California Asphalt Magazine Environmental Issue 2015 by CMS

Revolutionizing The Way You Pave!

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Publisher’s Letter CalAPA Committees share information, influence policy At our most recent Southern California Contractors’ Dinner meeting, we welcomed representatives from the law firm of Hart-King as our newest associate members. Attorney Kimberly Wind gave an informative presentation on some legal do’s and don’ts every contractor should know, and updated the group on recent court rulings that could impact current and future projects. She was joined by her co-workers, Attorney Christopher Elliott and James Moorhouse, the firm’s marketing manager. It was a great way for the firm, which has expertise in construction law, to introduce themselves to our members and provide valuable information that any contractor could benefit from. But then they took an important next step often overlooked by many CalAPA members: they volunteered to participate in our committees, specifically signing on to our Environmental and Legislative committees. As Elliott told us, the firm believes committee participation is one of the best ways to keep current on looming issues, help the association devise effective strategies and influence the policy debate with regulators, agencies and elected officials. He’s exactly right. As the principal staff liaison to the Environmental Committee, I’m looking forward to Elliott contributing a legal perspective to committee deliberations as we grapple with the frustratingly complex world of environmental regulation and compliance. He joins a committee that boasts a diverse group of experts who have made significant contributions on behalf of our industry over the years. Recently, the Environmental Committee has focused attention on a proposal percolating over at the South Coast Air Quality Management District (SCAQMD), known as “RECLAIM SHAVE.” The Regional Clean Air Incentives Market (RECLAIM) program covers nitrogen oxide and sulfur oxide emissions. The SCAQMD is looking to substantially cut the credits of the 2012 levels. The companies in the RECLAIM program make up about 5 percent of the NOx emissions in the region yet they are taking the brunt of the new proposal. This is part of the SCAQMD rule-making process for the 2016 Air Quality Management Plan (AQMP). At last count, at least 10 CalAPA members are affected by this proposal. CalAPA is participating in a broad-based coalition to ensure the concerns of our industry are adequately addressed by the air district. The coalition includes asphalt producers, oil refiners, aggregate producers and other trade associations, plus large employers and utilities, such as Boeing and Southern California Edison. This is just one example of the good work being done by CalAPA committees to represent the interests of our industry in an organized, united and effective way. Health Risk Assessments, Odor Nuisances, and Water Quality Regulations are also part of the ongoing discussions. There are many different ways to contribute – all you have to do is ask! Sincerely,

Tony Grasso Deputy Executive Director CalAPA 4

California Asphalt Magazine • 2015 Environmental Issue

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Contents 4

Publisher’s Letter

DeSilva Gates Expands their Sunol Aggregate Quarry with a New Asphalt Plant

Industrial Storm Water Program

Caltrans Seeks to Go From Orange to Green

Page 10

Advertiser Index

On the Cover:

DeSilva Gates’ new asphalt plant in Sunol, Calif. Photo supplied by DeSilva Gates.

Page 14

CALIFORNIA ASPHALT PAVEMENT ASSOCIATION www.calapa.net

HEADQUARTERS: EXECUTIVE DIRECTOR: DEPUTY EXECUTIVE DIRECTOR: MEMBER SERVICES MANAGER: TECHNICAL CONSULTANT: GUEST PUBLISHER: PUBLISHED BY: GRAPHIC DESIGN: CONTRIBUTING EDITORS: ADVERTISING SALES:

P.O. Box 981300 • West Sacramento • CA 95798 (Mailing Address) 1550 Harbor Blvd., Suite 211 • West Sacramento • CA 95691 • (866) 498-0761 Russell W. Snyder, rsnyder@calapa.net Tony Grasso, tgrasso@calapa.net Sophie You, syou@calapa.net Rita Leahy, PhD., P.E., rleahy@calapa.net Tony Grasso, CalAPA Construction Marketing Services, LLC • P.O. Box 892977 • Temecula • CA 92589 (909) 772-3121 • Fax (951) 225-9659 Aldo Myftari, aldo@ironads.com Scott Taylor, Alta Environmental, Tina Lau, Lehigh Hanson West Region, Russell W. Snyder, CalAPA, Christopher R. Elliot, Hart King and Bob Mahan, Mahan Insurance Brokers, Inc. Kerry Hoover, CMS, (909) 772-3121 • Fax (951) 225-9659

Copyright © 2015 – All Rights Reserved. No portion of this publication may be reused in any form without prior permission of the California Asphalt Pavement Association. California Asphalt is the official publication of the California Asphalt Pavement Association. This bi-monthly magazine distributes to members of the California Asphalt Pavement Association; contractors; construction material producers; Federal, State and Local Government Officials; and others interested in ensuring that asphalt remains the high quality, high performance pavement choice in the state of California.

California Asphalt Magazine • 2015 Environmental Issue

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DeSilva Gates Expands their Sunol Aggregate Quarry with a New Asphalt Plant By Scott Taylor, Vice President, Air Compliance Services, Alta Environmental

eSilva Gates’ recent completion of their Sunol asphalt plant marks the beginning of providing asphalt from a site long known for aggregates. However it also is the end of a lengthy permitting process that required careful planning, implementing the latest technology, and continuously being flexible and innovative. The installation of this plant will be the latest Hot Mix Asphalt plant in their operations which support the company’s construction division and local and regional projects. DeSilva Gates was prepared for a lengthy environmental process as the Sunol Quarry project required an EIR for the addition of 30 years to their mining operation and a new asphalt plant. The EIR was completed in 2012 and the project received final approval from the county of Alameda in July 2012. After such a thorough and deliberative

