turned-independent Mark Kersey are termedout of District’s 7 and 5, respectively. This sets up for a battle between the business community and progressive Democrats, and there is a chance Council Member Chris Cate could end up as the lone Republican on the nine-seat City Council come December 2020. Busy times are ahead for AGC’s PAC as it continues to interview candidates and support those who believe in fair and open competition and investing in the region’s infrastructure. If you would like to join the PAC and participate in the political process, please contact AGC’s PAC Chair Bill Haithcock of Casper Company at billh@caspercompany.com or AGC’s Executive Vice President Brad Barnum at bbarnum@agcsd. org.
AGCSD.ORG
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ENGINEERING Transportation Outlook for Contractors 2019-2020 By Mike McManus, Director of Engineering Construction & Industry Relations
activities. This is consistent with the continued implementation of SB 1. We would rate it as “a promise kept”. The Caltrans construction program has not grown as was expected due to SB 1, which is driving the perception that the promises are not being kept. The reality is that Caltrans is playing catch up and is in the process of developing projects for future delivery and that is reflected in this year’s budget. We generally think promises are being kept, and we will be evaluating the efficiency piece of the promises as we get additional information. The construction outlook in transportation has three separate components to look at; each part has opportunities and challenges as we move forward. Let’s review the evolving picture at the State, Federal and local levels. State The perception of some contractors is that we paid handsomely by fighting off Proposition 6 last fall to protect the SB1 funding increases for transportation. But, perception-wise, the promises of SB 1 and the “no on Proposition 6 campaign” have yet to be met. Remember the promises were not only a massive increase in funding for transportation projects, but also reforms and efficiencies at Caltrans to address what some industry observers, fairly or unfairly, consider to be a bloated overstaffed bureaucracy. So let’s look at what the facts are. The first place to look to see if promises are being kept is this year’s state budget. The budget proposes total expenditures of $14.6 billion for Caltrans in the present fiscal year. This is $5.1 billion, or about 53 percent, higher than the expenditures in the 2017/2018 fiscal year, which reflects the pre-SB1 funding levels for Caltrans. The budget includes a total of about $2 billion in SB 1 funding for state highway maintenance and repair, bridge and culvert repairs, enhancements to the state’s trade corridors, and various other 10 AGCSD.ORG
San Diego According to the League of California Cities, there will be an influx of State gas tax dollars for cities and counties across the state. For the San Diego region, we estimate that to be an additional $1.5 billion for road repairs across the cities in San Diego County, including our county roads. All public works staff we have spoken to confirm there is a significant new funding level to maintain roads, which is badly needed. SB 1 also had some significant annual funding for congestion relief, transit projects and active transportation projects among other small programs. SANDAG has done well in competing for those funds, and we expect that to continue as new opportunities to compete come up. What we can expect here in this region is two initiatives moving forward. The first is an anticipated MTS proposal to hike the county sales tax to increase funding for transit. This is still being fleshed out as to what parts of the county it will apply to, how much the tax hike will be, and what it will fund. We are tracking, this but it is too early to know the specifics. The second initiative is the SANDAG “5 Big Moves” – unveiled at an April joint meeting of the SANDAG Board of Directors, Policy Advisory Committees, and Independent Taxpayer Oversight
2020. Although the legislation does not provide a permanent funding fix for the Highway Trust Fund, bipartisan leaders in the Senate are committed to paying for the bill through user fees.
