California State University (6610) |
Funds are not available to complete the proposed and previously approved projects for the three
segments of higher education in California. The unfunded cost to complete all projects
previously authorized for the three segments plus those in this budget is about $1.2 billion. The
balance of unappropriated bond funds, exclusive of reserves for augmentations and other costs, is
approximately $55 million. As discussed in the Crosscutting Issue "Funding Higher Education
Capital Outlay," we recommend projects be approved for funding using specific priorities and
criteria rather than in accordance with an arbitrary allocation among the segments. We also
recommend additional study of the proposed CSU campus at the Camarillo State Hospital site.
In our crosscutting issue, "Funding Higher Education Capital Outlay," we recommend that the Legislature discontinue the approach of allocating equal shares of each higher education bond fund to each of the segments. Instead, we recommend that projects from all three segments be evaluated and funded based on how effectively they meet statewide priorities. We provide criteria for establishing statewide funding priorities that focus:
The Governor's budget proposes funding for 24 CSU projects. We have evaluated these projects against the criteria discussed in our crosscutting issue and our recommendations are based on this evaluation. We recommend the Legislature approve the ten projects listed in Figure 22 and that they be funded from existing bond funds. We recommend the Legislature approve the ten projects in Figure 23 (see page 82) from the proposed 1998 Higher Education Capital Outlay Bond Fund.
| Figure 22 | |||
| Projects Recommended for Funding
With Existing Higher Education Bond Funds | |||
| (In Millions) | |||
| Campus | Project | Amount | Cost to Complete |
| Priority No. 1--Critical Fire, Life Safety, and Seismic Deficiencies | |||
| Northridge | Business Administration, Economics and Education Building--constructiona | $700 | -- |
| San Marcos | Initial Facility--constructiona | 570 | -- |
| Priority No. 2--Necessary Equipment | |||
| California Maritime Academy | Laboratory Addition/Library Addition--equipment | $693 | -- |
| Fresno | Renovate McLane Hall--equipment | 606 | -- |
| Humboldt | Wildlife/Fisheries Renovation and Addition--equipment | 953 | -- |
| Los Angeles | Renovate Engineering and Technology Building--equipment | 4,400 | -- |
| Pomona | Science Building Addition and Renovation--equipment | 1,703 | -- |
| San Bernardino | Corporation Yard/Administrative Services Addition/Renovation--equipment | 322 | -- |
| Priority No. 3--Utility System Deficiencies | |||
| Humboldt | Infrastructure Improvements--construction | $19,618 | -- |
| Priority No. 4--Academic Improvements (Renovation, 30 Years Old) | |||
| Los Angeles | Remodel Music Building--working drawings and construction | $9,895 | -- |
| Totals | $39,460 | -- | |
| aThese expenditures have been classified Priority 1 because they are judgments or settlements arising from construction claims that the state is obligated to pay. | |||
| Figure 23 | |||
| Projects Recommended for Funding
With Proposed 1998 Higher Education Bond Funds | |||
| (In Thousands) | |||
| Campus | Project | Amount | Cost to Complete |
| Priority No. 4--Academic Improvements
(Renovation/Replacement, 30 Years Old) | |||
| Long Beach | Renovate Fine Arts 1, 2, 3, and 4-- working drawings and construction | $15,116 | $766 |
| Sacramento | Classroom Building II-- working drawings and construction | 13,910 | 1,260 |
| Priority No. 5--Operationally Essential Facilities | |||
| Chico | Fire Life Safety--construction | $1,298 | -- |
| Dominguez Hills | Natural Sciences and Mathematics Building--preliminary plans, working drawings, and construction | 3,919 | -- |
| Fresno | Infrastructure Improvement--preliminary plans, working drawings, and construction | 7,192 | -- |
| Pomona | Chilled Water Central Plant--preliminaryplans, working drawings, and construction | 4,486 | -- |
| San Diego | Infrastructure Improvements--construction | 6,530 | -- |
| Priority No. 6--Administrative, Research, and Support Facilities | |||
| Dominguez Hills | Technology Center, Health and Administrative ServicesBuilding--drawings and construction | $30,915 | $3,574 |
| Totals | $97,739 | $5,600 | |
