Mud. It’s everywhere on a jobsite, but if you’re a contractor working a jobsite in California, you’d better make extra sure mud doesn’t leave the premises or else you could get fined as much as $37,000 a day. The risks to builders of wandering mud and rainwater runoff are so great that too much of it can prevent dealers from making a delivery, says Steve Patterson, president of Central Valley Builders Supply (CVBS) in Napa, Calif.
What California thinks of mud, and the rules it has written about it, symbolize not only what’s notable about the Golden State, but also what the future may hold for construction supply dealers in the rest of the country.
California has a well-deserved reputation for starting trends, and on environmental and building regulations it’s a bellwether. The Porter-Cologne Water Quality Control Act that California passed in 1969 was used by federal legislators when they passed the Clean Water Act in 1972. Now California is ahead of the crowd on building codes, air emissions, fires, and even how its government works.
California often moves first largely because its huge population (35 million people), economy (roughly the ninth-biggest in the world), land size (only Alaska and Texas are bigger states), and geographic and ethnic diversity (it was a minority majority state years before the rest of the country) mean that complications arise here earlier than other places. It’s also a fragile state, subject to earthquakes, droughts, mudslides, wildfires, blizzards, tsunamis, and Santa Ana winds, all of which require accommodations to the environment—as well as to the state’s numerous environmentalists.
Those special factors, combined with government’s view of itself as a prime force in shaping the state’s destiny, have turned Sacramento into an early adopter of ideas and regulations. Many of them enrage California-based dealers and distributors.
In the current political climate, “business and the environment are not really being seen as able to co-exist,” says Augie Venezia, president of Fairfax Lumber & Hardware in Marin County, just across the Golden Gate Bridge from San Francisco. “Some people feel businesses should be paying more and more.”
Concerns about anti-business views are typical for a conservative, but Venezia’s credentials also bear a heavy green tinge. Venezia has turned Fairfax Lumber into one of the nation’s leading green building material suppliers. He started Fairfax’s in-house green product certification program back in 2006. Today Fairfax even runs its own recycling program, which collects old building materials and appliances, usually from local remodeling jobs, and resells or recycles the materials to customers and artists.
In much of the country, Venezia’s green activities would be avant-garde. In Marin County, he’s the norm.
Venezia also is government affairs/political action committee chair for the Lumber Association of California and Nevada (LACN). That makes him a frequent visitor to Sacramento and an up-close observer of the first major trend that dealers elsewhere can expect to see: a muscle-flexing, seemingly out-of-touch state government.
“California is a highly regulated and politicized state,” declares John Mensinger, president of American Lumber Co., based in Modesto. “At every level, the state of California does not function.”
LBM folks in most regions might say the same about their state’s bureaucracy, but few can make a stronger argument than dealers in California. First, it’s huge, with 225,000 workers on the payroll (excluding university system employees) as of May. Second, it’s activist, with a fulltime legislature and an initiatives system that makes it possible for the public to dictate how government operates. Third—and worst of all, say LACN leaders—it’s run largely by bureaucrats, especially those working at the state’s 328 control boards.
LACN executive director Ken Dunham says the four worst boards issue rules dealing with air, water, fires, and environmental protection. “Each one of those agencies marches to its own drumbeat, blithely disregarding the economic impact of actions, disregarding sound science and not showing common sense,” he wrote in a 2011 memo.
“They can do anything they want to do and they’re not beholden to nobody,” says Venezia. “At least with elected politicians we have some glimmer of opportunity to vote them out if they do a bad job. When you’re dealing with bureaucrats, you’re stuck.”
Mensinger, Venezia, and Dunham all believe the overly tough regulators hurt the business climate. Forbes magazine ranks California 39th on its annual list of Best States for Business, while CNBC ranks the Golden State at No. 32 overall but last in friendliness to business.
Dunham argues that rogue boards should be reined in through legislative oversight. But that’s hard to do in any state that’s growing because legislators have to represent more people. At the same time, there are calls by conservatives to give states more authority. That encourages increased state activism—in other words, becoming more like California.