Legislative Analyst's Office, July 7, 1996

SUPPLEMENTAL REPORT
OF THE 1996 BUDGET ACT
1996-97 FISCAL YEAR

CONTAINING STATEMENTS OF INTENT
OR REQUESTS FOR STUDIES
ADOPTED BY THE LEGISLATURE


Business, Transportation, and Housing

Item 2180-001-0067--Department of Corporations
Item 2310-001-0400--Office of Real Estate Appraisers
Item 2660-001-0042--Department of Transportation
Item 2660-001-0046--Department of Transportation
Item 2660-325-0042--Department of Transportation
Item 2720-001-0001--California Highway Patrol



Business, Transportation, and Housing

Item 2180-001-0067--Department of Corporations

1. Potential Closure of San Francisco Office. On or before December 2,1996, the department shall report to the chairs of the appropriate policy and fiscal committees in each house and the Chair of the Joint Legislative Budget Committee on the potential closure of its San Francisco office. This report shall include detailed information on the potential costs and benefits resulting from the office closure, such as (a) the number of department staff affected by the closure and (b) cost-savings associated with the closure.

Item 2310-001-0400--Office of Real Estate Appraisers

1. Review of Fee Estimates. The Legislative Analyst's Office (LAO) and the staff of the legislative budget committees shall review the fees assessed by the Office of Real Estate Appraisers for support of the Real Estate Appraisers Regulation Fund. The LAO shall advise the legislative budget committees during consideration of the 1997-98 Budget Bill on (a) the amount of fees assessed by the office for support of the Real Estate Appraisers Regulation Fund and (b) an appropriate level of annual reserves for this fund.

Item 2660-001-0042--Department of Transportation

1. Capital Outlay Support Budget Model. The Department of Transportation (Caltrans) shall develop its proposed 1997-98 Capital Outlay Support budget using a project development workload model that estimates resources at the project level. The estimating process shall be based upon the efficient resource level required to perform identified work, rather than upon historical averages and unsubstantiated adjustments. Caltrans shall have its approach validated by engineering and management practitioners from the private and public sectors. The validation shall include at least the following:

    a. A peer review evaluation, consisting of representatives of large, comparable private and public engineering enterprises. This peer review shall, at minimum:

    i. Review Caltrans' proposed approach for developing capital outlay support workload and budget.
    ii. Compare Caltrans' proposed approach against industry "best practices."
    iii. Recommend needed modifications.
    iv. Provide to Caltrans and the Legislature, not later that September 30, 1996, a Report of Findings and Recommendations.

    b. An evaluation by an independent management consultant. This evaluation shall, at minimum:

    i. Assess the methods proposed, especially the support resource estimating approach (person-hour estimating standards and resource costing procedures).
    ii. Assess the proposed performance measures, including the ability of these measures to ensure that resources will be budgeted efficiently and that person-hour estimating standards will reflect greatest possible efficiency on an ongoing basis.
    iii. Assess the department's interim approach for developing the 1997-98 budget.
    iv. Evaluate project management strategy, progress and implementation.
    v. Recommend method, process and system improvements.
    vi. Provide to Caltrans and the Legislature, not later that January 1, 1997, a Report of Findings and Recommendations.

    Caltrans shall report to the Legislature no later than March 1, 1997 on its progress in implementing this new approach and its response to recommendations made by the peer review and management consultant evaluations.

    2. Report on Toll Bridge Seismic Retrofit. Caltrans shall, by January 1, 1997 provide the Joint Legislative Budget Committee with a comprehensive report which identifies the total cost of, and details the design and construction schedule for, each state toll bridge requiring seismic retrofit work. This report shall include an estimate of annual support and capital outlay expenditures to complete the retrofit of each bridge project which will be necessary until all toll bridge seismic retrofit work is complete.

    3. Report on Environmental Mitigation Costs. Caltrans shall submit a report to the Legislature by March 1, 1997 on the cost of environmental mitigation. The report shall identify costs for projects awarded in 1995-96, including total mitigation costs and mitigation costs as a percentage of total project cost. Mitigation costs include both support and capital outlay costs. Where feasible, the report should identify fund sources allocated to mitigation costs of a project.

