June 2008

Executive Summary

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:

• Federal Motor Carrier Safety Administration (FMCSA) – The local office of FMCSA paid an unexpected visit to one of our contractors. Do you need a USDOT number?
  
• Caltrans – Exception Program delays local Contractor.
  
• County of Contra Costa – Annual Permits have been approved, Implementation tentative July 1
• City of Los Angeles – Ad-Hoc Transportation Meeting May 13 – More Progress.
  
• City of Palos Verdes Estates – Permits issued 8 a.m. to 10 a.m., travel midnight to 5 a.m.

U. S. Department of Transportation, Federal Motor Carrier Safety
Administration (FMCSA) – Are you required to have a USDOT number?

A local contractor member recently received an unexpected visit from the local office of FMCSA. The FMCSA investigator, prior to his visit, observed one of our member’s service trucks traveling on the freeway and wrote down the company information. He didn’t see that the vehicle was displaying a DOT number, which in this case was required.

The FMCSA investigator explained that as of October 1, 1997, the federal hazardous materials transportation law (49 U.S.C. 5101 et seq.) mandates that DOT regulate the transportation of hazardous materials in intrastate commerce. We believe that this may be news to many of our contractors or anyone with a permanently mounted tank containing a hazardous material (including fuel) with a capacity greater than 119 gallons or anything requiring a placard. This would also include a service truck that is being transported on a lowbed, the transport company would also be required to have a DOT number and be in compliance with federal hazardous material transportation laws.

We have this information on our website to help clarify why, when, who and what is required to meet the federal hazardous material transportation laws. Fines for failure to meet these requirements can reach $25,000 per violation.

Attorney General Opinion request No. 08-102 – Senator Bob Margett requested
an opinion on behalf of the Construction Industry

Many of you may recall Senator Margett introduced SB229 on behalf of the Southern California Contractors Association (SCCA). We were 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 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 as additionally insured, in addition to $1 million in Auto Liability coverage. There are increased delays because they want it on their form and then approval by their City Attorney. With 458 cities in the state, this will become a compliance nightmare.

We asked Senator Margett to withdraw the proposed bill because of the strong opposition from both the California League of Cities who was formally opposing the bill and the Consumer Attorneys of California (plaintiff’s counsel) with their concerns. We have continued to work with the California League of Cities to come to a better understanding of the intent of the bill.

We also asked Senator Margett to request an opinion from the Attorney General’s office “For purposes of Vehicle Code Section 35782(b), what is the definition of “unusually large or heavy load”?

We recently were advised that the Attorney General’s Office has sent out invitations to comment on Attorney General Opinion Request No. 08-102. Counsel representing the International Union of Operating Engineers Local 12 received an invitation to comment on the above referenced opinion.

SCCA asked the Operating Engineers Union for help. We appreciate Bill Waggoner, Business Manager of the Operating Engineers Local 12, directing their counsel to respond to this very important Attorney General’s opinion.

They submitted an in-depth letter, defining areas such as “large and heavy loads …that pose a substantial risk to public facilities” and that the risk has to be “substantial” in order for Caltrans or a local authority to impose a requirement of extra insurance or other financial security. As soon as we have a response from the AG, we will report to you.

Caltrans – Exception Program delays local Contractor

Caltrans’ Exception Program has been in place for years for the purpose of allowing industry to move larger equipment and/or equipment where there is no current written policy. An exception for a specific vehicle and it requires a substantial amount of paperwork, pictures and drawings submitted to show good cause as to why Caltrans should consider approving the exception. If the load requires increased weight, Caltrans Structures will review and approve the move. In a case last year, we were also required to go to Pavement Design for approval. As you might guess, this can be a tedious process, but generally, the outcome is successful. The equipment owner may have to comply with certain changes, such as specific routing and the vehicle weight may have to be reduced, if possible.

Identical equipment has been given a reprieve from this ordeal. Recently Caltrans agreed that if there is an approved exception for an identical piece of equipment requiring one, it would only require an inspection by Caltrans Vehicle Inspector, which is the final process before approval.

Industry struggles with Caltrans on what is going to be approved and what isn’t. For example, Caltrans is continually telling us that the crane manufacturers are going to have to stop building cranes so big and heavy. Our position is different – until those cranes reach maximum weights, they should be permitted.

