LAO Analysis of the 1997-98 Budget Bill
Capital Outlay Departmental Issues, Part 1-a

  1. Office of Emergency Services (0690)
      1. Headquarters and State Operations Center
  2. Department of Justice (0820)
      1. Crime Laboratory Replacement
      2. Status of Capital Outlay Proposals
  3. Department of General Services (1760)
      1. Seismic Retrofit Projects
      2. Office Alteration Project
      3. Reappropriation of Funds For Local Assistance
  4. Department of Transportation (2660)
      1. District 11 Office Building Seismic Retrofit
      2. Sacramento Regional Transportation Center
  5. Department of the California Highway Patrol (2720)
      1. El Cajon Area Office
      2. Equipment for Sacramento Regional Transportation Center
  6. Department of Motor Vehicles (2740)
      1. Office Reconstruction--Oakland/Claremont
  7. Department of Forestry and Fire Protection (3540)
      1. Statewide Communications

Office of Emergency Services


Headquarters and State Operations Center

We recommend deletion of $22.8 million for construction of the headquarters facility because the project is behind schedule and the Legislature does not have adequate information on the project scope and cost. (Delete $22,818,000 under Item 0690-301-0660.)

The budget includes $22.8 million for construction of a 126,000 gross square foot (gsf) headquarters facility for the Office of Emergency Services (OES) in the Sacramento area. (The funding source would be a new authorization of lease-payment bonds, which do not require voter approval.) The project includes a 54,500 gsf administrative area, a 41,000 gsf emergency command operations center, and a 32,000 gsf warehouse/shop area.

In the 1996-97 Budget Act, the Legislature appropriated $5,348,000 to cover the costs of land acquisition ($3,414,000), preliminary plans ($813,000) and working drawings ($1,121,000) for the project. (The funding for working drawings was included to allow the project to proceed more quickly.) With regard to selection of a site for the headquarters, the Legislature adopted budget act language requiring OES and the Department of General Services (DGS) to first assess the potential for locating the facility at Mather Air Force Base. The DGS is in the process of evaluating a site at Mather.

Project Behind Schedule. At the time this analysis was written DGS, which is managing the project, was evaluating potential sites and will start an environmental review once a site is selected. The DGS anticipates requesting approval by the State Public Works Board to purchase the property in May or June 1997. The current project schedule, as prepared by DGS, indicates that preliminary plans will not be completed until October 1997 (instead of July 1997 as originally planned) and working drawings will not be completed until April 1998.

Given the projects' current optimistic schedule, there is no clear need to appropriate construction funds in 1997-98. The Legislature will not have any more information on the project scope and cost until after preliminary plans are completed. We therefore recommend that the Legislature delete funding for construction in 1997-98 and consider the merits of funding construction for this project in 1998-99. (Delete $22,818,000 from Item 0690-301-0660.)

Department of Justice


The Department of Justice (DOJ) operates ten regional criminalistic laboratories throughout the state. These laboratories provide analysis of all types of physical evidence and controlled substances, and, when requested, assist local law enforcement agencies in processing and analyzing crime scenes (including clandestine drug laboratories). The department also operates a state DNA analysis laboratory in Berkeley. The 1997-98 Governor's Budget proposes $21.7 million for projects involving the replacement of four of the regional laboratories. This amount includes $3.2 million from the General Fund and $18.4 million from a proposed new authorization of lease-payment bonds. We discuss these proposals below.

Crime Laboratory Replacement

We recommend deletion of $21.7 million for four crime laboratory projects because the Department of Justice should be reimbursed by user agencies for the costs of these services and it is not clear that new laboratories would be needed if users paid for the department's services. (Delete $3,231,000 under Item 0820-301-0001 and $18,435,000 under Item 0820-301-0660.)

In the 1996-97 Budget Act, the Legislature appropriated $877,000 from the General Fund to prepare preliminary plans for replacement of the Central Valley (Modesto and French Camp) and Riverside laboratories. As shown in Figure 16, the Governor's budget includes funding to complete these projects and to acquire land and begin design work for the replacement of laboratories in Redding and Santa Rosa. The estimated total cost of the four projects is $28.8 million.

