STATE BOARD OF DIRECTORS MEETING HIGHLIGHTS FESS PARKER DOUBLETREE RESORT, SANTA BARBARA, CA FEBRUARY 8, 2013

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1 STATE BOARD OF DIRECTORS MEETING HIGHLIGHTS FESS PARKER DOUBLETREE RESORT, SANTA BARBARA, CA FEBRUARY 8, 2013 AGC of California held its first State Board of Directors meeting of the year on February 8, 2013 at the Fess Parker Doubletree Resort in Santa Barbara, CA. Past President John Nunan, Unger Construction Co., called the meeting to order and welcomed Past Presidents, Directors, and guests. During the self-introductions the State Board of Directors were asked to write down a potential member company to be contacted on a piece of paper and submit it to President Randy Douglas. Oath of Office: Past President Nunan then swore in the 2013 Officers as his last duty as 2012 President. President Randy Douglas, Tierra Construction Company then presided over the meeting. President s Scholarship: Past President John Nunan announced the 2012 President s Scholarship Award Recipients: Kimberly Braga, and Robert Clark. Both Kimberly and Robert are students at Sacramento State University. Kim Braga participated in several AGC events last year including Legislative Day (as the CEF student rep) and both Spring/Fall Conference. Kimberly is a recognized leader in the Construction Management department and she constantly works to encourage and motivate other students to step up and participate (especially her female peers). Kim is the President of the AGC student chapter at Sacramento State University. Robert Clark participated in both Spring/Fall conferences. He was a camp counselor for the ACE Summer Camp in 2011 and In 2012 he led his high school student team to victory with the best design/build project at camp. He s currently beginning a new role as Camp Director for the 2013 Summer Camp. Robert was given that role based on his demonstrated leadership capacity. Robert serves as Vice Chair of the AGC student chapter at Sacramento State. Neither recipient could attend the State Board Meeting as they were participating in the Construction Management competition in Reno. State Board of Directors Orientation: President Randy Douglas and CEO Tom Holsman provided an annual orientation outlining the duties and responsibilities for all State, Division, and District Directors, as well as the responsibilities for Chairs of the Standing State Committees/Councils. A review of the Executive Committee composition and a summary of how the Association functions was also provided. President Douglas highlighted key goals for 2013 in the areas of membership, marketing, organizational effectiveness and services. These goals were established by the Executive Committee during the annual Strategic Planning Session, and are tracked on a regular basis through the strategic scorecard. President Douglas encouraged member attendance at statewide and national events planned for the year, such as AGC of America National Convention in Palm

2 Springs, spring board meetings and Constructor Awards, Legislative Day and the Fall Conference. Keynote Speaker: Robert Lapsley, California Business Roundtable President, acknowledged meeting attendees as the foundation of California s economy and thanked them for their hard work and perseverance in tough times. He presented meeting attendees with an electoral analysis of the elections in November and what California s voting demographics look like moving forward. The analysis that Mr. Lapsley presented led to the following conclusions: GOP registration is in decline, Republican turnout advantage is falling, the GOP brand is universally disliked, online voter registration was significant and organic in 2012, the female vote is 8 points over men and less conservative, and Latino, Asian, and Youth votes are increasingly impactful. These conclusions are the reality of the current political climate. How those realities are approached is what will dictate California moving forward. Mr. Lapsley reported that California s Governor is gliding toward re-election and at the present time is acting as the backstop of majority bills. This leaves Republicans in an interesting place in terms of their relationship with Governor Brown. President s Report: President Douglas requested that the members of the 2013 Executive Committee stand so they might be recognized by the board. He then gave a report on the Executive Committee meeting held the day prior. The Committee received a 2012 Strategic Scorecard accomplishment report by Past President Nunan and each Officer highlighted key goals for the year in their focused area of responsibility. He reported that the Executive Committee reviewed and approved the Budget Committee s proposed budget for 2013 which was to be brought forward to the State Board of Directors for discussion and vote. The Committee also approved the Construction Industry Advancement Group s (CIAG) 2013 Board of Directors which consists of President Randy Douglas, Sr. Vice President Curt Weltz, Vice President Jon Ball, Treasurer John Douglas and Past President John Nunan. During the Executive Committee meeting the Division and Standing State Committee Chairs provided updates on strategic goals and upcoming activities for An update on the approved 2013 Industry Fund Grant status was also provided. The State Board of Directors approved President Douglas s report as presented. CEO s Report: CEO Tom Holsman highlighted the Association s accomplishments and struggles in Mr. Holsman highlighted some shining stars for A successful legislative year was had and AGC directly lobbied 38 bills on which the Legislative Committee took positions, yielding 34 wins against only 4 losses. CLC Expansion in 2012 was a major success with over 57 companies participating in the CLC in 2012, and the number of CLC members on standing state committees and councils doubled. Technology and social media was enhanced in 2012, with AGC Connect, e-marketing and social media channels established to engage, and inform members and non-members of AGC accomplishments and services. Student Chapter Participation was outstanding in 2012 with an excellent turnout of students at both spring and fall conference. The major struggle in 2012 continued to be membership, 2012 ended with 73 new members short of 2012 membership goal of 1016 members, and only an 83% retention rate. Looking ahead for 2013, Mr. Holsman reported on the 2013 financials, on what members can expect to see in AGC marketing efforts, and education and training. AGC Connect will continue to be pushed in 2013, with AGC members needing to participate in order to make it