The Legislature has previously approved funding for development of working drawings for the projects in Figure 24. These projects are now before the Legislature because it has the opportunity to review projects after completion of working drawings to assure conformance with current needs and priorities. We recommend that the need for these projects be reevaluated to determine if they are of sufficient risk to warrant seismic retrofit funding. As discussed in the Crosscutting Issue "Assessing Seismic Risk in Higher Education Buildings" in this chapter of the Analysis, we recommend all state buildings--including those on CSU campuses--be evaluated for seismic risk using the methodology and rating scale developed by the Department of General Services (DGS). Without this uniform process, the Legislature has no basis for comparing funding proposals from the different segments and for general state buildings to determine if they are risk level V or VI and therefore should be improved for seismic safety. The CSU provided some information indicating the Fullerton project to be level IV based on an informal conversion of their evaluation to the DGS risk scale. If this is the risk level of the building, we would recommend the Legislature not fund this project. The CSU also indicated the California Maritime Academy project would be level VI, but again this was done informally and without following the DGS method. Further, in order to maximize limited state funds to make improvements to the largest number of high-risk buildings and to meet other capital outlay needs throughout higher education, we recommend these projects be reevaluated to assure their scope and cost cover only structural seismic improvements. If after reevaluation these projects are determined using the DGS process to be seismic risk V or VI, and if they consist only of structural corrections, they may warrant the Legislature's consideration. For purposes of allocating existing bond funds, we have assumed that these projects will not proceed in the budget year.
| Figure 24 | |||
| Seismic Correction Projects
Recommended for Reevaluation | |||
| (In Thousands) | |||
| Campus | Project | Amount | Cost to
Complete |
| California Maritime Academy | Seismic Upgrade, Campuswide --Construction | $3,743 | -- |
| Fullerton | Seismic Upgrade, Langsdorf Hall --Construction | 3,923 | -- |
| Total | $7,666 | -- | |
We withhold recommendation on the requests for $14.2 million for minor capital outlay projects and $200,000 for statewide seismic studies until the California State University reevaluates these proposals in accordance with the statewide priorities and criteria.
The CSU proposes $14.2 million for minor capital outlay projects ($250,000 or less per project) statewide. It has submitted a list of about 230 projects (total cost of $21 million) from which it proposes to select for funding. The list has been divided to show priorities at each campus, but there is no unified statewide priority list. The CSU should reevaluate the minor capital outlay proposal and separate the projects based on the statewide criteria and priorities we have outlined. In this way, the Legislature would know the priority areas targeted for minor improvements and be able to better assess the merits of the proposed funding level for minor capital outlay.
The Governor's budget for CSU also includes a proposal for $200,000 to fund seismic studies statewide. We recommend this proposal be treated as a minor project and be incorporated into the statewide priority list.
Pending receipt of this information, we withhold recommendation on these proposals.
The budget includes $5.1 million to renovate the 50,000 assignable square feet (asf), four-story Business Classroom Building at the San Jose campus. This facility houses the College of Business, classrooms, and offices for other departments. The building was constructed in 1972 and is of reinforced concrete design. The full project cost is $15.6 million, which consists of the $5.1 million in state funds for construction, $9.4 million for construction to come from donors, and $1 million of future state funding for equipment. The seismic repair portion of the project is about $200,000.
The project is only minimally directed at seismic deficiencies and is primarily a renovation, which is the basis upon which we evaluated it. Since the building is not 30 years old, it does not meet the criterion for renovation based on age. Furthermore, the limited information submitted to justify this project does not reveal any problems that would warrant the expenditure of over $5 million of state funds. Most of the proposed work is for mechanical and electrical system changes. Other than in very general terms, the information does not identify the problems with these systems. We therefore recommend the Legislature delete the $5,135,000 requested for this project.
The renovated space would provide classrooms (26,600 asf), laboratories (11,400 asf), library (4,000 asf), and offices and support spaces (12,000 asf). The renovation is planned to be accomplished in two phases, with the first phase completed by January 1999 in order to move the center to the Camarillo site at that time. The second phase would be completed by summer 1999. Completion of phase one would provide for the CSU projected enrollment of 1,100 full-time-equivalent (FTE) students and completion of phase two would provide space for 2,400 FTE and allow for the projected enrollment of 1,500 FTE by fall 1999. The Governor's budget also includes a $5.2 million augmentation to the CSU budget for the higher cost of operating the center at the Camarillo site.