According to DOJ, many of its regional laboratories are housed in crowded or substandard space. The DOJ indicates having such substandard facilities increases the potential for inaccurate test results and thus improper court outcomes. The proposed replacement laboratories are intended to address these existing facilities problems.
Figure 16
Department of Justice

Laboratory Replacement Projects

(Dollars in Thousands)
Location Phasesa 1997-98 Cost Future


Central Valley awc $9,389 --
Riverside awc 11,271 --
Redding ap 360 $2,933
Santa Barbara ap 646 4,218
Totals -- $21,666 $7,151
aPhases: a=acquisition; p=preliminary plans; w=working drawings; and c=construction.

In addition to the projects in Figure 16, the department will request funding in 1998-99 to replace two other regional laboratories--at Santa Rosa and Fresno--with an estimated cost of $16 million. Thus, the Legislature will be asked to fund a $45 million capital outlay program for these regional laboratories. Before committing to such a costly effort to build new facilities, we believe it is imperative that the Legislature carefully consider the merits of continuing the DOJ crime laboratories program as currently structured.

Crime Laboratories Provide Free Services. In the current year, we estimate that DOJ crime laboratory services will cost the state $16 million from the General Fund. The vast majority of the workload at the laboratories is providing service to local law enforcement agencies. These laboratory services, with the exception of blood alcohol analysis, are provided at no charge to the local agencies. In general, local governments in California are responsible for law enforcement, including investigating and prosecuting crimes. This responsibility includes developing physical evidence, which often requires laboratory testing and analysis. Because such services are integral to their overall law enforcement responsibilities, these costs should be borne by the counties and cities. We believe that this would appropriately align local governments' programmatic and funding responsibilities for investigation and prosecution activities. Consequently, in our analysis of the DOJ budget under Item 0820-001-0001 (see the Criminal Justice section of this Analysis), we have recommended enactment of legislation requiring payment for these services.

As discussed below, local agencies have several options for obtaining these laboratory services, many of which may be more cost-effective than the state. Thus, we expect local agencies to rely less on the state laboratories, and the continued need for state regional laboratories would be questionable.

Demand for Laboratory Services Could Decline. Local agencies have the following options for obtaining the services now provided by the state's regional crime laboratories:

We believe that, given the local agencies' alternatives to obtain these services, requiring payment for state-provided services will create a competitive environment in which local agencies would choose among the options listed above based on their particular needs and the costs for the various services. We believe it is reasonable to assume that, if the state no longer provided a free service, the workload at the laboratories would decline and the need for regional laboratories would diminish significantly. For example, when the state began charging to partially offset the cost for blood alcohol tests, local agency use of DOJ laboratories declined 29 percent in the first year the fees were established. With declining DOJ laboratory work, a reduced number, or a single consolidated laboratory (at the Sacramento facility), could continue to provide state services for those local agencies who would choose to pay the state's costs.

Thus, under this nonstate subsidized fee-for-service scenario, we believe it would not be prudent to embark on a $45 million plan to construct new laboratories. Instead the DOJ should consider consolidating laboratories and closing those that are substandard. The workload, along with necessary equipment and staff, for these laboratories could be transferred to other existing laboratories. By taking these steps, the state would realize savings from closing the substandard laboratories and avoiding the cost of constructing new facilities. After having sufficient experience under a fee-for-service structure, the need for new laboratory facilities, if any, could be evaluated. We therefore recommend that the Legislature delete funding for the four crime laboratory replacement projects proposed in the Governor's budget. Delete $3,231,000 under Item 0820-301-0001 and $18,435,000 under Item 0820-301-0660.

Status of Capital Outlay Proposals

If the Legislature decides that the state should continue providing the Department of Justice laboratory services for free, the Legislature should not approve the proposed projects until the department provides information justifying the scope and cost of each laboratory.

If the Legislature decides that the state should continue to provide free laboratory services through the regional laboratory operations, then information needs to be available with which to consider the merits of the proposed projects. The four laboratory projects are proposed to have a total of 84,000 gross square feet of building space. At the time this analysis was written, however, the DOJ--in conjunction with the Department of General Services (which is managing the projects)--was still in the process of determining its program and space needs for the new laboratories. Thus, the programmatic need for the various laboratories and the cost to construct them are uncertain. Lacking this information, we cannot advise the Legislature whether the scope and cost of the four projects is appropriate. With regard to the Central Valley and Riverside projects, the preliminary plans are scheduled to be completed by May and June 1997, respectively.