3 a success. Lastly Mr. Holsman updated the Board on some staffing changes, and shifts: With the departure of Dave Jenkins, Erin Volk is now Manager, Statewide Conferences and Events while Sophia Taft has assumed responsibilities of marketing of events and sponsorship programs. With the departure of Sean O Donoghue, Mark Reynosa has been promoted to Director, Industrial Relations North. The position of IR North Field Services Representative has been left open for the time being, and IR North Staff will be picking up those additional duties for now. Moving forward Dave Jones will be taking on Joint Engineering and we will be seeing him more regularly around the West Sacramento Office. As Dave transitions to Joint Engineering he will be working with Charmaine Tyrrell as she assumes the role of District Manager for the San Joaquin District. Charmaine will continue to be the staff liaison for the Membership Development Committee as well as the point person for Premier Sponsorship Program. John Cooper will be taking on Statewide CLC (Construction Leadership Council). Lastly, Tony Morelli will be assuming the Associates Council following the conclusion of the Board and Installation. Consent Agenda: Directors approved the October meeting minutes, and written District and Committee/Council reports that were provided in the meeting packets. It was noted that the Industrial Report was pulled from the consent agenda and would be reported on later in the meeting. New Business 2013 Proposed Budget: Treasurer John Douglas, Granite Construction Co., wrapped up the budget numbers for He reported that in 2012 overall dues revenue decreased 7.7% from 2011 levels. Total AGC Revenue in 2012 projected at 2.7% below 2011; while total expenses were about 3.7% below The 2012 Budget was approved with a $196k net deficit; current projections for 2012 operating results show a net deficit of approximately $175k. As of December 2, 2012, AGC chapter membership declined by 72 members which was about a 7.1% net loss from Dues revenue for 2013 is budgeted at $2,445,000; up from $2,370,152 in A 3.2% increase. For 2013 the budget shows a projected deficit of $80K. In 2012 overall expenses were about 3.8% below budget and about.8% below 2011 actual. The initial 2013 projection is 5.8% below the 2012 level. Mr. Douglas reported on the projections for the following expenses: Staff, general expenses, occupancy, meeting expenses and other/non Op expenses. Directors approved the budget as submitted. Membership Report: Vice President Jon Ball, Hensel Phelps Construction Co., reviewed the fourth quarter membership report which showed a gain in membership; however, for the year AGC had a net loss in membership. Vice President Ball stressed the importance of increasing membership for the financial strength of AGC. In the first month of 2013, AGC lost a total of 11 members. Mr. Ball noted that in 2008 when the economy tanked, all businesses had a decision to make on how they would keep moving forward, to get lean and mean, to work smarter, etc. This is now precisely where AGC is as an association. AGC is operating on a negative budget and is faced with tough decisions. Budget issues can be solved, but that will take membership being solved, keeping high retention rates, and adding new members. Mr. Ball pushed each member in attendance to submit a company name of at least one potential member, noting that then and