California Asphalt Magazine • 2015 Environmental Issue

environmental impact process, the next step in obtaining the air quality permits seemed as though most of the work had been completed. However, the permitting process with the local air districts requires a completely separate review and evaluation process. The permit application and data supplied to the Bay Area AQMD focuses on much greater detail of the equipment and evaluation of the best available control technology to ensure that emissions are controlled to the most stringent standards achieved anywhere. Meeting these strict standards requires the use of the very best technology. The aggregate dryer on the plant was required to meet emission standards for combustion which mandated

the use of natural gas and a low NOx burner. Currently, low NOx is 33 PPMV @ 3 percent O2 for asphalt dryers. The plant will reach the emissions standards with a 125 MMBTU/hr Phoenix Phantom from Astec. Achieving low NOx emissions from the dryer can be challenging but doing it while also being held to emissions standards for carbon monoxide, non-methane organic compounds and Particulate Matter (PM) and other emissions like Benzene, Formaldehyde and Nickel, requires more than just an efficient burner. The plant is also utilizing an Astec double barrel drum to allow mixing to occur separate from the flame. This allows a significant reduction in emissions from the older style dryers which allowed drying and mixing

together in the same drum. Additional control comes from the baghouse which is equipped with bags which use Microdenier felt to achieve the necessary capture efficiency. Bay Area Air Quality Management District requires asphalt plants to meet both a filterable and condensable PM grain loading at their baghouse stacks. While the burner and dryer try to reduce the PM from being created, the dryer air is forced through the baghouses filter media to control the emissions. Compliance with all emission standards is demonstrated through a source test at the stack. At one time new asphalt plants were focused on just the emissions from the dryer and baghouse. Today, as requirements from both the [ Continued on page 12 ]

Background: With a lengthy permitting process, DeSilva Gates Aggregates pushed to set up the plant as quickly as possible. Here the Sunol HMA Plant nears completion.

California Asphalt Magazine â&#x20AC;˘ 2015 Environmental Issue

[ Continued from page 11 ]

County and BAAQMD, become more restrictive, facilities are required to look at other sources of emissions around the plant to obtain even greater emissions control. This includes the asphalt silo storage and loading area. DeSilva Gates will be using six 300 ton asphalt storage silos to store finished asphalt and load it into trucks for delivery to projects. The Sunol plant will be equipped with a separate blue smoke control unit which will provide control for the silos while they are loaded and unloaded. As asphalt is mechanically conveyed from the dryer to the silos and then loaded into trucks, the blended asphalt can create bluesmoke. That bluesmoke will be captured from duct work that is

connected to several locations throughout the material handling process. These pickup points are strategically located where the potential for bluesmoke creation is highest. The bluesmoke ends up in the Astec fiberbed mist collector. The bluesmoke passes through two stages of filters. The first stage removes the largest particles and the second stage utilizes coalescing candle filters to achieve the necessary emission control required. The new Sunol facility also utilizes a number of smaller but equally important control devices and best management practices to reduce emissions to the maximum amount possible. They include a low NOx burner for the oil heater, Mist Eliminators on the asphalt oil tanks, and utilization of water

Below: In order to reduce emissions from truck traffic on haul roads, Desilva Gates Aggregates paves around the facility.

throughout the facility for dust control. The implementation of these technologies minimizes the impact of this operation such that it can meet both the Countyâ&#x20AC;&#x2122;s conditions of approval and the BAAQMDâ&#x20AC;&#x2122;s requirements. The additional benefit to DeSilva Gates is that the facility can meet these standards and operate with a limit of 1,000,000 tons/year of asphalt. This gives the facility the flexibility to handle the production demand of any project that it may need to supply material to now and in the future. Anyone having questions about this article can contact CalAPA Environmental Committee Staff Liason, Tony Grasso, at 916-791-5044. CAM

Industrial Storm Water Program By Tina Lau, Area Environmental Manager, Lehigh Hanson West Region

y the time you’re reading this, the July 1st* implementation date for the Industrial Storm Water General Permit (General Permit) will have come and gone. Your facility’s Notice of Intent (NOI) has been filed, and your Storm Water Pollution Prevention Plan (SWPPP) and site map have been uploaded into the State’s Storm Water Multiple Application and Report Tracking System (SMARTS) website. You’re done and you can relax now, right? Wrong. Unfortunately, the hard work is really just beginning! But take a deep breath, and read over the tips and pointers below. While it’s not a substitute for reading the permit, these suggestions should guide you in getting prepared to implement the new General Permit. Are you ready for your new monitoring program? There is a new definition for what is a qualifying storm event (QSE): a rain event that produces a discharge for at least one drainage area and is preceded by 48 hours with no discharge from any drainage area. This definition will result in more sampling opportunities than under the old permit. There may also be new constituents to sample for based on your facility’s SIC code, pollutant site assessment, and receiving water’s presence on the 303(d) 14

list of impaired waterbodies. Questions to think about: - Are you prepared to comply year-round? There is no longer a “rainy season” in the General Permit. This means storm water discharge observations and sampling occur year-round. - Do you have additional sampling supplies? We are now required to collect 4 samples from QSEs each year: 2 within the first half of each reporting year (July 1 to December 31), and 2 QSEs within the second half of each reporting year (January 1 to June 30). Be sure you are properly staffed and prepared with supplies. - Do you have the right kind of sampling supplies? If your SWPPP identified new sampling constituents, you may need different types of sample bottles with different types of preservatives. Make sure your laboratory is qualified to analyze any new constituents you may have. - How will you be measuring pH? The General Permit requires pH to be measured in the field within 15 minutes of sample collection. You can use litmus paper or pH meters (required if 2 or more pH results are outside range of 6.0 – 9.0 in any reporting year). Do you have either one ready, including calibration solution and protocols for the pH meter if you plan to use a meter?