In view of the lack of information on these projects, we recommend that, if the Legislature decides to fund the four replacement projects, it should not do so until the DOJ (1) provides detailed programmatic information justifying the scope and cost of each project and (2) completes the preliminary plans for the Central Valley and Riverside projects.

Department of General Services


The budget includes $47.3 million from the Earthquake Safety and Public Buildings Rehabilitation Bond Fund of 1990 (general obligation bonds) to structurally strengthen 14 state buildings. This program is administered by the Division of the State Architect (DSA) within the Department of General Services (DGS). The budget also includes $1 million from the Service Revolving Fund to renovate part of a state building in Sacramento. We discuss these projects below.

Seismic Retrofit Projects

We withhold recommendation on the $47.3 million to structurally strengthen 14 state buildings pending completion of preliminary plans and review of refined scope and cost estimates for each project. The Legislature will also face several other issues regarding the earthquake safety bond program.

Background. In June 1990, voters approved $300 million in general obligation bonds for safety-related renovations of state buildings ($250 million) and matching grants for structural retrofits of local government buildings ($50 million). As required by the bond measure, DSA surveyed and evaluated the structural safety characteristics of state buildings. Through a multistep screening process, the highest priority projects were identified for expenditure of the bond funds. Buildings were evaluated by structural engineers and assigned a risk level of 1 through 7 (the highest risk). Only buildings that have been rated either a risk level 5 or 6 are being retrofitted (no buildings were rated a risk level 7).

In the 1996-97 Budget Act, the Legislature appropriated $106.5 million for 27 projects. This amount included $98.4 million to complete the retrofit of 12 projects, $7.3 million to complete the design work on 14 projects, $693,000 for managing the program, and $50,000 for a study of one building.

In order to review retrofit schemes for each project and to ensure consistency in applying retrofit guidelines established for the program, DSA established a Peer Review Board consisting of structural engineers. The Peer Review Board recently determined that one project funded for construction--the Resources Building in Sacramento--is a risk level 4 rather than a risk level 5. This building will therefore not be retrofitted, and almost $31 million previously appropriated for this project will be available for other risk level 5 or 6 buildings.

1997-98 Proposal. The Governor's budget includes $46.6 million for construction of 13 projects for which retrofit schemes are currently being designed. Because the preliminary plans for these projects have not yet been completed, the amounts requested for each project reflect the cost estimate that was prepared over a year ago for the 1996-97 budget proposal. These plans will be completed between February and April. Until these plans are available, the proposed structural improvements and associated cost estimate for each project is uncertain. We therefore withhold recommendation on the budget proposal pending review of the completed preliminary plans and cost estimates.

In addition to considering the budget proposal for the seismic retrofit projects, the following issues concerning this program will be before the Legislature during budget hearings:

Department of Corrections, California Rehabilitation Center, Norco--Administration Building. This 69-year-old building was determined to be a risk level 6. The administration proposed to retrofit the building at an estimated cost of $20.4 million. Rather than proceed with costly structural improvements to this old, inefficient building, the Legislature appropriated $50,000 for DSA to prepare a proposal to construct new facilities to replace the functions currently located in this building. At the time this analysis was written, the study had not been completed, but it should be available for legislative review prior to budget hearings.

Employment Development Department, 800 Capitol Mall, Sacramento.The federal government claims significant equity in buildings occupied by the Employment Development Department (EDD), including a 77 percent equity in this Sacramento building (which is a risk level 5). In the 1996-97 Budget Act, the Legislature appropriated $496,000 to prepare working drawings for this project. The estimated construction cost is $7.1 million. The Legislature also directed DGS and EDD to seek federal funding for the construction phase of this project. The departments made this request to the federal Department of Labor in September 1996 and a response is pending.

Federal Emergency Management Agency Funding. The DSA is anticipating approval from the Federal Emergency Management Agency (FEMA) to receive Federal Hazard Mitigation Grant Program funds for five of the retrofit projects included in the budget proposal. Under this program, the federal government provides 75 percent of project costs and grant recipients fund the remaining 25 percent. The federal funds are available as a result of the 1994 Northridge earthquake and can be used for mitigation projects in Los Angeles, Orange, and Ventura Counties. The five retrofit projects are: the state office building in Santa Ana, three projects at Metropolitan State Hospital in Norwalk, and one project at Lanterman Developmental Center in Pomona. The estimated total cost of these projects is $39.7 million, thus the federal share would be $29.8 million. Use of these federal funds would therefore free up this amount of bond funds for other state building projects. Final determination from FEMA should be available by the spring, so the level of state funding for these projects can be adjusted accordingly during the budget process. We applaud DSA's efforts in obtaining these federal monies.