4 there was when AGC needed to react and turn the membership issue around. The membership report was approved by the board as submitted. Vice President Jon Ball went on to present the 2012 Dave McCosker Membership Awards for most new members and highest net gain in each district. The San Joaquin District received the award for the highest contractor member net gain, and the San Francisco Bay District was awarded for the most new members. Industrial Relations: UCC North representative, Don Dolly, Vortex Marine Construction, Inc., updated the State Board on some recent IR activity, with the focus in Northern California. Some significant outcomes for Northern California came in the way of an agreement reached initially by a competing trade association in order to gain Contract Administration Fund (CAF), and trustee appointments. The competing association did this without securing any benefit for the employer. AGC subsequently reached an agreement and was successful in adding (9) additional items to the benefit of the employer, including special single shift provision, pension, health and welfare, etc. Mr. Dolly reported on the potential implications for the future of AGC in terms of a jeopardized Contract Administration Fund and industry fund revenue, which would not only have a legislative, regulatory and political impact but would also have a budget impact of up to 30% on AGC. In terms of future direction Mr. Dolly reported that a strategic planning session was being scheduled for February in Northern California in which all these items would be topics and be reviewed further. AGC Education Foundation: Chair Mike Mencarini, Unger Construction Co., provided an overview of the 2012 AGC Education Foundation, which included a report on the following: scholarships, AGC student chapters, ACE mentor partnership, upcoming events, and the 2013 annual fund campaign. Mr. Mencarini updated the board on the district match scholarships, which was led by the Tri-Counties District with $11,500 in scholarships. The Education Foundation surveyed students that attended the Fall Conference in October and reported on their responses to various questions including the following: the quality of the training seminars provide, the value of their experience, whether or not they would recommend that other students attend an AGC of CA conference, and whether they plan to join AGC as a CLC member should they begin working for an AGC member post graduation. Mr. Mencarini was happy to report that each of the questions had a favorable response. AGC of California s Education Foundation will be teaming up with National AGC to hold a joint silent auction at the National Convention in Palms Spring, March 6-8, Lastly, Mr. Mencarini thanked each of the 2012 annual fund sponsors and challenged State Board members to become 2013 Annual Fund sponsors. Legislative Report: Legislative Chair John Nunan, Unger Construction Co., reported on the Legislative Committee s activities planned for the 2013 year. Directors were reminded of the 2013 Legislative Program which was adopted last October by the State Board. This is a critical period for AGC as 2013 bills begin to trickle in. The Legislative Committee is scheduled to meet in March to prioritize legislation. Mr. Nunan noted that the March legislative meeting is one of the most important meetings of the year and helps to create a roadmap and strategy for the legislative year. Two specific issues were highlighted in Mr. Nunan s address: the creation of a highway safety bill which would unify rules and regulation for governing safety and highway

5 construction, and Workers Comp reform. With the fully funded legislative program, Mr. Nunan was pleased that AGC would have a skilled advocate in Paul Gladfelty to help navigate through the Workers Comp reform issues. At the May board meeting a complete report on the 2013 hot buttons will be presented to the directors. PAC Chair Mark Thurman, ARB Structures, Inc., stressed the importance of contributing to AGC s PAC and 120 Club, as each contribution makes a significant difference in the PAC program and is a major factor in what makes the AGC Legislative Program as successful as it is. Division Reports: Detailed highlights from the Division meetings are attached. Awards Program: Awards Chair Dave Garese, Excel Bonds and Insurance, provided an update on the Constructor Awards entries. Preliminary judging will take place on February 26, 2013 at the AGC Sacramento Office, with finalists announced in March. Winners will be announced at the Constructor Awards Banquet on May 4, 2013 at the Palace Hotel in San Francisco. Announcements & Future Meetings: President Douglas thanked all those in attendance and announced future meetings for 2013 including the National Convention, which will be hosted in Palm Spring, CA. The next State Board of Directors meeting is May 3, 2013 at the Palace Hotel in San Francisco, CA

