Editor's Note: As 2014 draws to a close, we highlight our choices for the Top 10 stories that impacted the asphalt industry in California over the past year. Click HERE for our Top 10 stories of 2013. Look for our 2015 predictions in next week's newsletter. 1. The lack of a comprehensive transportation funding plan at the federal and state level continued to be a top story in 2014, much like it was in 2013. The nation began the year with a compromise, short-term surface transportation bill in place but little consensus as to what to do when it expired on Sept. 30. Talks between Republican and Democratic leaders in a divided Congress got nowhere, and ushered in a series of short-term funding extensions that  transportation planners said hampered the ability to move projects off the drawing board and on to the street. The latest extension expires on May 31, 2015. The mid-term elections in November saw Republicans solidify their majority status in the House of Representatives, and achieve a new majority in the U.S. Senate, leading some transportation advocates to hope that congressional gridlock on transportation funding could be broken, possibly in a "lame duck" session before newly elected Senators and Representatives are seated, but no such plan emerged. At the state level, much of the attention was focused on the proposed High Speed Rail line to run up the spine of the state, including diverting the lion's share of "cap-and-trade" funds from the state's landmark greenhouse gas reduction programs. While roads did see some of the money, state and local officials continued to lament the dwindling transportation coffers and inadequacy of fuel taxes devoted to transportation programs. One bright spot, voters in Alameda County in November endorsed a 30-year extension of the local sales tax devoted to transportation, Measure BB, which was projected to generate $3 billion for roads. 2. The influential asphalt pavement specifications published by the California Department of Transportation (Caltrans) continued to evolve throughout the year, incorporating elements of the national "Superpave" initiative that ushered in new mix design and testing equipment, such as the gyratory compactor and the Hamburg Wheel Track device. Caltrans and industry representatives met throughout the year to review and refine the specifications and evaluate the  impact on real-world projects. Meanwhile, big changes are on the horizon when using crumb rubber modifier (CRM) in asphalt cement. Additional QC testing is required for asphalt rubber (AR) producers and a process to verify the quantity of CRM in "terminal blended" binders is nearing completion. Elsewhere Caltrans floated an idea of including CRM in all unmodified binder as a way to help the department meet state mandates to divert scrap tires from landfills and into pavements. RHMA issues even spilled into the Legislature, where a bill to extend a rubber pavement incentive program failed to make it out of a policy committee. 3. One story that never made it into the pages of the California Asphalt Insider newsletter nevertheless loomed large over the industry in 2014: the worldwide drop in oil prices. The price of oil, which ultimately influences the price of asphalt binder - a petroleum-based product - plunged toward the end of 2014 amid a softening of global demand and the development of new sources and new extraction methods. Economists and political prognosticators scrambled to assess the impact the price drop would have on the economy, currencies and governments of oil-producing and oil-dependent nations. While global prices of oil take a while to make their way through the supply chain, and can vary by project, location and other factors, it was nevertheless clear that the impact would be felt locally. According to the Caltrans-published "California Statewide Crude Oil Price Index," for example, prices that had exceeded $600 at times in 2012 and 2013 were pegged this month at $399.7. The lower crude oil prices, which many experts believe will continue well into 2015, also may have an impact on assumptions for the lifecycle cost of different pavement types over their expected lifespan. 4. The California Department of Transportation (Caltrans) continued to undergo fresh scrutiny, self-evaluation and personnel changes in 2014. An evaluation of the department ordered by State Transportation Agency Secretary Brian Kelly, released January, found the department at times "out of step" with the current realities of  the transportation needs of California, and the Legislative Analysts Office concluded that the 20,000 employee department was overstaffed by 3,500 positions. In May, eight construction trade associations, including CalAPA, wrote a letter to Kelly calling for action on longstanding issues related to materials testing: test-result variability and turnaround time; and tester certification. Two joint industry-agency task forces were created to examine the issues and come up with recommendations, and reported meaningful progress by year's end. Top Caltrans leaders who often interacted with the asphalt pavement industry also announced their departure, including Chief Deputy Director Rick Land and Construction Chief Mark Leja, who retired, and State Pavement Engineer Amarjeet Benipal, who took over as District 3 Director. CalAPA presented Leja with a special leadership award at the Fall Asphalt Pavement Conference in Sacramento. Land was replaced by Kome Ajisi, a former District 10 director. The construction and state pavement posts have yet to be filled permanently. Meanwhile, the department recommitted itself to transparency in operations, rolled out a new "Mile Marker" performance report card, and at industry's suggestion revised the joint industry-agency Rock Products Committee charter to include language reinforcing the department's commitment to give industry an opportunity to comment on proposed specification changes. 