Additional Projects. With the cancellation of the Resources Building retrofit and assuming approval of federal funding for the EDD building and the five FEMA-funded projects, we estimate that there would be about $94 million in bond funds remaining for retrofit of state buildings after 1997-98. The DSA should therefore submit to the Legislature a proposal for evaluating additional buildings in order to determine if there are other risk level 5 or 6 state buildings that should be seismically retrofitted.

Office Alteration Project

We recommend approval of $663,000, a reduction of $337,000 from the Service Revolving Fund, for an office renovation because a future building tenant should finance the cost of installing any modular workstations that are needed for its operations. We also recommend that the department move a state function that is currently occupying leased (rather than state-owned) space into the altered space. (Reduce Item 1760-301-0666 by $337,000.)

The budget includes $1 million for DGS to renovate 29,000 square feet of vacated space in the Food and Agriculture Building in downtown Sacramento (across N Street from the State Capitol). This is one of 35 state office buildings managed and maintained by the DGS' Office of Buildings and Grounds (OBG). State agencies occupying all of these buildings pay a uniform rental rate to OBG to cover operations and maintenance costs. In the budget year, this rate will be $1.54 per square foot per month. The renovation projects, by making the 29,000 square feet of additional office space available, will provide about $535,000 in annual rent to OBG for purposes of maintaining state buildings.

The project would remove existing laboratory and individual office space that was previously occupied by the Department of Food and Agriculture and convert this into open office space. The work involves three phases. The first phase ($105,000) includes asbestos abatement and demolition of partition walls. The second phase ($558,000) involves installing carpeting, ceilings and light fixtures, painting, and providing electrical and communication distribution service for an open office layout. The third phase ($835,000) consists of purchasing and installing modular office workstations. The estimated project cost is therefore $1.5 million. The budget proposal is for only $1 million, however, because DGS indicates that the new occupant of the space is required to provide $500,000 toward the cost of the modular furniture.

Making vacant state-owned office space available for use by a state agency is desirable, but the capital outlay project should only include the first two project phases (total cost of $663,000) outlined above. These phases make the space ready for occupancy. The new tenant should finance the cost of any modular workstations or other furniture and equipment that it may need for its operations in this space. We therefore recommend a reduction of $337,000 from the budget request to delete the cost of the modular workstations.

Appropriate Tenant Should Occupy Renovated Space. It is our understanding that DGS plans to move the State Personnel Board (SPB) into the renovated space. The SPB currently occupies about 40,000 square feet of office space in another state-owned building managed by OBG. Given that state agencies in Sacramento currently are leasing over 6 million square feet of office space and paying over $120 million annually for rent, it would be more appropriate to make the renovated space available to a department that is in leased space rather than a department already in state-owned space. We therefore recommend that SPB remain at its current location and DGS relocate a department to the Food and Agriculture Building that has a need for downtown office space and is currently leasing private office space.

Reappropriation of Funds For Local Assistance

We recommend deletion of Item 1760-491 to reappropriate funding for all local government seismic projects because the bond funds should no longer be available for projects that have not proceeded on schedule. The Division of the State Architect should instead prepare a list of projects to fund in 1997-98 with the balance of bond funds still available.

The Earthquake Safety and Public Buildings Rehabilitation Bond Act of 1990 provided $50 million to assist with seismic safety upgrading of certain local government buildings. This program is administered by the DSA. Projects funded with these bonds must include a 25 percent local matching contribution.

In the 1994-95 Budget Act, the Legislature appropriated $45.5 million in earthquake safety bonds for 114 local government projects. While some of the 114 projects proceeded as planned, many others experienced significant delays. In the 1995-96 Budget Act, the Legislature reappropriated all funds that were not encumbered by local entities in 1994-95. In the 1996-97 Budget Act, however, the Legislature only reappropriated unencumbered funds for 86 specific projects in which the local governments had demonstrated reasonable efforts toward completing their projects.

The 1997-98 budget again proposes to reappropriate all unencumbered funds for these 86 projects. By June 1997, each of these projects will have had three years to be under construction. We believe that this is more than sufficient time and that these monies should not be available for another year, particularly because other local governments may have high priority projects that could use the bond funds.

