The 2016-17 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. The 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. Additionally, during an emergency, OES is responsible for coordinating the state’s activities under the California Emergency Services Act. The department also acts as the state’s conduit for federal assistance related to recovery from disasters and hazard mitigation. In this capacity, OES helps local governments to assess their disaster-related damages and prepare their federal and state grant and loan applications. Additionally, OES administers various programs that provide assistance to victims of crime.

The Governor’s budget proposes 918 positions and $1.5 billion (roughly two-thirds from federal funds) for support of OES in 2016-17. Of this total budget, $1.2 billion is for local assistance. This total budget is a net increase of less than $1 million from current-year estimated expenditures.

Deferred Maintenance

LAO Bottom Line. While deferred maintenance is an important state need, most of the projects OES proposes to implement with the $800,000 requested appear to be low priorities. Accordingly, we recommend the Legislature reduce the funding provided to the department by $550,000 (to $250,000). We also recommend the Legislature require the department to report on the causes of and planned strategy for addressing the deferred maintenance backlog.

Background

OES Headquarters Facility. The OES headquarters facility is located in the Sacramento area. The 118,000 square foot building was constructed in 2002, which makes it among the newest state office buildings. A 2015 assessment determined that the building is in good condition. Based on its condition, the assessment placed the OES headquarters facility among the top third of buildings that were evaluated.

2015-16 Budget Funded Large Majority of OES’ Deferred Maintenance Needs. The Governor’s 2015 Five-Year Infrastructure Plan identified deferred maintenance needs of $3.6 million at the OES headquarters facility. The 2015-16 Budget Act provided $120 million across a variety of departments for deferred maintenance, including $3 million for OES to address a roof replacement, parking lots repairs, carpet replacements, and replacement of an energy management system at the headquarters facility. However, as shown in Figure 1, the estimated cost of the projects that the department proposes to fund in 2015-16 totals $3.2 million, slightly above the $3 million provided.

Governor’s Proposal

The Governor’s 2016 Five-Year Infrastructure Plan identifies $3 million in deferred maintenance needs—almost all new projects since 2015-16—at the OES headquarters facility, as shown in Figure 2. These needs include a variety of types of projects from code compliance, to energy efficiency upgrades, to electrical work. The Governor’s budget for 2016-17 proposes $800,000 on a one-time basis from the General Fund for deferred maintenance at the OES headquarters facility. The department indicates that it will use this funding for energy efficiency upgrades, window replacements, and painting as shown in Figure 2. This funding is part of a larger proposal to provide $500 million one-time General Fund for deferred maintenance needs across a variety of departments through Control Section 6.10 of the 2016-17 budget bill. (See our February 2016 publication The 2016-17 Budget: Governor’s General Fund Deferred Maintenance Proposal for an assessment of the Governor’s larger deferred maintenance proposal.)

LAO Assessment

Unclear Why Backlog Has Changed Over Time. The Legislature funded a large majority of OES’ identified deferred maintenance need in 2015-16. Despite this funding, OES identified a substantial amount of new need in 2016-17, including a number of new projects that were not identified as needs in 2015-16. The OES was not able to provide a clear explanation as to why they identified these projects as needs for 2016-17 but not for 2015-16. It is unclear whether the newly identified projects in 2016-17 represent actual differences in needs since last year or are a result of differences in how deferred maintenance is catalogued or reported by the department. It is important to understand what is leading to these changes to identified backlogs because it might point to different legislative responses. To the extent that changes in the department’s backlog represent actual differences in accumulated needs since last year, it might suggest that OES’ routine maintenance activities are insufficient to keep up with its annual needs and that it should improve its maintenance program to prevent the further accumulation of deferred maintenance. However, to the extent that the changes in the department’s reported need level are a result of differences in its reporting methodology, the information on its reported backlog might not be sufficiently reliable to inform decision making about how to most appropriately address the department’s deferred maintenance challenges. Instead, it might point to the importance of gathering improved information on the department’s backlog.

