Grag Dineen & Associates

We work in the most regulated industry in the most regulated state in the union. This report looks at the following changes in the ever-shifting regulatory scene:

SB229 – Requirements for additional Insurance for Transportation Permits
We recently had a conference call meeting with a sub-committee of the League of Cities assigned to review SB 229. This is a SCCA bill being carried by Senator Margett. We are requesting a change to California Vehicle Code (CVC) 35782 (3) (b), “Unusually large or heavy loads” as it relates to local insurance requirements.

Local government insurance requirements are becoming an increased burden on those transporting your equipment. Local agencies are requiring transportation companies to have $1 million or more in General Liability coverage and are requiring that the municipality be named an additional insured, in addition to $1 million in Auto Liability coverage.

What a waste—GL coverage excludes any vehicle liability that is going to affect the traveling public, so it can’t be used to cover Transportation Permits.

This isn’t always a simple process, even for contractors that carry these limits of liability to do contracting. We have a contractor member that has been trying to obtain an Annual Permit from the City of Camarillo, but has been delayed for over 30 days because of their strict insurance requirements. There are other localities such as the City of Glendale that require a 2-week delay for their City Attorney to approve the permit.

These are the day-to day issues that you don’t hear about until your permit is delayed or your equipment doesn’t arrive as scheduled. We will keep you informed.

City of Anaheim – Pilot Car requirements
A member who has several Annual Permits in the City of Anaheim wonders why the city requires a pilot car for each of their cranes exceeding 75’ in length to travel and Caltrans doesn’t?

We reminded the city that we had worked with them on this issue in June of 1999. At which time we did a demonstration at the Anaheim Stadium showing that 7, 8, 9-axle multi-trailer combinations could negotiate around corners as safely as any vehicle at 75’. They agreed through the demonstration that we were safe and the requirement was changed to include multi-trailer combination trailers exceeding 85’ would require a Pilot Car rather than 75’. This allowed 7-axle combinations to travel through the city empty or loaded under 12’ wide. It was better than what we had, but still there isn’t any surrounding jurisdiction with this requirement for length:

City of Costa Mesa – Regulating Through Truck Traffic
A member was informed by city staff that they were going to be limited on the number of loads traveling through their jurisdiction. Our member was notified after a City Council person called and complained about the number of trucks traveling through the city. Staff informed our member that they were going to have to reduce the number of loads from 270 to 150 and still have the job done within the 2 weeks. The project was in Huntington Beach to Tustin traveling through Costa Mesa on a designated truck route.

We explained to the member that the city can’t regulate legal trucks or the number of trucks and they could not require them to obtain a haul permit. We spoke with the city and explained the situation and as a good neighbor, the member agreed to lower the number of trucks to 200 in order to complete their contract on schedule.

City of Culver City – Citation issued for $24,000
We have been working with our member and City Staff to resolve this unfortunate situation prior to having to go to court. This has taken unnecessary time of our member and the court for something that the City could have stepped up and acknowledged that their permit process had flaws. Their enforcement division and Public Works were not seeing eye-to-eye on their permit process. The city issued a site permit to the contractor, which was good for any subcontractors doing work on the project using a specific route. The contractor only needed to contact the city to let them know who to add on the permit and it was a one-time permit good for 30 days. The Contractor called in and left a message the day before our member was requested to show up on the project. There were even phone records that showed the call was placed to the city’s direct line for permits.

Our member was doing business as usual and traveled to the project and was stopped and cited. He also obtained the permit within 45 minutes and was on his way.

Three different District Attorneys were assigned to the case, each of whom told us in no certain terms that this case was not going to be dismissed and it was going to be a substantial fine. Over a period of five months, we convinced the District Attorney that this was a problem created by the city and not our member.

The case was dismissed and we were asked by the DA to work with the city to clarify the language as to not put others in the same situation.

Desert Hot Springs – Uniform Application and Pilot Car Requirements
We were contacted by a member regarding the city’s permit application not being in compliance with the CVC 35781. We produced an application with the city’s logo and appropriate information as we have done for several other agencies. The city was very thankful for our assistance.

We requested the city consider adopting our industry-recommended pilot car requirements. We will keep you informed as to our progress on this issue.

City of Los Angeles - Ad-Hoc Transportation
Workgroup scheduled to meet November 13th
The Mayor’s office and Public Works Department are reaching out to contractors to get bids that are more competitive for public work projects for the City of LA.

We were asked as to tell what they can do to make working with the city more business-friendly. The city says it is dedicated to creating an approach that will attract our industry to do business. The city’s goal is to make the City of LA the “Customer of Choice,” much like Caltrans’ effort—this is good for all of us.

We are very happy to assist. Trucking operations are usually addressed as an after-thought so this is an opportunity to get in at the ground floor of the process. We have explained that we need to address this issue and a uniform set of requirements for every project. There are more efficient ways and we have been requested to bring our issues and have them addressed.