Committee. Conceptually it includes: • Road Pricing • High-speed Transit • Mobility Hubs • Shared Vehicles • New Technology AGC has consistently promoted the idea of a balanced approach in transportation, between highways, roads, and transit; which this plan is not consistent with. The next steps for the SANDAG board will to deliberate on the future of transportation in San Diego which will be outlined in the 2021 Regional Transportation Plan. Then they need to figure out the cost of the new vision and how we are going to pay for it. We will be tracking that. Federal On July 30, the Senate Environment and Public Works (EPW) Committee unanimously voted to approve America's Transportation Infrastructure Act (ATIA). ATIA covers the highway portion of the reauthorization legislation and provides $287 billion in contract authority for the federal-aid highway program over five years beginning at the expiration of the FAST Act on September 30,
AGC urges its members to contact their U.S. Representatives and U.S. Senators to encourage them to pass a robust highway and transit bill. Visit agcsd.org and select Government Relations on the homepage, then choose Take Action to send an email. If you want to get the latest in Transportation issues, attend AGC's 2019 Highway and Utility Contractors Conference, as it is the place to get ahead of your competition on all the issues impacting the highway, bridge, transit and utility construction markets. Find out the latest information about next year's elections, Federal legislation, funding, regulations, technology, safety, workforce and other developing industry trends from top industry experts. This year's conference is scheduled for November 6-8, 2019, at the Lowes Ventana Canyon Desert Resort in Tucson, Arizona. To register for the conference, visit https:// meetings.agc.org/JCC/highway/
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Title Sponsors: Alliant Insurance Services and Moss Adams LLP
NATIONAL NEWS Eighty Percent Of Contractors Report Difficulty Finding Qualified Craft Workers To Hire As Firms Give Low Marks To Quality Of New Worker Pipeline Reprinted news release from the Associated General Contractors of America website
Firms Are Boosting Pay and Benefits, Adding New Training Programs and Adopting New Technologies to Cope, but Labor Shortages Threaten Broader Economic Growth as Officials Outline Federal Measures to Help. Eighty percent of construction firms report they are having a hard time filling hourly craft positions that represent the bulk of the construction workforce, according to the results of an industry-wide survey released today by Autodesk and the Associated General Contractors of America. Association officials said the industry was taking a range of steps to address the situation but called on federal officials to takes steps to assist those industry efforts. “Workforce shortages remain one of the single most significant threats to the construction industry,” said Stephen E. Sandherr, AGC’s chief executive officer. “However, construction labor shortages are a challenge that can be fixed, and this association will continue to do everything in its power to make sure that happens.” Of the nearly 2,000 survey respondents, 80 percent said they are having difficulty filling hourly craft positions, Sandherr noted. All four regions of the country are experiencing similarly severe craft worker shortages, with 83 percent of contractors in the West and South reporting a hard time filling hourly craft positions, almost identical to the 81 percent rate in the Midwest and 75 percent rate in the Northeast. Seventy-three percent of firms report it will continue to be hard, or get even harder, to find hourly craft workers over the next 12 months. One reason for their worries is that contractors are skeptical of the quality of the pipeline for recruiting and preparing new craft personnel. Forty-five percent say the local pipeline for preparing well-trained and skilled workers is poor, and 26 percent say the pipeline for finding workers who can pass a drug test is poor. Labor shortages are prompting many firms to boost pay and compensation. Two-thirds of firms report they have increased base pay rates for craft workers. Twenty-nine percent report they are providing incentives and bonuses to attract craft workers. Firms are also taking a greater role in developing their own workforce. Forty-six percent report that have launched or expanded in-house training programs and half report getting involved in career building programs. “Construction workforce shortages are prompting many firms to innovate their way to greater productivity,” said Allison Scott, head of construction integrated marketing at Autodesk. “As the cost of labor continues to increase and firms look to become even more efficient, technology can enable better collaboration and ultimately lead to more predictable outcomes. There is also opportunity in untapped 14 AGCSD.ORG
pools of talent such as tradeswomen, veterans, and young people looking for an alternative to the traditional four-year university.� Scott noted that 29 percent of firms report they are investing in technology to supplement worker duties. One-fourth of firms report they are using cutting-edge solutions, including drones, robots and 3-D printers. Meanwhile, 23 percent of firms report they are taking steps to improve jobsite performance by relying on lean construction techniques, using tools like Building Information Modeling and doing more off-site prefabrication. Even as the industry works to address labor shortages, 44 percent of firms report they are increasing construction prices and 29 percent are putting longer completion times into their bids for new work because of the lack of workers, putting future development and infrastructure projects at risk. Association officials called on the federal government to boost funding for career and technical education. They also called on federal leaders to allow more immigrants to enter the country to work in construction, let construction students at community and career colleges qualify for federal Pell Grants, and make it easier for firms to establish apprenticeship and other training programs. The national survey results, analysis of the data and regional and state-by-state results are available at https://www.agc.org/news/2019/08/27/eighty-percent-contractors-report-difficulty-finding-qualifiedcraft-workers-hire
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EGCA FOUNDATION Honoree and Scholarship Awards Mixer & Dinner August 15, 2019
Title Sponsors: Trench Shoring Company and RDO Equipment Co.