- Are your samplers trained in the new requirements? Make sure your samplers are trained in proper sampling techniques, and understand the new rules to sampling. For example, samples must now be collected within 4 hours of the start of the discharge, or within 4 hours of the start of facility operations if the QSE occurs within the previous 12-hour period. Make sure you have a system in place for tracking when QSEs occur, and when samples are needed. - Are there new discharge points at your facility? The General Permit requires samples to be collected from each drainage area at all discharge locations, and is more prescriptive about sampling point reductions/combinations. Have all the discharge points been identified, and how will each one be safely accessed during a rain event? Ensure there are appropriate Best Management Practices (BMPs) for any new discharge points. - Who is going upload monitoring results into SMARTS? Sample results need to be uploaded into SMARTS within 30 days of obtaining all results for each sampling event. Ensure you know how to do this, and have access to SMARTS. - Do you have the new inspection forms ready? There are no longer quarterly [ Continued on page 16 ]

California Asphalt Magazine • 2015 Environmental Issue

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[ Continued from page 14 ]

non-storm water discharge observations and October – May monthly storm water discharge observation. Instead, visual observations are required every month, with additional observations required during sampling events. Your monitoring forms will need to be updated. Do you understand the risks at your facility? As you are probably well aware, the General Permit has Numeric Action Levels (NALs). There are instantaneous NALs and annual NALs for the basic parameters (pH, Total Suspended Solids (TSS), and Oil & Grease). But there are also annual NALS for many constituents, including metals. There are too many to include here, but the NALs are listed on Table 2 of the General Permit. All facilities start at Baseline Level. A NAL exceedance will elevate your facility from the Baseline Level to Risk Level 1 for the next reporting year; if the facility is at Level 1, then a NAL exceedance will elevate the facility to Risk Level 2 in the subsequent reporting year. There are 2 types of NAL exceedances: 1. Annual NAL exceedance = when the average concentration for each parameter, using the results of all the sample results for the entire facility, for the reporting year is higher than the NAL. 2. Instantaneous maximum NAL exceedance = when 2 or more analytical results from samples taken for any single parameter within a reporting year is higher than the instantaneous maximum NAL value for TSS or Oil & Grease, or are outside of the instantaneous maximum NAL range for pH. A facility can return to Baseline status from Level 1 or Level 2 if 4 consecutive QSEs 16

sampled subsequent to BMP implementation indicate no additional NAL exceedances. NAL exceedances, and being in a higher Risk Level, are not violations in and of themselves. However, not responding to a NAL exceedance is! Some questions to think about: - What are the chances your facility will enter a higher risk level? Take a look at which pollutants have exceeded the benchmark levels in the past and determine your potential future risks. - If there’s a chance you will enter a higher risk level, what BMPs can you implement now? There may be some simple, cost effective source control BMPs that can be implemented now (such as putting a cover over potential sources of pollutants) to prevent the elevation of Risk Level. - If you get a NAL exceedance, how will you respond? If the results exceeded the annual NAL slightly, it might be worthwhile to collect additional qualifying discharge samples after implementing BMP improvements. The additional sample could take your average results down below average NAL levels (but keep in mind the potential for NAL exceedances of other types!) - Are there sources of run-on to your facility? If so, assess whether the run-on could contribute any potential pollutants. For example, run-on from a dirt lot could contribute TSS, or run-on from a concrete ready-mix yard could contribute high pH. If there are potential run-on pollutant sources, collect samples before the run-on mixes with your discharge to confirm. Consider diverting the run-on flow, or placing BMPs to treat the run-on. - Who will be your QISP? If you are elevated beyond Baseline status, you will have to identify a

QISP in SMARTS. The QISP will also have to conduct evaluations, write Exceedance Response Action (ERA) reports, and technical reports (Level 2). Additional Things to Consider - Does your facility discharge into a receiving water body that is included in the 303(d) impairment list in the General Permit? If so, it should be identified in your SWPPP and Total Maximum Daily Loads (TMDLs) may impact your facility. The General Permit will be reopened and amended to incorporate TMDL-related provisions in the upcoming years. TMDL provisions will be developed at the Regional Board level. It is important to maintain awareness of and track issues concerning TMDLs as there can be significant potential impacts to your operations. One final thought: all SWPPPs and sampling data are now required to be uploaded into the online SMARTS system. This means all of your information is readily available to anyone interested, including third parties who want to initiate lawsuits. It is more critical than ever to ensure your facility is complying with all aspects of the General Permit, including paperwork. If you have questions, the SWRCB has useful information on its website: http://www. waterboards.ca.gov/water_ issues/programs/stormwater/ industrial.shtml. Your Regional Board is an important resource as well. Because the General Permit is so new, there are many issues that are still unclear and many questions that are still unanswered. It will be an interesting journey as we all learn to implement this permit! *Due to SMARTS technical issues, the SWRCB has extended the compliance deadline to August 14, 2015. CAM

California Asphalt Magazine • 2015 Environmental Issue

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Caltrans Seeks to Go From Orange to Green By Russell W. Snyder, Executive Director, California Asphalt Pavement Association (CalAPA)

ittle-known fact: the official color of the California Department of Transportation is “Omaha Orange,” which for years has been a fixture on Caltrans trucks and equipment. These days, however, Caltrans is seeking to be known more for green than orange. The massive department, with a $10 billion a year budget and more than 20,000 employees, extends a large environmental footprint across the state, and has demonstrated that even incremental changes can pay big environmental dividends in the long run when deployed on such a massive scale. In April of 2013 the department produced an exhaustive report, “Caltrans Activities to Address Climate Change,” and has been following up ever since with periodic updates on topics such as recycling, energy reduction and water conservation. In an exclusive interview with California Asphalt magazine, Caltrans Director Malcolm Dougherty talked about the enormous challenges in going green, but also the tremendous benefits. “At Caltrans, we have a lot of work to do to take care of the existing infrastructure, the existing pavement we have out there,” he said. “At the same time, we’re taking care of all the traffic we have, but we have to do it in a sustainable way.” 18

Caltrans Director Malcolm Dougherty rides his bike past the state Capitol in Sacramento earlier this year as part of a bicycle awareness event.

