California Asphalt Magazine – 2022 Forecast Issue

RISE TO MEET THE ROAD Every job site demands your focus, your effort and your abilities. With Cat® paving, rise to meet any challenge that comes your way. Trust the leader in paving to deliver superior equipment so you can complete work on time and on spec. Count on your local California dealer for unmatched parts and service support to keep costs down and productivity up.

When it comes to tackling what’s next in paving – from growing your business to adapting future technologies – we’re right there with you.

Visit cat.com/risetomeettheroad to learn more.

AP1055F

SINCE 1956 www.hawthornecat.com San Diego 800-437-4228

CS10 GC

SINCE 1931 www.holtca.com Central Northern California 888-294-9778

PM620

RM400

SINCE 1936 www.petersoncat.com Bay Area & Northern California, Oregon, and Southwest Washington 844-349-4353

SINCE 1919 www.quinncompany.com Central & Southern California 888-842-2155

© 2021 Caterpillar. All Rights Reserved. CAT, CATERPILLAR, LET’S DO THE WORK, their respective logos, “Caterpillar Yellow”, the “Power Edge” and Cat “Modern Hex” trade dress as well as corporate and product identity used herein, are trademarks of Caterpillar and may not be used without permission. www.cat.com / www.caterpillar.com

Bakersfield 9150 Golden State Hwy. Bakersfield, CA 93308 661.387.6090

Big projects, big performance

Corona 22099 Knabe Rd. Corona, CA 92883 951.277.7620 Fresno 4501 E. Volvo Ave. Fresno, CA 93725 559.834.4420 Lakeside 12345 Mapleview St. Lakeside, CA 92040 619.441.3690 Redding 4963 Mountain Lakes Blvd.

Redding, CA 96003 279.201.4869 Sacramento 8594 Fruitridge Rd. Sacramento, CA 95826 916.504.2300 San Leandro 1944 Marina Blvd.

San Leandro, CA 94577 510.357.9131 Turlock 1275 Venture Ln. Turlock, CA 95380 209.410.6710

vcesvolvo.com

DD110C

| Volvo Double Drum Compactor

Unlock the full potential of your machine with Compact Assist, the optional Intelligent Compaction system. For an efficient job, Compact Assist offers real-time insight into the work using pass mapping and temperature mapping. When Density Direct is enabled, the operator is able to easily track density values to help eliminate any destructive over compaction.

Volvo Construction Equipment & Services offers you a range of compactors so you can choose the machine that best matches your needs. Whether you’re compacting on a highway or airport, wide or deep pavements and on Roller Compacted Concrete (RCC), Warm Mix Asphalt (WMA) or any other material – Volvo compactors boast the best compaction in the market place. Whatever your requirements, Volvo has the best compactor for the job.

Contact your nearest VCES location today.

Find us on social media: facebook.com/volvoces

VolvoCES

volvoces

volvoces

Publisher’s Letter A rising tide lifts all boats At a recent meeting of the state asphalt pavement association executives I shared the following story, which is illustrative of what our association does on behalf of its members and our industry: Not long ago I was contacted by Mike Keever, chief deputy director of the California Department of Transportation (Caltrans), who wanted to meet with me regarding a recent article in our weekly association newsletter, the “California Asphalt Insider.”

As you may know, our weekly electronic newsletter is a key communication channel we use to convey important information and insight about matters that impact our industry. Early on, our association leadership made an important policy decision to make this publication widely available (and free) to not only CalAPA members, but also non-members, agency personnel, academia and anyone else interested in gaining insight about the asphalt pavement industry in California. At last count, we have more than 2,500 subscribers, including more than 300 subscribers from Caltrans alone,. Many Caltrans employees have told me over the years that our newsletter is an important source of information for them, even on the operations of their own department as well as external forces that may impact them.

Specifically, Keever wanted to know more about our predictions of the top issues our industry will face in 2022 and beyond. This stimulated a wide-ranging conversation about the state of the relationship between Caltrans and our industry, and issues of mutual concern, such as workforce development, sustainability, funding, environmental and social justice and more.

Since I have been in this job for more than 13 years, and have previously worked at Caltrans, I also can step back and view trends that are unmistakable, and those were also part of my conversation with Keever. One in particular I think has been influenced in a positive way by our association, and It can be summed up in a phrase you no doubt have heard many times: “A rising tide lifts all boats.”

A version of this concept was related to me years ago by former Graniterock CEO Bruce Woolpert, who told me that he could not envision his company being successful without contributing to the success of his customers, many of whom are public agencies. That concept has been embraced by our Board of Directors and appears in many forms through our strategic plan and manifests itself in our many products and services. To name just a few: Our knowledge-transfer initiatives, in the form of high-quality technical training classes, conferences, technical webinars and other activities, are largely open to anyone. They have proven to be a popular workforce development component of many of our partners. The Caltransindustry Joint Training & Certification Program for materials technicians, championed by CalAPA, also embraces this shared knowledge ethos. So has the Caltrans-industry Pavement & Materials Partnering Committee that reviews and updates specifications and test methods. Our recently launched Quality Paving Certificate program also is designed to establish standards of excellence for our industry, and its development was influenced in a large part through our interactions with our customers.

After more than a decade of promoting this collaborative way of ensuring mutual success, the following is unmistakable: Our industry leaders and our agency partners have recognized the benefits of this approach. Trust has increased steadily.

And, as I shared with Mike Keever, I have noticed the competence and effectiveness of all parties increase dramatically. That, in turn, has resulted in more problems being solved, more quickly, and technical challenges being overcome. Our ultimate customers, the taxpayers and transportation system users, benefit greatly from this approach.

Influential business thought-leader and author Peter Drucker once said, “Culture eats strategy for breakfast.” Our association is working to create a culture of mutual respect, collaboration and innovation among all partners and stakeholders.

That foundation will serve us well as we tackle the challenges we face in 2022 and beyond, together.

Russell W. Snyder, CAE Executive Director California Asphalt Pavement Association

4

California Asphalt Magazine • 2022 Forecast Issue

SMART. CHOICES. INTRODUCING THE INDUSTRY’S MOST FLEXIBLE GRADE MANAGEMENT SOLUTIONS. With John Deere, you can adopt integrated grade management technology at your own pace. Choose from 2D Grade Guidance all the way up to SmartGrade™ 3D Grade Control. And upgrade at any time.

So you’re free from stakes and strings, overdigging, and rework. And to build precise bids that win jobs, and deliver margins. All backed by John Deere’s legendary dealer network. It’s the smarter way forward.

To learn more, visit JohnDeere.com/SmartChoices or contact us at coastlineequipment.com/contact.

COASTLINE

Long Beach, CA (Headquarters) 6242 N. Paramount Blvd. Bldg A Long Beach, CA 90805 Phone (562) 272-7400 • Fax (562) 272-7414

Equipment

Phone (661) 399-3600 Fax (661) 399-8782

Oxnard, CA 1930 East Lockwood Street Oxnard, CA 93036 Phone (805) 485-2106 Fax (805) 485-7963

Santa Ana, CA 3216 Westminster Avenue Santa Ana, CA 92703 Phone (714) 265-5500 Fax (714) 265-5505

Santa Maria, CA 1950 Roemer Place Santa Maria, CA 93454 Phone (805) 922-8329 Fax (805) 922-4582

Sylmar, CA 12435 Foothill Blvd.

Sylmar, CA 91342 Phone (818) 890-3353 Fax (818) 890-5013

Jerome, ID 26 East 300 South Jerome, ID 83338 Phone (208) 324-2900 Fax (208) 324-3212

McCall, ID 13886 Highway 55 McCall, ID 83638 Phone (208) 634-3903 Fax (208) 634-3108

Meridian, ID 2000 East Overland Road Meridian, ID 83642 Phone (208) 888-3337 Fax (208) 888-3088

Elko, NV 645 Romeo Way Elko, NV 89801 Phone (775) 777-7070 Fax (775) 777-8070

Las Vegas, NV 3540 North 5th Street N. Las Vegas, NV 89032 Phone (702) 399-2700 Fax (702) 399-2772

Bake 4252 Saco Road

Contents Volume 25, Issue 1

2022

4

Publisher’s Letter

8

Quality Paving Certificate program debuts

ECONOMIC OUTLOOK

Designation will help project owners identify companies committed to industry-recognized standards of excellence

10

Page 10 !"#$$#%!&'()&*#%+#,$-.#&/0&%#1*/,2#,$13

2022 economic forecast favors growth and expansion despite numerous negative factors still in play

)! (! '! &! %! $!

18

#!

Results mixed in annual CalAPA ‘Better-Worse’ survey

22

Kenco Engineering is a bellwether indicator of the asphalt industry in California, nationally

26

Association News

"! ! #!"!

#!""

#!"#

#!"$

#!"%

#!"&

#!"'

#!"(

#!")

#!"*

#!#!

#!#"

Page 18

On the Cover:

California Asphalt Pavement Association's Quality Paving Certificate logo created by Aldo Myftari, CMS.

