Legislative Analyst's Office
Analysis of the 2001-02 Budget Bill
The Department of Developmental Services (DDS) operates five developmental centers (Agnews, Fairview, Lanterman, Porterville, and Sonoma) and two leased facilities (Canyon Springs and Sierra Vista). As of December 31, 2000, the system housed almost 3,800 clients. The budget includes $5.4 million for one project at the Agnews Developmental Center.
We recommend the department report to the Legislature prior to budget hearings regarding (1) any recommendations for restructuring the state developmental centers, (2) the effect these recommendations will have on the existing capital program and assets, (3) the future capital needs resulting from any changes in service delivery, (4) the effect of the recommendations on the developmental centers' operating costs, and (5) a proposed time line for implementing any changes.
In response to requirements in Chapter 93, Statutes of 2000 (AB 2877, Thomson), the department has formed a working group to study options for restructuring its service delivery method. The department was directed to consider options to meet its current and future client needs through various delivery methods including: (1) the currently operated centers, (2) smaller state-owned and operated facilities, and (3) privately owned and operated facilities. The department's findings and recommendations are due to the Legislature in March 2001.
In its November 17, 2000 progress report, the department's advisory group adopted five principles to help focus the study. Two of the principles are:
Given the pending report and potential impacts on the capital program and developmental center operations, we recommend the department report to the Legislature prior to budget hearings regarding (1) the recommendations for restructuring the department, (2) the effect these recommendations will have on the existing capital program and assets, (3) the future capital needs resulting from any changes in service delivery, (4) the effect of these recommendations on the developmental centers' operating costs, and (5) a proposed time line for implementing any changes.
We recommend the Legislature delete $5.4 million for working drawings and construction for the Agnews Building 54 Fire and Life Safety Upgrade project because (1) construction funds have already been provided and (2) the department has not justified a twofold increase in construction costs. (Delete Item 4300-301-0001 ).
The Governor's budget includes a request for $5.4 million from the General Fund for working drawings ($206,000) and construction
($5.2 million) for Fire and Life Safety modifications to Building 54 at the Agnews Developmental Center. The 1998-99 Budget Act appropriated a total of $107,000 for preliminary plans ($19,000) and working drawings ($88,000) to correct code deficiencies cited by the State Fire Marshall. The scope of work for the project included installation of fire dampers and addition of access panels at corridor doors adjacent to sleeping areas. At the time, construction was projected to cost $902,000 and was scheduled to be completed by December 2000. The administration, however, did not proceed with the project in that fiscal year. The project was presented to the Legislature again in 1999-00, but at a cost that had increased by over 140 percent. The Legislature approved the higher cost, and the 1999-00 Budget Act included $2.5 million for preliminary plans ($117,000), working drawings ($143,000), and construction ($2.2 million). At that time, the project was scheduled to be completed by February 2002.
The 1999-00 funding was reappropriated in the 2000-01 Budget Act. At that time, the department did not indicate that either the scope of work or the project budget was inadequate.
Escalating Construction Cost. The cost of construction for this project has continued to increase and has now reached 118 percent of the 1999-00 estimated cost (430 percent of the original estimate). The department has provided no justification for the increased construction costs other than to indicate it is due to construction phasing and an increased scope of work. No information is available regarding an attempt to bring the project cost in line with the most recent appropriation. Furthermore, the scope of work contained in the completed preliminary plans, which the request is based on, is inconsistent with that previously approved by the Legislature. It is not clear why the previous scope of work was inadequate.
Moreover, as mentioned above, the department is reevaluating the delivery of services to its clients. This reevaluation may significantly change the function and occupancy of developmental centers. In view of this, the department should assess whether or not this building should be altered. If the building is to be occupied in the long term, then we urge the department to expedite the project and proceed within the cost and scope of work previously approved by the Legislature.
In view of the above, additional funds for this project should not be needed. Consequently, we recommend the Legislature delete Item
4300-301-0001 (1), for a savings of $5.4 million.