Some Proposed Projects Appear to Be Low Priorities for Deferred Maintenance Funding. We find that some of the deferred maintenance projects proposed for funding appear to be low priorities given other maintenance needs. First, OES’ rationale for funding painting is primarily aesthetic—related to maintaining a professional appearance for the headquarters facility. While it is desirable for buildings to be attractive, we find that there are higher priority projects at other departments—such as those that address fire, life, and safety concerns or those that reduce the need for more costly repairs in the future. Second, OES expects to use half of its proposed funding—$400,000—for energy efficiency upgrades. We find that these upgrades could potentially be funded from other sources such as existing state revolving loan programs to fund energy efficiency projects at state buildings. By funding these types of energy efficiency upgrades through state revolving programs, monies could be made available to fund other legislative priorities, including deferred maintenance projects in other departments. We also note that energy efficiency upgrades, while potentially worthwhile, are typically not considered deferred maintenance, since they are not the result of maintenance that was delayed.

LAO Recommendations

Adjust Proposed Funding for OES’ Deferred Maintenance. We recommend that the Legislature reduce the amount available in Control Section 6.10 for OES by $550,000, specifically related to funding requested for energy efficiency upgrades and the painting project. As discussed above, these projects appear to be low priorities for deferred maintenance funding. We do not have specific concerns with the $250,000 for window replacements. We find that funding for window replacements is justified in order to address longstanding leaks that could result in problematic and costly repairs in the future due to mold or water damage.

Require Reporting at Budget Hearings. We recommend that the Legislature require OES to report at budget hearings on why its backlog has changed since 2015-16 and its plans to prevent the accumulation of additional deferred maintenance. This information would enable the Legislature to better assess the nature of the backlog and assist it in crafting policies to ensure that the department effectively tracks its maintenance backlog and adequately manages its maintenance program on an ongoing basis to prevent the accumulation of future deferred maintenance.

Emergency Operations and Critical Infrastructure Support

LAO Bottom Line. The Governor’s proposal requests an increase of 77 positions and $35 million in General Fund to support emergency operations and critical infrastructure support. The proposal includes 16 separate components related to the department’s emergency preparation, response, and recovery activities. We find that the proposal generally provides few details. Based on follow up information provided by the department, we identify portions of the proposal that: (1) do not raise specific concerns, (2) are justified in concept, but require technical modifications, and (3) are poorly substantiated and merit rejection or modification. Overall, our recommended modifications to the Governor’s proposal result in a reduction of 41.5 positions and $32 million in funding in 2016-17 relative to the Governor’s proposed increases.

Background

The OES serves as the state’s emergency management agency. As such, OES coordinates planning, response, and recovery activities related to a variety of potential disasters, such as fires, terrorist attacks, and earthquakes. As part of its coordination activities, OES works closely with various entities such as federal agencies, other state departments, and local governments. In recent years, OES’ mission has expanded to include additional related functions such as public safety communications.

Governor’s Proposal

The Governor’s proposal requests 77 positions and $35 million from the General Fund in 2016-17, including $20 million in one-time spending on fire equipment. As discussed below, the proposal also includes a reduction of federal fund authority of $3.9 million. The proposal includes 16 different components as reflected in Figure 3 and described below. These components relate to fire response, disaster coordination, facilities, technology, and other activities for the department.

Fire Apparatus Fleet Replacement and Augmentation ($20 Million). The department owns and maintains a fleet of 141 fire apparatus that are placed throughout the state through agreements with local agencies. Apparatus can include engines as well as other related support vehicles. The OES can call on these fire apparatus when the state needs them for emergency response. The department has a budget of $1.8 million annually to replace these apparatus. Historically, this level of funding has allowed OES to replace apparatus on a 15-year cycle, which OES reports is the industry-standard schedule. The Governor’s proposal would provide a one-time augmentation of $20 million from the General Fund to purchase 62 fire apparatus, increasing the total number of OES fire apparatus from 141 to 203. The OES indicates that the new apparatus are needed to fulfill a recommendation made in a 2004 report by the Governor’s Blue Ribbon Fire Commission (Blue Ribbon Report) that OES acquire an additional 150 apparatus. (The OES reports that since the Blue Ribbon Report, it has acquired 44 apparatus.)