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APPRENTICESHIP PLAs – Fact or Fiction??? By Pete Saucedo, Executive Director - AGC Apprenticeship
At nearly every government agency, school board, etc., both small and large, organized labor has a team of individuals who actively pitch project labor agreements (PLAs). Labor has had success at several levels in peddling PLAs, most recently at the San Diego Airport Authority, as well as various school districts, and some large private projects too. While in a court of law, for example, both sides through their attorneys argue the merits of a case, and the most persuasive argument typically prevails. With PLAs, labor has stacked the deck so to speak. They do not rely on the merits of a PLA to sell itself, rather the Building Trades actively support politicians, and once elected, they persuade those same supported politicians to introduce and pass a PLA. This strategy has been successful with some entities, although when a vote is put to the people, the electorate has consistently rejected PLAs. The Fallacy Labor’s hired guns eloquently tout that PLAs are primarily about four things: - Local hire - Labor harmony/no strike clauses - Veteran outreach and utilization on projects - Apprenticeship utilization and training All these things sound great on its face, and who wouldn’t support these important concepts? The Reality What Labor officials do not tell politicians is the real motive behind their efforts. PLAs are a political tool to gain market share - period. There are two main components of a PLA that support this reality: 1. Labor wants their workers to perform the work. 2. They want union dues and all fringe benefit dollars to go into their trust funds/coffers. This often amounts to tens of millions of dollars on large bond issues. 18 AGCSD.ORG
These are the only two reasons why Labor consistently pushes PLAs locally and statewide. And how do we know? Because we have offered to negotiate a PLA with all the benefits that Labor claims (local hire, veteran outreach, labor harmony, and apprenticeship utilization) but without those two major provisions (the contractor can use their own workers, and all fringe benefit money can go to any bona fide third-party fund in accordance with state prevailing wage laws). Labor will never agree to such a modified PLA because it doesn’t accomplish the two primary goals previously stated: they want their workers to perform the work, and they want the money (and not necessarily in that order!). Based on objective data and also testimony of large general contractors who have performed both PLA and non-PLA work, the costs of a PLA project will increase somewhere between 10-20%. The primary reason is reduced bidders. Many open-shop subcontractors will not even bid a PLA project because they can’t utilize their own team, and for the very few core workers a non-union contractor may use, their fringe benefit monies are often gobbled up by the system with the worker receiving absolutely no benefit (i.e., pension contributions where a worker doesn’t work five years to vest are often forfeited in their entirety). On a bond issue of say $500 million, a PLA can cost an extra $50-$100 million in excess costs due to the union only provisions. $50-$100 million buys a lot of buildings, and PLAs promote economic waste on several levels. So why would any board ever pass a PLA? Politics, plain and simple.
