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Claims Resolution Procedure Changes

02 Dec 2016 00:00:00 -0800

Claims resolution procedures for public contracts in California will change under a new law that takes effect Jan. 1. Assembly Bill 626, recently signed by Gov. Jerry Brown, establishes a claims resolution process applicable to any contractor claim, as defined, filed in connection with a public works project for contracts entered into on or after Jan. 1, 2017.

Public Contract Code section 20104, which remains in place and establishes a dispute resolution procedure for local agencies, only applies to public works claims of $375,000 or less; however, AB 626 will apply to all public works claims, regardless of the amount.

Within 45 days of receipt of any claim, AB 626 requires specified public entities to provide a written statement to the claimant identifying the disputed and undisputed portions of the claim. If a written response is not timely issued, the entire claim is deemed rejected. If the claimant disputes the public entity’s response, the claimant may demand a meet-and-confer conference, and any portion of the claim that the parties continue to dispute following the conference is subject to nonbinding mediation.

Payment due on undisputed portions of a claim must be processed within 60 days, and unpaid claim amounts accrue interest at 7 percent per annum. AB 626 also establishes a formal process for subcontractors and lower tier subcontractors that lack standing to assert claims to request the prime contractor to pass through claims, and imposes requirements on the prime contractor with regard to any such requests. AB 626 does not affect other existing claims resolution procedures, such as the Government Claims Act.

Moving forward, this process must be included in the plans or specifications for all public works projects. Best Best & Krieger LLP will issue additional, detailed guidance to clients regarding incorporating these provisions into contract documents. If you have any questions about this legislation or how it may impact your agency, please contact the attorney authors of this Legal Alert, or your BB&K attorney.

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Disclaimer: BB&K Legal Alerts are not intended as legal advice. Additional facts or future developments may affect subjects contained herein. Seek the advice of an attorney before acting or relying upon any information in this communiqué.

New California Laws Impacting Public Agencies

18 Dec 2015 00:00:00 -0800

There were many bills passed by California lawmakers this year that will impact municipalities and other public agencies. Follow the link below to read more about the bills that are of specific importance to your work. Please contact us for further information about the bills you see here, or any legal matters with which you need assistance.

RECENT CHANGES

AB 1 - Drought: local governments: fines. Prohibits a city, county, or city and county from imposing a fine under any ordinance for a failure to water a lawn or having a brown lawn during a period for which the Governor has issued a proclamation of a state of emergency based on drought conditions.

AB 2 - Community revitalization authority. Authorizes certain local agencies to form a community revitalization authority within a community revitalization and investment area, as defined, to carry out provisions of the Community Redevelopment Law in that area for purposes related to, among other things, infrastructure, affordable housing and economic revitalization.

SB 21 - Political Reform Act of 1974: gifts of travel. Requires a nonprofit organization that regularly organizes and hosts travel for elected officials, as specified, and that pays for these types of travel for an elected state officer or local elected officeholder, to disclose the names of donors who, in the preceding year, both donated to the nonprofit organization and accompanied an elected officer or officeholder for any portion of the travel, as specified. The bill requires a person who receives a gift of a travel payment from any source to report the travel destination on his or her statement of economic interests. This bill contains other related provisions and other existing laws.

SB 34 - Automated license plate recognition systems: use of data. This bill imposes specified requirements on an "ALPR operator" as defined, including, among others, maintaining reasonable security procedures and practices to protect ALPR information and implementing a usage and privacy policy with respect to that information, as specified. The bill imposes similar requirements on an "ALPR end-user," as defined. This bill contains other related provisions and other existing laws.

AB 57 - Telecommunications: wireless telecommunication facilities. Provides that a collocation or siting application for a wireless telecommunications facility is deemed approved if the city or county fails to approve or disapprove the application within the reasonable time periods specified in applicable decisions of the Federal Communications Commission, all required public notices have been provided regarding the application, and the applicant has provided a notice to the city or county that the reasonable time period has lapsed. This bill contains other existing laws.

AB 69 - Peace officers: body-worn cameras. Requires law enforcement agencies to consider specified best practices when establishing policies and procedures for downloading and storing data from body-worn cameras, including, among other things, prohibiting the unauthorized use, duplication, or distribution of the data, and establishing storage periods for evidentiary and non-evidentiary data, as defined.

SB 88 - Water. Authorizes the State Water Resources Control Board to order consolidation with a receiving water system where a public water system, or a state small water system within a disadvantaged community, consistently fails to provide an adequate supply of safe drinking water. This bill also authorizes the Board to order the extension of service to an area that does not have access to an adequate supply of safe drinking water so long as the extension of service is an interim extension of service in preparation for consolidation.

SB 107 - Local government. Current law dissolved redevelopment agencies and community development agencies as of Feb. 1, 2012, and provides for the designation of successor agencies to wind down the affairs of the dissolved redevelopment agencies and to, among other things, make payments due for enforceable obligations and to perform obligations required pursuant to any enforceable obligation. This bill provides that any action by the Department of Finance, that occurred on or after June 28, 2011, carrying out the Department's obligations under the provisions described above constitutes a Department action for the preparation, development, or administration of the State budget and is exempt from the Administrative Procedures Act.