5. Economists say the "Great Recession" ended in 2009, but unlike other economic downturns California's economy didn't spring quickly back to life but rather has been on a slow and gradual crawl upward ever since. State and local finances, in general, have improved somewhat, but there remains a wide gulf between funds available for roads and the money needed to pay for it. Because California is such a large state - if it were a separate country its economy would be the eighth largest worldwide - some areas of the state are experiencing more economic activity than others, most notably the San Francisco Bay Area. The housing industry, while showing signs of life, still remains well below pre-recession levels, leading some to speculate if this is the "new normal." Additional details will be featured in the 2015 Forecast issue of California Asphalt Magazine, which is due out in January. 6. A lawsuit by environmental groups tossed a monkey wrench into the 40-year transportation plan as envisioned by the San Diego Association of Governments (SANDAG). The lawsuit, which prevailed in Superior Court and then on appeal to the 4th District Court of  Appeal, cast a cloud over a $200 billion program and sent shockwaves through the 19 other counties that finance transportation improvement programs via local sales tax measures. Statewide, about 60 percent of transportation funding is generated through so-called "self-help" counties. The environmental groups that sued SANDAG argued in court that not enough was being done in the plans to address climate change issues, including reducing transportation-related greenhouse gas emissions. SANDAG has appealed the case to the State Supreme Court. An exclusive interview with SANDAG Executive Director Gary Gallegos also will be featured in the next issue of California Asphalt Magazine. 7. Transportation California, a key voice in advocating for more transportation funding in the state, announced that Executive Director Will Kempton, a respected former Caltrans director, was leaving to take over as executive director of the California Transportation Commission. A statement released by Transportation California, which is supported financially by CalAPA and other construction trade associations, indicated that it would be reassessing its role in light of the work of the Northern California-based California Alliance for Jobs, which is backed by construction trade union and employer contributions, and the emergence of a similar group, the Southern California Partnership for Jobs. No replacement for Kempton has been announced. 8. Federal guidance on pavement preservation activities that may trigger Americans with Disabilities Act (ADA) accessibility alterations continued to roil state and local agencies. Although the guidance was issued in 2013, its impact only started to be realized in 2014, and  ignited an uproar, particularly among cash-strapped local public works agencies. The technical guidance, which treated some pavement preservation treatments, such as chip seals, as routine pavement maintenance, while other seemingly similar strategies, such as micro-surfacing, are deemed to be altering pavement surfaces and must include the installation of ramps and other infrastructure to be in compliance with ADA and other federal laws. The Pavement Preservation Center and California State University, Chico, conducted a survey of public works agencies and found that 63 percent of survey respondents said the new guidance with "greatly" impact their ability to maintain roads under their jurisdiction. 9. The year began with CalAPA presenting a special innovation award to Caltrans District 2 for designing and building long-life (perpetual) asphalt pavement projects on Interstate 5 in the North State, the completion of a long-life project along a stretch of Interstate 80 west of Sacramento, and the identification of other candidate projects in Southern California. Long-life asphalt pavement projects are designed to last 40 years or more with minimal maintenance. 10. The Los Angeles City Controller's Office released an audit concluding that the city could save millions by purchasing hot mix asphalt (HMA) from private industry rather than producing it from the two plants it owns. The city has been producing HMA since the 1920s, and currently churns out about 600,000 tons per year for use by the City's Bureau of Street Maintenance. The report comes on the heels of the City of San Francisco's decision in 2011 to shutter its plant, which it put up for auction in 2013. Honorable mention: Some other notable events and trends that took place in 2014: A new industrial storm-water permit ushers in a new era of complexity, reporting; More widespread use of Reclaimed Asphalt Pavement (RAP) in California; New state specifications allowing the use of Recycled Asphalt Shingles (RAS) debut; Contractors continue to be pressured by air quality regulations and enforcement; Use of the inertial profilometer to measure pavement smoothness is now required on state projects. |