Page 22

CALIFORNIA ASPHALT PAVEMENT ASSOCIATION www.calapa.net HEADQUARTERS: EXECUTIVE DIRECTOR: TECHNICAL DIRECTOR: REGIONAL DIRECTOR: MEMBER SERVICES MANAGER: MEMBER SERVICE COORDINATOR: GUEST PUBLISHER: PUBLISHED BY: GRAPHIC DESIGN: CONTRIBUTING WRITERS: ADVERTISING SALES:

P.O. Box 981300 • West Sacramento • CA 95798 (Mailing Address) 1550 Harbor Blvd., Suite 211 • West Sacramento • CA 95691 • (916) 791-5044 Russell W. Snyder, CAE, rsnyder@calapa.net Brandon M. Milar, P.E., bmilar@calapa.net Bill Knopf, wknopf@calapa.net • (442) 400-9697 Sophie You, syou@calapa.net Jackie Henry, jhenry@calapa.net Russell W. Snyder, CAE, CalAPA Construction Marketing Services, LLC • (909) 772-3121 P.O. Box 892977 • Temecula • CA 92589 Aldo Myftari Russell W. Snyder, CAE, CalAPA, Brian Hoover, CMS Kerry Hoover, CMS, (909) 772-3121

Copyright © 2022 – All Rights Reserved. No portion of this publication may be reused in any form without prior permission of the California Asphalt Pavement Association. California Asphalt is the official publication of the California Asphalt Pavement Association. This bimonthly magazine distributes to members of the California Asphalt Pavem­­ ent Association; contractors; construction material producers; Federal, State and Local Government Officials; and others interested in asphalt pavements in California and gaining exclusive insight about the issues, trends and people that are shaping the future of the industry.

6

California Asphalt Magazine • 2022 Forecast Issue

OUR SERVICES • Paving Grade Asphalt

• Asphalt Rejuvenating Agents

• Railcar Logistics

• Cut Back Asphalt

• Asphalt Release Agents

• Asphalt Delivery Services

• Asphalt Emulsions

• Dust Palliatives

• Asphalt Spreader Services

Paving Roads in the Northwest for over 50 years www.albina.com HEADQUARTERS Vancouver, WA 360-816-8016

VANCOUVER TERMINALS Vancouver, WA 360-816-8550

CHOWCHILLA TERMINAL Chowchilla, CA (New Location) 559-665-5500

MADRAS TERMINAL Madras, OR 541-475-6638

KLAMATH FALLS TERMINAL Klamath Falls, OR 541-884-5100

Quality Paving Certificate program debuts Designation will help project owners identify companies committed to industry-recognized standards of excellence

By Russell W. Snyder

WEST SACRAMENTO, Calif. – Dec. 20, 2021 – The California Asphalt Pavement Association, the voice of the asphalt industry in California, today launched a new program to help project owners identify asphalt paving contractors that have demonstrated a commitment to industry-recognized standards of excellence.

The “Quality Paving Certificate” designation will be conferred to asphalt paving companies that meet strict standards for excellence recognized by the industry and independently verified by the California Asphalt Pavement Association (CalAPA), a respected statewide organization representing the asphalt industry in California since 1953.

Companies that achieve the CalAPA Quality Paving Certificate must first complete an application of qualifications and self-assessment questionnaire, pass a written exam with a passing score of 80% or higher, and provide proof of completion of a series of core-competency classes.

Companies must also agree to abide

by CalAPA’s “Code of Ethics” in all of their business operations. To ensure that companies stay abreast of the many changes in standards, technology and best practices, there are continuing education requirements and the certificate must be renewed every three years.

“CalAPA has trained thousands of industry and agency personnel over the years in how to perform a quality asphalt paving job,” said CalAPA 2021

8

Chairman Scott Fraser with R.J. Noble Co. “The Quality Paving Certificate is the next logical step for our association to provide a standardized way for public and private project owners to have confidence that the companies performing work for them have demonstrated a commitment to performing quality work and delivering outstanding results.”

The program, years in development, builds on CalAPA’s decades of experience in delivering high-quality technical and practical training via veteran instructors recognized as authorities by their peers statewide and nationally. CalAPA classes consistently earn high marks from public agencies and private industry participants.

“CalAPA’s core mission is to elevate the industry through various knowledge-transfer activities,” said

Toni Carroll with Graniterock, vice-chair of the CalAPA. “It is a logical next step for us to formalize this activity in the form of a certificate program that can be easily recognized by project owners as a symbol of quality in our industry.”

Information on the Quality Paving Certificate can be found on the CalAPA website: www.calapa.net.

The process of obtaining a Quality Paving Certificate includes submitting a completed application and $750 processing fee (waived for CalAPA members), completing a 100-question self-assessment, successful passage of a 20-question on-line exam with a passing rate of 80% or greater, and completion of three core training classes, plus one elective. The core training classes, which are four-hours each, are: “Asphalt Pavement 101,” “Quality Asphalt Paving” and “Asphalt Forensics.” A fourth class, chosen

California Asphalt Magazine • 2022 Forecast Issue

The Quality Paving Certificate application process includes a 100-question self-assessment of best practices recognized by the asphalt pavement industry. The following are a few samples from the self-assessment questionnaire: QUALITY PAVING SELF-ASSESSMENT Company

Today’s Date

Name of Person Completing Form & Title Paving Crew Designation E-mail Address

Phone Self-Assessment Instructions:

Russell W. Snyder, CAE, is executive director of the California Asphalt Pavement Association.

No - 0 pt.

• •

The California Asphalt Pavement Association (CalAPA), founded in 1953, is a non-profit trade association representing the asphalt pavement industry in California. Members of the association include asphalt producers, refiners, paving contractors, suppliers, engineering firms, testing labs, equipment manufacturing companies and others that are part of the industry. CalAPA is the only statewide construction trade association focusing exclusively on asphalt pavements. To learn more visit www.calapa.net .

•

Is field testing equipment (density gauges, profilers, etc.) calibrated in accordance with established standards (ASTM, AASHTO and Caltrans)?

Are field personnel qualified/certified in the proper use of field testing equipment such as field density gauges, profilograph, etc.?

Partial - 1 pt.

About CalAPA:

•

The person completing this self-assessment should be in a supervisory/management position within the company and familiar with all aspects of paving operations. Answer questions based on typical practices for a particular paving crew (paving crew designation).

Yes - 2 pts

QUALITY CONTROL

Question

from the CalAPA course catalog, must also be completed. Among the choices are classes such as “Essentials of Asphalt Pavement Smoothness & Best Practices” and “Troubleshooting HMA Plant Production.” The fourth class requirement can be waived for companies employing technicians who hold a current certification by Caltrans via the Caltrans-industry Joint Training & Certification Program.

“Even the best specifications or batch of asphalt mix will not result in a long-lasting pavement surface if the asphalt is not placed properly in the field,” said Brandon Milar, P.E., CalAPA’s Director of Technical Services. “The Quality Paving Certificate will help set a standard for excellence to give project owners confidence that the final product will meet or exceed their expectations.”

For more information on the Quality Paving Certificate, contact CalAPA Regional Director Bill Knopf at (442) 400-9697. CA

QUALITY CONTROL 1

Is the pre-paving meeting held by the contracting agency and contractor?

2

Is the QC/QA Master Plan used at all times for governing paving operations and material suppliers?

3

Are there daily communications between QC and paving operations?

4

Is the line of authority for quality control separate from that of paving and production operations?

5

Does Quality Management System provide for paving equipment inspection as well as testing?

6

Is field testing equipment (density gauges, profilers, etc.) calibrated in accordance with established standards (ASTM, AASHTO and Caltrans)?

7

Do field supervisors have access to daily test reports and production reports?

8

Are all field test equipment calibrations on file and readily available for review?

9

Are field personnel qualified/certified in the proper use of field testing equipment such as field density gauges, profilograph, etc.?

10

Are test strips constructed for different mix types, foundations and/or depth to establish roller patterns and paving operations?

11

Has every crew foreman or supervisor been trained in and have a copy of the latest edition of the Manual for Uniform Traffic Control Devices (MUTCD)?

California Asphalt Pavement Association © 2021

WORK ZONE SAFETY PRACTICES • •

Does every crew member wear ATSSA approved apparel on the job site?

Does every crew have at least one member with first aid and CPR training?

SITE PREPARATION & PLANNING • •

Are pavement surfaces clean and free of debris prior to paving?

When tack coat is required is the pavement surface sprayed uniformly across the surface (no drilling or streaks) at the required application rate?

PAVER OPERATIONS • •

Are trucking, MTV and paver speed coordinated to keep the paver moving at a constant speed?

When allowed, longitudinal joints are constructed using practices that improve the performance of the longitudinal joint (i.e. joint sealing, wedge, cutting back, etc.).

COMPACTION

Rollers are operated at a speed that results in an optimum compactive effort.

Are paving personnel monitoring the mat temperature?

TRAINING •

•

At least 80% of crew supervisors (foreman and superintendents) and equipment operators including MTV operators, paver operators, screed persons and compactor operators receive an average of 20 hours of training each year, of which at least 4 hours must be in classroom or on-line course setting.

