Legislation to reauthorize and revise the State’s alternative public works contracting procedures has been passed by both the House and Senate and awaits the Governor’s signature, which is expected.

The bill (ESHB 1466) is necessary as the law authorizing the use of GCCM, Design-Build (DB) and Job Order Contracting (JOC) on certain public projects is set to sunset at the end of June, 2013.  This bill reauthorizes the statute for eight more years while making a few tweaks.

Even though the bill had broad support in the Legislature, industry groups had to work hard to ensure that the popular measure did not become a vehicle for amendments that would have endangered its path to enactment.  The bill ultimately passed without controversial changes.

The bill was endorsed unanimously by members of the Capital Projects Advisory Review Board (CPARB), the body that advises the State on alternative public contracting issues.  CPARB had been working on the legislation for months. Its Reauthorization Task Force gathered input and made recommendations on any changes.  All of the changes included in ESHB 1466 were unanimously approved by CPARB.

Changes include:

• Allows certified public bodies to use GCCM on any size project without going to CPARB’s Project Review Committee (PRC) for approval, and DB on no more than five projects between $2 million and $10 million during the certification period.
• Changes the number of DB projects between $2 million and $10 million that the PRC may approve from 10 to 15 projects, and requires the PRC to report annually to CPARB on these projects and recommendations for further use.
• Increases the maximum total dollar amount that may be awarded through JOCs in counties with a population of more than 1 million to $6 million.

The Legislature is working on a new 2013-2015 State Capital Budget passed that will positively affect every segment of the construction industry.  Current proposals include hundreds of projects like Edmonds’ fishing pier renovation, Yakima’s Toppenish family housing project, Enumclaw’s water system replacements and Kent’s SE 256h St. widening.

Currently there are competing House and Senate versions, but the total funding in each is not far apart:  The House plan, coming in at $3.6 billion is about $130 million more than the Senate version.

To check out the list of projects that are being considered in the two plans, click House Capital Budget proposal and Senate Capital Budget proposal.

It’s crunch time in Olympia as the Legislature is taking action on many fronts that will impact funding for all types of construction. Today’s focus is the Public Works Trust Fund.

A proposal in the State Senate would PERMANENTLY redirect existing funding sources out of the PWTF — endangering dozens of infrastructure projects such as water, sewer, stormwater and some local roads and bridges.

The PWTF provides grants and low-interest loans to local governments for public works projects – many that could not otherwise be financed and built by small communities themselves. Dozens of proposed construction projects — such as the City of Port Orchard Marina Pump Station, City of Omak Sewer System Improvements, and the City of Washougal Stormwater Decant Facility — are in danger should the Legislature adopt a proposal that would gut the Public Works Trust Fund.

In addition to loan repayments—at interest rates ranging from 0.25 to 2 percent per year—the PWTF receives revenue from four state tax sources related to the types of infrastructure aided by the fund: 6.1 percent of the revenue from the real estate excise tax, 20 percent of the revenue from the water utility excise tax, 60 percent of sewerage collection tax revenues, and all the revenue from the state tax on solid waste service.

The State Senate’s budget plan would redirect all of the tax streams — except for two percent of the real estate excise tax — away from the public works trust fund and into other government accounts.

PWTF projects facilitate private economic growth and provide jobs for the hard-hit construction industry which, in turn, supports jobs in industries from material supply to food service and a variety of small businesses. Plus, many of the projects funded by the PWTF protect the environment and improve the quality of life in the state.

Urge your Senator NOT to redirect funding out of the Public Works Trust Fund!

As construction activity continues to rebound, staying focused on workplace safety and preventing injuries is more important than ever. Construction industry workers, owners and supervisors have an opportunity to focus on industry-specific training at the sixth annual Construction Safety Day, on Wednesday, May 8. This year’s event will be held from 7 a.m. to 3:45 p.m. at the Puyallup Fairgrounds Pavilion.

Construction Safety Day is co-sponsored by the Governor’s Industrial Safety and Health Advisory Board and the Department of Labor & Industries to promote safety in the construction industry. Despite improvements in equipment and training, construction remains a hazardous occupation. Last year, eight workers died in Washington State due to construction-related accidents. Many more were seriously injured.

In addition to demonstrations on cranes, job-site equipment and tools, an exhibit hall, and health and wellness booth, this year’s Construction Safety Day will have workshops for workers, owners and supervisors on:

· LEAN for construction

· Communication and leadership for safety

· Safety rule update, including the newly revised Fall-Protection rule

· Accident Prevention Plan (APP)

· Aerial lift and reach truck safety

· Scaffolding

See the Registration Brochure for more information about the workshops. Registration is $55 in advance or $65 at the door. There is a $10 per person discount for groups of five or more. Visit www.regonline.com/wagovconf-csd to register online.

