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Budget and Policy Post
March 13, 2018

The 2018-19 Budget

The Governor’s Office of Emergency Services

The Governor’s Office of Emergency Services (OES) coordinates emergency planning, response, and recovery activities related to disasters. OES maintains the State Emergency Plan—which outlines the organizational structure for emergency response to natural and man-made disasters—and assists local governments and other state agencies in developing their own emergency preparedness and response plans. During an emergency, OES is responsible for coordinating the state’s activities under the California Emergency Services Act. Additionally, OES administers various programs that provide assistance to victims of crime. The Governor’s budget proposes $1.4 billion (more than two-thirds from federal funds) for support of OES in 2018‑19. Of this total budget, $1.2 billion is for local assistance. (This includes $25 million proposed for OES as part of the Governor’s 2018‑19 cap-and-trade expenditure plan.) This total budget is a net decrease of $7 million (0.5 percent) from current-year estimated expenditures.

In this analysis, we assess two proposals for OES included in the Governor’s 2018‑19 budget: (1) the California Earthquake Early Warning (CEEW) system and (2) the California Disaster Assistance Act.

California Earthquake Early Warning System

LAO Bottom Line. The Governor’s budget proposes to provide $15.8 million from the General Fund in 2018‑19 and $750,000 annually thereafter from the General Fund to support the CEEW system through the installation of additional earthquake sensor stations and funding for four positions to oversee and manage the system. We recommend the Legislature withhold action on the Governor’s proposal pending the release of the forthcoming business plan from OES. Without the business plan, the Legislature lacks key information concerning the system’s costs as well as potentially available funding sources that would be necessary to determine the merits of the administration’s request.


CEEW System Would Provide State With Some Advance Notice of an Earthquake. Chapter 803 of 2016 (SB 438, Hill) authorized the development of the CEEW system through a multi-agency partnership including OES, the University of California, the United States Geological Survey (USGS), and other stakeholders. When fully deployed, the CEEW system would use a network of 1,115 sensor stations and other related infrastructure to provide warnings several seconds prior to the arrival of an earthquake. These advance warnings would enable individuals, business, and governments to take actions to reduce harm and loss of life from earthquakes. For example, light rail systems could automatically suspend train operations upon receipt of an earthquake warning to minimize the chance of derailments.

CEEW System Would Build Off of Existing System. The CEEW system would build on the foundation of the state’s existing California Integrated Seismic Network (CISN), which is a statewide network of earthquake sensors that provide information on the time, location, and magnitude of earthquakes in the state within 30 to 90 seconds after earthquakes begin. The implementation of the CEEW system would require upgrading of some of the existing CISN sensors to meet the needs of the new, more advanced system planned, as well as the installation of additional sensors and related infrastructure.

CEEW System Has Received Funding From Multiple Sources. The 2016‑17 budget provided $10 million from the General Fund on a one-time basis for the CEEW system. Of this amount, $6.4 million funded the installation of 83 new sensor stations and integration of 100 upgraded existing sensors from CISN. As shown in Figure 1, these new and upgraded sensors—along with 649 sensors that were already in place—brought the total number of CEEW sensors to 832 (and left 283 remaining to be funded). The remaining $3.6 million provided in 2016‑17 paid for public education and training activities, the development of a business plan (discussed further below), and four positions for one year to develop and manage the CEEW system.

Figure 1

California Earthquake Early Warning (CEEW) Sensors


Sensors Required for CEEW


Currently Funded Sensors

Pre‑existing CISN sensors


Sensors funded by USGS


Sensors funded through OES in 2016‑17


Subtotal of Currently Funded Sensors


Remaining Sensors to Be Funded


CISN = California Integrated Seismic Network; USGS = United States Geological Survey; and OES = Governor’s Office of Emergency Services.

In 2017‑18, OES utilized one-time savings from other programs supported by the federal Emergency Management Performance Grant to continue funding the four positions. We note that the CEEW system has also previously benefited from other federal grants. For example, USGS funded the installation of some of the existing CEEW sensor stations. Additionally, through its Earthquake Hazards Program, USGS awarded $3.7 million in 2016‑17 and $4.9 million in 2017‑18 to six universities, two of which are in California, to support the development of ShakeAlert, a prototype earthquake early warning technology utilized by the CEEW system.

OES Is Required to Submit a Business Plan for Future CEEW System Funding. Chapter 803 requires OES to submit a business plan identifying estimated system costs, sources of funding, a project completion schedule, risks, and roles and responsibilities of program stakeholders by February 1, 2018. On January 31, 2018, OES submitted a letter to the Legislature notifying it of a 45-day delay in the release of the business plan due to recent disaster response-related workload. We note that there have been some past estimates of the potential costs of the CEEW system. Notably, a document prepared by OES and its partners in 2016 titled California Earthquake Early Warning System: Project Implementation Framework estimated total one-time costs of $28 million and ongoing costs to operate and maintain the system at $17 million annually. A more recent document prepared by OES for the CEEW Advisory Board meeting in November 2017 estimated remaining unfunded one-time costs of $35 million and ongoing costs at $21 million annually.

