Editor's Note: As 2015 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 2014. Look for our 2015 predictions in next week's California Asphalt Insider newsletter.

1. The year began much as it had the year before, and the year before that. Partisan gridlock in Washington left the nation without a comprehensive, long-term surface transportation bill as evidence mounted that the lack of adequate funding for roads was putting the system at risk for falling apart. At the same time, the construction-related jobs that could bolster the economy, still clawing out of the Great Recession, were left by the side of the road. Transportation advocates spent most of the year engaged in furious lobbying and grass-roots activities and, like reflective cracking, the message spread to every corner of the country. Finally, a leadership shakeup in the Republican-controlled House of Representatives created a glimmer of hope that sanity could return to the Beltway. Then, as the weather started to turn cold and the thoughts of politicians turned toward upcoming elections when members of the "Do Nothing" Congress could be punished by voters at the polls, a compromise began to emerge. Like most compromises, it was an orphan - unwanted and unloved, but it was something, anything, to show the constituents back home that Congress was capable of getting something done. The final compromise bill, 5-years in duration, 1,300 pages long, contained more budget gimmickery to pay for it, but the long-term certainty that comes with $305 billion over five years was a welcome relief to state and local transportation planners and the road construction industry. Still left for another day, and a future Congress, is to come up with a comprehensive plan to replenish the flagging Highway Trust Fund. President Obama signed the bill into law Dec. 4, delivering an early Christmas present to industry, unions and state and local public works agencies. Because of its sheer size and clout, California figured prominently in the federal funding debate. House Minority Leader Nancy Pelosi from San Francisco was kept busy rounding up Democratic votes, while House Majority Leader Kevin McCarthy from Bakersfield stumbled in his bid to replace House Speaker John Boehner. U.S. Sen. Barbara Boxer (D-Calif.), ranking member of the Senate Environment & Public Works Committee, kept up a frenetic pace in the negotiations, bringing the sides together to ultimately cement a deal. Her work on transportation funding earned her a "Legislator of the Year" award in 2013 by the National Asphalt Pavement Association and presented to her by NAPA and CalAPA representatives at the Capitol. CalAPA members deserved recognition as well, for the many phone calls, meetings, letters, plant tours and other activities that kept the issue on the policy front-burner.

 

2. The influential asphalt pavement specifications published by the California Department of Transportation (Caltrans), completely revised, appeared in projects statewide in 2015, imposing new requirements, and new risk, for contractors that resulted in conflicts, confusion and claims for those caught unaware. CalAPA rolled out a special "Caltrans Section 39 HMA Specifications" class at multiple locations, and featured the changes prominently in the association's spring and fall asphalt conferences, as well as numerous meetings, seminars, articles and other forms of communication. Particularly nettlesome was new "Superpave" requirements that brought about new test methods and testing equipment for California, such as the gyratory compactor and the Hamburg Wheel Track device. Strict new pavement smoothness requirements also forced many contractors to conduct unexpected and expensive grinding to help pavement projects meet specification. Caltrans and industry continue to meet in numerous committees under the umbrella of the joint Caltrans-industry Rock Products Committee.

 

3. Caltrans in 2015 announced that it would partner with the construction materials industry on a joint training and certification program for lab technicians, a reform long sought by industry and subject of a 2014 multi-association letter to California State Transportation Secretary Brian Kelly and subsequent materials "summit" held in Sacramento. Caltrans committed the seed money, and a joint agency-industry task force worked on developing the scope of work to be delivered via an interagency agreement with an academic institution. Caltrans reports that the first classes are expected to be held in late 2016. The program was designed to mirror similar programs in dozens of other states that have been demonstrated to improve material testing and product quality while reducing conflicts and claims.

 

4. The unexpected worldwide drop in crude oil prices, which burst into the news in 2014, continued to make headlines in 2015 as oil markets and nations grappled with an oversupply of crude oil and additional capacity. Prices remained low by historic standards in 2015 and economists predict the trend to continue well into the new year. The price of oil, which ultimately influences the price of asphalt binder - a petroleum-based product - as well as the cost of fueling vehicles, equipment and other costs of doing business in the construction industry. 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 in December of 2014 at $399.7 and continued to drop throughout the year to $222.4 this month. The continued trend in oil prices is expected to have widespread impact on assumptions for the lifecycle cost of different pavement types over their expected lifespan, as well as to help stretch scarce transportation dollars further.

 

5. Mirroring in many ways what was taking place in the nation's Capitol, the governor and the state Legislature spent a good part of 2015 discussing the problem of California's deteriorating transportation system and what to do about it. The fuel tax, which paid for the lion's share of road improvements over most of the past century, was not indexed to inflation and has not been raised since George Deukmejian was governor. Gov. Jerry Brown called a special session of the Legislature to deal with the issue, including a focus on developing a new, sustainable form of funding. The momentum that seemed to be picking up steam around midyear dissipated when the state Capitol became mired in leadership fights in the Assembly and Senate and, as 2015 drew to a close, no agreement emerged. The construction industry, meanwhile, continues to push a good-roads agenda at all levels of government, and support it with calls, letters, plant tours and other grass-roots activities.