Fire and Rescue Branch Staffing ($2.5 Million). The Fire and Rescue Branch performs various maintenance activities on fire apparatus and coordinates fire-related mutual aid requests. The branch currently has $5.7 million (primarily General Fund) and 34 existing positions. The Governor’s proposal would provide an additional 12 permanent positions and $2.5 million annually from the General Fund to support various fire apparatus maintenance and coordination activities associated with the 62 additional proposed fire apparatus, as well as to support the existing fleet.

Automated Vehicle Location ($342,000). Currently, the OES fire fleet does not have Automated Vehicle Location (AVL), which is a system that provides real-time information on vehicle location and condition. The AVL also provides for alerts if vehicles leave a specified area or are in an accident. The Governor’s proposal would provide $342,000 in 2016-17 and $177,000 annually thereafter to fund an AVL system on 250 fire vehicles. The OES indicates that the AVL system is needed to better track and monitor vehicles to increase safety, communication, and accountability.

Fire Apparatus Operating Costs and Maintenance ($102,000). Generally, OES pays for certain operating and maintenance costs—such as fuel and tires—associated with the fire apparatus it owns and provides to local agencies. These operating and maintenance costs total about $520,000 annually. The Governor’s proposal would provide an additional $102,000 in 2016-17 and $224,000 annually thereafter from the General Fund to fund operating and maintenance expenses associated with the proposed 62 additional fire apparatus.

Statewide Disaster Programs ($5 Million). The department administers statewide disaster programs, which provide mitigation, planning, and recovery support to a variety of public entities. This includes various programs with specific purposes. For example, the Hazard Mitigation Program supports the updating of state and local hazard mitigation plans. The Pre-Disaster and Flood Mitigation Program awards planning and project grants and raises public awareness about taking actions before disasters occur in order to reduce future disaster losses. Additionally, the Recovery Public Assistance Program coordinates recovery assistance and administers state and federal funding for disasters. In total, these programs are currently supported by $6.4 million from the General Fund and $6.7 million from federal funds.

The Governor’s proposal would provide an additional $5 million in ongoing General Fund support for the statewide disaster programs and reduced federal fund authority of $3.9 million. The proposed changes largely reflect the intent to alter the funding mix for the three subprograms to make them more reliant on the state’s General Fund and less reliant on federal funds. According to OES, such a shift in the funding mix is needed because the department cannot rely on federal funds to support these activities. Specifically, OES indicates that federal funds are not a guaranteed funding source for the Hazard Mitigation Program, since the federal government distributes funds for this purpose on a competitive basis. The OES also indicates that federal funding for Recovery Public Assistance is not sufficient to meet the department’s needs since some projects no longer qualify for federal reimbursement of costs (such as because OES has not processed reimbursements within the required eight-year window) or are related to state-only disasters and thus are not eligible for federal support. The proposal would also provide three years of funding—at $188,000 annually from the General Fund—to close out a backlog of work related to disasters that do not qualify for federal reimbursement. Finally, the proposal would also provide $561,000 annually from the General Fund for two additional positions and operating costs for climate adaptation. The OES indicates that these positions are necessary due to growing workload associated with climate adaptation.

Regional Response and Readiness ($2 Million). The department provides support to local governments for emergency preparedness. In the event of a major disaster, OES also provides disaster response assistance to local governments. Currently, there are 38 positions focused on regional response and readiness across OES’ three regional centers (Inland, Coastal, and Southern). These positions are funded by $6.8 million (roughly evenly split between General Fund and federal funds). The Governor’s proposal would provide an additional $2 million from the General Fund and 13 positions ongoing to support the program. The OES indicates that these positions are needed to enhance the state’s preparedness and response activities in response to increases in natural disasters and terrorist activities.

Law Enforcement Branch Staffing ($1.7 Million). The Law Enforcement and Homeland Security Branch interacts with various federal and other agencies related to homeland security and other threats. The branch has 48 staff supported by $11.7 million in funding ($2.5 million from the General Fund and $9.2 million in federal funds). The Governor’s proposal would provide an additional $1.7 million from the General Fund and six positions on an ongoing basis to increase coordination with federal agencies and other law enforcement entities related to homeland security and other threats. The OES indicates that this increase is needed because there have been increasing threats from both domestic and international terrorist groups, and the security and threat landscape has grown more complex over the past several years.