AB 169 - Local government: public records. If a local agency, except a school district, maintains an Internet resource, including, but not limited to an Internet website, Internet web page, or Internet web portal, which the local agency describes or titles as "open data," and the local agency voluntarily posts a public record on that Internet resource, then this bill requires the local agency to post the public record in an open format that meets specified requirements, including, among others, that the format is able to be retrieved, downloaded, indexed, and searched by a commonly used Internet search application.

AB 219 - Public works: concrete delivery. Current law defines "public works," for purposes of requirements regarding the payment of prevailing wages for public works projects, to include, among other things, the hauling of refuse from a public works site to an outside disposal location with respect to contracts involving any state agency. This bill expands the definition of "public works" for these purposes to include the hauling and delivery of ready-mixed concrete, as defined, to carry out a public works contract, with respect to contracts involving any state agency or any political subdivision of the State.

SB 239 - Local services: contracts: fire protection services. With certain exceptions, this bill permits a public agency to exercise new or extended services outside the public agency's jurisdictional boundaries pursuant to a fire protection contract, as defined, only if the public agency receives written approval from the local agency formation commission in the affected county. This bill contains other related provisions and other existing laws.

AB 243 - Medical marijuana. Requires the Department of Food and Agriculture, the Department of Pesticide Regulation, the State Department of Public Health, the Department of Fish and Wildlife, and the State Water Resources Control Board to promulgate regulations or standards relating to medical marijuana and its cultivation, as specified. The bill also requires various state agencies to take specified actions to mitigate the impact that marijuana cultivation has on the environment.

AB 266 - Medical marijuana. Enacts the Medical Marijuana Regulation and Safety Act for the licensure and regulation of medical marijuana and establishes, within the Department of Consumer Affairs, the Bureau of Medical Marijuana Regulation, under the supervision and control of the director of Consumer Affairs. The bill would require the director to administer and enforce the provisions of the Act.

SB 272 - The California Public Records Act: local agencies: inventory. Requires each local agency, except a local educational agency, in implementing the California Public Records Act, to create a catalog of enterprise systems, as defined, to make the catalog publicly available upon request in the office of the person or officer designated by the agency's legislative body, and to post the catalog on the local agency's Internet website.

AB 277 (& SB 493) - Legislation narrows use of at-large elections to elect public officials. AB 277 codifies the holding in Jauregui v. City of Palmdale (2014) 226 Cal.App.4th 781 to prohibit the use of at-large elections in a political subdivision if it would impair the ability of a protected class to elect their chosen candidates or otherwise influence the outcome of an election. The definition of “political subdivision” has been amended to expressly include a charter city, charter county, or charter city and county.

AB 313 - Enhanced infrastructure financing districts. Requires, after the adoption of a resolution of intention to establish a proposed district, the legislative body to send a copy of the resolution to the public financing authority. This bill would revise the duties of the public financing authority after the resolution of intention to establish the proposed district has been adopted, so that the public financing authority, instead of the legislative body, will perform the specified duties related to the preparation, proposal, and adoption of the infrastructure financing plan and the adoption of the formation of the district.

SB 331 – Public contracts: local agencies: negotiations. Enacts the Civic Reporting Openness in Negotiations Efficiency Act to establish specific procedures for the negotiation and approval of certain contracts valued at $250,000 or more for goods or services by cities, counties, cities and counties, or special districts that have adopted a civic openness in negotiations ordinance, defined as an ordinance imposing specified requirements as part of any collective bargaining process undertaken pursuant to the Meyers-Milias-Brown Act. The Act requires the designation of an independent auditor to review and report on the cost of any proposed contract.

SB 374 - Local agency design-build projects: transit districts. This bill specifies that the definition of a local agency authorized to use the design-build method of project delivery includes the San Diego Association of Governments. The bill defines projects, as it pertains to the San Diego Association of Governments, to include development projects adjacent, or physically or functionally related, to transit facilities developed by the association.

SB 383 – Civil actions: objections to pleadings. Requires a demurring party in certain civil actions, before filing the demurrer, to engage in a specified meet-and-confer process with the party who filed the pleading demurred to. This is for the purpose of determining whether an agreement can be reached as to the filing of an amended pleading that would resolve the objections to be raised in the demurrer. The bill prohibits a party from amending a complaint or cross-complaint more than three times in response to a demurrer filed before the case is at issue, except as specified.

AB 401 - Low-Income Water Rate Assistance Program. Requires the State Water Resources Control Board, no later than Jan. 1, 2018, in collaboration with the State Board of Equalization and relevant stakeholders, to develop a plan for the funding and implementation of the Low-Income Water Rate Assistance Program, which includes specified elements. The bill permits the board to consider existing rate assistance programs authorized by the commission in developing the plan and authorizes the plan to include recommendations for other cost-effective methods of offering assistance to low-income water customers.

AB 402 – Local agency services: contracts. Establishes a pilot program, until Jan. 1, 2021, for the Napa and San Bernardino commissions that permits those commissions to authorize a city or district to provide new or extended services outside both its jurisdictional boundaries and its sphere of influence under specified circumstances. This bill contains other related provisions.

SB 415 - Voter participation. Beginning Jan. 1, 2018, this law prohibits a political subdivision, as defined, from holding an election, other than on a statewide election date, if holding an election on a non-concurrent date has previously resulted in voter turnout for a regularly scheduled election in that political subdivision being at least 25 percent less than the average voter turnout within the political subdivision for the previous four statewide general elections, except as specified. This bill contains other related provisions.

