Lost In Translation
Hidden Trucking Costs Buried in the Construction Permit Process

September 15, 2006

The haul permit process is a complex part of every construction project. It involves every member of the construction team - local government, owners, developers, general contractors, subs and the construction transportation industry. The key to simplifying the process is good communication at every level.

If the communications effort breaks down, critical information, such as pre-agreed-to haul routes can be lost in translation, resulting in excess costs and aggravation for everyone. But, with good communications, the process can be much simpler for everyone concerned.

Local governments, in response to a combination of citizen complaints and a need for more revenue, are getting very creative in finding new ways to regulate legal trucks operating on virtually every major project.
While Federal law doesn’t allow these governments to regulate others in the trucking industry, there is a loophole which allows them to single out the construction industry. Localities are using the construction permitting process to accomplish this goal. Local governments are including in the grading and building permit process excessive trucking regulations that are restricting hours of operation and forcing complicated and extensive routes on our industry.

During the planning stages of these projects there are areas overlooked or not recognized as problems, particularly in the realm of the import and export of dirt on local projects.  The place to look for these excessive regulations is in permit requirements negotiated by the owners or developers which restrict the contractor and/or their sub-contractors travel during certain hours or other major restrictions.

For example, on a recent job in the city of San Jacinto, the city was restricting trucking dirt operations from using local streets to a mere six hours per day - 9:00 a.m. and must shut down at 3:00 p.m. We also have localities that restrict and only allow operations from 9:00 to 11:30 a.m. and then again from 1:30 to 3:00 p.m.

Restricting import and export procedures to working schedules of 4 to 6 hours a day affects profitability for everyone. This may not seem significant when the developer or the contractor is negotiating with city officials to obtain the proper permits or get approval for the job, but it becomes very significant when the number of hauls or the miles required by the haul route escalates because of these agreements.

It is very important to take into account the impact that these seemingly minor items will have on a project before the permits are issued or contracts are signed.

We recently had two members on a Huntington Beach project that were experiencing this scenario, which ultimately cost the contractor an additional $250,000 in extra trucking time.
In another example, a contractor working in Palos Verdes Estates ran into an adjoining city which would not approve a direct haul route which cost the contractor and his customer an additional $75,000.

Solving the Situation
An example of thinking this process through (and attendant cost savings) comes from the Town of Apple Valley, which understands the need to make sure that everyone is informed of haul permit requirements and is working with industry to accomplish this mission. 

At a recent Town Council meeting, Councilman Tim Jasper said that it was unfair to the trucking industry when there are any surprises.  The Town Council has agreed that everyone involved in the permit process must be notified and it is the responsibility of the developer or property owner on any large import export project to make sure this is done.  This notification requirement helps ensure that interested parties have all the information they need so everyone is bidding competitively - which saves the owners money and time.

There are advantages to having haul routes; once the locality has given you a route, then there are no surprises and you have a route that won’t change and if it does, and then you have a course for additional charges.

We need to make sure developers and contractors are aware of the local government time restraints and the consequences, in terms of both cost and the fact that time restraints will stretch out the construction process.  While many localities are looking to increase their property tax base, they must be made aware that with growth come growing pains and, at least for the construction period, those growing pains include a little extra trucking. 

Haul routes are being overlooked until time of import or export and then it is too late. If this is made an issue on the front end it won’t become an issue during the project. It is very difficult to work trucks 4 to 6 hours a day. It is much more efficient to get the trucks in and done in fewer days and not have to add additional trucks (and additional costs) to complete the job on time.

A warning for contractors - the trucking company is only going to figure this increased cost into their bid, with either an increased cost for additional trucks or charge you the eight hours that the trucks would normally work on other projects. This will be absorbed by the contractor who has to either eat it or pass it along to his customer - the developer who will then pass it on to the owner who is already recoiling from the high cost of construction in California.

We need to add, that in some cases, there are no additional trucks or drivers available. With the increased number of projects in our area, each with a need for trucks; it is very difficult for the trucking industry to meet the demands for the work.

There may be a solution to be found in Assembly Concurrent Resolution 23 (ACR 23) which was chaptered by the Secretary of State on August 17, 2005. 

ACR 23 was passed unanimously by the Senate and Assembly to address problems such as these being created by localities. The Legislature encouraged regional transportation planning agencies to be proactive in encouraging localities to review their current master plans and incorporate “through truck routes that will allow the shortest and quickest routes through their locality.” With this new resolution, we are hoping the localities will embrace what the legislature is requesting and that this will help resolve issues of this nature.

Until that time, we need to be sure that localities stop including the requirements in their permit process, or if they do, everyone steps up their communication effort for these projects.

The ultimate test may also be a court challenge associated with the Federal Aviation Administration Authorization Act of 1994 (F4A) and the Clean Air Act. Our industry would argue that the F4A is constantly being violated due to route restrictions effect all three of the areas of concern – price, routes and service. The environmental angle would argue that circuitous routing of trucks adds hundreds if not thousands of pounds of diesel emission by-products into the air we breathe because trucks are unreasonably rerouted hundreds of thousand of miles each year because of the (nimby – not-in-my-back-yard) mentality the trucking industry faces nationwide. These two options will no doubt carry a long term financial commitment for legal expenses so it is important that if we do proceed we have the right information and right case to test the law.