Our company maintains documentation on employee training completed and available for inspection upon request.

CUSTOMER & EMPLOYEE SATISFACTION • •

The company has a process in place to promptly and effectively address customer complaints.

All employees are encouraged to be innovative and offer ideas to improve operations.

California Asphalt Magazine • 2022 Forecast Issue

9

2022 economic forecast favors growth and expansion despite numerous negative factors still in play

By Brian Hoover, CMS

2022

ECONOMIC OUTLOOK

A

s we look forward to the remainder of 2022 and into 2023, let's take a peek at current conditions that could affect and impact our economy here in California.

We can begin with the most obvious, the pandemic. Let's take Jan. 17 as an example. On that day in the United States, there were 790,553 reported cases, 156,998 hospitalizations and 1961 deaths. Jan. 17 is an excellent example as the Omicron variant has cases soaring to around this same amount daily. The highly transmissible variant has many experts agreeing that we are still weeks away from peak numbers.

Now, let's add massive and ongoing supply chain issues, inflation rates at greater than 7%, 10

and a labor force growth rate that continues to be smaller than over the past 10-years. Piling on to all this bad news is Congressional Budget Office (CBO) claims that the total interest cost on the federal debt will rise to $5.4 trillion over the next 10 years. Not such a rosy picture by anyone's standards but respected quarterly economic reports from institutions such as UCLA and Chapman University are still calling for more substantial growth in 2022 than previously predicted.

SOME INSIGHT FROM THE 2022 UCLA ANDERSON FORECAST The UCLA Anderson School of Management's March 2021 forecast predicted robust economic growth for the United States. Specifically, the report

called for 6.3% growth in 2021, 4.6% growth in 2022 and 2.7% in 2023. Those numbers were eventually adjusted with the UCLA Anderson Forecast for the first quarter of 2022, coming in at 2.6% national growth, which is quite a bit down from their previous 4.6% prediction. However, the UCLA economists called for a more vigorous growth than previously predicted for the second quarter of 2022. For the third and fourth quarters of 2022, the UCLA Anderson School of Management forecast came in at 4.6% and 2.4%, respectively. UCLA essays and reports noted that the economy added around one million jobs this past June and July, with approximately 200,000 to 530,000 more being added every month [ Continued on page 12 ]

California Asphalt Magazine • 2022 Forecast Issue

WHEN IT COMES TO ASPHALT PAVING HAS WHAT YOU NEED

CR 1030 W Rubber Tire Paver

BW138AD-5 Tandem Vibratory Roller

BM1200-35 Cold Milling Machine

SB2500 Material Transfer Vehicle

RX700 Milling Machine

CP130-II Commercial Paver

Centennial Oil Truck

ChipSpreader

CP100-II Commercial Paver

NORTHERN CALIFORNIA

SOUTHERN CALIFORNIA

(916) 783-9333

(909) 877-5597

9220 Viking Place Roseville, CA 95747

2711 Lilac Ave. Bloomington, CA 92316

[ Continued from page 10 ]

since. This being said, employment and labor force numbers are still lagging at almost 2% less than pre-pandemic numbers. When the calculations are complete, the U.S. has around 3.1 million fewer workers currently in the labor force.

The unemployment rate is now hovering at approximately 3.9%, down from 5.9% this past June.

The UCLA Anderson Forecast also suggested that higher oil prices had a lot to do with recent inflation. The report points to supply eventually catching up with demand, thus bringing down oil prices. According to the report, lower oil prices should act as a deflationary force against inflation in other goods and services. Overall, UCLA's national forecast calls for continued strong economic growth and labor market recovery. The forecast also expects additional labor market recovery, with a lessening of supply constraints and inflation.

The report did, however, leave room for temporary setbacks due to the unpredictable omicron variant.

For California, the 2022 UCLA Anderson Forecast points out that the winter surge in COVID-19 cases will impact the state's recovery 12

time. While the logistics industry will continue to grow, tourism and other hospitality businesses will suffer as long as the virus remains prolific. California's current unemployment rate is running at just below 7% but is expected to fall to an annual average of 5.6% in 2022 and 4.4% in 2023.

According to the UCLA Forecast, California's 2021 inflation rate was around 4%, with expectations of 4.1% in 2022 and 2.9% in 2023.

The UCLA Anderson report also points to skyrocketing home prices and its impact on housing affordability and California's general economic outlook. The numbers are staggering as the California Association of Realtors state's a 33.6% growth in the median home price to a record high of $800,000. Accordingly, the report suggests that housing permits are expected to increase to 123,700 in 2022 and 139,700 in 2023.

A REVIEW OF CHAPMAN UNIVERSITY'S 2022 ECONOMIC FORECAST Chapman University's forecast in Dec. 2020 for 5.7% growth in real GDP in 2021 was right on target. So, now let's take a quick look at Chapman University's U.S.

LA FO BO RC R E

SU CH PP AI LY N

FL AT IO N IN

PA N D EM IC

ECONOMIC WILD CARDS

forecast highlights for 2022. The Chapman 2022 economic forecast suggests that the lagged effects of aggressive fiscal policy, rising household income, and sharply higher savings rates will lead to strong Real GDP growth at 4.4% in 2022. Although this represents a decline from 2021's 5.7% growth, it would still be roughly double the typical rate of increase. Total jobs by year-end 2022 are forecast at 17.4 million, still below the prerecession level of 17.7 million.

The report also states that although prospects for a relatively strong U.S. economy in 2022 are high, several factors point to a growing possibility of a recession in 2023. Those factors include less expansionary fiscal and monetary policy, increases in interest rates, and the adverse effects of rising inflation on purchasing power.

Additionally, the Chapman 2022 forecast points to strong international Pacific Rim trade that is fueling sharply higher job growth in transportation, warehousing, and other sectors engaged in moving imported and exported goods through the L.A. and Long Beach ports – the two largest ports in the U.S. Imports from China to the U.S. increased from $303 billion through Sept. 2020 to $360

California Asphalt Magazine • 2022 Forecast Issue

billion through Sept. 2021 – an increase of 19%.

A Chapman research report was released that showed California's relatively high housing prices are not explained by a housing shortage but rather by its higher median income levels and amenities. Chapman forecasters debunked the state's claims of a critical housing shortage in California. Evidence was presented that showed the average number of people living per residential unit in California at 2.94 in 2019 is the same as it was in 2010. The percentage of renters has also remained the same over the last 10 years. After increasing by 14.7% in 2021, the total number of residential permits is forecast to decrease from 115,000 units in 2021 to 111,000 in 2022 – a decrease of 3.2%.

Dr. Raymond Sfeir is the Director of the A. Gary Anderson Center for Economic Research and Professor of Economics at Chapman University. He served for 18 years as Associate Provost and then as Vice-Chancellor. Sfeir teaches microeconomics, statistics and forecasting. His research interests include operations research, capital asset pricing models and applied economics.

Sfeir produces the California, Orange County and Inland Empire forecasts. He also conducts the quarterly survey of purchasing managers in California and is quoted frequently in the media.

He is currently studying the performance of the manufacturing sector in California.

Sfeir shared this with California Asphalt magazine, "We believe that after being adjusted for inflation, California Real GDP will grow by 4.4% in 2022. This is a very solid growth rate that exceeds the average of around 2% that we have realized over the past 10 years, said Sfeir. "It is also true that 2021 Real GDP came in at 5.6%, but that is a direct

result of 2020 being such an overwhelmingly bad year." Sfeir points to the newly passed Infrastructure Investment and Jobs Act and the previously passed Road Repair and Accountability Act of 2017 (SB 1) as tools that will go a long way toward repairing California's roads, bridges and overall transportation infrastructure.

"California and the entire nation are in great need of transportation infrastructure replacement and repair. This $1.2 trillion investment by our federal government will go a long way toward assuring that every American has access to functional and sustainable infrastructure for many years to come."

INFRASTRUCTURE INVESTMENT AND JOBS ACT The Infrastructure Investment and Jobs Act, recently signed into law Nov. 15, 2021, will positively impact California's construction and overall economy in 2022 and beyond. According to a press release from the White House Briefing Room (whitehouse.gov), the infrastructure deal is set to rebuild America's roads, bridges and rails, expand access to clean drinking water and ensure that every American has access to high-speed internet. The press release also states that the newly passed legislation is also set up to tackle the climate crisis, advance environmental justice, and invest in communities that have too often been left behind. Additionally, the press release states that legislation will help ease inflationary pressures and strengthen supply chains by making long-overdue improvements for our nation's ports, airports, rail, and roads.

It will drive the creation of goodpaying union jobs and grow the economy sustainably and equitably so that everyone gets ahead for decades to come. It will add, on average, 1.5 million jobs per year for the next 10 years.

California Asphalt Magazine • 2022 Forecast Issue

Other major talking points associated with the Infrastructure Investment and Jobs Act include what the White House is calling "the largest investment in passenger rail since the creation of Amtrak." It also states that funds will be available to build a national network of electric vehicle (EV) chargers, upgrade our power infrastructure and deploy cuttingedge energy technology to achieve a zero-emissions future. The legislation will reauthorize surface transportation programs for five years and invest $110 billion in additional funding to repair our roads and bridges and support major, transformational projects.