SB 493 (& AB 277) - Legislation narrows use of at-large elections to elect public officials. SB 493 authorizes the legislative body of a city with a population of fewer than 100,000 people to adopt an ordinance that requires the members of the legislative body to be elected by district without submitting the ordinance to the voters for approval.

SB 533 - Cities and counties: sales and use tax agreements. Repeals a specified prohibition of the Bradley-Burns Uniform Local Sales and Use Tax Law and instead prohibits, on or after Jan. 1, a local agency from entering into any form of agreement that would result, directly or indirectly, in the payment, transfer, diversion, or rebate of Bradley-Burns local tax revenues to any person, as defined, for any purpose, if the agreement results in a reduction in the amount of Bradley-Burns local tax revenues that, in the absence of the agreement, would be received by another local agency and the retailer continues to maintain a physical presence within the territorial jurisdiction of that other local agency, with specified exceptions.

AB 552 - Public works contracts: damages. Among other things, this bill provides that a public works contract, entered into on or after Jan. 1, that contains a clause expressly requiring a contractor to be responsible for delay damages, as defined, is not enforceable unless the delay damages have been liquidated to a set amount and identified in the public works contract. Under the bill, these provisions do not apply to specified state agencies. The bill also makes findings and declarations related to public contracts.

SB 555 - Urban retail water suppliers: water loss management. This bill requires each urban retail water supplier, on or before Oct. 1, 2017, and on or before Oct. 1 of each year thereafter, to submit a completed and validated water loss audit report for the previous calendar year or previous fiscal year as prescribed by rules adopted by the Department of Water Resources on or before Jan. 1, 2017, and updated as provided. The bill requires the Department to post all validated water loss audit reports on its website in a manner that allows for comparisons across water suppliers and to make these reports available for public viewing.

SB 570 - Personal information: privacy: breach. Current law requires a person, business, or agency that is required to issue a security breach notification to meet specific requirements, including that the notification be written in plain language. This bill additionally requires the security breach notification to be titled "Notice of Data Breach" and to present the information under prescribed headings. The bill prescribes a model security breach notification form, as specified.

AB 594 - Political Reform Act of 1974: campaign statements. Recasts the requirements for filing pre-election statements and repeals other reporting requirements, including supplemental pre-election statements and supplemental independent expenditure reports. This bill contains other related provisions and other existing laws.

AB 622 - Employment: E-Verify system: unlawful business practices. Expands the definition of an unlawful employment practice to prohibit an employer or any other person or entity from using the E-Verify system at a time or in a manner not required by a specified federal law or not authorized by a federal agency memorandum of understanding to check the employment authorization status of an existing employee or an applicant who has not received an offer of employment, except as required by federal law or as a condition of receiving federal funds.

SB 643 - Medical marijuana. Sets forth standards for a physician and surgeon prescribing medical cannabis and requires the Medical Board of California to prioritize its investigative and prosecutorial resources to identify and discipline physicians and surgeons that have repeatedly recommended excessive cannabis to patients for medical purposes or repeatedly recommended cannabis to patients for medical purposes without a good faith examination, as specified. The bill requires the Bureau of Medical Marijuana to require an applicant to furnish a full set of fingerprints for the purposes of conducting criminal history record checks.

SB 664 - Water: urban water management planning. This bill requires an urban water supplier to include within its plan, beginning Jan. 1, 2020, a seismic risk assessment and mitigation plan to assess the vulnerability of each of the various facilities of a water system and mitigate those vulnerabilities. This bill also authorizes an urban water supplier to comply with this requirement by submitting a copy of the most recently adopted local hazard mitigation plan or multi-hazard mitigation plan under specified federal law that addresses seismic risk.

AB 744 - Planning and zoning: density bonuses. Current law prohibits a city, county, or city and county from requiring a vehicular parking ratio for a housing development that meets specified criteria in excess of specified ratios. Notwithstanding the above-described provisions, this bill additionally prohibits, at the request of the developer, a city, county, or city and county from imposing a vehicular parking ratio, inclusive of handicapped and guest parking, in excess of .5 spaces per bedroom on a development that includes the maximum percentage of low- or very low-income units, as specified, and is located within 1/2 mile of a major transit stop, as defined, and there is unobstructed access to the transit stop from the development.

SB 761 - Advertising: Internet private residence rental listings: notice. Requires a hosting platform, as defined, to provide a specific notice to an occupant listing a residence for short-term rental on a hosting platform that states, among other things, that, if the occupant is a tenant, listing the room, home, condominium, or apartment may violate the lease or contract and could result in legal action by the landlord, including possible eviction.

AB 809 - Local initiative measures: ballot printing specifications. Current law requires that the ballots used when voting on a proposed county, city, or district ordinance submitted to the voters as an initiative measure have printed on them specified text relating to the proposed ordinance and dictates the placement of that text. This bill also requires that, if the ordinance proposes to impose a tax or raise the rate of a tax to be levied, the ballot include in the statement of the ordinance the amount of money to be raised annually and the rate and duration of the tax to be levied.