Disaster Logistics Program ($421,000). The department supports various emergency planning and response activities, including those related to logistics. For example, the department develops facility use agreements, in coordination with the Department of General Services, to ensure that the necessary locations are available for use during emergency events. The OES reports that the department does not have any existing staff dedicated to disaster logistics, and this function has been covered by existing staff. The Governor’s proposal would provide $421,000 and three positions to support disaster logistics and address gaps identified in a recent assessment study, the 2012 Logistics Capability Assessment Tool.

Regional Coordination Center ($700,000). The department operates three Regional Centers: (1) Inland, (2) Coastal Region, and (3) Southern. The OES’ regional offices provide space for coordination and communication with local governments to support local emergency response activities. The OES also maintains a Public Safety Communications shop for repair of radios and other equipment. Rent on these existing facilities is currently $162,000 annually. The Governor’s proposal would provide an additional $700,000 ongoing from the General Fund to consolidate two of the three regional centers—the Inland Center and the Coastal Region Center—as well as the Public Safety Communications shop into one facility. The proposed funding would go towards increased rent for the new facility as well as costs associated with moving and tenant improvements. The OES indicates that the consolidation would provide additional space needed for its operations and also address other deficiencies in its current facilities.

Fire Maintenance Shop Lease ($94,000). The department has a maintenance shop for fire vehicles as well as a storage warehouse. The maintenance shop is currently leased from the Sacramento Metro Fire District for about $40,000 annually and the warehouse space is currently leased for about $50,000 annually. The Governor’s proposal would provide an additional $94,000 annually from the General Fund to lease a new fire maintenance facility to replace the existing shop and warehouse. The department indicates that Sacramento Metro will no longer lease maintenance space to OES.

Information Technology ($1 Million). The department maintains information technology (IT) hardware and software to support its various functions. For example, OES maintains servers to support its IT needs and also utilizes Geographic Information System (GIS) software licenses to create maps for use in its disaster response activities. The OES indicates that its hardware was purchased with one-time federal funds, and that it has $540,000 in annual baseline funding to replace hardware. The OES also reports that its existing GIS software licenses have been funded by one-time funding from the General Fund. The Governor’s proposal would provide $1 million annually from the General Fund for IT, including $660,000 to update hardware on a five-year cycle and $370,000 for enhanced GIS software licenses. The OES indicates that these additional IT expenditures are necessary to better incorporate updated information into its maps in order to support its disaster response activities.

Cal EOC Support ($495,000). Launched in 2013, Cal EOC is an online emergency management system that is available for use by California counties, state agencies, and business partners. The system is interoperable with the emergency management systems operated by 21 counties that have their own systems. The OES reports that Cal EOC is currently managed by one Emergency Management Coordinator/Instructor. The Governor’s proposal would provide $495,000 and three positions ongoing. One position would develop and provide training on Cal EOC to employees of state and local governments. The other two positions would maintain and modify the system, which the department indicates requires enhancements to meet operational needs.

Federal Emergency Management Program ($700,000). The state receives an annual grant from the Federal Emergency Management Agency for various emergency management needs, including regional response operations, training, and preparedness. The annual federal grant is about $28 million, of which the state retains about $12 million and provides the remainder to local governments. This annual grant requires a 50 percent cost share, which can be met with state funds or in-kind contributions. In recent years, the state has provided about half of the match through cash and half through in-kind contributions such as staff time. The Governor’s proposal would provide an additional $700,000 in General Fund ongoing for the state match. The OES indicates that this would allow it to maximize federal funds.

Emergency Operations Incident Support Training ($169,000). Recently, OES created a California Specialized Training Institute to provide additional training for OES staff. The OES’ internal staff training is funded by a variety of sources, such as federal funds, General Fund, and Anti-Terrorism funds. The Governor’s proposal would provide $169,000 in annual General Fund support to cover costs associated with additional specialized training for OES employees.

Public Safety Communications (No Funding Requested). The Public Safety Communications Office was transferred to OES from the California Department of Technology (CalTech) in 2013 and conducts various activities including installing telecommunications equipment and maintaining and repairing radios. Currently, there are 321 Public Safety Communications positions funded by $63 million—generally from reimbursements from client state agencies. The Governor’s proposal would provide 28 positions for the Public Safety Communications section. These positions were eliminated by CalTech during the recession and prior to the transfer of the office to OES. However, since their elimination, OES reports that they have generally been filled on a temporary basis to continue to support the section’s ongoing workload and is requesting that they be reestablished on a permanent basis.