Now known formally as the Bipartisan Infrastructure Law, the law makes the single largest investment in repairing and reconstructing our nation's bridges since the construction of the interstate highway system. It will rebuild the most economically significant bridges in the country as well as thousands of smaller bridges. In the United States, 1 in 5 miles of highways and major roads and 45,000 bridges, are in poor condition. In total, the new investments and reauthorization in the infrastructure deal will provide $89.9 billion in guaranteed funding for public transit over the next five years — the largest Federal investment in public transit in history. According to the White House briefing, the legislation invests $17 billion in port infrastructure and waterways and $25 billion in airports to address repair and maintenance backlogs, reduce congestion and emissions near ports and airports and drive electrification and other low-carbon technologies. Modern, resilient, and sustainable port, airport, and freight infrastructure will strengthen our supply chains and support U.S. competitiveness by removing bottlenecks, expediting commerce, and reducing the environmental impact on neighboring communities.

13

CALIFORNIA BREAKOUT OF $45.5 BILLION SHARE Roadway Construction

$25.3 Billion

Public Transportation Bridge Replacement & Repair Water Infrastructure Airports Additional Associated Development Electric Vehicle Charging Stations Wildfire Prevention

CALIFORNIA'S SHARE OF INFRASTRUCTURE FUNDING The $1.2 Trillion Infrastructure Investment and Jobs Act will include $110 billion allocated to states for road and bridge improvements.

Additionally, $66 billion will go toward railway projects and $39 billion for public transit systems.

So, how much of the $1.2 trillion will California residents receive? $45.5 billion is the number, and although that amount represents less than 4% of the total investment, it is the largest amount allocated to any state in the union.

One might think that is not quite enough when you consider that California's GDP in 2021 was $3.35T, representing 14.6% of the total U.S. economy. California will receive around $1,200 per resident, which is the lowest of any other state per capita. Two-thirds of California's share ($30 billion over five years) is reserved for repairing roads, highways and bridges.

This is good news to a state that continues to rate near the bottom for road conditions, leaving only Rhode Island, Hawaii, and Wisconsin with worse roadways and bridges.

14

$9.45 Billion $4.2 Billion $3.5 Billion $1.5 Billion $1.082 Billion $384 Million

$1.2T Trillion Infrastructure Investment

$84 Million

According to consumeraffairs.com, California has more than 1,530 bridges and over 14,220 miles of highway in poor condition. As stated earlier, approximately $30 billion will go toward fixing these roads and bridges over the next five years.

Specifically, $4.2 billion for bridge replacement and repair, $25.3 billion for federal-aid highway apportioned programs and $9.45 billion to improve public transportation.

An additional $1.5 billion will be allocated for infrastructure development. The remainder of the funds will go toward water infrastructure improvements ($3.5 billion), airports ($1.5 billion), wildfire prevention ($84 million), electric vehicle charging stations ($384 million), and other projects like expanding internet access.

When you combine these funds with the $54 billion (over 10 years) received from the Road Repair and Accountability Act of 2017 (SB 1), it seems that all of California's infrastructure worries are a thing of the past.

Well, according to California's infrastructure report card found at infrastructurereportcard.org, more than $130 billion is the number

needed over 10 years to bring our roadways, bridges, and transportation infrastructure into a state of good repair. So, if you combine SB 1 with the federal infrastructure funds, you still have a shortfall of more than $30 billion. That is a challenge for another day, as Californians should at least take a moment to appreciate what we do have and the great potential our state now has due to programs like these.

CALAPA WEIGHS IN ON CALIFORNIA ECONOMIC FORECAST The California Asphalt Pavement Association in Dec. produced a 29-page publication exclusively for CalAPA members, "2022 Asphalt Market Forecast for California." The report projected the anticipated production of asphalt tonnage for the year in the Golden State based on a myriad of factors and data gathered by the association, plus interviews with industry representatives and state policy shapers.

"With Covid-19 disruptions largely waning, strong economic indicators and robust infrastructure [ Continued on page 16 ]

California Asphalt Magazine • 2022 Forecast Issue

Interested in a smoother surface and a smoother workflow?

Contact your local SITECH dealer today!

Northern California SITECH NorCal 833 Montague Ave. San Leandro, CA 94577 888-4-A-LASER

Central California SITECH West 4221 Northgate Blvd. #7 Sacramento, CA 95834 916-921-0550

Southern California SITECH Pacific 1499 Palmyrita Ave. Riverside, CA 92507 951-300-0400

2022 CALIFORNIA HOUSING MARKET 2015

2016

2017

2018

2019

2020

2021p

2022f

SFH Resales (000s)

409.4

417.7

424.9

402.6

398.0

411.9

439.8

416.8

%Change

7.00%

2.00%

1.70%

-5.20%

-1.20%

3.50%

6.80%

-5.20%

Median Price ($000s)

$476.3

$502.3

$537.9

$569.5

$592.4

$659.4

$793.1

$834.4

%Change

6.60%

5.40%

7.10%

5.90%

4.00%

11.30%

20.30%

5.20%

31%

31%

29%

28%

31%

32%

26%

23%

3.90%

3.60%

4.00%

4.50%

3.90%

3.10%

3.00

3.50%

Housing Affordability Index*

30-Yr FRM

https://www.car.org/aboutus/mediacenter/newsreleases/2021releases/2022housingforecast p = projected f = forecast * = number of households who can afford median-price home

[ Continued from page 14 ]

investments at the local, state and federal levels, the outlook for the asphalt pavement industry in 2022 is stronger than it has been in several years," the CalAPA Forecast reported.

"While many of the economic indicators point to a promising outlook for 2022, there remains mixed messages from many sectors of the economy," said Crystal Howard, founder of Crystal Waters Consulting, a CalAPA member and principal co-author of the report.

"The public side of infrastructure investments definitely looks to be on an upward trajectory, but continuing volatility in the private sector as it relates to inflation, labor shortages, and supply chain issues may dampen the overall market in the coming year."

CalAPA Executive Director Russell W. Snyder echoed those sentiments but cautioned that the continuing harsh regulatory climate in California and unexpected events – such as the governor proposing in his 2022-23 state budget a state gas tax inflation adjustment "holiday" that could drain transportation coffers of more than $500 million – could trim the 16

2021 4 Quarter

2022 4 Quarter

Federal Funds Rate

0.1

0.6

10-Year T-Bond

1.6

2.5

30-Year Mortgage Rate

3.0

3.9

INTEREST RATES

th

th

https://economicforecast.chapman.edu/

number of pavement projects in the state.

"Anyone who lives in California knows to expect the unexpected," said Snyder, who was the other co-author of the CalAPA Market Forecast Report. "Our industry tries to plan for and anticipate obstacles to conducting our business, but continuing pressure for more environmental regulations, misguided legislation and other government policies can weigh down on expectations from motorists and taxpayers to see meaningful progress in addressing decades of deferred maintenance on California freeways, streets, and roads." CA

REFERENCE: newsroom.ucla.edu UCLA Anderson Forecast, economicforecast.chapman.edu Chapman University Economic Forecast Review, californiaforecast.com California Economic Forecast, whitehouse.gov The Infrastructure Investment and Jobs Act will Deliver for California, thepolypost.com Californians hope $1 trillion bill will alleviate infrastructure woes, car.org California Association of Realtors, calmatters.org California gets small share of infrastructure bill.

Brian Hoover is co-owner of Construction Marketing Services, LLC, and editor of CalContractor Magazine.

California Asphalt Magazine • 2022 Forecast Issue

We cover you better!

From quality seal coat products and subcontracting support to equipment rentals and more, turn to Diversified Asphalt Products for exceptional service and lasting value.

We’ve delivered consistent, professional quality and superior service to the asphalt industry for over 25 years.

SUBCONTRACTING DIVISION

• Full Service Oil Spreading • Fog Seal • Paving Fabric Installation • Crack Filling • Tack & Prime Coat

Equipment Rental

• Hot Crack Filling Machines • 600 to 6000 Gal Seal Tanks

MANUFACTURING DIVISION

• OverKote® Seal & Crack Filler • SS1H Emulsion • Paving Fabric Rolls • Petrotac and Geotextiles • Oil Flow and Oil Spot Sealer • Latex Additives • Hot Soup Buckets • Diamond Shield Fortifier

DIVERSIFIED ASPHALT PRODUCTS 1227 NORTH OLIVE STREET • ANAHEIM, CA 92801 TOLL FREE: 855-OVERKOTE • 855-683-7568

diversifiedasphalt.com

Results mixed in annual CalAPA ‘Better-Worse’ survey

By Russell W. Snyder

%&$'" The results are in. The 12th annual CalAPA "Better or Worse" survey shows respondents slightly more optimistic than last year when the COVID-19 pandemic cast a pall over work and personal lives, but still worried about the economy, inflation, finding enough workers and the expected waning of the pandemic.