AB 848 - Alcoholism and drug abuse treatment facilities. Current law requires the State Department of Health Care Services to license adult alcoholism or drug abuse recovery or treatment facilities, as defined. This bill authorizes an adult alcoholism or drug abuse recovery or treatment facility that is licensed under those provisions to allow a licensed physician and surgeon or other health care practitioner, as defined, to provide incidental medical services, as defined, to a resident of the facility at the facility premises under specified limited circumstances.

AB 851 - Local government: organization: disincorporations. Current law authorizes a local agency that is conducting proceedings for the incorporation of a city, formation of a district, change of organization, a reorganization, a change of organization of a city, or a municipal reorganization to propose the adoption of a special tax on behalf of the affected city or district in accordance with this procedure. This bill additionally authorizes a local agency conducting proceedings for the disincorporation of a city to propose the adoption of a special tax on behalf of an affected city in accordance with the above-described procedure.

AB 852 - Public works: prevailing wages. Expands the definition of "public works," for the purposes of provisions relating to the prevailing rate of per diem wages, to also include any construction, alteration, demolition, installation, or repair work done under private contract on a project for a general acute care hospital, except on a project for a rural general acute care hospital with a maximum of 76 beds, when the project is paid for, in whole or in part, with the proceeds of conduit revenue bonds, as defined, that were issued on or after Jan. 1, 2016. This bill contains other related provisions and other existing laws.

AB 856 - Invasion of privacy. Expands liability for physical invasion of privacy to additionally include a person knowingly entering into the airspace above the land of another person without permission, as provided.

AB 901 - Solid waste: reporting requirements: enforcement. The California Integrated Waste Management Act of 1989, administered by the Department of Resources Recycling and Recovery, generally regulates the disposal, management, and recycling of solid waste. This bill revises specified provisions by, among other things, 1.) requiring recycling and composting operations and facilities to submit specified information directly to the Department, rather than to counties, 2.) requiring disposal facility operators to submit tonnage information to the Department, and to counties only on request, and 3.) deleting the requirement for counties to submit that information to cities, regional agencies and the Department.

AB 952 - Local government: vacancies. Provides that if a city council fills a vacancy in an elective office by appointment, and that vacancy occurred in the first half of the term of office and at least 130 days prior to the next general municipal election, the person appointed to fill the vacancy holds office until the next general municipal election at which a person is elected to fill that vacancy, and thereafter, until the person elected is qualified.

AB 953 - Law enforcement: racial profiling. Enacts the Racial and Identity Profiling Act of 2015, which, among other changes, revises the definition of racial profiling to instead refer to racial or identity profiling, and makes a conforming change to the prohibition against peace officers engaging in that practice.

AB 990 - Political Reform Act of 1974: advertisement disclosures. The Political Reform Act of 1974 imposes various disclosure statement requirements with respect to advertisements supporting or opposing a candidate or ballot measure. This bill requires that disclosure statements be printed in no less than 14-point bold, sans serif type font. The bill requires that an advertisement supporting or opposing a candidate that is paid for by an independent expenditure include a disclosure statement with specific content and, if the advertisement is mailed, it requires that the disclosure statement be located within a quarter of an inch of the recipient's name and address and be contained within a box that meets prescribed criteria.

AB 1020 (& AB 1461) - Expanded options for voter registration. AB 1020 authorizes persons to pre-register to vote in an election if that person is at least 16 years of age and makes other voter registration changes applicable to local elections officials.

AB 1077 - Mutual water companies: open meetings. Prohibits a mutual water company from meeting solely in an executive session without holding a meeting. The bill requires notice of a meeting to be given to an eligible person at least four days prior to the meetings. The bill also requires a board of directors of a mutual water company to allow an eligible person to personally attend a meeting of the board, if the eligible person gave the board at least 24 hours advance written notice of his or her intent to personally attend the meeting.

AB 1119 - Public utilities: municipal corporations: rights of way. Requires a municipal corporation, before using any street, alley, avenue or highway within any other municipal corporation or county, to request of the municipal corporation or county that has control over the street, alley, avenue or highway to agree with it upon the location of the use and the terms and conditions to which the use shall be subject. This bill contains other related provisions and other existing laws.

AB 1164 - Water conservation: drought tolerant landscaping. Prohibits a city, including a charter city, county, and city and county, from enacting or enforcing any ordinance or regulation that prohibits the installation of drought tolerant landscaping, synthetic grass or artificial turf on residential property, as specified. The bill additionally states that this is an issue of statewide concern. This bill contains other related provisions.

AB 1191 – Quimby Act: fees. This bill defines the term "fee," as used in the Quimby Act with regard to the expenditure of fees, to include any interest income generated from a fee charged and collected pursuant to that Act. The bill provides that these provisions are declaratory of current law.

AB 1194 - Mental health: involuntary commitment. Under the Lanterman-Petris-Short Act, when a person, as a result of mental health disorder, is a danger to others, or to himself or herself, or gravely disabled, he or she may, upon probable cause, be taken into custody and placed in a facility for 72-hour treatment and evaluation. This bill provides that, when determining if a person should be taken into custody pursuant to specified provisions, the individual making that determination shall consider available relevant information about the historical course of the person's mental disorder if the individual concludes that the information has a reasonable bearing on the determination, and that the individual shall not be limited to consideration of the danger of imminent harm.