We’ve explained numerous times that California is not the crane manufacturers’ only marketplace. They are global and California isn’t even a significant part of it. It is not beneficial to the crane manufacturers to meet their requirements and cater to just California, when they are servicing the rest of the world. These cranes are allowed throughout the rest of the U.S. and are not allowed in California.

To meet the demands of their customers now and because nothing was available in California that met their needs and the Air Resources Board requirements, our member purchased a used crane out-of-state, because there is a two-year waiting list for new at double the price of used. They searched through out the country and found a LTM 1300 Liebherr, 6-axle carrier and a 4-axle dolly. This crane was permitted in Illinois without any problem using the 4-axle dolly, but had to be re-manufactured into a 3-axle dolly to meet Caltrans’ special requirements.

We are all aware that the construction industry is challenged by all the new air quality rules. Before even thinking of purchasing this crane, the first thing the forward-thinking owner did was to make sure it complied with local air district requirements. They submitted the machine’s information to the local air district and it was pre-approved for use.

This maze of regulatory challenges is particularly difficult for the crane industry. Cranes today are in short supply and projects are going to start seeing lack of availability, especially of machines that meet the air quality rules.

Our member thought that hardest challenge was getting it approved by the local air district. We thought so too, but not in this case. We were hoping that Caltrans would take the position of “what can we do to make this work and find a way to say yes, rather than no.” We need Caltrans to assist industry in working out these problems and not make the comment, “sell it out of state”.

We are continuing communication with Caltrans trying to convince them that if their refusal to approve the LTM 1300 Liebherr would be in contradiction of their own exception program.

Contra Costa County – Annual Permits approved implementation hopefully July 1

It has been over two years since we started working with the county through the Board of Supervisors’ office, requesting the need for Annual Transportation Permits. It sometimes takes longer than you can imagine and in this case 2 years, but good thing come to those that have the patience to wait.

The county sent a draft proposal for our review and comments, which we have returned for consideration. Once the county makes their final proposal, we will inform industry.

City of Los Angeles – Transportation Ad-Hoc Working Group Meeting met on May 13

Public Works, Street Services, Risk Management and industry met to discuss the following issues:

1. We discussed a one year Pilot Program for 10’ wide loads/trailers traveling through restricted hours.
   
   
2. Insurance requirements are becoming more business friendly. Risk Management has recently made changes that will make it easier to submit a certificate of insurance and approved in just a couple of days. They are hoping to be able to submit your insurance certificate directing from the insurance carrier within a couple of months, on line. We requested that Risk Management look into being consistent in their requirements
   
   
3. The Central Business District, which covers the area between Pico Blvd. to Cesar E. Chavez Ave. and between Figueroa Street to Los Angeles Street has a restriction which only allows permit loads from 12 a.m. (Midnight) to 6 a.m. only.
   
   We questioned whether the Central Business District restriction applies on weekends, as regular curfew hour restriction only apply Monday through Friday? The ordinance doesn’t state that it does or doesn’t. We requested an interruption of the intent from the City Attorney’s office. If the City Attorney’s office agrees, this will solve the problem, if not we will have to propose a change to the current city ordinance.
   
   Those members that happen to do work in the Central Business District on weekends are experiencing continued loss of revenue for their equipment and unnecessary additional cost. We recently had a member that was only needed on the project for a short period, 4 hours. They had to arrive prior to 6 a.m., wait until 8 a.m. to start and finished at noon. The problem is they couldn’t move the machine until midnight according to the ordinance.
   
   
4. We requested changes on a few items related to Pilot Cars being required for weight that shouldn’t be required. These were changes that had been previously approved, but had not been updated. The City agreed to make the necessary changes.

City of Palos Verdes Estates – Business Friendly isn’t on their radar

We recently had a member trying to obtain a transportation permit for their equipment. They were told that they could only move equipment in and out from Midnight to 5 a.m. This was supposed to happen near the million dollar homes on the cliff. Our member tried to explain the problems with trying to move equipment at that time of the night in that exclusive area.

An additional delay was because that city only issues transportation permits from 8 a.m. to 10 a.m. Monday through Friday; if there is any problem with the permit, come back tomorrow. This permit application was submitted to only find out that they didn’t meet the city’s insurance requirements.

The city required:
The City of Palos Verdes Estates, its officers, agents and employees, and the officers and employees of the firm, Charles Abbott Associates, are named as additional insured’s.
The permit was issued 3 days later with no time restrictions, which had to be picked up in person, because they don’t allow faxing.

Respectfully submitted,

Gregory D. Dineen
Industry Transportation Consultant

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