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Governor Approves Retention
and Park Construction Bills
At the end of September,
California Governor Arnold Schwarzenegger signed into law Senate Bill 593, which
prohibits the California Department of Transportation (Caltrans) from
withholding retention when making progress payments to contractors for
state-funded projects. The California Public Contract code previously directed
Caltrans to retain at least five percent of the contract price until its
completion.
In the past, Caltrans used retention to maintain financial control over the
project – which enabled them to be sure that the project was satisfactorily
completed. Many contractors, however, pointed out that Caltrans often delayed
making the retention payments after the projects were completed without a valid
reason.
During committee hearings on the bill, Caltrans officials said that the
elimination of retention will not increase their project costs because payment
and performance bonds ensure that contractors perform and complete work to the
satisfaction of the agency.
While SB 593 restrains Caltrans ability to withhold retention, the law does not
apply to other California departments or agencies. Also, prime contractors can
withhold retention if subcontractors cannot secure a performance bond. The law
will become effective on January 1, 2009 and expire on January 1, 2014.
Gov. Schwarzenegger vetoed another bill last month that would have required all
contractors to obtain a special license from the Contractors State License Board
before performing work on public works projects. If the bill had passed,
contractors would have been burdened with additional testing and fees.
Also, in early October, Gov. Schwarzenegger signed into law Assembly Bills 31
and 2494, which aim to facilitate park and affordable housing rehabilitation and
construction.
“We all know that over the past few decades California has grown tremendously,”
said Gov. Schwarzenegger. “Many of our communities were built up very quickly
over these few decades and very fast this state developed, so that parks and
open spaces were neglected at the same time, especially in urban and in
low-income areas. In a state that is leading the way in the nation and the world
when it comes to protecting our environment, I think we can do much better than
that.”
While AB 31 directly provides $400 million in Proposition 84 money to build new
parks, AB 2494 exchanges local government construction of affordable housing for
grant money allocated to park construction. Funding for park construction under
AB 2494 comes from Proposition 1C, the $2.85 billion housing bond passed in
November 2006.
As stipulated in AB 2494, the HCD and Department of Parks and Recreation (DPR)
will issue grants to cities and counties that:
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Are critically underserved by
park and recreation facilities;
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Have implemented affordable
housing plans approved and supervised by the HCD; and
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Have issued building permit for
new construction of affordable housing.
Assembly Bill 31 also tasks DPR
with establishing methods for determining which California cities will be
allocated funding and distributing the parks-allocated Proposition 84 grants to
the cities.
The passage of these two bills is good news for landscaping and playground
contractors, who will likely see an increased demand for their services in the
coming year. Contractors interested in bidding on projects funded through AB 31
and AB 2494 should keep an eye on city and county public work sites for bid
notices.
To read the Senate’s Bill 593
analysis, visit:
http://info.sen.ca.gov/pub/07-08/bill/sen/sb_0551-0600/sb_593_cfa_20080808_165453_sen_floor.html
To read AB 31, visit:
http://leginfo.ca.gov/pub/07-08/bill/asm/ab_0001-0050/ab_31_bill_20080930_chaptered.html
To read AB 2494, visit:
http://leginfo.ca.gov/pub/07-08/bill/asm/ab_2451-2500/ab_2494_bill_20080930_chaptered.html
To read Gov. Schwarzenegger’s comments about AB 31 and AB 2494, visit:
http://gov.ca.gov/index.php?/speech/10733/
DBE Program Return Delayed Again
In meetings held across the state in August, California Department of
Transportation (Caltrans) officials predicted that the state’s Disadvantaged
Business Enterprise (DBE) program would be re-implemented in October. The
program’s re-launch, however, has been delayed for a second time because the
Federal Highway Association (FHWA) is requesting more information about the
proposed changes from Caltrans.
Originally, Caltrans expected to receive FHWA approval for its DBE program plans
in August.
The department has proposed an overall DBE participation goal of 13.5 percent
for the 2009 Fiscal Year – meaning that the accumulated DBE utilization on
individual contracts should equal the overall goal. Race-conscious and
race-neutral measures are expected to be equally utilized to meet the annual
participation goal.