AB 1222 - Tow trucks. Current law makes it a misdemeanor for the owner or operator of a tow truck to stop at the scene of an accident or near a disabled vehicle for the purpose of soliciting an engagement for towing services, either directly or indirectly, or to furnish any towing services, unless summoned to the scene, requested to stop, or flagged down by the owner or operator of a disabled vehicle, or requested to perform the service by a law enforcement officer or public agency pursuant to that agency's procedures. This bill applies those provisions to a towing company.

AB 1303 - Subdivision Map Act: map expiration dates. Extends, by 24 months, the expiration date of any approved tentative map or vesting tentative map that was approved on or after Jan. 1, 2002, and not later than July 11, 2013, within a county that meets certain criteria, except as specified. The bill additionally requires the extension of an approved or conditionally approved tentative map or vesting tentative map, or parcel map for which a tentative map or vesting tentative map was approved on or before Dec. 31, 2001, upon application by the subdivider at least 90 days prior to the expiration of the map, as specified.

AB 1358 – School facilities: design-build contracts. Current law authorizes the governing board of a school district, until Jan. 1, 2020, and upon a determination by the governing board of the school district that it is in the best interest of the school district, to enter into a design-build contract for both the design and construction of a school facility if that expenditure exceeds $2.5 million, as provided. This bill makes those provisions inoperative on July 1, 2016, and as of that date, instead authorizes, until Jan. 1, 2025, a school district, with the approval of the governing board of the school district, to procure design-build contracts for public works projects in excess of $1 million, awarding the contract to either the low bid or the best value, as provided.

AB 1431 - Local Agency Public Construction Act: job order contracting. The Local Agency Public Construction Act authorizes job order contracting, as provided, by the Los Angeles Unified School District, until Dec.31, 2020. This bill repeals the provisions relating to the LAUSD and instead authorizes job order contracting in a similar manner for school districts until Jan. 1, 2022.

AB 1461 (& AB 1020) - Expanded options for voter registration. AB 1461 requires the Secretary of State and Department of Motor Vehicles to establish the California New Motor Voter Program. Under this program, the DMV is required to electronically provide to the Secretary of State the records of a person issued an original or renewal driver’s license or state identification card. That person is automatically registered to vote unless s/he affirmatively declines to be registered to vote or is deemed to be ineligible to vote.

AB 1533 - Infrastructure financing. The Bergeson-Peace Infrastructure and Economic Development Bank Act makes findings and declarations, provides definitions and authorizes the board to take various actions in connection with the bank, including the issuance of bonds, as specified. This bill, among other things, revises the definition of economic development facilities to include facilities that are used to provide goods movement and defines goods movement-related infrastructure. The bill revises the definition of port facilities to specifically reference airports, landports, waterports and railports.

AB 1544 - Political Reform Act of 1974: behested payments. The Political Reform Act of 1974 provides for the comprehensive regulation of campaign financing and related matters, including campaign contributions, as defined. This bill provides that the provision relating to payments made by a government agency exclusively governs a payment by a governmental agency that is made principally for legislative or governmental purposes at the behest of a candidate who is an elected officer, and consequently the payment is not subject to the reporting requirement that applies generally to payments made for legislative, governmental, or charitable purposes.

For more information, contact the authors of this Legal Alert listed at right in the firm’s FAST Act, in addition to a more extensive breakdown of funding provided for in the Act.

Block Grants Surface Transportation Program: By converting the Surface Transportation Program to a block grant program, the Act seeks to increase state and local agency control over transportation decisions. The Act focuses a larger share of funding from the Surface Transportation Program toward more populated urban areas and establishes a Tribal Transportation Self-Governance Program under which Indian tribes may receive and administer transportation funds. Complementing the FAST Act, the Department of Transportation is also encouraging the use and development of advanced smart transportation technologies and transit-oriented development through grant programs and initiatives, as we recently discussed in a BBKnowledge post.

Funds Public Transit: It is estimated that $11.8 billion is authorized for programs administered by the Federal Transit Administration, with that amount rising to $12.6 billion in 2020. The FAST Act focuses on transit safety and ensuring a state of good repair for transit systems, in addition to providing funding for the Capital Investment Program administered by the FTA, which includes New Starts. However, the limitation that federal full funding grant agreements be limited to 60 percent is included in the Act.

Further, recognizing how costly vehicle procurements can be for transit agencies, the Act supports cooperative procurements. The FAST Act also establishes a pilot program for cooperative procurements to be administered by eligible nonprofit entities. In taking advantage of such opportunities, it will be important for agencies to review and understand the guidelines for such programs and make sure the necessary legal terms are included in any procurements and contracts.

Emphasizes Role of Rail and Freight Movement: The Act largely emphasizes the importance of our nation’s freight system and the existing strains that need to be addressed. The Act authorizes a new competitive grant known as the Nationally Significant Freight and Highway Projects program, which provides $800 million in funding for 2016, rising to $1 billion in 2020. Eligible applicants for the NSFHP grant include states or groups of states, municipal planning organizations for urban areas and public authorities with a transportation function, such as a port authority. Further, the Act provides resources for the continued update of the National Highway Freight Network.

Provides Clarity in Surface Transportation Project Financing: The Act encourages DOT to ensure all available funding mechanisms are being utilized for transportation projects. In furtherance of this goal, the Act establishes the National Surface Transportation and Innovative Finance Bureau to provide assistance and communicate financing and funding opportunities to eligible entities, and promote innovative financing best practices while reducing costs and risks to taxpayers in the construction and delivery of projects. With regard to large capital projects exceeding $1 billion, federal monies may not be obligated until an applicant demonstrates the ability to meet the non-federal share for the grant.