We therefore recommend that the Legislature delete Item 1760-491 and not reappropriate funds for any projects. Instead the DSA should prepare a list of new local government projects for the Legislature's consideration during budget hearings. This list should be based on the balance of bond funds that remain available for appropriation.

Department of Transportation


This item appropriates funds for the Department of Transportation's (Caltrans') capital outlay program for Caltrans buildings. The budget proposes $1 million from the State Highway Account, State Transportation Fund, for capital outlay for Caltrans administrative buildings: $0.9 million for two major projects and $0.1 million for project planning.

District 11 Office Building Seismic Retrofit

We recommend that the Legislature reduce Item 2660-301-0042 (2) for seismic retrofit of the Caltrans District 11 Office Building, San Diego, by $321,000 to provide seismic improvements only, rather than completely remodel the building, consistent with legislative action for other state buildings. (Reduce Item 2660-301-0042 by $321,000, future savings of $11,536,000.)

Caltrans requests $412,000 from the State Highway Account to prepare preliminary plans for a project to seismically retrofit and make other major alterations to the Caltrans District 11 Office Building in San Diego. Total estimated future cost is $14.9 million. The estimated future cost includes $3.3 million for seismic improvements and $11.6 million for other alterations that are not part of the seismic work.

Under the State Building Seismic Program, the Division of the State Architect evaluated the structural safety characteristics of state buildings. Based on this evaluation, buildings were ranked according to risk of structural failure during an earthquake. A risk level 1 represents very low risk and risk level 7, a high risk. The District 11 Office Building has been assigned a risk level 6 and should be structurally strengthened. The estimated project cost for the necessary structural work is $3.4 million, including $91,000 for preliminary plans. The balance of the proposed project, however, is not related to the seismic work and should not be included with this work. Instead, Caltrans should reconsider the need to spend $11.9 million for this seismically unrelated work in priorities with other demands on the State Highway Account. Proceeding in this manner would be consistent with the Legislature's actions on other state buildings, where alterations work other than the work required as a direct result of seismic retrofit has been deleted from the projects. Consequently, we recommend the Legislature reduce Item 2660-301-0042 (2) by $321,000 (future savings of $11,536,000).

Sacramento Regional Transportation Center

We recommend that the Legislature add language to Item 2660-301-0042 specifically prohibiting Caltrans from funding the planning and construction of Caltrans transportation management buildings or other office buildings under the Caltrans appropriation for highway construction because these facilities should be part of the Caltrans office building program reviewed by the Legislature.

The Caltrans capital outlay program has been developed such that all Caltrans buildings--other than facilities directly associated with highway construction and maintenance (such as highway maintenance stations)--are budgeted through a separate item (Item 2660-311-0042) subject to legislative review and approval. Caltrans, however, has interpreted this process to exclude Caltrans "Regional Transportation Management Centers," from which Caltrans monitors and controls traffic conditions on state highways. In fact, Caltrans has already constructed a transportation management center in San Diego, has a center under construction in San Bernardino, plans to begin construction on a center in Sacramento in June 1997, and plans in the future to construct centers in Orange County and downtown Los Angeles.

In San Diego, Caltrans constructed a 42,000 gross square foot (gsf) transportation management center to house the Caltrans highway traffic monitoring services and the California Highway Patrol (CHP) communications services. Under an agreement between Caltrans and the CHP, Caltrans funded the planning and construction of the center without legislative review, and the CHP funded part of the equipment for the center ($160,000) from the CHP support budget. The building was constructed at a cost of $9.6 million.

Caltrans and the CHP have also entered into an agreement for the construction of a 32,800 gsf transportation management center in Sacramento. As with the San Diego facility, Caltrans will fund planning and construction out of its lump-sum highways appropriation, and the CHP will fund the equipment. The center is scheduled to be bid for construction in June 1997, with an estimated construction cost of $8 million. The CHP has requested $1.6 million from the Motor Vehicle Account under Item 2720-301-0044 of the budget bill to purchase equipment for the center.

The Legislature was not given the opportunity to (1) review the need for these centers, (2) review the costs associated with constructing and operating them, or (3) assess whether these centers are in the Legislature's priorities for use of the State Highway Account. As discussed above, the cost to construct the facilities in San Diego and Sacramento total nearly $20 million. The need to construct these facilities and the cost-effectiveness of operating them is not known because the proposals were not submitted to the Legislature. These centers are similar to buildings currently subject to legislative review, and we believe they should be budgeted in the same manner.