The brief, non-scientific poll of more than 2,600 "Asphalt Insider" newsletter subscribers, conducted in November, found optimism ticked up slightly from last year’s glum numbers, which were nevertheless higher than were registered during the depths of the last economic recession in 2011.

The number of respondents who said next year would be better than 2021 stood at 43%, up from 33% last year.

That is in stark contrast to 2011, when the “better” number was just 20 percent. The comments seemed to indicate, however, a belief that it would be hard to top the depressing news of a year dominated by the coronavirus global pandemic that has claimed the lives of more than 776,000 Americans, including more than 73,000 in California as 2021 drew to a close. The survey was conducted prior to the onset of the latest Omicron variant that has created new disruptions in California and across the nation.

“Hope Covid will be behind us,” one state agency respondent wrote.

Added a paving contractor, “I think we’re through the worst of Covid.”

Another state agency representative added, “more people vaccinated and I am an optimist.” One local agency respondent predicted 18

!"#"$

%&'#%

()&*+'$)

)$,-.$)

!+((%-$)

(#/-.01'&.")#'"&)

!+((%-$)

(#/-.01'&.")#'"&)

!"##"$

!"#"$

%&'#%

()&*+'$)

)$,-.$)

brighter times ahead but noted that it was “dealing with low morale due to Covid.”

Indeed, many survey respondents looked ahead to a time, hopefully soon, when the pandemic restrictions will be curtailed and life can return to something more resembling normal. As with last year’s survey, a positive event was that road construction continued to be designated as an “essential” activity by state and local authorities, and projects funded by SB1, the $50 billion Road Repair & Accountability Act of 2017, coupled with local funds, continued to funnel dollars to state and local road-repair programs.

The survey was conducted before Congress passed a $1.2 trillion infrastructure bill that is expected to boost federal highway funding to California by 49% over five years.

“Voters passed a measure to increase sales tax, allowing for more transportation project funding in the city,” one city public works official wrote. A paving contractor observed that “more public money (is) being invested in roads,” while another added, “Ending 2021 on a very high note with one of the largest backlog of work to be carried into 2022.” Yet another wrote, “Great backlog and a lot of work bidding.”

California Asphalt Magazine • 2022 Forecast Issue

On the negative side, 16.5% of respondents said next year would be worse than 2021, slightly more than half of the 31% of respondents who felt that way a year ago, which was a record high for the question. The “worse” number was still higher than the previous high of 25% recorded in 2010. Much of the pessimism was pegged to lack of work, particularly in rural areas, work force shortages, logistic disruptions, inflation and government regulations.

“The backlog is lighter and the amount of forecasted work seems lighter in our areas,” wrote one asphalt producer, who predicted 2022 would be worse than 2021.

“The rising costs of oil, parts, and other items seems to have no end right now.” The top challenge, the producer wrote, will be “staying ahead of the inflationary costs that are very volatile at this time.”

Of the overall survey respondents, about a quarter were public agency representatives, with the rest comprising asphalt producers, refiners, paving contractors and other companies that are part of the industry, plus a smattering of others – a similar proportion of respondents as in previous years.

For the sixth year in a row, the survey added an optional question, “What is the No. 1 challenge where you work?” That question elicited 118 written responses. As it has in recent years, work force issues continued to dominate the comments. Next were supply chain issues, logistics, trucking, price inflation and competition. One city public works official observed: “Business seems to be coming back, and with it, more sales tax funds for projects. However, the inflation in project costs is substantial and makes forecasting project budgets uncertain.”

As the workforce ages and enters retirement or moves to other fields, the survey suggests, the churn in personnel continues to

!"#$$#%!&'()&*#%+#,$-.#&/0&%#1*/,2#,$13 )! (! '! &! %! $! #! "! ! #!"!

#!""

#!"#

#!"$

#!"%

#!"&

#!"'

#!"(

#!")

#!"*

#!#!

#!#"

!"#$%!&'(%)*%+,#-%&./&)%0(.+1%+,02 '! &! %! $! #! "! ! #!"!

#!""

#!"#

#!"$

#!"%

#!"&

#!"'

#!"(

#!")

#!"*

#!#!

#!#"

!"#$%&!'()*'+&$,&-./0&'#1'$&%+#-2&-.%3 %" %! $" $! #" #! " ! $!#!

$!##

$!#$

$!#%

$!#&

$!#"

create conflicts between industry and agency personnel. One survey respondent described the top challenge this way: “Labor. It used to be ‘qualified’ labor -- now it’s finding any labor at all -- despite significant increases in wages offered.”

Several other respondents, both industry and agency, cited the increasingly complex regulatory environment as a top challenge

California Asphalt Magazine • 2022 Forecast Issue

$!#'

$!#(

$!#)

$!#*

$!$!

$!$#

heading into 2022, and a few mentioned the additional public health and worker safety restrictions brought about by the Covid-19 pandemic. The California Department of Public Health reported that, as of Jan. 23, there have been 7.1 million confirmed cases of COVID-19 in California (up from 4.7 million in late November), resulting in 77,722 deaths (up from 73,365 deaths 19

in late November). The national COVID-19 death toll, according to the latest figures reported by the U.S. Centers for Disease Control and Prevention, is 862,494 deaths (up from 776,070 in late November).

The past year has seen cases surge and recede and surge again, confounding public health officials and employers trying to stay abreast of constantly shifting public health guidance.

“Covid preparedness with constant moving goal posts or purported regulations,” wrote one frustrated paving contractor.

Another contractor described California’s overall regulatory climate this way, “Overzealous regulations coming from every level of government burdening every element of running a construction materials and paving company.”

One state respondent acknowledged the increasing

environmental regulations, writing, “I see there being more challenges arising from the requirements for Climate Action, GHG emission restrictions and the implementation for the recycled materials California is currently using.”

The main CalAPA survey question is purposefully vague: "For your company or organization, how do you think 2022 will compare to 2021?" However, most of the voluntary comments offered up by survey respondents to justify their opinion centered around how much work is expected in the coming year. The answer varied by company, agency and region, reflecting the size and diversity of California's massive economy and the economic micro-climates that are spread across the state.

As in previous surveys, the weather largely depends upon where you are standing. Some respondents commented that work was brisk, while others were disappointed, particularly in rural areas of California. The delay in passage of the federal infrastructure bill also was cited as potentially contributing to a delay in pavement projects in the pipeline.

“The delayed passing of an infrastructure bill will continue to create uncertainty and the municipal governments are waiting to confirm funding for their projects,” one asphalt producer wrote. “This, coupled with the impacts due to Covid-19, will continue to impact 2022.”

A total of 176 people took part in the voluntary on-line survey, which was conducted from Oct. 18 to Nov. 8. Elements of this survey were included in an exclusive report sent to CalAPA members, “California Asphalt Market Forecast 2022” that was distributed Dec. 4 and is filled with data and insight available nowhere else. CA Russell W. Snyder, CAE, is executive director of the California Asphalt Pavement Association.

20

California Asphalt Magazine • 2022 Forecast Issue

Kenco Engineering is a bellwether indicator of the asphalt industry in California, nationally

By Russell W. Snyder

F

or better or worse, in good times and in bad, longtime CalAPA member Kenco Engineering is a leading indicator of the health of the asphalt pavement industry in California and across the nation.

Kenco Engineering, a familyowned business started in 1957 in the San Francisco Bay Area, designs and manufactures wear components for the road construction industry, including many parts that are utilized in asphalt plants, aggregate extraction, laydown construction activities and recycling. They are currently based in Roseville but serve customers across California and across North America.

In a recent interview, Brian Handshoe, V.P. – Operations of Kenco Engineering, said the current economic climate, replete with COVID-19 disruptions, continues to confound his industry even as there appears to be a flood of orders, indicating that the industry is investing in equipment as they ramp up in anticipation of work.

“Our backlog is the largest we’ve ever had by far,” Handshoe said. “Which, ironically, the highest we had up to this point is March of 2020, going into the COVID-19 shutdowns.”

But as the workload increases, so do COVID-19 related logistical challenges, he said.

“Here we go again with a backlog larger than we had back then, but now dealing with the challenges brought on by the pandemic,” he said. “It is very difficult for us to get workers on the production line, 22

in shipping, or in customer service.

We have a challenge with the escalation of prices. The raw steel that we use has gone up about 45% since the start of the year.

The alloys that we use for the castings have gone up, along with power costs. Those are averaging cost escalations of 20-25%.”

And on top of the cost increases, shortages of some materials also has been a challenge, Handshoe said.

“I don’t want to jinx myself, but we’ve still been able to source everything we need, but its very expensive and you aren’t going to get it as soon as you need it. I’ve been out of a specific cardboard fiber drum that we use to ship a lot of our product. We have been buying these drums from the same company for decades. It took them three weeks to return our call to tell us they were out of them. Once we finally got them to admit that they were out of them, and that it’s going to be another three weeks, for a total of six weeks, just to get the same cardboard box that we have been buying for decades.”