The Act also encourages the use of low-interest loans provided for rail projects through the Railroad Rehabilitation and Improvement Financing Program. Knowing the Act does not provide enough federal grant monies for all the projects necessary to provide the update and modernization needed to bring the country’s transportation infrastructure up to speed, we anticipate seeing an increase in use of such low-interest funding programs in the future, in addition to the increased use of public-private partnerships for the completion of future transportation projects.

Modernizes Project Delivery and Environmental Oversight: The Act continues the goals of streamlining the environmental review and permitting process, and eliminating duplicate reviews by allowing one lead agency to coordinate the environmental review process under the National Environmental Protection Act.

Embraces Continued Development of New Technologies: The Act continues to support research into the roll-out of autonomous vehicle technologies and requires the Department of Transportation to designate, within the next year, highway corridors where electric charging and hydrogen, propane and natural gas fueling stations and infrastructure should be built. The Act also adds the deployment of low- or zero-emission vehicles to the list of transportation projects eligible for research funding provided under the Act.

While there is always room for improvement and the need remains for a serious discussion on how to fund future transportation projects beyond 2020 (i.e. whether to raise the gas tax or implement a revenue creating alternative), the passage of the FAST Act is a welcome development for states, local governments, planning agencies and our transit providers.

Click here for more additional information on funding included within the Act.

Due to the size and breadth of the FAST Act, we look forward to providing more information on funding opportunities and issues that focus on the trends and best practices coming out of the many transportation and infrastructure projects that will be kicking off across the country. In the meantime, Best Best & Krieger’s transportation and infrastructure attorneys and Government Relations team look forward to assisting agencies in taking advantage of funding opportunities for transportation projects made possible by the FAST Act, assisting in successfully delivering projects, from planning and procurement to construction and project close-out, and helping communities prepare for the introduction of smart technologies, such as automated vehicles into our nation’s transportation network.
For more information, contact the author of this Legal Alert listed at right in the firm’s Government Relations Services group, or your BB&K attorney.

Disclaimer: BB&K legal alerts are not intended as legal advice. Additional facts or future developments may affect subjects contained herein. Seek the advice of an attorney before acting or relying upon any information in this communiqué.

ACWA CLE 2015

11 Sep 2015 00:00:00 -0800

Best Best & Krieger Partner Mary Beth Coburn and associate Rebecca Chaparro will speak on “Now Trending: Hot Topics in Public Infrastructure” during the Association of California Water Agencies’ “ACWA CLE ‘15.” The session will focus on the latest trends surrounding the stages of public infrastructure from the bidding process, to construction and on to project completion.

When:
Friday, Sept. 11
8-9 a.m.

Where:
Waterfront Hotel
10 Washington Street
Oakland, CA 94607

For more information or to register, click here.

BB&K Associate Jake Vollebregt Recognized as an Emergent Young Leader by ULI

08 Jun 2015 00:00:00 -0800

IRVINE, Calif. - Best Best & Krieger LLP congratulates Associate Jake Vollebregt for being named a Young Leader by the Urban Land Institute Orange County/Inland Empire District Council, which honored him with an Emergent Leadership Award during a ceremony on Thursday evening at the Newport Beach Civic Center. The ULI district council’s Young Leaders Group recognizes professionals in the real estate industry who have proven to be motivated, dedicated and inventive. “It is important to highlight the most outstanding local emerging leaders whose contributions to their company and ULI make it clear that they lead by example,” according to ULI.

Vollebregt, who works out of BB&K’s Irvine office, advises both public entities and developers on land use approvals and entitlement due diligence and applications. His practice focuses on public law, land use and municipal code enforcement litigation, and he serves deputy city attorney and deputy agency counsel for several cities, special districts and other government entities in Southern California.

Prior to joining BB&K, Vollebregt served as a judge advocate in the U.S. Marine Corps. He received his law degree with a certificate in taxation from the Fowler School of Law at Chapman University. He is an Orange County native, and still resides there with his wife and two children.

Read the Young Leader Spotlight Q&A with Vollebregt by clicking here, and learn more about the Emergent Leadership Awards by clicking here.

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Best Best & Krieger LLP is a national law firm that focuses on environmental, business, education, municipal and telecommunications law for public agency and private clients. With 200 attorneys, the law firm has nine offices nationwide, including Los Angeles, Walnut Creek, Sacramento, San Diego and Washington, D.C. For more information, visit www.bbklaw.com or follow @BBKlaw on Twitter.

Losing Bidders Can Sue When Winners Don't Pay Prevailing Wages

13 Mar 2015 00:00:00 -0800

The second-place bidder on a government contract has a cause of action for intentional interference with prospective economic advantage against the winning bidder if the contract was awarded as a result of -wrongful conduct. In the recent case of Roy Allan Slurry Seal v. American Asphalt South Inc., 2015 DJDAR 2014 (Feb. 20, 2015), the 2nd District Court of Appeal held that plaintiffs could state that cause of action if the winning bidder was able to submit a lower bid because it illegally paid its workers less than the prevailing wage.