    4. Highway Maintenance Contracting--Evaluation Report. Caltrans shall submit to the Legislature, by March 1, 1998, a report evaluating the cost-effectiveness of contract maintenance. The report shall include the following: (a) a comparison of the cost of contract staff and state staff (including cost of benefits, operating expenses, equipment, and other necessary factors to enable a valid comparison); (b) a comparison of the relative quantity, quality, and timeliness of work; and (c) an evaluation of total savings or costs to the maintenance program resulting from contract maintenance.

    5. Proposition 192 Funds--Display in Governor's Budget. Caltrans and the Department of Finance shall ensure that, beginning in 1997-98, the Governor's Budget displays expenditures, fund condition, and reconciliation tables for the Seismic Retrofit Bond Act of 1996 (Proposition 192) funds.

    6. Middletown Maintenance Station Closure--Report on Continuation of Service.Caltrans shall report to the Legislature by April 1, 1997 on the effect of closure of the maintenance station at Middletown on maintenance service levels in the region formerly served by that station. The report shall compare, through objective measures, maintenance service provided before and after the closure of the station.

    7. Transportation Demand Management Program. It is the intent of the Legislature that no future funds be made available to local jurisdictions for the Transportation Demand Management Program.

    8. Cost of Environmental Mitigation. It is the intent of the Legislature that the department report at budget hearings annually on costs of environmental mitigation incurred in the course of accomplishing its statutory mission.

    The report should include costs of mitigation as a percentage of total project costs and should identify all fund sources allocated to mitigation costs. Mitigation costs should include items or actions required by federal, state, or local law or regulation. This includes, but is not limited to, studies, surveys, analyses, acquisition of land to provide replacement habitat, costs to complete Environmental Impact Reports or Assessments, preparation of plans, site preparation, and acquisition of habitat inventory such as elderberry bushes or other vegetation required by the mitigation project. The report should include costs associated with alteration of a project to avoid mitigation. The report should include mitigation cost reimbursements to other departments or governmental agencies.

    Item 2660-001-0046--Department of Transportation

    1. Intercity Rail Operating Plan. The department shall include in its annual rail operating plan, submitted as part of its budget request, a display on the state's total budget-year estimated costs for the intercity rail program, including: (a) the proposed Amtrak contract amount for intercity rail services, associated feeder buses, and equipment costs, (b) by route an estimate of the amount proposed in the contract for the categories of rail services, feeder-buses, and equipment,
    (c) marketing and advertising costs by route, and (d) administrative costs.

    Item 2660-325-0042--Department of Transportation

    1. Highway Capital Outlay Budget. The Department of Transportation shall, in conjunction with the Legislative Analyst's Office and the Department of Finance, commence a comprehensive review of its process and procedures of how it builds its annual capital outlay budget request. The department shall submit a report to the Joint Legislative Budget Committee by March 1, 1997 which details its findings, and the recommendations of the Department of Finance and the Legislative Analyst's Office with respect to how the capital outlay budget is built.

    Item 2720-001-0001--California Highway Patrol

    1. Pay for Physical Performance Program. As part of its annual budget request, the department shall provide to the Joint Legislative Budget Committee and to the budget committee of each house no later than March 1, a report on expenditures resulting from the Pay for Physical Performance (PPP) program, which was discontinued July 1, 1995. The report shall include: (a) the status of any outstanding workers' compensation claims filed as a result of the PPP program, (b) the current-year's actual expenditure level for PPP-related workers' compensation claims and medical screening costs, and
    (c) the budget-year estimated expenditure level for PPP-related workers' compensation claims and medical screening costs.

    2. Cost Control. The California Highway Patrol (CHP) shall submit a report to the Joint Legislative Budget Committee by February 1, 1997 which details the specific actions being taken by the CHP to control or reduce the costs of doing business including, but not limited to, overtime, special pay, workers' compensation, and related employee benefits and pay policies. The report shall also identify specific strategies or policies which have been adopted by the CHP, and which have savings that are reflected in the 1997-98 Governor's Budget proposal.


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