Handshoe, who is chairman of the CalAPA Political Action Committee, often uses stories like his to illustrate to elected officials the difficulties for a manufacturing firm to conduct business in California, which has an additional regulatory burden not experienced by companies based in other states.

And making the product makes no difference if you can’t ship it to the customer. That’s where the recent disruptions in the supply

Brian S. Handshoe, V.P. - Operations and Dave Lutz, President, Kenco Engineering.

chain and logistics also hit his company hard, or as he calls it “the nightmare that was March of 2021.”

“At that time we were predominantly using FedEx to deliver our goods,” he explained.

“FedEx had allowed the retirement or voluntary layoff of so many drivers that they didn’t have enough. Here on the West Coast, so much of our product goes to customers East of the Mississippi, most was going by train and then to the Joliet, Ill., intermodal facility that you have been hearing about recently. That Joliet intermodal is where freight goes to die. In March of last year we had a huge order going to a customer back East, unfortunately coinciding with that huge ice storm they had that hit Texas. That customer needed four shipments of flights that were going inside a new drum.

Those flights had to arrive at their production facility in a certain sequence in order for them to put the drum together. We shipped out

California Asphalt Magazine • 2022 Forecast Issue

Don Lutz, Vice President and Ron Brajkovich, Central CA Sales Representative.

all the parts in exactly the order that they needed them to put into the drum, to get them to their customer. We found out the hard way that was the beginning of a period that all the freight companies, collapsed. We had freight stuck in that intermodal facility, stuck in a train car, for six weeks. The intermodal facility was so screwed up they didn’t put the last shipment on a train. The truck went straight to Louisville, Kentucky, dropped it off, and it was the very first shipment to arrive. When the parts finally started coming out of the intermodal facility, all four pallets arrived at the customer’s location in exactly the wrong order. It was so frustrating because we busted our butts, with a huge backlog, to get the product out the door and then the shipping completely put a noose around our neck.”

Fortunately, Handshoe said, COVID-19 disruptions, logistics and shipping issues have been a nationwide crisis. Consequently, his customers were understanding that he was doing everything in his control to get them the parts they needed on time.

“The only saving grace for us,” he added, “was that we weren’t in a bubble. That was the world that has been 2021. I admit, in 2020

Keith Gramcko, Design Engineer.

I was so excited about getting out of that year and getting into 2021 because I thought things were going to be so much better, I thought the pandemic would be over and we could get back to work and, honestly, we’re worse off now than we were then because now the personnel situation, retaining and hiring new employees, the pricing escalations with steel and raw materials is off the hook, energy prices are rising, these freight delays are killing me on a daily basis. So, in so many ways, 2021 was worse than it was in 2020. That’s so frustrating because we have this amazing backlog, and customers who have been really great to work with us, but even they are starting to get frustrated because it is not just us, it is everyone. I think we’re getting to a point where people can only take so much. I’m wondering how long its going to be before we have customers, who are the end users, just decide to forgo projects or forgo equipment purchases, or whatever, just because the cost on this item or piece of equipment has gone up 50%, or doubled. With the lingering issues of the pandemic, the issues in Washington, do the end users lose confidence on what the future is going to hold?”

California Asphalt Magazine • 2022 Forecast Issue

Ben Whitman manning the cutting edge manufacturing line.

Even seemingly good news, like Congress passing a $1.2 trillion infrastructure bill, is colored by some of this pessimism, Handshoe said.

“I’ve had several people ask, aren’t you happy about this transportation bill?” Handshoe said. “Yes, I am. In a way this is part of what has caused the problem to be as bad as it is, because it has created a lot of the demand that has piled on to everyone. I’ve talked to a lot of our competitors.

They are in the exact same position as I am. They have massive orders, but they are struggling to get the raw materials and the people they need to fill those orders. And each of those end users needs those parts right now. We can’t get them to everyone at the same time. So, my job on on a daily basis is to conduct a triage to figure out which products can we make for which customers and how to get them there as quickly as we can.”

COVID-19 and supply chain issues aside, Handshoe does see his company as continuing to be a predictor of things to come for the industry, as it has been during previous economic cycles.

“We tend to be a leading indicator in that, since our products are a long-life premium product.

23

When a customer sees a very good prospect of long-term jobs, they are more willing to spend money on a premium product because they know it is going to help them long-term,” he said. “We tend to see the downturns quickly,” Handshoe said. “But we see the recovery earlier because when the tons begin to flow, a company that is making a lot of asphalt is going to wear out a lot of parts, and consequently, we sell a lot of parts when those customers are making a lot of tons. I think that is a good indicator right now, with our backlog telling you the asphalt producers in America are prepared to absolutely explode with tonnage.”

Conversely, Handshoe’s company has seen his customers pull back in the face of economic downturns.

“In a grand irony, we benefit when the market tanks, because we have seen customers, instead of buying a new piece of equipment, rebuild what they’ve got. One of the reasons we still make parts for 35-year-old PF500s is we still have customers who have them in the boneyard and will break them out as necessary, when the market is constrained.

At the same time customers will come in and want our products because they have massive jobs and they don’t want to be in the plant every three months fixing something. It does seem that some products will benefit from down markets and up markets.

“That’s especially true in what we see now,” he continued. “We tend to see larger orders for some of the higher-dollar drum-mix plant parts when a customer has a backlog themselves and they are confident they are going to get paid for it. That’s where I think the transportation bill really helps.

They invest in their equipment when they have a confidence that they are going to get paid for that investment.”

24

Brian Handshoe (left) speaks with Gov. Jerry Brown at the Governor’s Mansion in Sacramento on Aug. 9, 2018.

Handshoe has been a stalwart with his involvement in the National Asphalt Pavement Association legislative-related activities as well as for many years at a “citizen lobbyist” in California advocating for prudent investments in transportation infrastructure. Those efforts, which took place over many years, bore fruit with the passage in 2017 in Sacramento of Senate Bill 1, the $50 billion “Road Repair & Accountability Act,” and now with the federal infrastructure bill. Handshoe describes those efforts as “a grind” but required to keep the issues on the front burner of the policy debate.

“The very first lobbying event I participated in was a NAPA Young Leaders event in Washington, D.C., quite a bit ago. California U.S. Sen. Barbara Boxer was chair of the Senate Environment & Public Works Committee back then. When we met with her, I felt like she needed to hear the perspective of what companies like mine were actually dealing with on a daily basis. I was convinced about this because the Legislators who are responsible for writing this legislation don’t actually write it, their aides write it. But if we aren’t in the room talking about the issues with their aides, helping these aides learn what we see at the ground level, that legislation will not benefit us.

It will not reflect our industry, if we

aren’t out there educating them about what the hell is going on. It’s not something I do for fun. I don’t like walking the halls on Capitol Hill. But I think it has at least helped those members understand that their votes don’t occur in a vacuum. Their votes actually do trickle down and affect individuals like all of my employees.”

Handshoe was also part of a delegation of CalAPA members invited to the Governor’s Mansion in 2018 in recognition for their work to oppose Proposition 6 on the November ballot that year that sought to repeal the fuel taxes that were essential to SB1. Handshoe ended up having an extended and animated conversation with Gov. Jerry Brown at the event.

“It was funny how, when you actually talk to him about the daily operations of his new farm, he completely understood about how our businesses run because he dealt with it on his farm. I found it comically hypocritical that the lessons that he knew at his level did not necessarily apply to the way he was proposing legislation aimed at businesses operating at our level.”

Handshoe sees legislative engagement continuing in the future, and says CalAPA’s strong presence has lent credibility in its dealings with elected officials.

“What has been very noticeable to me, particularly at the state level, is when we walk into a legislator’s office they say, ‘Oh, it’s the asphalt guys.’ It’s been amazing walking in and instantly getting credibility from the member behind the desk because CalAPA has become the voice of the asphalt industry in the state, and that’s one of the reasons why I have been proud to work with the association. I’m confident that the reputation that this group has built has been earned.” CA Russell W. Snyder, CAE, is executive director of the California Asphalt Pavement Association.

California Asphalt Magazine • 2022 Forecast Issue

Bitumen Equipment - Soil Stabilizers We help customers find aggregate and material supplies that make your business function. So you can keep the focus on what matters most.

USB-3 | Bitumen Modification

USB-2 | Bitumen Emulsion Production Machine 8.8GPM

USB-2 | Bitumen Emulsion Production Machine 35.2gpm Contact Summit Source Co. for details and pricing.

Summit Source Co.

C: 760-539-2707

Psyllium Husk Psyllium Landscape Soil Stabilizer

USB-2L Laboratory Bitumen Modification

summitsourceco.com tschmidt@summitsourceco.com

linkedin.com/in/taylor-schmidt-291b7b88/

ELIMINATE THE WASTE OF PAPER TICKETS Asphalt is America's most recycled product. HaulHub is committed to helping California’s producers, contractors, and suppliers continue that environmental trend with e-Ticketing tools that are better for the environment and your bottom line.

LEARN MORE AT HAULHUB.COM

California Asphalt Magazine • 2022 Forecast Issue

25

ASSOCIATION NEWS

An asphalt conference (and golf outing) to remember Gratitude was on the agenda on Oct. 13-14.