Among the prominent “green” initiatives he highlighted are the department’s increasing use or Reclaimed Asphalt Pavement (RAP) in asphalt mix designs, and the growing use of Warm Mix Asphalt technologies, which allow asphalt to be produced at lower temperatures, reducing fuel consumption and emissions. “We need to explore whatever innovative ways we can take care of the pavement so that we can try to accommodate the movement of the traveling public, and the movement of goods and services, while at the same time preserving the environment,” he said. “Sustainability is going to be a big issue for us going forward – greenhouse gas reductions on our construction activities, from the trucks that haul the asphalt to the production of the asphalt, to the production of the concrete. It goes across the board.”

With California grappling with one of the worst droughts in its recorded history, the crisis has spotlighted the need for additional conservation measures, as well as more water storage and conveyance facilities. Gov. Jerry Brown declared a state of emergency in January of 2014, and called for all state agencies to reduce water usage by 20 percent. But Caltrans already had been incorporating water-wise designs in projects and maintenance since the state’s first big drought in 1976-78, and those efforts are now starting to pay dividends. As one of the state’s largest departments, responsible for 30,000 acres of landscaping, Caltrans has accounted for more than half of the water savings by state agencies, according to another Caltrans report, the “Mile Marker,”

California Asphalt Magazine • 2015 Environmental Issue

published in the second quarter of 2015. Caltrans is using roughly half the volume of water to irrigate 33 percent more acreage of landscaping than it did in 1992, due largely to the incorporation of plants that need less water, “smart” irrigation systems and recycled water used for irrigation. “We have been trying to do water conservation for many years,” Dougherty told California Asphalt magazine. “It is of heightened importance now, and this also goes to our landscape, and to our construction activities as well -- anything we can do. We’ve made a commitment to reduce our irrigation use by 50 percent. We’ll do that by using new technology, and also by using recycled water as much as possible in our irrigation and in our construction activities as much as we possibly can.” For contractors, that will mean additional scrutiny on how water is used on the jobsite, effective storm-water management and other water-related issues. In the Caltrans Greenhouse Gas Reduction report, several other construction materialsrelated initiatives that the department believes will contribute to a reduction in ozone-harming GHG emissions in a meaningful way. Caltrans manages more than 50,000 lane miles of freeways and highways connecting every corner of the state. Among those initiatives include the use of Rubberized Hot Mix Asphalt (RHMA), Reclaimed Asphalt Pavement (RAP) and Warm Mix Asphalt (WMA). The department reported that the use of alternatives to conventional Hot Mix Asphalt has reduced its operational

GHG emissions by more than 61,000 tons per year – “More than any other GHG reduction initiative quantified in this report. This is equivalent to the annual emissions produced by approximately 11,800 passenger vehicles.” In the case of RHMA, another environmental benefit is realized – a reuse of discarded tires that might otherwise end up in landfills. The report said that, based on the most recently available figures (from 2007 to 2011), Caltrans used almost 25 million recycled tires. “Not only does all of this recycling help to keep tires out of landfills,” the report said, “it also reduces greenhouse gas (GHG) emissions associated with the production of petroleum-based kiln fuels and asphalt cement.” Other Caltrans “green” initiatives cited in the report included the use of porous asphalt pavements, striving for smoother pavements to reduce fuel consumption by vehicles driving on the paved surface, long-life asphalt pavements and quieter pavements. Elsewhere, Caltrans also has achieved energy savings with lighting upgrades in office buildings and changes to signs on the highway system. Recently, Caltrans replaced old 4-foot fluorescent light tubes with LED tubes in its headquarters building in downtown Sacramento, which will save an estimated $41,000 a year in energy costs. The Sacramento Municipal Utility District presented Caltrans with a $135,000 rebate check to offset the cost of the purchase of the new lighting tubes. The department is also embarking on a program to replace its lighted green-

California Asphalt Magazine • 2015 Environmental Issue

background highway signs with “retroreflective” signs that in many cases will require no electricity because they are fully illuminated by headlights. California’s highway system has more than 600,000 signs. The State Highway Operations and Protection Program will invest about $89 million to replace about 1,800 old signs with new high-performance ones this year, and is scheduled to spend an additional $28 million to replace obsolete signs in the San Diego region, according to a recent “Mile Marker” report by the department. Significantly, many of the new signs will eliminate the need for catwalks to replace burned-out bulbs, which saves money, reduces risk to workers and decreases opportunities for graffiti vandals and copperwire thieves. For the asphalt pavement industry, being aware of the areas of emphasis of prominent owners, such as “green” initiatives by Caltrans, will help inform company strategies to complement those efforts. CalAPA’s recently adopted Code of Ethics states, in part, that it is the official position of the association’s member companies to be responsible stewards of the environment. “As members of an industry long concerned with being good community neighbors in an environmental sense,” the statement reads, “we have voluntarily applied the latest available technology and have dedicated our efforts to toward protecting the quality of the environment in which we operate.” If Caltrans orange is switching over to green, can black asphalt be far behind? CAM 19

CalAPA engages San Diego Air Pollution Control District over regulation of mobile equipment utilized for the placement of asphalt rubber binder By Russell W. Snyder, Executive Director, California Asphalt Pavement Association (CalAPA)

he Environmental Committee of the California Asphalt Pavement Association spearheaded an effort to engage the San Diego Air Pollution Control District on proposed revisions to Rule 11 that would require spray equipment that is currently exempt from permitting to obtain a permit to operate under Rule 10 of the air quality regulations. CalAPA called upon members in the San Diego area and elsewhere to provide feedback to the committee on the proposed rule change, which will help the Committee and Association develop a strategy and talking points to engage the Air District on this issue. “We are pleased that the local air district was seeking our input, and we were happy to provide them with what we hope is practical and verifiable information on the impact changes to the regulations may bring about,” said CalAPA Deputy Executive Director Tony Grasso. Last year CalAPA sent a comment letter to the Air District on the issue, and subsequently learned that Caltrans has proposed 5 percent rubber in the base binder which would expand the number of units requiring permits. CalAPA representatives have been communicating regularly with the air district on the issue. 20