 

6. The California economy continued its slow, steady climb out of the depths of the Great Recession, which economists said officially ended in 2009 but the effects of which continued to ripple across the state. California's economy began gathering momentum in 2015, and was outpacing the nation in job-creation after lagging behind other states during the economic downturn and recovery. Housing, a key barometer for the construction industry, continued to improve, and employment finally surpassed the highs of the last decade. The state's finances were similarly on a positive trajectory, and state workers were handed large pay increases, prompting many who were nearing retirement to put off leaving state service to sweeten their pensions. In the nation-state of California, which if it were a separate economy would be the world's eighth largest, economic recovery continued to be uneven across the state. Economic activity was red hot in the jobs-rich Silicon Valley, the San Francisco Bay Area in general, and pockets of Southern California. But large swaths of the Central Valley and other rural areas were waiting to see the benefits. Additional details will be featured in the 2016 Forecast issue of California Asphalt Magazine, which is due out in January.

 

7. Another concern mentioned in the 2014 multi-association letter to the governor's transportation cabinet secretary centered on material tests, specifically the timely conducting of tests and reporting the results back to the contractor and supplier. Industry supplied numerous examples of needless cost and delay because of lagging test results, while Caltrans presented information suggesting the problem was periodic and sometimes linked to unusual events. Another task force created to dive deeply into the issue met throughout 2015 and has developed a number of recommendations for improvement in the process of gathering, transporting and testing samples, as well as reporting the test results. The task force will continue its work in 2016.

 

8. The California Asphalt Pavement Association began the year by adopting a "Code of Ethics" in an effort to communicate to owners, and the rest of the industry, the commitment by CalAPA members to conducting business in an open, honest and fair manner. The code of ethics, which mirrors a similar one adopted by the National Asphalt Pavement Association, is part of CalAPA's focus to elevate the entire industry and promote standards of excellence. You can read it HERE.

 

9. A long-life asphalt pavement project, on Interstate 5 in the North State, won a Caltrnas Excellence in Transportation award in 2015. Recognized in the "Transportation Innovations" category, the $31 million, 14.5-mile project in Red Bluff was a collaboration of Caltrans, industry and the University of California Pavement Research Center. The goal of the project was to design and construct a durable pavement on the major truck route that will last 40 years or more with minimal maintenance. According to Caltrans, a life-cycle cost analysis completed during the North Red Bluff project shows a savings of $5 million to $10 million over the service life of the project versus conventional pavement rehabilitation. Road user costs, such as traffic delays from maintenance and construction activities, could add up to another $1 million. The Red Bluff long-life project in District 2 is one of seven Caltrans has completed so far on routes that must stand up to some of the most punishing truck traffic in the state, including another project on I-5 near the North State community of Weed (also in Caltrans District 2), on Interstate 80 west of Sacramento and four projects on the 710 Freeway in Los Angeles County leading out of the Los Angeles-Long Beach port complex. The department's long-life asphalt pavement efforts earned it a national "Pavement Pioneer" award by the Asphalt Pavement Alliance in 2014.

 

10. TIE: AB219 and SB350. A bill to greatly expand California's prevailing wage laws to extend to the delivery of construction materials was hotly debated in the Legislature in 2015. The bill, AB219 by Assemblyman Tom Daly, D-Anaheim, was backed by construction trade unions but fiercely opposed by the construction industry, including asphalt, concrete and aggregate interests, who argued it was unprecedented, would be complex and nearly impossible to enforce, and would add cost to public works projects, the latter contention supported by a Caltrans analysis. The bill was eventually amended to remove all references to asphalt and was passed by the Legislature and signed into law by the governor. It will take effect July 1, 2016. Another bill that polarized the statehouse, SB350, by Sen. Kevin DeLeon, D-Los Angeles, would have included major targets for fuel reductions as part of an ambitious climate action plan, but moderate, pro-business Democrats aligned with Republicans to force DeLeon to amend the targets out of the bill (a 50 percent reduction in motor vehicle fuel use by 2030), which eventually passed and was signed into law by Gov. Jerry Brown. Not only did the bill pit environmentalists against business interests, but it also was a proxy battle of sorts between the legislative and executive branch of government. Legislators, newly emboldened by the potential for longer terms in office thanks to a voter-approved revision in the state's term-limits law, sought to assert themselves more on California's environmental policy, but could not muster enough votes to do so on a key provision of SB350, known as the "Clean Energy and Pollution Reduction Act of 2015." The victory for business interests also may have had the unintended consequence of strengthening the powers of the executive branch of government in general, and the California Air Resources Board in particular, which is controlled by gubernatorial appointees. Going forward, CARB will continue to wield unprecedented power over air quality policy in the state.

 

Honorable mention: Some other notable events and trends that took place in 2015: CalAPA asserts itself in the environmental arena, joining with other associations in broad-based coalitions that engaged with air- and water-quality regulators at the local and statewide level. 2015 also marked the official end of the "Hveem" era in California as Caltrans issued a memo Sept. 4 officially adopting the elements of "Superpave" materials design and testing, and retiring Hveem mix designs, developed by, and later named after venerable Caltrans materials engineer Francis N. Hveem (pronounced "VEE-m") in the 1920s and used for decades. Caltrans and industry also tussled over Reclaimed Asphalt Pavement (RAP) specifications, standards for low-volume routes, and post-plant gradations.