The Green Construction Panel at North Bay Business Journal's Construction Conference 2011 on Tuesday will explore the new environmental-quality requirements at various government levels and how the construction industry is meeting the challenge.

Construction Conference 2011

Tuesday, May 10, 2011

Construction overview

Paul Campos, vice president of governmental affairs and general counsel, BIA of the Bay Area

"Super-regulators" of the Bay Area

Roger Nelson, president of Midstate Construction

Nelson Index survey of future local construction activity [see related story]

Keith Woods, chief executive officer, North Coast Builders ExchangeGreen Construction Panel

Michael Kimberlain, regional engineer, KriStar Enterprises

Dave Leff, president, Leff Construction

John McGarva, president and CEO, Western Water Constructors

Mark Soiland, president, Soiland Co.Opportunities Panel

Paul Elmore, president, RNM Properties

Bob Mitsch, vice president for facility planning and development, Sutter Health

Keith Rogal, partner, Rogal + Walsh + Mol, redeveloper of the Napa Pipe plantRead responses from the Opportunities Panel to several questions on industry trends.

Panelists addressing new rules for air quality and stormwater management as well as innovations in dealing with trash will be Michael Kimberlain, regional engineer for KriStar Enterprises; Dave Leff, president of Leff Construction; John McGarva, president and chief executive officer of Western Water Constructors; and Mark Soiland, president and chief operating officer of Soiland Co.

Mr. Kimberlain, a civil engineer, joined Santa Rosa-based KriStar in 2007 and works from the company's Southern California office. He specializes in design of stormwater storage and treatment systems. KriStar has been on the forefront of the erosion control in construction and agriculture since it started producing fiber rolls, or straw wrapped in netting to trap water-borne earth, in 1993. Newer products include modular systems for storing and filtering rainwater.

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Mr. Leff started his Sebastopol-based design-build company in 1978, focusing on alternative-energy systems, remodeling and renovation, and downsized homes from the outset. In the past few years, the company has leveraged its know-how into a new income stream of building-performance evaluations and retrofits.

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Founded in 1959, Santa Rosa-based general contractor Western Water historically has tackled large municipal water and wastewater treatment facility projects. With government finances in turmoil, the company is shifting toward public works projects funded via public-private partnerships.

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Soiland Co. has hewn out new business opportunities in quarry and earth-based products since Mr. Soiland's father, Marv, started it in 1962. As Sonoma County regulations increasingly restricted operations at quarries and establishment of new ones, Soiland Co. has incorporated more recycling of road and construction materials into its revenue mix, now including soil amendments from composting of organics.

What are the significant new laws, regulations, rules and policies affecting North Bay builders? How are the changes altering your business?

Michael Kimberlain: The newly adopted construction general permit [for the] North Coast and San Francisco Bay Regional Water Quality Control Board--originated updates to the local National Pollutant Discharge Elimination System (NPDES) permits, the draft industrial general permit and low-impact development (LID) regulations and ordinances are some of the significant new regulations we encounter in our business daily.

These new regulations present an almost entirely new approach to site design and building construction.  In addition, the dynamic process of the regulations makes it difficult to plan the business operations for the future.

John McGarva: For 50 years we've worked on large municipal water and wastewater projects and haven't been affected by local actions. Now we're the engineering, procurement and construction contractor on an agricultural waste energy project for Sonoma County Water Agency. It is heavily affected by what's happening locally. A CEQA (California Environmental Quality Act) document is on the street right now, and at this point it's moving along positively.

In our market for state and federal projects, it's all about the economy. As the tax base has eroded, so have funds municipalities have to do water and wastewater projects. Each year there is a backlog of projects to keep up deteriorating infrastructure, and without funding the backlog of work is growing without much relief.

It's unfortunate that in the state of California for quite a while there has not been much movement on enabling legislation for anything more than low-bid work. Most of the country has been moving to the design-build model. In my opinion, it drops prices for projects and gets them done faster. In my opinion, it is because of a lack of initiative by the Legislature.

Everyone in my industry believes one of the things that will be happening -- and is happening on a national level -- is public-private partnerships. We're working as the junior partner for water and wastewater projects in the Western U.S. with a European company -- Gruppo ACS of Spain. It’s one of the largest construction companies in world that’s not government-owned. It owns about 900 companies worldwide, and its move into the U.S. is to go after public-private partnership work to bring money to projects that do not have financing.