The Caltrans proposal also excludes Asian/Subcontinent Americans and Hispanic
Americans from the list of minority subcontractors eligible for the fulfillment
of race-conscious goals.
DBE Goodfaith will continue to keep you up-to-date regarding the
re-implementation of California’s DBE program.
* 2008 ELECTION ENDORSEMENT *
Vote 'Yes!' on Prop. 1A & Prop. 12
Proposition 1A: “The Safe, Reliable High-Speed
Passenger Train Bond Act”
Proposition 1A Explained
Originally slated for the 2004 ballot, Proposition 1A would allocate $9.95
billion to the California High-Speed Rail Authority for the construction of a
San Francisco-Los Angeles rail line and improvements to local rail systems. The
state will raise funding required by Prop. 1A through 30-year general obligation
bonds. The $9.95 billion, however, is insufficient for the completion of these
projects; as a result, the Authority will rely on the federal government
matching the funds to cover the total cost.
In total, Prop. 12 will cost an estimated $19.4 billion ($9.95 billion plus bond
costs). Also, once the Proposition-funded high-speed rail line construction is
completed, maintenance is expected to cost upwards of $1 billion annually.
Why Proposition 1A Right for Californians
Despite the cost of Prop. 1A, it will provide numerous benefits to Californians.
First, it will offer long-distance commuters an affordable and reliable
alternative to driving. Secondly, it will help ease congestion on the roadways
for the state’s growing population which, in turn, reduces the amount of harmful
carbon emissions into our environment. Finally, the injection of almost $10
billion will create jobs and help maintain the vitality of California’s
construction industry.
Proposition 12: Veterans Bond
Act of 2008
Proposition 12 Explained
Unanimously passed by the Senate and Assembly to be placed on the ballot,
Proposition 12 sets aside $900 million to help California veterans obtain loans
for the of purchase farms and homes. The California Legislative Analyst’s Office
estimates that the total cost of Prop. 12 to the state will be approximately
$1.8 billion ($900 million principal plus interest).
Why Proposition 12 is Right for Californians
In service to their nation, veterans sacrificed their most formative years. It
is Californians’ patriotic duty to support programs that help secure the welfare
of veterans when they return from duty – just as veterans helped secure the
welfare of all Americans through their service abroad.
To read more about Prop. 1A,
visit:
http://www.smartvoter.org/2008/11/04/ca/state/prop/1A/
To read more about Prop. 12,
visit:
http://www.smartvoter.org/2008/11/04/ca/state/prop/12/
What is DBE Goodfaith?
DBE Goodfaith Inc. is an outreach assistance firm
dedicated to providing a web-based service solution for construction and other
firms seeking socially and economically disadvantaged business (DBE/DVBE/WBE/SBE/MBE/HUB)
participation on government funded projects.
With the help of our services, businesses can comply with the Good Faith Effort
requirements of state and local government agency disadvantaged business
programs. By placing subcontracting opportunity ads on our website and directly
soliciting disadvantaged business firms via email, fax, and telephone, we help
take the stress of out the Good Faith Process and allows firms to concentrate on
the business of providing the most competitive bids on their projects. To ensure
that all disadvantaged businesses are included in our outreach procedures, we
maintain an up-to-date database of all registered disadvantaged firms in
California, Nevada, New York, and soon Texas. When customers search our online
database they can easily find disadvantaged businesses by their location and/or
by the type of goods and services or work they provide.
Also, in an effort to inform and educate the community on procurement,
construction, and other pertinent topics, we send out electronic newsletters
throughout the year. In our e-newsletter, businesses can find in-depth
discussions on procedures and regulations effecting disadvantaged business
programs, analysis of current events, and valuable resources such as events
listings. We also offer construction trade and focus information on our website
related to DVBE, DBE, MBE, WBE, and other programs.
For more information on our services, please
visit our website at: http://www.dbegoodfaith.com
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