Apprenticeship One of the major provisions of a PLA expressly bans the use of non-union apprentices, even though these same apprentices come from programs like the AGC that are state and federally approved. This amounts to discrimination, and again, is a tactic by Labor to gain market share through politics. In any shape or form, discrimination is always wrong. ALWAYS WRONG! In several public hearings regarding the merits of a PLA, local Building Trades leader, Tom Lemmon, has openly stated that his union programs are “the Harvard” of apprenticeship programs. While we acknowledge that many union apprenticeship programs are of high quality, the one metric the state of California uses to evaluate programs are graduation rates. In the most recent stats published by the DIR, the AGC graduation rate for Laborers is 62.7%, the union Laborer program’s rate is 4.8%. For Carpenters, the union program graduates 23.3%, while the AGC graduates 65.1%. A resounding difference in our two largest trades. AGC Philosophy The formal AGC position both locally and nationally is we strongly oppose government-mandated PLAs. AGC is committed to free and open competition for all publicly funded work and believes that the lawful labor relations policies and practices of private construction contractors should not be a factor in a government agency’s selection process. AGC believes that neither a public project owner nor its representatives should compel any firm to change its lawful labor practices to compete for or perform public work, as PLAs effectively do. AGC also believes that government mandates for PLAs can restrain competition, drive up costs, cause delays, lead to jobsite disputes, and disrupt local collective bargaining.
best. Labor self-proclaims they are the Harvard of apprenticeship, the best of the best. But those bold claims beg perhaps the most important question of all: If union training programs are the best, and therefore their workers are the best trained, why do they need a political solution to guarantee market share? If you are the best, you go into the courtroom, onto the field or court, or onto a construction project and you beat your competition! You don’t need to stack the deck by electing politicians that will guarantee work. Labor’s primary strategy of imposing PLAs wherever they can is unethical. It’s discriminatory, it’s anti-competitive, and it’s simply un-American. The New England Patriots have won six Super Bowls and are generally regarded as the best team in the league, if not all time. Can you imagine a scenario where they lobby politicians, so they don’t even have to play the game; they just cut straight to closing ceremony and are awarded the Super Bowl trophy. It is not opinion or rhetoric – if you look at the actions of labor officials themselves, they are screaming out loud that their constituency cannot compete in the open market. If they could, why would they continuously push for political options that guarantee the work and guarantee they will receive the money? Either they are the best, and therefore they can compete and win in the open market, or maybe they are not the best in spite of what union leadership alleges, and they truly need the government handout? The AGC is comprised of both union and non-union contractors. We do not support only one side – we promote the entire industry. And we absolutely do not support the use of discriminatory and wasteful PLAs!
In contrast to the discriminatory tactics of Labor, the AGC believes that all workers (both union and non-union) and all contractors (both union and nonunion) should have the right to work on and build publicly funded projects. The Question The AGC has acknowledged both locally and nationally that union programs are some of the AGCSD.ORG 19
CLC Hot Rods Showcased During AGC Summer Mixer By Kellie Korhonen, Digital Communications & Technology Manager
A colorful variety of classic cars, trucks and hot rods lined up in the AGC San Diego parking lot for the 7th annual Summer Mixer & Car Show hosted by AGC’s Construction Leadership Council (CLC) in July. The event brought over 230 AGC members, local industry partners, public officials and public agency leaders together in a casual environment to network and form relationships with other industry professionals. Attendees enjoyed the local microbreweries on tap and delicious eats from local food trucks. The event serves as an open house for the wide range of activities and services offered by AGC San Diego. It would not be possible without our CLC committee volunteers, our many sponsors and event partner, National Electrical Contractors Association (NECA) San Diego Chapter, who sponsored the food and beverages. The CLC is part of the nationwide AGC organization that provides an open forum for early to mid-career construction professionals to receive training, network, socialize with peers, and exchange ideas on special issues facing the construction industry. For more information or to join, please contact Kellie Korhonen at kellie@agcsd.org.
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AGCSD.ORG 21
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Register at www.agcsd.org
UPCOMING EVENTS
JOIN US...
FALL GOLF CLASSIC - OCTOBER 7 @ Country Club of Rancho Bernardo
Spend the afternoon on the golf course for this tournament set for 144 players - lunch and dinner included! Registration available online, but limited spots remain.
TECH TALK LUNCHEON - OCTOBER 15 9 AM TO 1 PM
Learn about ‘Emerging Construction Site Technology’ in this half day event at AGC San Diego. Registration information available online.