The proposed exemption is as follows: (d)(15) COATING AND ADHESIVE APPLICATION EQUIPMENT AND OPERATIONS For the purposes of this Subsection (d)(15), “Operation” means the coating of an individual substrate (e.g., wood, or plastic or metal, etc.) or the application of an adhesive material. (ii) Application equipment and processes used exclusively to apply coatings and/or adhesive materials to stationary structures and/ or their appurtenances at the site of installation, to portable buildings including mobile homes at the site of installation, to pavement, or to curbs. This exemption does not apply to application equipment and processes where coatings or adhesive materials are applied in off-site shops or to nonstationary structures such as airplanes, ships, boats, railcars, and automobiles. This exemption does not apply to the application of rubberized asphalt binder. (The underlined text represents APCD proposed changes and double underlined text represents modifications requested in a CalAPA comment letter dated June 20, 2014.) Specifically, CalAPA has expressed concerns to the air district that permitting the portable equipment is

unprecedented, represents a potentially onerous new regulation that would be expensive to implement and difficult to enforce. After CalAPA met with the SDAPCD on March 16, 2015, association representatives came away with an understanding that the purpose was not to create a broad-brush permit for this equipment, but have a means to address repeat-offenders for visible smoke violations. Following the meeting, CalAPA participants were confident the air district heard and incorporated the industry suggestions that were discussed. At the time of this reporting, this last line has been removed completely from the version presented for consideration at the June 19, 2015 Workshop. The proposal would continue to address this issue under Rule 50- Visible Emissions, Standards (section 5) for opacity and visible smoke. For questions on this topic, contact CalAPA Deputy Executive Director Tony Grasso at (909) 362-9192. The co-chairs of the CalAPA Environmental Committee are Scott Cohen with Sespe Consulting Inc., who can be reached at (619) 894-8669, and Scott Taylor with Alta Environmental, who can be reached at (562) 495-5777. CAM

California Asphalt Magazine • 2015 Environmental Issue

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Legal COLUMN HOW DO THE NEW STATE AND FEDERAL EMPLOYMENT LAWS IMPACT A CONTRACTOR’S BID ON A PUBLIC WORKS PROJECT? By Christopher R. Elliott, Hart King

ontractors take note! Not only could new State and Federal employment laws subject you to employment lawsuits, but they could also jeopardize your bid on a public works project. As employers, contractors must keep up with new employment laws. Specifically, employers must comply with: 1. the Patient Protection and Affordable Care Act-often referred to simply as “Obamacare”; 2. the Family Medical Leave Act (“FMLA”)—the federal law requiring covered employers to provide employees jobprotected and unpaid leave for qualified medical and family reasons; 3. the California Family Rights Act (“CFRA”)—the California version of the FMLA; and 4. the Healthy Workplaces, Health Families Act (“HWHFA”)--California’s new paid sick leave legislation. Very importantly, on July 1, 2015, the HWHFA becomes effective as do a number of significant amendments to the CFRA. To protect yourself from possible claims by employees, it 22

is essential for you to revise (or adopt if necessary) an employee handbook which addresses these new employee benefits. In addition, there are a number of other “hot issues” which should be addressed, including social media, personal digital devices, cell phones, electronic data, and privacy concerns. So what do these new employment laws have to do with bids on public works projects? A failure to provide legally required benefits to employees could allow an unsuccessful bidder to challenge the bid and/ or sue the successful bidder for interference with contract. For example, in February of 2015, the court in Roy Allan Slurry Seal, Inc., v. American Asphalt South, Inc., (2015) (234 Cal. App. 4th 748) upheld the “second place bidder’s” right to sue the winning bidder for intentional interference with contract based on allegations that the successful bidder was only able to obtain the lowest bid “by illegally paying its workers less than prevailing wage.” Although failure to pay prevailing wages was the “wrongful act” at issue in that case, failure to provide the new required employee benefits could also provide a basis for a challenge to a bid and/or a lawsuit. In addition, new laws passed in late 2014 put business owners on notice that if a staffing agency with whom they contract violates

these employment laws, the contractor will be on the hook too. As such, a challenge or lawsuit could also be asserted if the successful bidder hires temporary workers from a staffing agency which does not comply with those laws. In short, this inter-relationship between the new employment laws and the bidding process on public works projects is yet another example of how “an ounce of prevention is worth a pound of cure”. So, make sure to review your company’s employment practices and documents to ensure you are in compliance with all current California employment laws. Christopher R. Elliott is a partner in the law firm Hart King, a CalAPA Associate Member. Hart King has substantial experience helping its contractor clients navigate these complex and ever-changing areas of employment law and bidding on public works projects. Please do not hesitate to contact one of our attorneys in our construction law group. For more information regarding the above or any other legal-related questions, he may be reached at (714) 432-8700 x308, (714) 619-7082 direct dial or celliott@ hartkinglaw.com. CAM

California Asphalt Magazine • 2015 Environmental Issue

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Insurance column General Liability Policy Exclusions – How to Plug the Holes By Bob Mahan, Mahan Insurance Brokers, Inc.

very General Liability (GL) and excess policy issued to a subcontractor has a myriad of limiting and exclusionary policy language. As a GC, how do you know that your subs or even your own policies are providing the maximum coverage? Here is a quick look at what may be contained in – or excluded from – your policy, and what you need to know to ensure you’re adequately covered. The basic Insurance Services Office (ISO) GL Form CG 00 01 incorporates numerous exclusions. These appear in either the bodily injury and property damage or personal injury coverage grants. Some of these exclusions, such as auto, aircraft, and workers compensation, exist because the coverages for these exposures are always purchased separately. Other exclusions are not so straightforward. These include: •

Intentional acts causing bodily injury or property damage.