6 BUILDING DIVISION BOARD OF DIRECTORS MEETING HIGHLIGHTS FEBRUARY 7, 2013 The Building Division meeting was held on February 7, 2013 in Santa Barbara, CA. Chair Erwin Villegas, Schipper Construction, called the meeting to order at 2:10 p.m. and asked for self introductions. Divisional Speakers Finding the Edge Rebekah Gladson, RG Group, spoke at length regarding the advancement of project delivery systems. Topics discussed include: Advancement Becomes Common o Electronic Mail Once Considered Leading Edge Added Value o Owners Want Predictable Outcomes Over the Edge, No Two Projects are the Same Technical Edge o Project Selection Process is More Complicated Finding (and Losing) Work in a Tough Economy, How to Approach Business Development: John Nunan, President, Unger Construction Co., and Daniel Dumke, Executive Vice President & General Manager, Suffolk Construction Co. spoke about Business Development and how a company can maintain and gain new clients. Topics include: What are You Selling and What is Your Brand? Who is Doing the Selling? Who Does the Vision and Creative Part? The Importance of Networking and Relationships. Cultivating a New Client. Stewardship of Current Clients Legislative Update: Dave Ackerman, DGA Associates, provided the division directors with a preview of the following topics: Design Build Court House Construction Prison / Jail Construction 2014 School Construction Bond CEQA Reform Public Work Issues Air / Water Quality Regulatory Update: John Hakel, Vice President, Government Relations,

7 spoke on the most recent regulatory construction requirements now being imposed on the construction industry. Discussions centered on air and water quality regulations: Air Quality: New 2013 CARB Standards Portable Equipment Clarification for 2013 Cap / Trade Mandates Water Quality: Certification Process and Proposed Training Programs Recent Water Quality Fees / Fines Mandating Training for Compliance on Active Job Sites Next Meeting: The next Building Division Meeting will be held on May 2, 2013 at the Palace Hotel in San Francisco, CA.

8 JOINT ENGINEERING DIVISION BOARD OF DIRECTORS MEETING HIGHLIGHTS FEBRUARY 7, 2013 Jaimie Angus chaired the meeting as the 2013 Joint Engineering Division Chair. Mr. Angus called the meeting to order and welcomed Steve Poindexter as the Vice Chair of the Engineering Division. Caltrans District 7 and Greater Los Angeles: Workload Outlook - Dan Freeman, Acting District 7 Director discussed District 7 ongoing projects, declining highway funding and future projects. He touched on recent needs assessment conducted by California Transportation Commission (CTC). $540 billion is needed for the next 10 years, with only $240 billion in revenue coming in to maintain the current infrastructure in California. Mr. Freeman discussed the stable funding level for the next two years for the Federal Reauthorization bill Map-21. Caltrans supports accelerating Project Delivery. Legislative Update and Transportation Funding - Dave Ackerman, DGA Associates, provided an update on the two major transportation issues for 2013:Infrastructure Financing and Highway Worker Safety. He discussed estimated highway repair needs, the shortfall in financing and possible funding solutions. Mr. Ackerman discussed highway worker safety and proposed safety measures. Will MAP-21 Provide Adequate Funding for Highway Work? - Rick Backlund, FHWA, discussed how the Moving Ahead for Progress in the 21 st Century Act (MAP-21) strengthens America s highway & public transportation system by creating jobs and supporting economic growth. MAP-21 supports an aggressive safety agenda and simplifies and focuses the Federal Program. Map-21 accelerates project delivery, promotes innovation and establishes a performance-based federal program. Open Discussion - The following items were discussed during the open forum with attendees: Caltrans 2010 Specification and the potential conflicts in interpreting the spec. A team will be set up by Caltrans construction management in Headquarters to address any potential conflicts. This team will include AGC contractors. SWPPP violations continue to be a real and present concern for industry. Recently in Northern California, a contractor (not an AGC member) was fined a $5 Million by the Water Board. Steve Bloise is the AGC representative on a taskforce established by Caltrans to address Water Board practices on construction sites. Will Kempton was named the new Executive Director for Transportation California. In his new capacity, he will be focusing on working with industry and government agencies to secure sustainable funding for transportation and infrastructure in California. The ACEC Liaison Meeting followed the Joint Engineering Board of Directors meeting.

9 Next Meeting: The next Joint Engineering meeting will be held on May 2, 2013 at the Palace Hotel in San Francisco, CA.