After a prolonged hiatus due to the coronavirus pandemic, the CalAPA Fall Asphalt Pavement Conference returned to Sacramento for the first time since 2019 and it was like the return of an old friend.

The 12th edition of the Fall Asphalt Pavement Conference, held Oct. 13 at the Hilton Sacramento Arden West Hotel, featured another packed agenda filled with informative presentations and insight about the asphalt pavement market, technical updates, political awareness and other views providing attendees with a 360-degree view of the industry as it emerges from a worldwide pandemic.

For the first time, the conference was broadcast live on the internet for those who could not attend the event in person, and save for a few technical hiccups attendees remarked how happy they were to be participating in another highquality another knowledge-sharing and networking event. Seeing old friends and connecting with new ones also contributed to the uplifting experience.

On Oct 14 many attendees stayed over and attended the golf event held at the Haggin Oaks Golf Complex. Attendees enjoyed an early morning round of golf, a delicious lunch and awards. CA

The conference would not be possible without the generous support of our sponsors and exhibitors. Special thanks go out to: • • • • • • • • • • • • •

A.G. Industrial Supply All States Materials Group Haul Hub Technologies InstroTek, Inc. Kenco Engineering LaStrada Partners Sitech Syar Industries TransTech VSS International Butler-Justice Inc. Cargill DeSilva Gates Construction

Russell Snyder, CalAPA Executive Director greets the attendees at the CalAPA Fall Asphalt Pavement Conference.

Amarjeet S. Benipal, Caltrans District 3 Director was the keynote speaker.

Jeff Sievers, principal in the firm Carpenter Sievers and the contract advocate for the California Asphalt Pavement Association.

Audrey Copeland, Ph.D., P.E. and president and CEO of the National Asphalt Pavement Association (NAPA) was one of the speakers.

Bob Humer, P.E., Asphalt Institute speaks to the attendees.

Roger Smith, P.E., Life Member of CalAPA and an asphalt consultant poses a question to Director Benipal.

Adam Hand, PhD., P.E., in civil engineering and a professor at UNR spoke at the CalAPA Fall Asphalt Pavement Conference.

John Harvey, Ph.D., P.E., UV Davis, UCPRC was a speaker.

Brandon Milar, P.E., CalAPA Technical Director addresses the attendees.

Terry “TJ” Young, president of Technical Training and Advisory Services Company (T2ASCO) was a presenter.

26

California Asphalt Magazine • 2022 Forecast Issue

Chris Long, P.E., Infrastructure Team Leader and Chu Wei, P.E., Asset Management/Pavement Engineer of the Federal Highway Administration (FHWA) spoke virtually.

Tom Pyle, Chief of the Office of Asphalt Pavement, Caltrans presented at the CalAPA Fall Asphalt Pavement Conference.

Jeremy Peterson-Self, Office Chief for the Office of Materials Management and Independent Assurance within Materials Engineering and Testing Services (METS), Caltrans was part of the state engineering perspective panel.

Sarah Hartz, Acting Chief for the Office of Central Laboratories, Caltrans was part of the state engineering perspective panel.

Richard Hibbard, Independent Assurance – North/Joint Training & Certification Branch Chief, METS, Caltrans was part of the state engineering perspective panel.

Jordan Reed, George Reed, Inc. (left) with Scott Dmytrow, PRISM Worldwide.

Shadi Saadeh, P.E., Professor CSULB asks a question.

Dan Ridolfi, Lastrada Partners poses a question to speaker Adam Hand, PhD.

John Lamond, TransTech at the CalAPA Fall Asphalt Pavement Conference.

VSS Emultech staff DJ Cruz (left) and Tom King (left) and Chris Mata of Christina Grajeda manned their booth. SITECH NorCal.

Ron Brajkovich, Kenco Engineering pictured at his exhibit.

Attendees were treated to breakfast, lunch, snacks and a reception at the end of the day sponsored by Cargill.

CalAPA staff Brandon Milar, Technical Director (left), Russell Snyder, Executive Director and Sophie You, Member Services Manager.

Bob Humer, P.E., Asphalt Institute (left) with Roger Smith, P.E., Asphalt Consultant.

Cameron Richardson, Ingevity (left), Miguel Conde, Lastrada Partners, Dan Ridolfi, Lastrada Partners and Sean McCaffrey, Lastrada Partners.

Jeff Reed, George Reed, Inc. (left) with Mike Butler, Butler-Justice.

Sally Gillian, A.G. Industrial Supply Nathan Mayo, Syar Industries (right) (right) confers with a potential customer. was an exhibitor.

Michael McCoy and Paul Valdovinos of Public Works Compliance Advisors.

California Asphalt Magazine • 2022 Forecast Issue

27

Golfers taking off… at the CalAPA golf event held on Corey Turney, George Reed, Inc. Oct. 14 at Haggin Oaks Golf Complex in Sacramento. (left), Cameron Richardson, Ingevity, Ken Cooper, George Reed, Inc. and Bob Siffert, Ingevity.

DeSilva Gates foursome; Frank Costa (left), Sean Harrigan, Matt Eala and Scott Lipp.

Scott Dmytrow, PRISM Worldwide (left), Dan Ridolfi, Lastrada Partners, Miguel Conde, Lastrada Partners and Brandon Milar, CalAPA.

Phil Reader, George Reed, Inc. (left), Chris Gerber, G3 Quality, Dave Brand, Volvo Construction Equipment and Services and Joh Noegel.

Ian Broddrick, Alta Vista Solutions (left), John Lamond, TransTech Systems, Alex Richardson and Erik Wallin, HaulHub, Inc.

Keith Terrill, Arkema (left), Mike Scardina, SurfaceTech, Kevin Jeffers, Albina Asphalt and Kyle Arntson, Albina Asphalt.

Cameron Martin, Sam Rhodes, Inc. (left), David Cox, George Reed, Inc., Brian Platt, G3 Quality and Mark Krasko Myers & Sons.

Steve D’Ambra, MAXAM Equipment (left), Mike Butler, Butler-Justice and Bill Taliaferro.

Dennis Leveron, SEFNCO (left), Nathan Mayo, Syar, Chad Mobley, SEFNCO and Larry Lawrence, Frank-Lin Distillers.

First place winners were the DeSilva Gates foursome; Frank Costa (left), Sean Harrigan, Scott Lipp and Matt Eala Frank Costa (left), Sean Harrigan, Matt Eala and Frank.

Cameron Richardson, Ingevity won the contest for the longest drive.

Last place winners were Dan Ridolfi, Lastrada Partners, Scott Dmytrow, Prism Worldwide, Miguel Conde, Lastrada Partners and Brandon Milar, CalAPA.

SKID-EXCAVATOR HIGH-SPEED World Innovation: MCR Series Change from Excavator to Skid Steer mode by turning a switch.

COMING SOON TO TEMECULA WITH A NEW BRANCH TO SERVE YOU

WORK SMARTER – NOT HARDER

SOUTHERN CALIFORNIA’S PREMIER EQUIPMENT DEALER Fontana / 909-822-2200

www.scottequip.com Serving California For 50 Years!

28

14635 Valley Blvd., Fontana, CA 92335

Santa Fe Springs / 562-777-0775

10918 Shoemaker Ave., Santa Fe Springs, CA 90670

SALES • RENTALS • PARTS • SERVICE MINI EXCAVATORS / SKID STEERS BACKHOES / SKIP LOADERS

California Asphalt Magazine • 2022 Forecast Issue

Kenco Engineering, Inc You spent big money on your equipment...

MAKE IT LAST!

Protect your investment with Kenco longer life wear parts. Kenco offers innovative products for the aggregate, asphalt and road building industries.

Call Kenco and let our application specialists protect your investments:

800-363-9859

www.kencoengineering.com

TESTING. KNOWLEDGE. SOLUTIONS. More than Services, We’re Preserving Our Future.

PRI is known industry-wide as an Independent, Third-party Laboratory for Quality Testing and Supporting Technical Services of Asphalt, Asphalt Products and Related Materials.

The staff provides over 400 years of combined experience.

Technical capabilities cover all facets of asphalt use from crude oil to finished products.

Analytical Services

Life Cycle Analysis

R&D

Validation & Certifications

Forensics

Accreditation

(813) 621-5777 | www.priasphalt.com California Asphalt Magazine • 2022 Forecast Issue

29

ASSOCIATION NEWS Southern California asphalt contractors gather to pay tribute to industry legend Carlos Hernandez

A very happy and touched Carlos Hernandez speaks at his commemorative dinner.

Len Nawrocki and Carlos Hernandez, old friends and industry icons, at the CalAPA Contractors’ Dinner.

Berlene Hernandez (left), Anastasia Henning, Del Crandell, C&C Transport and Carlos Hernandez

Friends, family and industry colleagues gathered on Nov. 9 at the Dal Rae restaurant in Pico Rivera to honor a true asphalt industry original, Carlos Hernandez. The acknowledgment of this CalAPA "Life Member" included heartfelt tributes to an admired and respected legend in the business, who continues to participate in association events and has a positive impact on those he interacted with over his long career.