•

Property Damage Limitations –Commercial Property, Builder’s Risk or other related.

•

Limited Pollution – A separate pollution policy.

•

Liquor Liability – Separate coverage is needed if business operations involve alcohol.

•

Electronic Data Breach – Cyber Liability coverage required.

•

Numerous exclusions associated with personal injury – Professional liability is needed to fill some gaps.

•

Shareholder suits and other pure contract actions – Directors and Officers cover.

Bear in mind that even the basic coverage form is most complex and very difficult for a layman to interpret. 24

In addition to the built-in coverage limitations in the basic coverage form, the carriers use many comprehensive, very limiting exclusionary endorsements. The following are not allowed on the policy of any subcontractor working under the AGC Standard Form Subcontract: ➢➢ Subsidence or earth movement exclusion. ➢➢ Prior acts or prior work exclusion. ➢➢ Action Over - Precluding indemnity for passive acts of Contractor contributing to injury of a Subcontractor’s employee. ➢➢ Contractual Limitation – Eliminating coverage for assumed liability. ➢➢ Supervisory or Inspection Service limitation. ➢➢ Insured vs. Insured Cross Suits. ➢➢ Clauses terminating coverage after a designated period of time. ➢➢ Residential or Habitational limitation if the work includes residential or habitational work. ➢➢ Classification limitation limiting coverage for work to be performed. If any of the above are present in the subcontractor’s policy and an uncovered loss occurs, the subcontractor will be in breach, leading to liability to the upstream party, such as the GC, for such uncovered loss. The carriers writing coverage for contractors in California will generally remove these exclusions, frequently at no charge. BUT, the broker has to be smart enough to get it done. Any broker who does not have a detailed understanding of your GL policy must be replaced. Look for brokers who have the Construction Risk Insurance Specialist (CRIS ®) designation. If your broker only holds himself out to be an order taker, California Asphalt Magazine • 2015 Environmental Issue

he only has liability for failing to procure the coverage you request. Other exclusionary endorsements that frequently appear include: asbestos, lead, mold, benzene, silica dust and other poisonous substances; total pollution; subcontractor limitation (this can bemajor problem); terrorism; engineering or construction management; employment related practices; wrap-up coverage; progressive bodily injury; exterior insulation finishing systems (EFIS) and many others of varying significance. The negative effects of the various exclusions enumerated above can be partially cured by upgrading the contractor’s program. We recommend the following: •

•

Professional Exclusion. Ensure a limited contactor’s professional exclusion (CG 22 79 or CG 22 80) is used in lieu of engineering or construction management exclusions. Combined Contractor’s Pollution and Professional Liability policy. This will fill the gap left by the total pollution and the poisonous substance exclusions. The basic policy form, as written, provides a substantial amount of coverage by exceptions in the language. But the now common “total pollution exclusion” removes all coverage. The contractor’s professional liability coverage will pick up design build liability exposures along with limited general contractor liability for defective supervision. This coverage is quite complex and should not be left to the layman to interpret. Builder’s Risk and Installation Floaters. These insure that work not yet accepted under the owner’s property is covered. No GL policy will cover damage to work where title has not passed. You can’t be liable to yourself! In the event of a fire before owner acceptance the GC may be paying for the damage. Employment practices liability coverage. Claims for employment related actions are increasing rapidly. You can’t be without this coverage. A related coverage option that is inexpensive is Employee Benefits Liability.

•

Excess coverage. It is best to purchase excess liability coverage that strictly follows the primary policy. Otherwise you will have an entire set of additional exclusions to bite you. Try to obtain coverage allowing for vertical exhaustion of limits. If not available, don’t assume contractual liability for noncontributory excess coverage. Ask your broker.

•

Cyber Liability. This coverage is highly recommended if you are handling credit card billing of any kind.

•

Directors & Officers Liability (D&O). This covers shareholder suits and other limited contract exposures. This is mandatory if you have outside shareholders.

•

Terrorism coverage. This important coverage is often widely ignored. If you have any exposure in target locations such as high rises, churches etc., you should elect this option.

Don’t hesitate to obtain a copy of the policies of your subcontractors where high hazard exposures exist. The AGC long form subcontract provides for such. The contracting community spends billions on insurance often without having a clue as to what their coverage includes (or excludes). Many of the policies sold to contractors today are done by inexperienced brokers with no legal background along with an inability to read the policies. By understanding what you’re getting in all your insurance contacts, you’re taking an important step to minimize your company’s exposure and risk and ultimately, to protect your bottom line. For advice on any of the above issues, contact your qualified AGC member broker or lawyer, or feel free to contact me anytime with questions at (949) 279-9937 or by email at bob@mahanins.com anytime. Bob Mahan, Mahan Insurance Brokers, Inc., Newport Beach, CA, is a registered engineer and a member of the California bar. Mr. Mahan was chairman of the AGCC Legal Advisory Committee in 1992 and served on the committee that drafted their Standard Form Subcontract. Mr. Mahan is a former Bechtel project engineer with many years of field experience. CAM

California Asphalt Magazine • 2015 Environmental Issue

Legislative Update ‘We are going to get something done,’ Legislative transportation chieftain proclaims as special session activity heats up

deas planted during grass-roots lobbying activity by CalAPA and others this spring have begun to germinate in recent weeks in Sacramento as Gov. Jerry Brown called for a special session of the Legislature to focus on road funding, and a number of proposals began to take shape under the sun-baked Capitol dome. Assemblyman Jim Frazier, D-Oakley, Chairman of the Assembly Transportation Committee, was named June 24 the chairman of the Assembly’s Transportation & Infrastructure Development Committee of the special session, and shortly afterward he proclaimed that “this year we are going to get something done” to address the funding shortfall that has contributed to California having some of the worst pavement in the nation. CalAPA also was one of the first associations or interest groups to endorse an omnibus bill introduced in the special session, SBX1 1, by Sen. Jim Beall, D-San Jose, which mirrors the language of a bill he introduced into the regular session of the Legislature earlier this year, SB16, that would cobble together funding from numerous sources, including a gas tax increase, to generate up to $3.5 billion per year over five years for transportation improvements, primarily roadways. The flurry of action came in stark contrast to recent years, when elected officials gave lip service to the state’s underfunded transportation system but did little to address it. 26

Assembly Transportation Committee Chair Jim Frazier, D-Oakley (center) meets with CalAPA members Brian Handshoe (left) and Len Nawrocki earlier this year.