Most public works contracts must be awarded to the lowest responsive bidder, provided the lowest bidder meets the minimum qualifications necessary to perform the work. Unlike private developers, public agencies usually have no discretion to choose a preferred contractor or to determine the contractor who is most qualified or provides the best value. Bids must be submitted under seal, with all of the bids opened at once. After the bid opening, a public agency only has two options: award to the lowest responsive, responsible bidder or reject all of the bids. There is no opportunity for further negotiations, and details of each bid, such as the budgeted costs and anticipated profits, are not revealed.

The purpose of this system is to create competition — to give every bidder an equal chance to perform public work, and therefore protect the public's financial interests. Of course, the system only works if everyone plays by the rules.

In Allan, the plaintiffs alleged that another contractor — the winning bidder on 23 separate public works projects — did not play by the rules. The defendant, American Asphalt South Inc., was awarded the 23 contracts, totaling more than $14.6 million, to apply slurry seal to public roads. The second lowest bidder on all 23 contracts was either Roy Allan Slurry Seal, Inc. or Doug Martin Contracting, Inc. The plaintiffs combined their cases and sued American Asphalt in five counties — Los Angeles, Riverside, San Bernardino, Orange and San Diego, yielding different results to various demurrers. The cases were all combined on appeal.

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To read the full article in the Daily Journal, which ran March 13, 2015, click here (subscription required).

Reflections on the Keys to a Successful P3

23 Feb 2015 00:00:00 -0800

Best Best & Krieger LLP Partner Seth Merewitz moderated the panel “Reflections on the Keys to a Successful P3 – Lessons Learned from Real Deals” at the P3C Public-Private Partnership Conference & Expo 2015 Feb. 23-25 in Dallas. There are proven "keys to success" to making a P3 project successful, regardless of the public partner or the project. Success requires more than value for money analysis, efficient capital deployment, operational expertise and innovative solutions. In this interactive session, attendees learned about the "4P's Required Before the P3" and other real world project-based reflections on what went well, what could have been done better and what was a failure.

When
Monday, Feb. 23, 2015
4:45 – 6 p.m.

Where
Sheraton Hotel Dallas

For more information, click here.

New law changes landscape for public projects

30 Jan 2015 00:00:00 -0800

Two pieces of legislation signed into law in 2014 will have a significant effect on contractors and developers in public works projects. Senate Bill 854 establishes a new system for the Department of Industrial Relations to monitor the payment of prevailing wages on all public works projects. Assembly Bill 1939 puts the onus on developers who receive public funding to inform their contractors of the prevailing wage requirements.

It is well established in California that public works projects generally require all contractors and subcontractors to pay their workers' the prevailing rate of wages, established by the DIR director. In determining the prevailing rate, the director must consider the collectively bargained rates in the area. The prevailing rate therefore does not necessarily reflect the wages paid to most workers - which may be lower - but rather the rates established for union workers through the collective bargaining process.

The Prevailing Wage Law, at least in theory, puts union contractors on equal footing with nonunion contractors to obtain public works contracts, which generally must be awarded to the lowest qualified bidder. Of course, by raising the labor costs, the costs of public work also rise. This system may provide contractors willing to risk paying lower wages with an opportunity to undercut other bidders.

With SB 854, the DIR is attempting to create a system that will substantially increase the risk of not paying prevailing wages. The new system works in three steps: (1) all contractors and subcontractors must register with tile DIR prior to bidding on or working on any public projects; (2) public agencies must notify the DIR of all public projects and which contractors were awarded the project and (3) contractors and all subcontractors must submit certified payrolls directly to the DIR on a weekly basis.

To read the full article in the Daily Journal, which ran Jan. 30, 2015, click here (subscription required).

New Laws of 2015: New Tax Infrastructure Financing Tools

06 Jan 2015 00:00:00 -0800

The final article in the New Laws of 2015 series focuses on new legislation that makes it easier for municipalities and special districts to harness tax increment—the future incremental growth in property tax revenues —for financing infrastructure.

Senate Bills 614 and 628 strengthen Infrastructure Financing Districts (IFDs) by lowering the vote threshold for creating IFDs and broadening their applicability to different types of projects. IFDs can finance capital investments in public facilities by issuing bonds backed by tax increment.

Though IFDs have existed in California law since 1990 (traditional IFDs), very few traditional IFDs have been created because redevelopment agencies had broader powers to leverage tax increment financing until they were dissolved in 2011.

CSDA thanks Jake Vollebregt and Paul C. Marra for their assistance with this article. Jake Vollebregt is a public law attorney with Best Best & Krieger LLP and Paul C. Marra is a managing principal for Keyser Marston Associates, Inc.

IFDs for Disadvantaged Unincorporated Communities

SB 614 allows any local taxing entity (except school-related agencies) to form an IFD in an unincorporated area with LAFCO approval. The IFD can invest the sponsoring entity’s tax increment to fund improvements or upgrades to structures, roads, sewer or water facilities, or other infrastructure that serves a disadvantaged unincorporated community. A community qualifies as a “disadvantaged unincorporated community” if the annual median household income is less than 80 percent of the statewide annual median household income.

