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Other Budget Issues

Last Updated: 3/15/2012
Budget Issue: Project initiation documents (PIDs).
Program: Department of Transportation
Finding or Recommendation: Reject Governor’s January budget proposal to provide Caltrans with additional funding and positions for the development of PIDs and enact budget trailer legislation requiring Caltrans to use streamlined PIDs.
Further Detail


At various stages throughout the development of a highway capital project, the Department of Transportation (Caltrans) estimates the cost and scope of the work required to complete the project. For example, Caltrans develops an initial estimate of the project early on, based on historical costs of similar projects. Subsequently, it completes another estimate during the preparation of the initial plan for the project, which is commonly referred to as a “project initiation document” (PID). Specifically, the PID contains various information about the proposed project, including the identification of the transportation problem that is to be addressed and evaluation of alternatives to address the problem. In addition to the estimated cost and scope, the PID also includes the estimated schedule of the project. According to Caltrans, the above information is needed to decide if, how, and when to fund a particular project.

State law requires a PID be completed before a project can be programmed for funding in the State Transportation Improvement Program (STIP), which is a four-year program for expanding the capacity of state highways. Caltrans and the California Transportation Commission (CTC) administratively require a PID also be completed before a project can be programmed for funding in the State Highway Operation and Protection Program (SHOPP), which is a four-year program of projects that rehabilitate the highway system or improve the system’s safety.

Caltrans develops PIDs to provide the necessary documents to add new projects to the STIP and SHOPP, because these programs are updated every other year. For example, Caltrans will develop PIDs in 2012-13 and 2013-14 for programming in the 2014 SHOPP. In addition, local transportation agencies develop many PIDs for STIP projects and PIDs for locally funded state highway projects. Caltrans oversees PIDs produced by local agencies and must approve the PID before a project can be programmed. After a project is programmed, then a more refined estimate is completed based on specific project scopes and designs.

Caltrans Requires a Substantial Amount of Information in PIDs. Caltrans typically requires PIDs to contain a substantial amount of information. Generally, PIDs include:

  • Review and study of geological hazards, utilities, and environmental constraints.
  • Development of travel forecasts, traffic models, surveys and maps.
  • Development and analysis of potential project alternatives.
  • Studies of the effects of potential project alternatives on traffic, noise, scenic resources, habitat and wildlife, community impacts, water quality, hazardous waste, cultural resources, air quality, and floodplains.
  • Preparation of preliminary geotechnical, structural, storm water, and construction cost estimates and reports.
  • Application for permits from numerous state and federal regulatory agencies.
  • Partial design of project alternatives, and preparation of design and engineering reports.

 It takes a significant amount of time to produce a PID, due in part to the numerous studies and reports that must be produced to generate all the required information. Based on information from Caltrans and local agencies, we understand that PIDs generally take from one to three years to complete. The cost to produce a PID ranges from the tens of thousands to low millions of dollars.

Efforts to Streamline PIDs Have Not Resulted in Change. In recent years, Caltrans, the CTC, and local agencies have had concerns that much of the information included in a typical PID is often unnecessary for at least some projects. This is because PIDs are produced at an early stage when many features of a project’s scope, schedule, and funding cannot be accurately determined. In addition, many of the studies and reports prepared for a PID must be repeated during the environmental review stage of a project in order to comply with state and federal environmental requirements.

In order to address these concerns, Caltrans began efforts in 2008-09 to streamline its process for developing and reviewing PIDs. The primary result of these efforts was the development of a shorter version of a PID for projects likely to require an extensive environmental review, called a Project Study Report-Project Development Stage (PSR-PDS). A PSR-PDS is intended to provide just enough information for the project to advance to the environmental stage by estimating the work that would be required by Caltrans to complete or oversee the environmental review of a project. Caltrans staff indicates that they have also developed a template for a streamlined PID for projects not likely to require extensive environmental review.  

However, at the time of this analysis, Caltrans has not completed any PSR-PDS documents. Similarly, Caltrans was unable to identify if any streamlined PIDs for projects not requiring extensive environmental review have been completed.