For more information, send an e-mail to GovSafetyConf@Lni.wa.gov or call 360.902.5446.

During the Legislature’s current budget battles, two significant proposals have been released that include raids on the State’s Public Works Trust Fund (Gov. Inslee’s budget proposal and SB 5895, just-introduced education funding bill).

Raiding this trust fund is counterproductive to any jobs agenda. How so?  The Public Works Trust Fund (PWTF) is one of the most important sources of infrastructure funding for local governments and special purpose districts in Washington State. The PWTF is a revolving loan fund that provides low-interest loans for basic infrastructure projects like water, wastewater, stormwater, and roads – the foundation for homes and businesses in our growing communities.

State investment in basic infrastructure is a strong and necessary foundation for economic growth, and the construction industry has yet to fully recover from the recession.  The mission of the PWTF is a vital part of the state’s overall economic-development strategy. According to the Department of Revenue, every dollar invested by the PWTF in basic infrastructure yields an additional $3.60 in statewide economic activity. The more than $2 billion total investment by the PWTF has generated $10.7 billion in gross construction-related economic activity.

These projects mean jobs because they help facilitate private economic growth and they provide construction work.  Keep in mind that for each $1 million invested in construction, an additional 16 jobs are created, not just in construction but also through “spin off” effects on material suppliers, retailers, etc.

There’s still time to head this off, but those who are concerned about raids on these infrastructure investments should let their legislators know how they feel right away.

The UW’s Pacific NW Center for Construction Research and Education is hosting its semi-annual Construction Industry Research Conference on Friday, April 19 fro 11:30 am-4:00 pm at their Magnusson Park facility at Sand Point. I went last time and plan to attend this one, too. While we are all busier than we really want to be, sometimes it is worth it to stop and look up. We need to work on what’s in front of us (bid’s due Tuesday!) but also to see what’s come at us and we can’t do that unless we look up every once in a while.
This half-day event will include a panel discussion on three UW-industry partnership research projects, and a research expo on topics such as pre-fab modularization, BIM, sustainable design, transportation design-build, life cycle costs of solar in schools, and technology in safety. There will be ample time for networking with others in the industry and UW construction faculty and construction management students.
It’s only $100 and a few hours on a Friday afternoon when you are too tired to start a new project anyway. As an industry leader, you have to look ahead. We are fortunate to have the Center for Construction Research at the UW and it deserves industry support. Hope to see you there!
To register, go to http://engage.washington.edu/site/Calendar?id=109362&view=Detail.

Last week’s brazen yet ultimately unsuccessful attempt by thieves to yank copper wire out of ten street lights along a busy Olympia highway — causing $5000 worth of damage — was one more reminder that metal theft continues to be a significant problem for contractors, utilities, government agencies and others.  According to insurance industry data, 25,000 insurance claims due to metal theft were filed in 2012 alone.

To combat metal theft Rep. Roger Goodman of Kirkland introduced ESHB 1552.  Goodman leads an informal Metal Theft Work Group composed of scrap industry, law enforcement, utility representatives and other stakeholders, and this bill is based on the group’s recommendations.

Goodman says that we’ve tried criminal penalties, but the problem has gotten worse, and that the market is insufficiently regulated.

The bill:

• Creates a scrap metal license for scrap metal businesses.
• Expands criminal penalties for metal theft and malicious mischief.
• Allows for civil forfeiture for any property used in the commission of a crime involving the theft, trafficking, or unlawful possession of commercial metal property.
• Creates a database by which scrap metal businesses may determine if a potential customer has a criminal conviction which makes him or her ineligible to sell property to a licensed business.
• Establishes a grant program to support special law enforcement emphasis targeting metal theft.

The bill passed the House and awaits further action in the State Senate.

Do you have a metal theft “horror story” to share from your jobsite?  Talk about it in a comment; I’ll make sure Rep. Goodman hears about it as further evidence of the need for his bill.

The construction industry added 48,000 jobs in February—the largest monthly increase since March 2007. Year over year, the industry has added 140,000 jobs, or 2.5 percent, according to the March 8 employment report by the U.S. Labor Department. The construction industry unemployment rate declined to 15.7 percent in February, down from 16.1 percent the previous month and down from 17.1 percent from one year ago.

The nonresidential building sector added 6,200 jobs for the month and has added 20,600 jobs, or 3.1 percent, during the last 12 months. Nonresidential specialty trade contractors added 14,600 jobs last month and the segment has added 23,000 jobs, or 1.1 percent, during the past year. Heavy and civil engineering construction employment increased by 8,200 jobs in February and is up by 32,100 jobs, or 3.7 percent, compared to February 2012.

