BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | AB 155| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: AB 155 Author: Alejo (D), et al. Amended: 8/12/14 in Senate Vote: 21 SENATE GOVERNANCE & FINANCE COMMITTEE : 6-1, 6/25/14 AYES: Wolk, Knight, Beall, DeSaulnier, Hernandez, Liu NOES: Walters ASSEMBLY FLOOR : Not relevant SUBJECT : Monterey County Water Resources Agency: design-build SOURCE : Author DIGEST : This bill allows the Monterey County Water Resources Agency (MCWRA) to use a design-build process solely to award contracts to construct a pipeline or tunnel connecting two lakes owned and operated by MCWRA. Senate Floor Amendments of 8/12/14 clarify the purposes to be served by the MCWRA's construction of a pipeline or tunnel, delete the bill's urgency clause, and make additional technical and conforming changes. ANALYSIS : The Local Agency Public Construction Act requires local officials to invite bids for construction projects and then award contracts to the lowest responsible bidder. State law also allows state and local officials to use the CONTINUED AB 155 Page 2 design-build method to procure both design and construction services from a single company before the development of complete plans and specifications. Under design-build, a public agency contracts with a single entity which can be a single firm, a consortium, or a joint venture to design and construct a project. Before inviting bids, the agency prepares documents that describe the basic concept of the project, as opposed to a complete set of drawings and specifications of what will be constructed. In the bidding phase, the agency typically evaluates bids on a best-value basis, incorporating technical factors, such as qualifications and design quality, in addition to price. All counties can use the design-build method to construct buildings and related improvements and wastewater treatment facilities that cost more than $2.5 million (SB 416, Ashburn, Chapter 585, Statutes of 2007). Similarly, all cities can use the design-build method to construct buildings and related improvements worth more than $1 million (AB 642, Wolk, Chapter 314, Statutes of 2008). A pilot program also permits cities, counties, and special districts to use the design-build method to construct 20 local wastewater treatment facilities, local solid waste facilities, or local water recycling facilities (AB 642, Wolk of 2008). This bill allows the MCWRA, not-withstanding any other law, to award a design-build contract for the combined design and construction of a project to connect Lake San Antonio and Lake Nacimiento with an underground tunnel or pipeline for the purpose of maximizing water storage, supply, and groundwater recharge at the lakes, and within the Salinas River Groundwater Basin and the Salinas Valley proper. This bill specifies that MCWRA may utilize a design-build process solely to award contracts for the project to connect the two lakes with an underground tunnel or pipeline, as defined in this bill, and for no other purpose. This bill requires that, if MCWRA does award a design-build contract, it must use the same design-build contracting process used by other counties under existing law, and ensures that the design-build entity selected for the project enters into a project labor agreement that will bind all of the contractors performing work on the project. AB 155 Page 3 Comments The MCWRA is a special act special district created to function as a flood control and water agency in Monterey County. MCWRA manages Lake Nacimiento and Lake San Antonio, two reservoirs on the Salinas River. Because Lake Nacimiento's watershed fills that reservoir nearly three times faster than Lake San Antonio is filled by its watershed, MCWRA officials must sometimes release water from Lake Nacimiento, when it is at capacity, while Lake San Antonio still has excess storage available. MCWRA officials are considering building a tunnel or pipeline between Lake Nacimiento and Lake San Antonio to redirect water from Lake Nacimiento that will otherwise be released out to sea and use it, instead, to fill excess capacity in Lake San Antonio. Prior Legislation AB 674 (Dutra, Chapter 84, Statutes of 2001) allowed the Santa Clara Valley Water District to use counties' design-build procedures for building construction contracts. SB 645 (Correa, Chapter 473, Statutes of 2007) allowed the Orange County Sanitation District to use counties' design-build procedures to build projects in excess of $6 million, including public wastewater facilities. SB 1699 (Wiggins, Chapter 415, Statutes of 2008) allowed the Sonoma Valley Hospital District to use counties' design-build procedures to construct a building or improvements at the Sonoma Valley Hospital. SB 268 (Gaines, Chapter 18, Statutes of 2014) allowed the Last Frontier Health Care District to use counties' design-build procedures to construct a building or improvements at the Modoc Medical Center. FISCAL EFFECT : Appropriation: No Fiscal Com.: No Local: No SUPPORT : (Verified 8/13/14) California American Water AB 155 Page 4 CH2M Hill International Brotherhood of Electrical Workers, Local 234 State Building and Construction Trades Council, AFL-CIO OPPOSITION : (Verified 8/13/14) Air Conditioning Trade Association Associated Builders and Contractors - San Diego Chapter Associated Builders and Contractors of California Plumbing-Heating-Cooling Contractors Association of California Western Electrical Contractors Association ARGUMENTS IN SUPPORT : According to the author's office, the project will maximize overall water storage at the lakes by allowing the conveyance of water to Lake San Antonio for storage that may otherwise overflow from Lake Nacimiento; thus, improving the benefits provided by the lakes and the Salinas Valley Water Project to the basin and the valley, mitigating the impact of the drought, and improving the economic viability of the valley and its agricultural production, all benefitting the state. Utilizing an alternative project delivery system, consisting of a design-build contract, will provide benefits by shifting the liability and risk for cost containment and project completion to the design-build entity, and will provide for the more timely and efficient project delivery in light of the current drought conditions and the Governor's emergency declaration. ARGUMENTS IN OPPOSITION : The opponents argue that this bill is unfair due to the unreasonable and discriminatory mandate that a Project Labor Agreement be used on all work done on the proposed project, and the vast majority of contractors and their employees--more than 80%--have voluntarily opted against unionization. ABC California states this bill ignores that right and attempts to use taxpayer dollars to exclusively award contracts to union contractors for this project. All contractors with the appropriate license, skilled workforce and meet other performance-based requirements should be able to bid and be awarded any taxpayer funded projects. To do otherwise blatantly discriminates against the majority of the hardworking California construction workforce. AB 155 Page 5 AB:d 8/13/14 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END ****