CalAPA members met with Sen. Jim Beall, D-San Jose (seated at right) earlier this year.

The governor June 24 signed into law a $115.4 billion general fund budget that will take effect by a state Constitutionmandated deadline of July 1. When special funds are added, the budget swells to more than $167 billion. The governor and the Legislature largely punted on transportation funding, instead opting for a special session of the Legislature devoted solely to the topic as a way to focus attention on the problem and cast a harsh spotlight on those who may seek to obstruct a long-term plan to address it. Details about the budget (proposed, revised and final) can be found at: http://www.ebudget.ca.gov/ Speaking June 24 to a transportation funding forum in West Sacramento sponsored by the California Transportation Commission and others, Frazier said he was honored to head the committee that is tasked to come up with a compromise transportation funding bill, saying “This year we are going to get something done.”

He noted that “this opportunity only comes once in a while” and added, “I need your help to tell the (Brown) administration what you need.” In a one-on-one conversation June 24 with CalAPA, Caltrans Director Malcolm Dougherty said: “I think there is momentum now, and we need to seize that momentum. Both the Administration and the Legislature are talking about transportation funding. The governor called for a special session of the Legislature. The focus of everyone’s conversation so far is ‘fix it first’ – take care of the existing infrastructure before you do anything else. We are behind the eight ball and we need to catch up and make sure we are investing to take care of the infrastructure on a payas-you-go basis. We’ve got an opportunity for the Legislature to come together and try to figure something out.” In CalAPA’s letter to Beall registering support for his SBX11, CalAPA said the measure [ Continued on page 28 ]

California Asphalt Magazine • 2015 Environmental Issue

Sully-Miller introduces VALET SERVICE Definition- A turn-key, Furnish, Deliver and Laydown (FD&L) paving service that specifically caters to commercial and residential developers, general contractors and pipeline contractors in both the private and public sector.

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For more info visit: www.Sully-Miller.com 135 S. State College Blvd. Suite 400 Brea, CA 92821 California Asphalt Magazine • 2015 Environmental Issue Simply scan the QR Code and visit sully-miller.com

Legislative Update [ Continued from page 26 ]

is “an important step forward” and “is an ideal bridge between today and tomorrow.” The text of the bill, which is awaiting its first committee hearing in the special session, can be found at: http://www.leginfo.ca.gov/ pub/15-16/bill/sen/sb_00010050/sbx1_1_bill_20150622_ introduced.pdf . CalAPA will continue to advocate for a robust investment in transportation infrastructure with a special emphasis on pavements, which have been shortchanged in recent years. In other Legislative news, a union-backed bill to greatly expand California’s prevailing wage laws to cover delivery of construction materials to public works jobs, continues to move steadily through the Legislature.

AB219 by Assemblyman Tim Daly, D-Anaheim, originally covered deliveries of concrete, but language was later added to include asphalt deliveries, which drew fierce opposition from CalAPA. Eventually, all references to asphalt were dropped from the bill, and CalAPA withdrew its official “oppose” position. However, the association continues to express grave concerns about the bill, along with a number of other construction trade associations. CalAPA encourages members to contact their elected representatives in Sacramento to let them know the many negative consequences that will transpire should the bill pass. Caltrans recently weighed in on the AB219, estimating that the bill will increase

maintenance costs for highways, bridges and culverts by 10 percent out of a $350 annual maintenance budget. Caltrans further estimates it will cost an additional $1 million to administer the new regulations. The bill cleared the unionfriendly Senate Labor and Industrial Relations Committee on June 18 on a 4-1 vote. CalAPA members are encouraged to contact their elected officials to let them know how important adequate investments in transportation are to their businesses and California’s quality of life. CalAPA’s “Legislative Action” page of grass-roots resources and fact sheets on transportation funding can be found here: http:// calapa.net/legislative.html CAM

California Asphalt Magazine • 2015 Environmental Issue

Associates Environmental is a client-focused environmental consulting firm and CalAPA member. Our goal is to become your “go to” company for professional environmental consulting services. Through a process we call “Industry, Charity and Prosperity” we help our clients focus on their businesses and the things they do best by relieving them of the burden of obtaining environmental permits and writing environmental plans. • Air Quality Permits (Stationary & Portable Equipment) • Air Pollution Dispersion Modeling • Greenhouse Gas Audits & Verifications • Health Risk Assessments (HARP2, New OEHHA Guidance) • New Storm Water Industrial General Permit Compliance

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Industry News Legal do’s and don’ts covered at Southern California Contractors’ Dinner One lawsuit can mean the end of a paving company, which is why you could have heard a pin drop at the June 9 Southern California

Contractor Dinner that featured a presentation on legal do’s and don’ts and other essential legal information every contractor should know.

Vulcan Materials is the largest producer of construction aggregates in the United States. The Western Division proudly supplies the highest quality materials for the production of roads, highways, dams, airports, seaports, commercial centers and residential housing as well as other Construction Material needs.