Residential building construction added 2,300 workers in February, but has only added 400 jobs, or 0.1 percent, compared to the same time one year ago. Many of the jobs added during the past year show up in the residential specialty trade contractors segment, which gained 17,100 jobs in February and has added 63,800 jobs, or 4.3 percent, during the past 12 months.

“Despite worries over automatic sequestration, high gas prices, the end of the payroll tax increase and a number of tax increases, the U.S. economy appears to be gaining momentum,” said Associated Builders and Contractors Chief Economist Anirban Basu. “Thanks to rising home and corporate equity prices, total U.S. household wealth appears to have established an all-time high.

“Corporate earnings remain solid, and for the most part balance sheets remain healthy,” added Basu. “Data also indicate that lending standards are easing, including with respect to commercial real estate. After today’s jobs report release, U.S. stock futures climbed higher.

“Perhaps even more surprising than the overall employment report was the performance of the construction industry, which ranked second in terms of job growth behind only professional and business services in February,” Basu said. “Job growth was reported in every significant construction segment, with specialty trade contractors responsible for approximately two out of every three jobs added last month.

“Heavy and civil engineering, often thought to be a leading indicator for the overall nonresidential construction sector, added 8,200 jobs in February, which represents a meaningful acceleration over prior months,” said Basu. “With the broader economy still gathering momentum and with leading indicators for both residential and nonresidential construction remaining positive, there is reason to believe that further construction job growth is ahead.

“This is not to suggest that the economy is completely out of the woods,” Basu added. “The effects of automatic sequestration, which represents roughly $44 billion in federal spending cuts during the next seven months—and then additional cuts beyond that—will gradually seep into the economy and potentially cause it to decelerate during the second quarter.
“But for now, economic performance is exceeding expectations and overall job creation is becoming more brisk even as the nation continues to trim aggregate public sector employment,” said Basu.

Things started out so well.  The State Senate, way back in February, passed a package of bills to tweak the state’s workers’ compensation system.  The Senate was responding to concerns from employers who are facing the prospects of $110 million in surcharges for each of the next ten years in order to build up the system’s reserves.  Building reserves is important, but it does not have to be done by hitting employers with huge surcharges just as the economy is finding its way out of the great recession.

The Senate-passed bills included one that would have allowed more workers to accept lump-sum payments instead of lifetime pensions.  The number of lifetime pensions provided in Washington State is waaayyy above the national average, and allowing the lump-sum payment option as 44 states do is one way to reduce costs for the system and to build reserves.  SB 5127 would have lowered the age of injured workers for whom lump-sum payments is an option from 55 to 40.  Younger workers may be interested in using upfront money to set up a new way to make a living…the choice would be theirs.

Of all the workers’ comp reform bills passed by the State Senate, SB 5127 passed with the most bi-partisan support,suggesting it had a shot in the House.  However, the House leadership reportedly won’t even give the bill a hearing.  Who knows what sort of political brinksmanship will occur toward the end of the legislative session that could resurrect a bill like SB 5127, but for now, the idea seems to have run into a dead end.

Over the past few budget cycles, the Legislature has greatly reduced the amount of funds available in the PWTF through budget transfers and legislation diverting certain revenue streams. Because the PWTF is a revolving loan fund, such actions continue to undermine the PWTF over time, even though the program is a national model that is widely supported throughout the state. These actions negatively impact job growth, economic development, and regulatory compliance in Washington State. During the recent application process, local governments and special purpose districts submitted over $1 billion in project requests for the available $685 million – even the available funding is inadequate to cover the demand for these basic infrastructure loans.

State investment in basic infrastructure is a strong and necessary foundation for economic growth, and the construction industry has yet to fully recover from the recession. The current mission of the PWTF—to fund essential infrastructure including water, wastewater, road, bridge, and solid-waste and recycling projects—is a vital part of the state’s overall economic-development strategy. According to the Department of Revenue, every dollar invested by the PWTF in basic infrastructure yields an additional $3.60 in statewide economic activity. The more than $2 billion total investment by the PWTF has generated $10.7 billion in gross construction-related economic activity.

These benefits of PWTF investment in basic infrastructure include construction contracts; production, transportation, and purchase of equipment and related goods and services; and purchases made by workers employed on PWTF-financed projects. Without this infrastructure funding, many Washington communities could not sustain, expand, and attract businesses vital to economic development, and could not meet the variety of regulatory requirements under the Growth Management Act, Clean Water Act, and other laws.

The PWTF is one of the rare programs in state government that has broad support from the full spectrum of stakeholder interests – business, labor, local government, and the environmental community.