Mark Soiland: There is increased enforcement from the federal government, but fewer dollars are available for training of our employees due to personnel cuts.

Also, there is onerous enforcement of new standards that are controversial and, perhaps, don’t make sense for enforcement and safety in our industry.

Increased sensitivity to environmental issues is another factor. There seems to be heightened awareness to noise, dust and pollution in general as well as stormwater runoff.

A new “industrial stormwater discharge” permit is in the works that is threatening to be impossible to adhere to. It's forthcoming in 2012 approximately.

The impact: costs and delays of our progress in permitting or actual accomplishment of work.

How is the local construction industry doing in satisfying public and government interest in an environmentally friendly built environment?

Mr. Kimberlain: I think the building industry as a whole is making a concerted effort with compliance, and there is genuine interest to build in an environmentally friendly manner. But it is still too early to tell if full compliance is achievable and if the regulators are satisfied with the efforts.

Dave Leff: Single-family and multifamily residential building-performance work. SCEIP (Sonoma County Energy Independence Program) is providing financing for building-performance work. Energy Efficiency California is providing rebates for residential energy-efficiency retrofits, and there are still tax credits available for residential retrofits and renewable energy systems.

We also see the residential remodeling sector picking up.  The number of project leads has been increasing since late last fall and project sizes have been growing.  We are seeing a greater willingness among our clients to pay more for high quality craftsmanship and great customer service.

Many people have learned that it hasn’t paid to hire a “hungry” contractor and that you do get what you pay for.  They are also willing to spend more to add home performance work to their projects, not in an effort to same money on their utility bills, but because they are interested in being more comfortable and living in a healthier home environment.

The Energy Efficiency California rebate program requires that energy-efficiency contractors be certified by the Building Performance Institute (BPI) for all but the lowest level of rebates.  The certification requires nine days of training, a classroom test and a field test, which together can cost $2,000 to $3,000.

Although the costs are coming down, the auditing equipment for building-performance testing is still quite expensive, in the $12,000 to $20,000 range.   There are some scholarships available. As consumer awareness grows about the retrofit programs, the demand for trained and qualified building-performance contractors will continue to increase.

Mr. McGarva: The Sonoma County Water Agency's waste-to-energy project came from a private developer (BioStar Systems) out Kansas City bringing its own money and other private money. It uses anaerobic bacterial digestion of waste feedstock -- in this case manure from Petaluma Poultry Processors facilities -- to create methane.

We've built many digesters for municipal wastewater plants to take the sludge from the treatment process. For years, plants would flare off the gas to get rid of it, but now most are using the gas to create energy. Heat and energy from digestion leaves leftovers as inoculated biosolids, which can be applied to land mixed with compost as soil-enhancing products.

We've helped the company taking rest of water and solids from the digester to turn it into solid organic fertilizer. In Europe there are a lot of ag waste digester facilities, but there is not a market for organic fertilizer. The water out of the digester is very high in nitrogen. Because of that you can't dump it in waterways, and it’s expensive to treat.

We take nitrogen from the remnant waste in the right forms, and we're going to create liquid organic fertilizer as a marketable product. Everything this touches is good environment, from taking waste stream that’s hazardous to the environment and cleans up the waste stream water to to standards of a state-of-the-art wastewater treatment plant.

We're moving more to private-based projects on this model. Our market has been devastated; our margins have gone south, and in base regions we can't compete anymore in the municipal market. We’re working on biodigester projects under development in Santa Rosa, Missouri and Oregon, the first two with BioStar.

The other company also has a business model to take municipal solid waste from trash cans -- 51 percent is organic waste -- and further sort it to send more to a biodigester. What’s cool about that model is it is reducing what goes to landfill today by 80 percent. We're a bit of investment money away from the first two such projects in California. We think it will have long-term business opportunities.

Mr. Soiland: Our industry has more than met the challenge to meet a “green building” standard for our area. The problem has become the cost of doing business the “green way.” Most contractors and suppliers deserve green awards for their behaviors. But in this current economy, those behaviors often (aren't covered) in the cost of a project. I believe most projects aren’t moving forward for financial reasons. The green standard is one area placing pressure on the cost to make a project pencil out.

Many projects are still being done, either due to grant monies awarded or simply an owner is willing to up-front the costs of doing something great for the environment. Bodean Company is ready to flip the switch on the world’s only solar-powered rock quarry this week -- but at great cost. The owners did it because it is a neat thing to do -- and the right thing to do with their land.