Administrative Support (No Funding Requested). The department’s administrative positions provide various support functions for other staff, such as accounting, budgets, human resources, IT, and legal assistance. Currently, there are 124 administrative support positions funded by $17.2 million annually (these costs are distributed to other programs). The Governor’s proposal would provide an additional ten administrative positions to support the other positions requested as part of the proposal.

LAO Assessment and Recommendations

The Governor’s proposal includes 16 separate components. The proposal generally includes few of the details that would be necessary to assess the merits of the components. Through follow up, the department has provided additional information to substantiate their proposal in some areas. In general, we find, given the additional information provided by the department, there are some portions of the proposal with which we do not have specific concerns. For these portions, we recommend approval. These components include: (1) Disaster Logistics Program, (2) Fire Maintenance Shop lease, (3) IT, (4) Cal EOC support, and (5) Public Safety Communications.

For other components of the proposal we either (1) identify technical concerns and recommend technical modifications or (2) find that they are poorly substantiated—even after substantial follow up with OES—and therefore merit rejection or reduction. Our assessment of these portions of the proposal and our associated recommendations are provided below.

In total, we recommend approving $3.1 million and 35.5 positions, as summarized in Figure 4.

Reject Fire Apparatus Fleet Replacement and Augmentation. We recommend that the Legislature reject the Governor’s proposal to provide $20 million to purchase 62 fire apparatus for several reasons. First, we find that the 2004 Blue Ribbon Report recommendation that OES relies on does not provide an analytical justification for the additional apparatus. Additionally, a dozen years have passed since the Blue Ribbon Report. Given the amount of time that has elapsed, it is uncertain whether the Blue Ribbon Report’s recommendations are still relevant.

Second, OES has not justified its need for the proposed fire apparatus. There are a wide-array of existing resources available to fight fires in the state. For example, the state department responsible for wildland fire protection, the Department of Forestry and Fire Protection (CalFire), operates a fleet of about 1,100 fire engines—including CalFire-owned engines and those operated by contract with local agencies—to respond to fires in areas of state responsibility. Furthermore, local agencies across the state maintain their own fire apparatus, which the state can access through the mutual aid system (in addition to those provided by OES). In order to justify the purchase of new fire apparatus, we would expect the department to analyze the full scope of existing resources available to address emergencies such as fires in areas of state responsibility and what gaps exist between existing resources and emergency response needs. The OES has not been able to provide such analysis. Furthermore, once OES identified gaps, we would expect that the department would provide a justification for why it is most appropriate to address these gaps through providing OES with additional fire apparatus rather than undertaking another strategy. For example, an alternative strategy could be to provide CalFire with additional resources. The OES has also failed to provide this justification. Moreover, OES has not conducted an analysis of where these new apparatus should be located to best meet the state’s needs.

Third, we are concerned with OES’ recent practice of using funds provided by the Legislature for replacement apparatus to instead be used to purchase new apparatus. According to OES, 27 of the 62 fire apparatus requested are needed because, starting a few years ago, OES decided to use its budget for replacement apparatus on the purchase of new apparatus. This redirection of funds, which occurred without formal legislative approval, resulted in the department deferring the replacement of the department’s existing apparatus. The department is now requesting that the Legislature backfill the funds that it redirected, so that it can replace existing apparatus.

Reject Fire and Rescue Branch Staffing. We recommend the Legislature reject OES’ request for additional Fire and Rescue Branch staffing. Our understanding based on discussions with the department is that the proposed staff would be used to support various fire apparatus maintenance and coordination activities associated with the 62 additional fire apparatus as well as the existing fleet. Since we recommend not funding the additional apparatus, the additional staffing related to these new fire apparatus would not be necessary. Furthermore, OES has not provided evidence to support the need for additional staffing related to its existing fleet—such as information to support that its current staffing levels are inadequate—and thus we find that any positions related to the existing fleet also have not been justified.