Governor’s Proposal

The Governor’s budget proposes $15.8 million from the General Fund in 2018-19 and $750,000 from the General Fund annually thereafter to support the CEEW system. Of this amount, the $15 million in 2018-19 would complete the build-out of 283 remaining planned sensor stations required for the CEEW system. The $750,000 in ongoing General Fund would continue funding four positions that currently oversee and manage the system as well as the travel expenses of the CEEW Advisory Board. As noted below, the administration indicates that the business plan will identify fund sources for additional operational costs.

LAO Assessment

Key Cost and Funding Details Unavailable Without Business Plan. There are critical details about the costs and funding plan for the CEEW system that are currently unavailable or not yet finalized. Such key information includes (1) the full array of equipment that will be proposed to operate the system, (2) the total one-time and ongoing costs for the system, (3) the availability of non-General Fund revenue sources that can be applied to the CEEW system (including federal funds) and how much General Fund support will be required to cover the remaining costs, and (4) the operational responsibilities of the various stakeholders (including the federal government). Many of these details should be provided in the forthcoming business plan.

Without this information, the Legislature will be unable to examine whether OES has developed an appropriate and reasonable plan for deploying the CEEW system. This information is also critical for the Legislature to evaluate the overall costs and benefits of continuing to support the CEEW system and whether the General Fund is the most appropriate funding source for the system, or whether other funding sources are available.

LAO Recommendation

Withhold Action Pending Release of Business Plan. In view of the above, we recommend the Legislature withhold action on the Governor’s proposal pending the release of the CEEW system business plan from OES. The Legislature will want to ensure that OES provides detailed information on (1) the equipment that still needs to be installed for the system, (2) total one-time and ongoing costs for the system, (3) how it will be funded, and (4) what support different stakeholders will provide to the CEEW system. This information would enable the Legislature to determine the merits of approving additional General Fund support.

California Disaster Assistance Act (CDAA)

LAO Bottom Line. The Governor’s budget proposes an additional $33.1 million in 2018-19 and $23.5 million ongoing from the General Fund to support CDAA. We recommend directing OES to make any future request for funding through budget proposals—rather than as adjustments to the department’s base funding amount—to ensure that the Legislature has the information it needs to make its budgetary decisions.


OES Provides Disaster Assistance Funding to Local Governments Through CDAA. CDAA authorizes the Director of OES to provide financial assistance to local jurisdictions whose resources have been overextended as a result of a disaster event. This assistance includes partial reimbursement of certain local government costs associated with responding to emergencies, repairing or replacing public property damaged or destroyed by disasters, and reducing certain threats to public health or infrastructure (such as the removal of dead and dying trees that pose a risk to public facilities). The base level of funding for CDAA in 2017-18 is $39.1 million from the General Fund.

Governor’s Proposal

The Governor’s budget proposes an additional $33.1 million in 2018-19 and $23.5 million ongoing from the General Fund for CDAA (for a total of $72.2 million in 2018-19 and $62.6 million ongoing for CDAA). Most of the proposed increase for 2018-19 is attributable to costs associated with helping local communities recover from the January and February 2017 storms. The administration indicates the proposed increase in ongoing expenditures represents an average of spending on CDAA in recent years, excluding years that it considered to be outliers. (We note that, in addition to this proposed funding, the budget includes about $10.7 million in one-time General Fund in 2018-19 for OES activities—primarily for CDAA—related to the October and December fires. These costs, which are budgeted separately, are discussed in our recent post The 2018-19 Budget: Fire Recovery Proposals.)

LAO Assessment

Approach Lacks Transparency. The Governor does not provide a proposal to justify the proposed augmentations to CDAA. Instead, the additional funds included in the Governor’s budget are included as a modification to the department’s base funding amount for 2018-19 (shown as an “other workload budget adjustment”) and not displayed at all for 2019-20 and beyond. In our view, the administration’s budgeting approach is problematic because it makes it difficult for the Legislature to identify the changes that the administration is proposing to OES’ budget for CDAA, particularly on an ongoing basis. Additionally, the approach fails to provide the Legislature with the workload and cost information necessary to assess whether the proposal is fully justified, should be modified, or warrants rejection. We note that this type of adjustment typically is reserved for technical changes—such as allocating already authorized changes in employee compensation—not substantive decisions on funding levels for specific programs.

LAO Recommendation

Direct OES to Make Future Funding Requests Through Budget Proposals. We recommend that the Legislature direct OES to submit any future requests for funding adjustments to CDAA through the submission of budget proposals rather than other workload budget adjustments. This approach—which is consistent with typical budgeting practice—will ensure that the Legislature has the information it needs to make its budgetary decisions.