State Regulations Hurting Building Projects in California

SACRAMENTO, CA - Local construction companies hurting from a decline in the number of building projects in the Sacramento area say a big reason for their suffering is coming from unfair state regulations.

The Associated General Contractors of America announced this week that Sacramento construction jobs will drop again, leading to the city of Sacramento losing another 23 percent of its construction workforce.

However, officials with the California chapter of the AGCA said it wouldn't be so bad if the state weren't imposing new rules that are costing companies millions.

Walking through the equipment yard of MCM Construction in North Highlands, Ed Puchi said much of their fleet is parked, waiting for work.

While Puchi said his company hasn't had to lay anyone off, he knows many who have.

"We know of some people and we have a lot more applications for employment than we've had in the past," Puchi said. "When you look at the inventory of residential units and inventory of commercial floor space all around the Sacramento area, you see it's not a surprise that there will be a continued downturn."

The continued downturn means another 23 percent loss in available jobs on top of 136,000 California construction jobs already lost in the past year, according to the AGC.

"People do what they have to do to make a living, and so, leaving is not a surprise at all," said Tom Holsman, CEO of the California chapter.

However, Holsman said there is a dim light at the end of the tunnel.

"It's not a real strong light. It's starting to show some signs of getting brighter, but at this point in time, we can't be overly optimistic," he said.

Holsman also blames the dim light on the state of California, including new diesel retrofit rules which will mandate a change in emission standards by the end of 2010.

The change applies to off-road diesel engine, including construction equipment, which will have to be retrofitted or replaced at a time when revenue is way off.

"We're talking multimillion dollar pieces of equipment here. We're talking fleets of them," said Holsman. "We're talking companies that have been in business for many years that are not in business right now and may not be in business."

But the California Air Resource Board (CARB), a division of the state EPA, said the cost to the general public's health far outweigh the cost to industry.

Dimtri Stanich said change must come because the emissions simply aren't safe.

"(It causes) cancer, cardio-pulmonary disease. It triggers asthma. It's a very dangerous chemical," he said.

Stanich also noted Proposal 1B set aside money to offset the industry's cost.

"Diesel PM is responsible for billions in health care costs every year in California, so the fractional cost it will cost to retrofit these is much smaller than the cost to take care of their damage," Stanich said.

"We're spending multiple millions a year to meet the new standards," said Puchi. "Either retrofitting the existing equipment or removing the equipment from the fleet and replacing it with new equipment."

But on the heels of more jobs lost, Holsman said the state is stifling economic recovery.

"The timing is going to exasperate the ability to create jobs," he said. "And when you do that, you're really not doing anything good for the economy in the state of California."

The CARB plans on regulating emission standards on all-diesel engines in the future. But for now, it is focused on off-road engines.

However, leaders have heard the construction cries and will hear opponents of the new regulations at a public hearing next week.

The meeting is set for December 9 and 10 at the EPA's headquarters at 10th and I streets, beginning at 10:00 a.m.

By Nick Monacelli, nickmonacelli@news10.net
News10/KXTV
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