The President's Column

by Steve Weitekamp

June 2016

In May, a week before our convention, the California Public Utilities Commission (CPUC) requested a legislative budget committee proposal (BCP) to increase the allowable fees that permitted carriers (legal movers) pay from 0.7% to 1%. Based upon estimates of currently reported revenue this would have had a negative impact on the legal industry of approximately $750,000 in additional fees. This request was addressed at legislative budget committee meetings on Wednesday (5-4-16) in the Assembly and Thursday (5-5-16) in the Senate. CMSA was the only party there in opposition to this action. The CPUC stated that the Transportation Rate Fund is currently at an unreasonably low balance and that an increase in carrier fees is the way they plan to address the shortfall. We strongly disagreed with this fee increase and in addition to our public comments asked members to contact legislators in opposition.

The last time the CPUC increased carrier fees, in 2005, the CMSA supported the change. That support was based upon a commitment, unfulfilled, that household goods enforcement would receive five additional staff to address issues that have negatively impacted our industry for years. These issues continue to have a significant negative impact on the regulated industry, unregulated operators providing the exact same services. Many of these operators are members of the underground economy recently addressed by the Little Hoover Commission, but some are otherwise legitimate businesses that the CPUC fails to bring into compliance.

This time our position was that the shortfall could be addressed by ensuring that those operating outside of the rules come into compliance and pay the same fees as those following the rules already do. In addition to our continuous requests to stop or bring into compliance the illegal unlicensed operators, we have once again (this time more formally), requested that the CPUC require restoration companies to come into compliance for the portion

of their business that are within the authority of the California Public Utilities Code, and charge a fee for transportation of used household goods on public highways.

The immediate result of our legislative action to stop the increase was that the CPUC request to have the opportunity to raise fees on permitted carriers was not approved, but left as an open item. Legislators stated that they were particularly concerned by my testimony related to lack of communication by the CPUC with the regulated industry. We had no advanced knowledge of the BCP even though the budgetary issue that was the basis for their request developed in 2013 and had no direct link to any actions related to permitted carriers. As of the publication of this issue the legislature has rejected the fee increase that would have negatively impacted all permitted carriers. If CMSA had not been present to express our concerns related to this item, it would have been rubber stamped as so many other items were that day, and all carriers would have seen an increase in their CPUC fees.

We believe that the CPUC will attempt to once again address their ability to increase carrier fees at their first opportunity. CMSA will continue to address this issue from the perspective of the industry and oppose any increase, particularly in an environment where legal movers face significant challenges from illegal and unlicensed operators.

This issue will feature the first column written by our 2016-2017 CMSA Chairman Robert “Bob” Fraser. He has been a very active member of the Association for many years. I have confidence in his leadership skills, and I am honored to welcome him as our new chairman of the board! I look forward to working with him on industry issues and other Association business.

June 2016 - CMSA Communicator