Modify AVL. We recommend a technical modification to the Governor’s request to fund an AVL system on 250 fire fleet vehicles. We find that it is reasonable for OES to use an AVL system to better track and monitor its fire apparatus. However, consistent with our recommendation not to fund additional fire apparatus, we find that OES only requires additional funding to add AVL to its existing fleet of 141 fire apparatus. Accordingly, we recommend reducing the funding for AVL to $193,000 in 2016-17 and $100,000 in future years.

Reject Fire Apparatus Operating Costs and Maintenance. We recommend the Legislature reject OES’ request for fire apparatus operating and maintenance costs. The OES indicates that additional funding is needed in order to support the operations and maintenance of the 62 apparatus that it proposes to acquire. However, since we do not recommend funding these additional apparatus, the additional operating and maintenance funding is not necessary.

Modify Statewide Disaster Programs. We recommend that the Legislature modify the Governor’s request for the Statewide Disaster Programs by approving $188,000 of the $5 million requested. We find that it could be reasonable for OES to adjust the mix of federal and state funds for this program to reflect the amount of workload that is reimbursable by the federal government (compared to the amount that must be funded with state resources). However, the department was unable to provide information—such as historical data—to demonstrate the amount of state funding that would be required to enable the department to adequately address the state-only workload and to justify that the proposed funding mix is appropriate. We also find that OES has not adequately justified the need for two positions to address climate adaptation. Specifically, OES has not clearly articulated what its role should be for climate adaptation and how these positions will meet that need. We do not have specific concerns with providing $188,000 General Fund annually for three years to close out a backlog of claims that are not eligible for federal reimbursement.

Reject Regional Response and Readiness Increase. We recommend rejecting the Governor’s request for additional funding for regional response and readiness. The department has not clearly demonstrated why existing resources are insufficient for responding to disasters. Furthermore, the OES indicates that increased natural disaster activity as well as domestic and international terrorist activity in California has increased demand for emergency response personnel. However, OES not provided adequate evidence to support the magnitude of these increasing threats. Thus, we find that the requested positions are inadequately justified and recommend rejection.

Reject Law Enforcement Branch Staffing Increase. We recommend the Legislature reject the Governor’s request for increased Law Enforcement Branch staffing. The department has not clearly demonstrated that its existing resources are insufficient. While OES has provided anecdotal evidence of increasing threats, it has not provided data to support the amount of these increasing threats. Thus, we find that these requested positions have not been adequately justified and recommend rejection.

Modify Regional Coordination Center. We recommend a technical modification to the Governor’s proposal to consolidate two regional centers and the Public Safety Communications shop into one facility. We find that the consolidation of facilities appears reasonable given OES’ operational needs and the deficiencies at existing facilities. However, the requested funding levels in the out years assume that one-time and short-term costs associated with the office moves and tenant improvements will continue on an ongoing basis. Accordingly, we recommend reducing the request from $700,000 to $500,000 in 2017-18. (This funding amount should be further reduced beginning in 2020-21 to account for reduced costs associated with tenant improvements.)

Reject Federal Emergency Management Program. We recommend the Legislature reject the Governor’s request for the Federal Emergency Management Program. While OES’ original justification for the proposed funding was that it would allow the state to maximize federal funds, in our follow-up conversations OES reported that it always receives the full amount of potential federal funds for this program. The department also reported that the additional state dollars requested actually would not result in the state receiving additional federal funds. Instead, these additional funds would allow the state to meet its federal match with a greater share of cash relative to in-kind contributions. We find that OES has failed to justify the benefit to the state of shifting the state’s match from in-kind resources to cash.

Reject Emergency Operations Incident Support Training. We recommend that the Legislature reject the funding requested for Emergency Operations Incident Support Training. The department has not clearly articulated what additional specialized training would be provided with the requested funds, how it differs from existing training, or what additional benefits the training would provide.

Reduce Administrative Support Positions. We recommend that the Legislature reduce the Governor’s request for additional administrative positions from 10 to 1.5 positions to reflect a reduction in support staff that is commensurate with our recommended reductions in new programmatic staff. (We note that our recommendation treats the 28 Public Safety Communications positions as existing positions since they have been filled using the department’s temporary help funding authority.)