To remedy this lack of legislative oversight, we recommend that the Legislature add the following language to Item 2660-301-0042:

No funds appropriated in this item shall be spent for planning or construction of office buildings or transportation management buildings or centers. All such facilities shall be submitted to the Legislature for review and approval on a project basis through the office building program in the annual budget.

Department of the

California Highway Patrol


The budget proposes $7.4 million from the Motor Vehicle Account, State Transportation Fund, for capital outlay for the Department of the California Highway Patrol (CHP) in 1997-98. Of this amount, $6.4 million is for three major projects, $0.8 million is for five minor projects, and $0.2 million is for project planning.

El Cajon Area Office

We recommend that the Legislature delete $400,000 requested to acquire land and develop design documents to remodel and expand the El Cajon Area Office because there is no apparent need to spend over $1.1 million for this purpose. (Delete $400,000 under Item 2720-301-0044, future savings of $717,000.)

The budget includes $400,000 for acquisition ($298,000), preliminary plans ($41,000), and working drawings ($61,000) to initiate a project that would remodel and expand the CHP's Area Office in El Cajon. The estimated future cost to complete the project is $717,000. The CHP plans to renovate the 8,649 gross square foot (gsf) office to increase building space and upgrade to meet various building codes. The CHP also plans to make other improvements to the building including adding new ceiling tile, interior and exterior painting, and adding new casework. In addition, the CHP would acquire an adjoining 0.67 acre land parcel, develop a surface parking lot, and construct a 2,805 gsf, three-bay vehicle service building.

According to the CHP, the existing facility that was designed to house 75 traffic officers needs to be altered and expanded to accommodate their current staffing level of 80 traffic officers. The CHP, however, has not explained why this small increase in officers results in a need to (1) purchase additional property, (2) construct a 2,805 gsf vehicle service building, or (3) improve the ceiling, paint, or add casework. In short, the CHP has not identified problems with this office that would warrant expenditure of $1.1 million.

Given the lack of justification for expansion of the facility or the need to undertake large components of the proposed project, we recommend that the Legislature delete the $400,000 request to acquire land and prepare plans to remodel the El Cajon Area Office.

Equipment for Sacramento Regional Transportation Center

We recommend that the Legislature delete $1,565,000 requested for the purchase of equipment for a Regional Transportation Management Center in Sacramento because the building, which the California Department of Transportation plans to construct, has not been authorized by the Legislature, and the California Highway Patrol has not substantiated the need for an augmentation to purchase equipment. (Delete $1,565,000 from Item 2720-301-0044.)

The CHP has recently entered into an agreement with the California Department of Transportation (Caltrans), under which Caltrans would fund the preliminary plans, working drawings, and construction (a total of $7,980,000 according to the CHP request), and the CHP would fund the equipment ($1,565,000), for a "Regional Transportation Management Center" in Sacramento to be occupied by Caltrans and the CHP. The CHP claims that its existing transportation management and dispatch center is too small to accommodate the additional equipment the CHP requires to process emergency calls from highway call boxes and 911 lines as quickly as needed. On this basis, the CHP claims that it needs to move its dispatch operations to a new building, and has chosen to enter into the agreement with Caltrans to fulfill this need.

The Caltrans transportation management building the CHP proposes to equip was neither presented to nor approved by the Legislature (see our analysis of Caltrans capital outlay in this section of the Analysis). Thus, the need to relocate, the cost-benefit of the new facility, or the need for new equipment was not submitted to the Legislature before Caltrans initiated the project and the CHP entered into an agreement with Caltrans. Undoubtedly, however, in making these commitments the CHP determined that it had the ability to relocate existing equipment and/or purchase new equipment without requiring an augmentation from the Legislature. This apparently was the case in a similar situation in San Diego, where Caltrans constructed a center (without legislative review or approval), CHP signed a similar agreement, and equipment was purchased without a legislative augmentation. Consequently, the CHP should acquire any necessary equipment without an augmentation. We therefore recommend that the Legislature not approve this request (delete $1,565,000 from Item 2720-301-0044).