BUILD SAN DIEGO AWARDS NOVEMBER 5 @ Hilton San Diego Bayfront
Celebrate the construction industry at this awards luncheon. Registration information available online.
HOLIDAY DINER DANCE DECEMBER 7 @ Hotel Del Coronado
An elegant evening full of holiday cheer. Registration information available online. 22 AGCSD.ORG
AGCSD.ORG 23
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AGCSD.ORG 25
DAY AT THE Sponsors: Bob Stall Chevrolet/Business Elite; Kyne Construction, Inc.; Trench Shoring Company; Trillium Construction
Races July 19, 2019
618 PINTS COLLECTED THANK YOU 2019 Blood Drive Hosts Acme Safety & Supply Corp. Balfour Beatty Construction Dynalectric Company
21 pints 24 pints 31 pints
Countywide Mechanical Systems, Inc.
37 pints
Erickson-Hall Construction Co. (Escondido)
103 pints
Erickson-Hall Construction Co. (Garden Grove) Erickson-Hall Construction Co. (Riverside) Hawthorne Cat Hensel Phelps
19 pints 36 pints 33 pints 22 pints 22 pints
Mack Packaging Oldcastle Infrastructure
24 pints
Soltek Pacific Swinerton Sundt Construction, Inc. TC Construction Co., Inc.
Largest Blood Drive in the County
25 pints
PeopleReady Skilled Trades Sherwood Mechanical, Inc.
4th
31 pints 34 pints 34 pints
AGC
41 pints 81 pints
SAVE THE DATES 2020 BLOOD DRIVE JULY 13 - 17, 2020 If your company would like to host the drive at your office, please contact: Marcy: marcy@agcsd.org (858) 731-8162 28 AGCSD.ORG
San Diego History Center
RISK... needs to be managed.
Construction of Coronado Bridge, circa 1969
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June 18, 2019 At Petco Park
Title Sponsor: Swinerton
AGCSD.ORG 31
SAFETY Know What’s Below. Call Before You Dig. By Sara A. Prince, SDGE Communications Manager
Underground pipelines can be located anywhere, including under streets, sidewalks and private property – sometimes just inches below the surface. Hitting one of these pipelines while digging, planting or doing demolition work can cause serious injury, property damage and loss of utility service. That's why it's important to know where they are before you dig. Whether you’re planning to build a major development or just landscaping your yard, make sure to call Underground Service Alert at 811 at least two working days before excavating. Underground Service Alert will coordinate with SDG&E and other utility owners in the area to mark the locations of buried utility-owned lines absolutely FREE. You can also request a ticket online through call811.com. The Underground Service Alert is available between 6 a.m. and 7 p.m., Monday through Friday (excluding holidays). What To Do: • MARK OUT your proposed excavation area in white paint or provide other suitable markings. • CALL Underground Service Alert at 811 from 6 a.m. to 7 p.m. Monday through Friday (excluding holidays) or submit a location request online at call811.com at least two working days before digging.
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• WAIT until either we mark our natural gas pipelines and indicate pipe material and diameter or advise you the area is clear before you start digging. • REMEMBER that we use only yellow paint, flags or stakes to mark out the location of our natural gas pipes. Other utility owners use other colors to mark their telephone, communications, water or other underground lines. • USE ONLY HAND TOOLS within 24 inches of each marked utility line to carefully expose the exact locations of all lines before using any power excavation equipment in the area. • REPORT any pipe damage by calling us immediately at 1-800-411-7343. No damage is too small to report. Even a slight gouge, scrape or dent to a pipeline, the coating, or any component attached to or running alongside the pipe, such as a wire, may cause a dangerous break or leak in the future. NOTE: SDG&E does not mark customer-owned natural gas lines, which typically run from the natural gas meter to the customer's natural gas equipment and appliances. To have customerowned lines located and marked before a project, you should contact a qualified pipe-locating professional. Even if you've hired a contractor, make sure the contractor calls 811 to have the natural gas lines marked.
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