Governor’s Proposal

The Governor’s budget proposes a total of $44 million ($35 million from the State Highway Account (SHA) and $9 million from reimbursements) and 331 positions for Caltrans to develop PIDs for 522 projects in 2012-13. This reflects an increase of $11 million (33 percent), and 67 positions (25 percent) from the levels provided to the department in 2011-12. According to the department, it will develop or oversee PIDs for 31 STIP projects and PIDs for 382 SHOPP projects. The budget assumes that no savings from streamlining PIDs will be achieved in the budget year and that Caltrans will continue to require a substantial amount of information in PIDs.

Proposal Raises Several Concerns

Our analysis finds two concerns with the Governor’s proposal: (1) it does not assume implementation of a  streamlined process for developing PIDs and (2) it overstates the number of PIDs that would be needed when compared to available funding for new projects, as discussed below.

Budget Does Not Assume Streamlined PIDs. The Governor’s budget assumes that Caltrans would continue to produce lengthy PID documents, rather than implement the recently developed streamlined versions. It is unclear why Caltrans’ transition to the use of streamlined PID documents has not occurred yet. We are concerned that the continued use of the more lengthy PIDs will unnecessarily delay projects and waste state transportation funds.

Budget Request Overstates Number of PIDs Needed. Our review also finds that the Governor’s budget likely overstates the number of PIDs needed to program projects in the upcoming 2014 cycles of the SHOPP and STIP. This will likely result in the development of PIDs that ultimately will not be used and reduce the amount of funding that could be used for projects.  For example, Caltrans plans to produce PIDs for up to $4.5 billion worth of projects over the next two years. However, funding for projects in the next SHOPP cycle is only estimated to be $4 billion and some of the funding likely will be needed to complete existing projects and, thus, not available for new projects. At a minimum, under the Governor’s budget proposal Caltrans would produce PIDs for $500 million worth of projects that are not likely to be funded. We have requested information from Caltrans on the portion of SHOPP funds that will be available to start new projects, but staff indicates it is not yet available. Similarly, the amount of funding requested for the development of PIDs for STIP projects over the next two years, greatly exceeds the amount of funding that is likely to be available for new STIP projects.

LAO Recommendations

Reject Governor’s Proposal. The increase requested in the Governor’s budget for staff to develop PIDs does not reflect efforts underway to streamline the PID process and would result in the production of PIDs for more projects than likely could be funded. Accordingly, we recommend that the Legislature reject the Governor’s requested increase and maintain PID funding at the current level of $33 million (SHA) and 264 positions.

Enact Trailer Bill Requiring Streamlining of PIDs. Streamlining PID documents to eliminate duplicative work at the PID stage would reduce costs and speed up the schedules of state and local transportation projects. Although Caltrans has been working on streamlining its PID process for over three years, it has been unable to transition away from producing lengthy PID documents. Accordingly, we recommend that the Legislature enact budget trailer legislation requiring Caltrans to use streamlined PIDs. Specifically, the department shall be required to streamline PID processes and documents for various types of projects:

  • Projects Requiring Extensive Environmental Review. Large projects requiring an environmental impact statement under state and/or federal laws should have a PSR-PDS developed to estimate the cost of completing the environmental review phase only. Estimating the cost, scope, and schedule of the remaining phases of work would be performed as part of the environmental review.
  • Projects Not Requiring Extensive Environmental Review. Projects that are not expected to require extensive environmental review could use a streamlined PID that focuses on developing a reasonable cost estimate and project schedule, while excluding extraneous information, and not replicating work that will be performed during the environmental and design phases. In addition, for some simple projects, such as pavement replacement, Caltrans would not develop a PID and the initial cost estimate would be based on historical costs.
  • Oversight of Local Agency PIDs. Caltrans should develop and implement an expedited process for the review and approval of PIDs developed by local agencies. At the PID stage, Caltrans would likely only need to determine what workload would be required of the department to perform or oversee the environmental phase of the project proposed by a local agency, and provide preliminary agreement on the project concept.

In order to ensure that Caltrans implements streamlining for PIDs, we recommend that the Legislature require the department to submit a report by May 1, 2013 detailing the changes implemented and the time and cost savings achieved.