Department of Motor Vehicles


The Department of Motor Vehicles' (DMV's) five-year capital outlay plan proposes $61 million in expenditures between 1997-98 and 2001-02. The DMV's capital outlay proposal for 1997-98 totals $7.6 million, including $7.3 million for three major projects, $250,000 for three minor projects, and $100,000 for project planning. All the proposed projects are to be funded by the Motor Vehicle Account, State Transportation Fund.

Office Reconstruction--Oakland/Claremont

We recommend approval of $5.5 million from the Motor Vehicle Account for construction contingent on completion of preliminary plans that are consistent with the scope and cost as previously approved.

In the 1996-97 Budget Act, the Legislature appropriated $482,000 to prepare preliminary plans to demolish and reconstruct and make certain site improvements to the Oakland/Claremont DMV field office building. The new building will be 26,517 gross square feet. According to the Department of General Services, which manages the project, the preliminary plans are scheduled to be completed in April 1997. We recommend that the Legislature approve the construction funding proposal contingent upon completion of preliminary plans that are consistent with the legislatively approved scope and cost.

Department of

Forestry and Fire Protection


The California Department of Forestry and Fire Protection operates 230 fire stations, 13 air attack bases, 9 helicopter attack bases, 41 camps, and a training academy. Nearly 80 percent of these facilities were built before 1960. The department's five-year capital outlay plan totals $346 million and emphasizes replacement of many of the department's older facilities, relocation of department facilities (due to changing circumstances in the areas in which existing fire stations are located), and acquisition of leased sites on which facilities are situated.

The Governor's budget proposes $31.9 million in capital outlay funding for the department in 1997-98, including $25 million for 19 major projects and $6.8 million for 24 minor projects. Of the $31.9 million, $19.5 million is from the General Fund, and $12.4 million is lease-payment bonds to augment a previous $10 million appropriation for a statewide effort to begin replacing emergency communications towers.

Statewide Communications
Towers and Vaults Augmentation Request

We recommend that the Legislature delete $12,360,000 for construction of 11 telecommunications towers and vaults because this work was included in a $10 million appropriation in the 1995-96 Budget Act and the department has not provided any information that would substantiate the need for a 124 percent augmentation for this work. (Delete $12,360,000 from Item 3540-301-0660.)

Currently, the department operates 103 telecommunications facilities, each of which consists of an antenna support structure (a tower), a radio communications building (a vault), related antennas and microwave dishes, and an emergency power generator. These facilities are used for command and control communications for personnel involved in the department's emergency responses to fires across the state. The facilities also support the telecommunications needs of numerous federal, state, and local agencies.

In the 1995-96 Budget Act, the Legislature authorized $10 million in lease-payment bonds to replace 22 of these telecommunications facilities at various locations throughout the state. Because this replacement project did not proceed on schedule, the department requested, and the Legislature approved, reappropriation of the $10 million in the 1996-97 Budget Act. When the reappropriation was requested, there was no indication from the department that the entire project could not be undertaken within the $10 million.

The department has indicated that in October 1996, bids for construction on the project were received and the bids were significantly higher than the appropriation authority. In December 1996, the Director of Finance advised the Joint Legislative Budget Committee of a proposal to change the scope of the project to construct only 11 communications facilities with the $10 million available. The committee did not concur with that proposal and advised the Director that the requested "scope change" represented an augmentation to project costs approved by the Legislature of over 124 percent. The committee advised further that, if the department cannot complete that project within the appropriation authority (under existing statute, cost increases of greater than 20 percent of the appropriation for a project must be approved by the Legislature), the department should resubmit the project to the Legislature with a complete explanation for the higher costs.

The Governor's budget includes a request for an additional $12,360,000 from the Legislature to fund construction of the remaining 11 telecommunications sites. The department, however, has provided only limited information justifying the extreme cost increase. For example, the department has not explained why the state's estimate (indicating that the entire 22 sites could be completed within the appropriation authority) was in error when the project was bid. Furthermore, the department has not explained why, after receiving bids, the same work should now cost $12.4 million (124 percent) more. Finally, the department has not indicated which elements of the work have become more costly after the project was bid, nor has the department indicated what steps, if any, it has taken to reduce costs to within the $10 million original authorization. For these reasons, we recommend that the Legislature not approve the department's $12.4 million augmentation request. (Delete $12,360,000 from Item 3540-301-0660.)

Return to 1997-98 Budget Analysis Table of Contents
Return to LAO Home Page