Serving all of California Southern California Area Los Angeles Basin Inside Sales: 626-633-4228 Customer Service Center (Dispatch) 626-856-6156 San Diego Area Inside Sales: 858-530-9472 Customer Service Center (Dispatch) 858-530-9465 Central California Fresno Inside Sales: 559-434-1202 Customer Service Center (Dispatch) 559-846-2852 Bakersfield

Customer Service Center (Dispatch) 661-835-4800

Northern California Bay Area, Pleasanton: 925-846-2852 Sacramento Area, Roseville HMA Inside Sales / Dispatch: 916-773-3968

Technical Services Department Northern California Pleasanton Laboratory Technical Services Manager – Toni Carroll 925-485-5982

Kimberly Wind, an attorney specializing in construction law for new CalAPA associate member law firm Hart King, was the featured presenter at June 9 dinner in Pico Rivera attended by more than 40 CalAPA members and guests. With apologies to recently retired Late Night talk show host David Letterman, Wind offered up her “Top 10” tips for asphalt paving companies, covering both public- and private-sector work. Recent court rulings have brought changes to many areas of interest to contractors, including audits, prevailing wages, disputes and more. The next Contractors’ Dinner is scheduled to take place Sept. 8 please contact the CalAPA office at 916-791-5044 for reservations or information. CAM

Central California Fresno Laboratory Technical Services Manager – Gary Dunkel 559-434-2714 Bakersfield Laboratory Technical Service Specialist – Bob Lee 661-398-6299 Southern California Los Angeles Laboratory Technical Services Manager – Tim Reed Technical Services Aggregate – Jeff Pollard Technical Services Asphalt – Pascal Mascarenhas 626-856-6190

Guest speaker Kimberly Wind gave a legal update on several new ruling for our industry.

Southern California San Diego Laboratory Technical Services Manager – Rob Piceno 858-547-4981 West Region Technical Services Manager LEED Green Associate – Ed Luce 619-843-3069

Grass Valley Area, Nev City, Auburn Area HMA Inside Sales: 530-273-4437 Western Division Administration 818-553-8800

Tony Grasso CalAPA Deputy Director gave the members an association update.

California Asphalt Magazine • 2015 Environmental Issue

YOUR NEW PARTNER IN SUSTAINABLE PRODUCTIVITY www.atlascopco.us

Scott Equipment now offers Atlas Copco road construction equipment, and has the parts and service to keep you on the road. www.scottequip.com

California Asphalt Magazine â&#x20AC;˘ 2015 Environmental Issue

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Target Compaction in Fewer Passes Intelligent Compaction (IC) is rapidly becoming a requirement for Caltrans projects. SITECH NorCal and SITECH Oregon have the cutting edge IC technology. Our CCS900 System enables your rollers to meet today’s stringent paving requirements: • Pass count mapping • Temperature mapping • Monitor Compaction Meter Values (CMV) • Wirelessly transfer data from the machine to the office for analysis

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CalAPA Annual Meeting and Dinner Jan. 21, 2016 (Tentative) Jonathan Club 545 S. Figueroa Street Los Angeles Meeting dates are subject to change. Watch the weekly Asphalt Insider newsletter for meeting updates or call CalAPA at (866) 498-0761 to confirm meeting date and location. For more information on California Asphalt Pavement Association Meetings Call: 866-498-0761

California Asphalt Magazine • 2015 Environmental Issue

New Members of CalAPA IPC GLOBAL

Kieran McGrane, CEO kmcgrane@ipcglobal.com.au 4 Wadhurst Drive Boronia, Victoria, 3155 Australia P: 613-9800-2200 www.ipcglobal.com.au

CONCEPT PAVING SOLUTIONS, INC. Joshua Cobb, CEO Josh.cobb@conceptpaving.com

Jacob Palmer, Vice President Jacob.palmer@conceptpaving.com 1411 N. Batavia Street, Suite 120 Orange, CA 92867 P: 714.997.2200 www.conceptpaving.com

3M PERSONAL SAFETY DIVISION Erik Williams, Regional Sales Manager ewilliams@mmm.com 5885 E. Camino Manzano Anaheim Hills, CA 92807 P: 714.262.5189 www.scotchlite.com

PACIFIC GAS & ELECTRIC COMPANY

Cinndy Hart, Business Segment Manager c2hb@pge.com 245 Market Street, N3Z San Francisco, CA 94117 P: 415.973.2877 www.PGE.com

D&H EQUIPMENT, LTD

Jason Cox, Director of Marketing info@dhequip.com P.O. Box 1660 Blanco, TX 78606 P: 830.833.5366 www.dhequip.com California Asphalt Magazine â&#x20AC;˘ 2015 Environmental Issue

Alon Asphalt Company......................................... 2

Nixon-Egli Equipment Co..................... Back Cover

Associates Environmental.................................. 29

Pavement Recycling Systems............................ 23

Bomag America...................................................... 9

Peterson CAT.......................................................... 5

Butler-Justice....................................................... 31

Quinn Co................................................................. 5

Coastline Equipment............................................. 9

RDO Equipment Co...........................................7, 35

CEI Enterprises, Inc.............................................. 17

Roadtec................................................................... 8

D&H Equipment, LTD........................................... 28

Sakai...................................................................... 35

Diversified Asphalt Products.............................. 21

Scott Equipment.................................................. 31

E.D. Etnyre & Co................................................... 33

Sitech.................................................................... 32

Hawthorne CAT...................................................... 5

Sully-Miller........................................................... 27

Herrmann Equipment, Inc................................... 13

Valero Marketing & Supply.................................. 3

Holt of California.................................................... 5

Volvo Construction Equipment & Svcs............. 15

Johnson Machinery............................................... 5

Vulcan Materials Company................................. 30

Support your Industry and Your Future by Joining the California Asphalt Pavement Association

Contact Sophie You for further information

866.498.0761 syou@calapa.net

calapa.net

www. 34

California Asphalt Magazine â&#x20AC;˘ 2015 Environmental Issue

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