Enhanced Infrastructure Financing Districts

SB 628 creates a new mechanism called the Enhanced Infrastructure Financing District (EIFD). Special districts can partner with a sponsoring city or county to create an EIFD for capital infrastructure and economic development projects. Though a municipality must take the lead in forming an EIFD, any affected taxing agency (except school-related agencies) may choose to partner with the sponsoring municipality and allocate some or all of its share of the tax increment toward the infrastructure financing plan. Municipalities and other taxing entities can combine this revenue stream with investments from other capital providers to further public-private partnerships. Here is an outline of the key distinctions between EIFDs and traditional IFDs:

1. Reduced approval threshold by the electorate: Traditional IFDs require voter approval by two-thirds of the electorate to both form the IFD and issue bonds. A municipality may form an EIFD without a ballot approval, and the EIFD may issue tax increment bonds with the approval of 55 percent of the voters in the affected area because the debt service is backed solely by the tax increment. If the proposed EIFD boundaries include fewer than 12 registered voters, the vote is held among the landowners.

2. Extended Financing Period: Traditional IFDs limited the financing period for repaying the issued bonds to 30 years from the date when the IFD was formed. EIFDs allow the financing (and the capture of tax increment) to extend for 45 years after the date the bonds are authorized. This extends the tax increment financing period by more than 15 years, which significantly increases the amount of tax revenue available for financing. Both traditional IFDs and EIFDs can also enter into reimbursement agreements with master developers as an alternative to conventional or bond financing.

3. Broaden Applicability to many types of infrastructure: EIFD funding may be applied to projects of communitywide significance that provide significant benefits to the EIFD area or the surrounding community. This includes flood control, storm water quality management, sewage treatment, water reclamation, industrial facilities for private use, and environmental impact mitigation.

4. Polanco Act Powers: An EIFD may also utilize any powers under the Polanco Redevelopment Act, which allows the EIFD to clean up toxic or hazardous substances within the EIFD’s boundaries. This power was reserved to redevelopment agencies and disappeared when redevelopment agencies were dissolved.

5. Cross-boundary cooperation: Municipalities may form multiple EIFDs within their jurisdictions and partner with other municipalities to form larger EIFDs across city and county lines.

Before creating an EIFD, a municipality must have completed the process of winding down its affairs of its redevelopment agency and received a notice of completion from the Department of Finance.

Creating a Value Proposition

These changes in the law may make tax increment financing a viable option for a broader array of infrastructure projects. There are many factors to consider in determining whether an IFD can add value to a project, including bond market conditions. Financing with tax increment depends on a “before and after” analysis of many factors, including anticipated amount, timing and valuation of new development within the affected area. EIFDs may not work for all jurisdictions, since the portion of the 1 percent tax levy that is allocated to cities varies widely. For example, the City and County of San Francisco receives approximately 57 percent of the 1 percent property tax levy. Even for projects of the largest scale, however, tax increment financing from an EIFD will likely be just one of several revenue sources in a project’s capital financing portfolio.

*This article first appeared in the CSDA e-News on Jan. 6, 2015. Republished with permission.

California Takes Significant Strides Toward Design-Build

20 Oct 2014 00:00:00 -0800

The adoption of Senate Bill 785 signifies strong movement toward authorizing design-build procurement in California at the state and local agency levels. SB 785, effective Jan. 1, repeals several design-build statutes previously adopted by the Legislature for the purpose of testing the effectiveness and viability of design-build procurement in California. The new law resolves various problems and inconsistencies with these prior statutes by providing consolidated design-build authorization under a single source of law.

For local agencies, SB 785 authorizes a city, county, city and county, transit district, or special district operating wastewater facilities, solid waste management facilities, water recycling facilities or fire protection facilities to utilize the design-build project delivery method on public works projects exceeding $1 million. To utilize design-build, the local agency must meet certain administrative requirements, including the use of a rigorous statutory selection procedure.

Local agencies wishing to utilize design-build under SB 785 must follow a two-step RFQ-RFP process where prospective design-build firms are first prequalified and, for those firms that are deemed qualified, then requested to submit proposals. Selection of the design-build firm may be made on the basis of low bid or best value. Best value requires the local agency to take into consideration various factors in addition to price in ranking proposals. At minimum, the local agency must consider technical design and construction expertise, project price and life-cycle costs over a minimum of 15 years. In the event a local agency elects to utilize best value, the agency may also hold discussions and negotiations with responsive proposers. Local agencies using best value must award the design-build contract to the firm offering the best value to the public. Once an award is made utilizing either low bid or best value, the local agency must publicly announce the award and provide a statement regarding the basis of the award.

In addition to the lengthy selection process under SB 785, the new law also contains significant skilled workforce requirements. Local agencies should be cognizant that design-build firms not meeting the skilled workforce requirements under the new law may not be prequalified. Because of this and other potentially restrictive requirements under SB 785, it should be noted that the enactment of SB 785 does not preclude local agencies that retain separate authority to utilize design-build from exercising that authority. Local agencies that are authorized to use design-build under SB 785 and one or more other sources of authority should determine what design-build procurement process and requirements best serves the agency’s interests.

For more information about SB 785 and the design-build project delivery method, please contact the authors of this legal alert listed at right in the firm’s Public Contracts and Construction group, Transportation group or your BB&K attorney.

Disclaimer: BB&K legal alerts are not intended as legal advice. Additional facts or future developments may affect subjects contained herein. Seek the advice of an attorney before acting or relying upon any information in this communiqué.