Bodean is also using it as a marketing tool. They didn’t undertake the project with that in mind. It just evolved in their minds. They believe that given a choice, a contractor and consumer base will choose to do business with a company that cares about the environment and their community. They are thoughtful risk-takers.

What is that interest doing to upfront and long-term project costs?

Mr. Kimberlain: Unfortunately, a lot of the regulations are prescriptive in nature, which removes flexibility from the design and development process.  In addition, the regulations include presumptive acceptance of solutions -- particularly in the area of storm water regulations -- that are unsupported by a credible and broad base of empirical evidence. These combined cause an increased up-front project cost with an uncertainty for long-term costs and performance.

What key "green" projects has your company been undertaking?

Mr. Kimberlain: KriStar provides innovative stormwater solutions to the building industry.  As such, we are involved in many (U.S. Green Building Council) LEED-rated projects.  KriStar’s Cudo Cube system is a modular underground stormwater storage and infiltration device that can be used for detention, retention and rainwater harvesting system.  The Cudo Cube is also made from recycled content polypropylene.

Kristar also produces the TreePod and Filterra biofiltration and bioretention stormwater devices.  These devices provide a terrestrial-based treatment approach to stormwater.  These as well as other devices have been used on several projects in the North Bay to help to achieve the requirements of some of the new regulations previously mentioned.

Mr. McGarva: With these same (biodigester) developers, once we prove the technology we're working on, we have our eyes on many, many projects around the U.S.

Any kind ag waste, from large dairy, pork and chicken producers, can work. We’re looking at growing energy crops in the form of maize or sorghum, which grows in very tough conditions. We wouldn’t compete with human-consumed foodstock. If municipalities have wastewater and land-apply it for irrigation we could grow an energy crop on that land and put the feedstock back into to biodigester. It is sort of a full circle.

Mr. Soiland: Stony Point Rock Quarry purchased Grab n' Grow Soil Products in 2009. This catapulted my idea of turning our business into a major recycling machine. Grab n' Grow recycles about 100,000 cubic yards of agricultural and vineyard waste per year into sustainable and often times organic-certified materials for gardening and landscaping.

We have also installed a small solar system at our Cotati facility. We recycle all office materials possible. We also recycle toilets, ceramic tiles and other masonry-type materials that most other recycling facilities won’t take.

We started an asphalt shingle recycling program two years ago to (divert) these from local landfills.

How are new requirements for water-conservation and stormwater requirements affecting project design?

Mr. Kimberlain: Many of the new regulations require more upfront planning and design and, in some cases, limit the design options. The design process has become more integrated and must be inclusive of several trades. In other words, the successful design of a bioretention stormwater treatment cell requires input from the civil engineer, geotechnical engineer and landscape architect. All of this can lead to a lengthened design and construction phase.

How dominant will public money, private funds or a combination of the two sources be in conservation and alternative-energy projects?

Mr. McGarva: I believe that public-private partnerships will play more into any large project. The sweet spot of this company (Gruppo AGC) is in the $500 million to $1.5 billion size of project. Any time a municipality has a need and does not have the revenue stream to satisfy that, they can find a private partner. (Gruppo AGC) knows water in the West and specifically in California is going to be big and is interested in doing peripheral canal work going to be done in Central California.

How is the role of recycling and recyclable products changing in construction?

Mr. Soiland: Recycling has changed, mostly because it has been mandated. Due to diversion targets that the state has placed on (landfill) operators, they measure out the diverted recyclables from their landfilled waste. We participate in this by providing certified weight tickets to some of the garbage handlers for the materials we process. They get the credit from the state.

Some bigger issues are composting, primarily food-waste composting. Sonoma County doesn’t have a solution yet for green-waste composting, let alone food waste. (The 2007 Sonoma County Waste Characterization Study found that about 27 percent of commercial garbage and 36 percent of residential waste is from food, totaling nearly 80,000 tons annually. Seventy percent of the 375,000 tons sent to county landfills was deemed recyclable.)

Once the area figures out how to deal with food waste from grocery stores and restaurateurs, we will be closer to reaching a 90 percentile of diversion. (The diversion rate was 64 percent in 2006, before the state reporting standard switched to tons per capita. In 2007 and 2008, the respective rates for the county were 5 and 4.5 per person.)