Our industry is starting to realize that the rules are getting more and more difficult and that we have to start addressing these issues at the start of a project. Change happens to everyone and this is an opportunity to be part of the change process. Here are some of this issues we will bring to the table:

Construction related issues

City of La Mirada – Haul Route/Permit, Tarping all Loads
We were contacted by an AGC Contractor Member regarding a requirement to apply for a haul route permit, in addition to requirements that all loads be tarped which is only required if the load peaks above 6” from the sides of the vehicle per the CVC.

We explained that because they were not doing a job specifically in the City and were traveling into another jurisdiction that the City could not regulate their vehicle and it wasn’t necessary as long as they were in compliance with the CVC.

City of Monterey Park – Permit Fees – Faxing
The city has been requested to lower their permits fees from $86 to $16 as per the Vehicle Code. The city is currently charging $18 for the permit and an additional $68 for services, which is in direct conflict with the CVC.

We are also requesting that the city allow faxing of permits, currently if you need a Transportation Permit, you will need to pick up the permit in person or go through a permit service at a cost for their runner of $65 and an additional $20 service fee. The total cost to go through a permit service is $171. If the city allowed permits to be faxed it should only cost the Industry $16.

City of San Jose – Business License Fee
We recently had a member contact us regarding the city charging a business license fee for a trucking company doing business in the city. This is a unique situation. The owner of the property had to purchase a business license for $150 for renting the property to the trucking company who in-turn was being required by the city to also purchase an additional business license for operating a trucking company within the city.

The Business Taxation Code is very clear that a trucking company solely operating a business or traveling through a locality is not required to obtain a business license. Trucking companies pay their fees through the DMV with the cost of their Motor Carrier Permit.
We have contacted the city to clarify this misunderstanding.

Policing Our Industry

We need to keep our changes and not be taking chances

For the last four and a half years, we have dedicated our efforts to improving the working conditions of the construction transportation industry and, hopefully without seeming boastful, we can say that we have had some success in this endeavor. But, the changes we have achieved are acquired knowing that anytime they can be taken away if we either don’t follow the guidelines or public safety is jeopardized.

I recently was traveling down the freeway and came up on a local hauler (nonmember) that was traveling through the LA basin. I noticed that the load really seemed rather wide; I estimated it to be upwards of 16’ if not wider. This was a 5-axle lowbed that should have had two pilot cars at a minimum and if over 16’ should have had CHP Escorts. I was behind the load trying to judge the width by how much of each lane it was taking, which was most of both - at least all of one 12’ wide lane and portions of the second lane. When I passed the truck, I noticed that this was a company that other members of our industry have said is a rogue company - one who doesn’t follow the rules. I figure the law of averages will eventually/hopefully catch up with them and since they aren’t members of one of our associations, perhaps their punishment will serve as an example for other rogues.
But it didn’t end there. I continued up the freeway and came up on an additional load - a 9-axle. The same hauler was transporting a similar section of the load, but this part weighed 109,000 lbs - at least that was what was painted on it. This section had additional items attached to the side that made it even wider than the first load. So now we have approximately a 200,000 lbs truck and multi-trailer combination traveling down the state highway in the middle of the day on a Friday afternoon without any pilot cars, a load that should have at a minimum two pilot cars. This would be considered a flagrant violation by Caltrans standards.

There are those who think that they are only able to get work by being the low bidder by not obeying the law, but they ought to ask their customers if they want to be liable for the consequences. Contractors aren’t directing these scofflaws to break the legal requirements; these rogues are making these decisions on their own, jeopardizing the safety of traveling public and the progress our industry has made.

We all end up sharing the responsibility of these guys. When there is an accident; it is a reflection on our industry and these guys are an accident waiting to happen. If the rogues are involved in an accident, and public safety was jeopardized in anyway, they are going to bring everyone into the lawsuit. I don’t think our contractors have any interest in being a part of that. When something like this happens, our industry is going to be scrutinized and then penalized.

We have spent years developing a reputation and building trust with Caltrans, CHP and local agencies that we aren’t a fly-by-night industry. These guys aren’t at the table working toward changes or even contributing to making our industry a better place to work. When we see or hear that this type of behavior is going on we need to take action and notify them or the authorities. In the long run, they are only hurting all of us and creating an uneven playing field where those who obey the rules are penalized for good behavior.
The construction heavy-haul transportation industry is small enough that we should try to police ourselves the best we can. We are thankful for the changes that Caltrans and local agencies have made to benefit our industry; in turn that we follow the rules and makes sure we’re following them safely.

cc:        John Hakel, AGC                                  D. Cash Benton, SCCA
            Richard Paine, ECA                              Sam Meyer, MCOG
            Richard Lambros, BIA                          Lee Brown, CDTOA
            Aimee Shook, DCA                               Jeff Hunter, CTTA
            Michael Vlaming, COA                         Michael Lewis, CIAQC
            Doug Ball, SC&RA

Executive Summary