Hernandez was inducted into CalAPA’s Lifetime Member club in 1998. He got his start in the asphalt paving industry on Dec. 5, 1968 when he joined Industrial Asphalt as a dispatcher. He eventually moved on to become a sales representative before being promoted to district manager overseeing the Santa Fe Springs plant facility. His next move was to serve as the district manager for Industrial Asphalt’s Irwindale plant. Then in 1977, he was offered a chance to join a new venture, Huntmix Corp., which was formed when Bob and Wally Hunt along with Bob Eckland purchased six asphalt plants from the Griffith Company. This

turned out to be a good move for Hernandez, who was managing two of the six asphalt plants in Irwindale and Wilmington and with an offer to purchase shares in the company.

When the Hunts retired, Bob Eckland became the managing director. Before retiring the Hunt brothers bought back Industrial Asphalt and then sold the business to Calmat. Hernandez became the zone manager for Calmat overseeing plants in both Northern and Southern California.

Then on Sept. 10, 1989, Carlos was appointed managing director, responsible for all Southwestern operations for Calmat. When Hernandez made the decision to retire in 1998, he was serving as vice president and general manager of the Asphalt Division for Calmat.

Early on he was a member of the Southern California Paving & Grading Association (SCPGA).

He served in many capacities, serving as chairman on two separate occasions. He also served as the first chairman of the Asphalt Pavement Association of California when they took the place of SCPGA. Although

retired, he remained active and helped to create and implement many programs and important changes to the California asphalt construction landscape over his 30 years in this industry.

He is still involved to this day, attending CalAPA’s Annual Dinners at the Jonathan Club and Southern California contractors dinners. A military veteran, he has traditionally led the Annual Dinner gathering in the pledge of allegiance with a smart salute that would make any veteran proud.

As a testament to his enduring legacy, a filled room of well-wishers paid tribute to his career, including sharing stories of how he always put others first.

Carlos was very touched by the event, “I just want everyone to know how much this evening meant to me, and I want to thank each and every one of you for taking the time to attend,” he commented. CA

30

California Asphalt Magazine • 2022 Forecast Issue

Anastasia Henning (left), Del Crandell, C&C Transport and Lisa Watts.

Russell Snyder, CalAPA (left) with Taylor Schmidt, Surface Tech.

John Rogers, Blue Diamond, Rich Shaon and John Todorovich, All American Asphalt.

Jim and Arleen Raysor, Jim Miller, Len Nawrocki, Berlene and Carlos Hernandez.

Carl Rundquist (left), John Todorovich, All American Asphalt and Jeff benedict, Valero.

Tim Saenz (left) RMA Companies, Heather Saenz, Patsy Mascarenhas and Pascal Mascarenhas, CRM.

(800) 300-4240 SERVING: LOS ANGELES, ORANGE, VENTURA AND SAN BERNARDINO COUNTIES.

FIVE STRATEGICALLY POSITIONED PLANT LOCATIONS Sun Valley Plants 11462 Penrose St. Sun Valley, Ca 91352 Irwindale Plant 2600 Avenida Barbosa Irwindale, Ca 91706 South Gate Plant South Gate Recycling 5625 Southern Ave. South Gate, Ca 90280 Inglewood Plant 441 Railroad Place Inglewood, Ca 90301 Victorville Plant Victorville Recycling 15650 Air Expressway Victorville, Ca 92394

www.BlueDiamondAsphalt.com

California Asphalt Magazine • 2022 Forecast Issue

31

ASSOCIATION NEWS

Welcome aboard: Jackie Henry CalAPA is pleased to welcome to its professional staff Jackie Henry, who will be the association's member service coordinator.

A familiar face to many at CalAPA, Henry has worked for many years for CalAPA member Valero Energy in various administrative and supervisory capacities. She will report to Member Service Manager Sophie You and enhance the association's delivery of quality services to members, including helping with events, technical training and member outreach. She has served as a volunteer to assist CalAPA at numerous association

0327

events over the years, including Annual Dinners, golf tournaments and other networking events.

She was formally introduced to the membership at the Southern California Contractors Dinner held in November in Pico Rivera.

Henry holds an Associate in Arts degree from Cerritos Community College, a Bachelor's Degree from California State University, Long Beach and a Master's Degree in business administration from the University of Phoenix. She resides with her family in Perris in Southern California. CA

800.316.0327

SALES • RENTALS • PARTS • SERVICE MINI EXCAVATORS / SKID STEERS BACKHOES / SKIP LOADERS

SKID STEER • No payments for up to 120 days • 0% for 60 months • Titanium & Platinum credit customers only • Eligible Units: – 300 Series Skid Steer Loaders – 300 Series Compact Track Loaders – Compact Excavators

SOUTHERN CALIFORNIA’S PREMIER EQUIPMENT DEALER

WORK SMARTER – NOT HARDER

Serving California For 50 Years!

Fontana | 909-822-2200 14635 Valley Blvd., Fontana, CA 92335

Santa Fe Springs | 562-777-0775

COMING SOON TO TEMECULA WITH A NEW BRANCH TO SERVE YOU

10918 Shoemaker Ave., Santa Fe Springs, CA 90670

32

California Asphalt Magazine • 2022 Forecast Issue

CA Lic. #569352

SAFETY & QUALITY 100% Employee Owned

CORE VALUES OF PRS

OUR EMPLOYEE OWNERS ARE COMMITTED TO DELIVERING ZERO INCIDENT SAFETY PERFORMANCES WITH EXCELLENCE IN QUALITY

(916) 685-2204 | www.pavementrecycling.com

California Asphalt Magazine • 2022 Forecast Issue

33

WE HAVE YOU COVERED

CHIPSPREADERS

DISTRIBUTORS

Albina Asphalt.......................................................................... 7 Clairemont Equipment.......................................................... 33 Coastline Equipment............................................................... 5 Diversified Asphalt Products............................................... 17 E.D. Etnyre & Co.................................................................... 34 GoldStar Asphalt Products.................................................. 21 HaulHub Technologies.......................................................... 25 Hawthorne CAT........................................................................ 2 Herrmann Equipment, Inc.................................................... 11 Holt of California...................................................................... 2 Kenco...................................................................................... 29 Nixon-Egli Equipment Co.....................................Back Cover Pavement Recycling Systems............................................. 33 Peterson CAT........................................................................... 2 PRI Asphalt Technologies.................................................... 29 Quinn Co................................................................................... 2 Scott Equipment..............................................................28, 32 Sitech...................................................................................... 15 Summit Source Co................................................................ 25 Sully-Miller Contracting Co................................................. 31 Taylor Environmental Services............................................ 34 TransTech Systems, Inc........................................................ 20 Volvo Construction Equipment & Svcs................................. 3 VSS International................................................................... 35

LIVE BOTTOM TRAILERS

ASPHALT TANKS

LOWBOY TRAILERS

Scott Taylor

P: (714) 587-2595 Ex 101 scott.taylor@tayloresinc.com

INTERNATIONAL

OREGON, IL ETNYRE.COM 800.995.2116 34

Susana Mitchell

P: (714) 587-2595 Ex 102 susana.mitchell@tayloresinc.com

www.tayloresinc.com California Asphalt Magazine • 2022 Forecast Issue

PAVEMENT SPECIALISTS PAVING GRADE ASPHALT GTR MODIFIED ASPHALT CUT BACK ASPHALT ASPHALT EMULSIONS SEALCOATS ASPHALT REJUVENATING AGENTS DUST PALLIATIVES / SOLUTIONS ASPHALT DELIVERY SERVICES ASPHALT SPREADING SERVICES

EMULSION PLANT LOCATIONS:

FREE ESTIMATES: 1.800.748.6551 contact@slurry.com www.slurry.com

Redding, California 530.241.1364 n

West Sacramento, California

Providing Asphalt Services and Expertise in California for Over 100 Years.

916.373.1500 n

Bakersfield, California 661.323.5904

2020 APWA Project of the Year 2020 ISSA Presidents Award 2020 IRF Award for Excellence AEMA Excellence in Manufacturing

UNPARALLELED

CUSTOMER SUPPORT! NO AUTOMATED SYSTEMS. NO SCREENING. JUST REAL LIVE PEOPLE ANSWERING YOUR CALL.

Gaby Scantee • •

HONEST KNOWLEDGEABLE

Yvette Konno

Natalie Olivares • •

PATIENT RESPECTFUL

Ian Roppel

Patty Marks • •

RESPONSIVE PERSONAL

Miranda Hamann

ADVANCED EQUIPMENT AND TECHNOLOGY BACKED BY OLD SCHOOL CUSTOMER SERVICE.

California’s Largest General Line Construction and Municipal Equipment Dealer.

So. California: 2044 S. Vineyard Ave., Ontario, CA 91761 • (909) 930-1822 No. California: 800 E. Grant Line Rd., Tracy, CA 95304 • (209) 830-8600 www.nixon-egli.com