Friday, February 19, 2016

CIFAC v. Ross Valley Sanitary Dist. (Cal. Ct. App. - Feb. 18, 2016)

This makes sense.

I'm not talking about the opinion.  Though that makes sense as well.  I'm talking about the underlying factual regime.

Here's the basic deal:

Sewer pipes get old.  You probably know that already.  They need to be replaced.  But -- as you also likely already know -- we're terrible lately about infrastructure repairs.  Just terrible.

Even in Marin County.  The Ross Valley Sanitary District maintains around 200 miles of sewer pipes in that tony enclave.  Most of which are "neighborhood" lines less than ten inches in diameter.  The District knows that around 139 miles of those pipes (!) eventually need to be replaced because their old and crumbling.

Traditionally, the District repairs these things through "spot repairs" -- basically, digs 'em up when they have a big problem and replaces them.  But that's a pain.  Fortunately, recently, the District discovered a new way of potentially dealing with this problem.  "In 2010, the District began experimenting with this new technique, which allows it to replace sections of sewer line by digging two holes about 350 feet apart, and then using a hydraulic pump to pull a torpedo-like device through the old pipe, bursting the old pipe and leaving a new pipe in its wake. With pipebursting, the District can replace 350-foot sections of pipe in about three days and without trenching, rather than engaging in weeks of work-intensive spot repairs."

Sounds cool.  Love it.  Seems like that's what you should do.  Get on it.  Great idea.

The District thinks so as well.  So it wants to hire some new "pipebursting" employees whose job it would be to implement this new technology.

Finally.  Government at work.  Rational.  Expeditious.  Infrastructure repair.  Everything's awesome.

But when the District lets the public know that's its plan, someone objects.  The Construction Industry Force Account Council, Inc.  You can probably figure out who this trade association represents.  CIFAC says that the District can't do this because there's a statute that says that every project over $15,000 needs to be put out to a public bid.  And even though any particular pipebursting project with the new employees wouldn't be over $15,000, the total salary of these new employees -- and the value of all the projects combined -- would be.  So the District can't do it in-house.  It'll have to hire outside people.

So the trade industry sues.  The trial court agrees.  And the District gets enjoined from hiring its new crew.

My reaction to this set of facts was not positive.  I see no reason why the District can't efficiently employ a crew to do what it's always done -- albeit in a different way -- in house.  I know perfectly well why there's a trade association that's suing.  But I don't like it.  It exemplifies classic agency cost problems.

Fortunately, the Court of Appeal reverses.  It's okay for the District to do it this way.

Thank goodness.

I know that we often want competitive bidding and lower-cost solutions rather than entrenched government employees.  But, here, I think the equities are exactly in the opposite direction.  My sense -- which I freely admit is not especially informed in this area -- is that, in the present case, it's the outside entitles that are the entrenched ones.  Seeking to preserve their turf against a more efficient centralized competitor.

But they lose.  And I'm happy about that.

So pipeburst away, Marin County.  Go crazy.

It's okay.