Background. Chapter 914, Statutes of 1997 (SB 623, O'Connell), authorizes the transfer of the vacated Camarillo State Hospital site to the CSU for ultimate development as a new campus. Currently, the CSU Northridge campus operates an off-campus center serving about 690 FTE (upper division undergraduate) students in leased space in downtown Ventura. The CSU Trustees have agreed to accept the hospital site on July 1, 1998, and move the Ventura center there only ifthe state appropriates additional funds to the CSU in recognition of the high costs of locating the center at the hospital site. The CSU expects (1) to receive amounts above those the CSU would normally receive in its operating budget for additional students and (2) that any capital outlay funds for Camarillo would be on top of funding for the CSU priorities in the CSU five-year capital outlay plan. The Governor's budget proposal meets the conditions identified by the Trustees.
CSU Plan. If the Legislature appropriates the additional funds (and presumably commits to providing additional funds in future years) and if cost-benefit, feasibility, and environmental impact studies indicate the center should be moved to the Camarillo site, the CSU Trustees have indicated that they would accept the Camarillo property. Assuming the funds are available and the studies are completed by July 1, 1998, the CSU would begin renovations in August and move students to the site in January 1999. The academic program at the site would continue to be an off-campus center under the CSU Northridge campus for at least seven years. At that time the Trustees would evaluate whether a campus requiring a full range of undergraduate and graduate programs is justified at Camarillo.
Existing State-Owned Site. The state owns a 260-acre site in Ventura County that it purchased for a permanent location of this off-campus center with the potential to expand the center into a full campus. The state purchased this site in 1995 for $7 million. This site would become surplus to the CSU needs if the center is moved instead to Camarillo.
As mentioned above, the CSU Trustees expect to obtain additional information before accepting the Camarillo site. We believe this is a prudent way to proceed and we believe the Legislature needs the same information, plus information on other issues, before the Legislature provides funds to move the existing center.
Cost Benefit Analyses and Feasibility Studies Not Completed. The Legislature has appropriated $1.6 million to the CSU to complete certain specific studies and analyses of the Camarillo site. Among these were:
These are the studies the CSU Trustees are waiting for before they accept the Camarillo site. The Legislature also should have this information before it makes a decision on moving the Ventura center.
Comparative Analysis of Camarillo and 260-Acre Sites. Prior to deciding to move the Ventura Off-Campus Center, the Legislature should have a cost-benefit analysis available for review. This analysis should compare locating the center (and possible future campus) at Camarillo with the alternative of developing the 260 acre site already owned by the state and it should identify when it would be cost-effective to relocate the center to either site. This analysis also should consider the cost of maintaining facilities that are not being used (such as the significant cost of maintaining the unused buildings and infrastructure at the Camarillo site) until such future time when enrollment growth may permit their effective utilization.
Environmental Impact Report Not Completed. Included in the work funded in 1997-98 was preparation and processing of an environmental impact report (EIR). The Legislature should especially be aware of any issues revealed through the EIR process that may affect the costs to develop this site or may limit its development before it commits to the Camarillo site.
Cost for Underutilized Infrastructure. There is substantial infrastructure in place at the Camarillo site and it has been well-maintained, but this appearance of "cost-free" facilities may be deceiving. The reason is that there is far more in the way of buildings and utilities existing at this site than the CSU can use in the foreseeable future, yet the state will have to bear the substantial expense of operating and maintaining the excess space. As an example, CSU Bakersfield has a current FTE enrollment of about 4,600 and a campus with 711,000 gross square feet (gsf) of facilities. The Camarillo site is proposed to open as an off-campus center in January 1999 with an FTE enrollment of 690 and 1.6 million gsf. Even at its planned enrollment of 3,000 FTE in 2004-05, the CSU will have to maintain more than 1.3 million gsf of buildings excess to the center's needs.
Contract Commitments for Co-Generation Plant. A co-generation plant has been constructed at the site by a private company. It generates steam (which it sells to the hospital) and electricity (which it sells to electricity utilities in southern California). The state is contractually committed to purchase steam from this plant. When operated as a 1.6 million gsf state hospital, this was not a disadvantage. When operated as a 100,000 gsf off-campus center, this purchase requirement may be a substantial burden.
Use of Lease-Payment Bond Proceeds Is Highly Improper. The Governor's budget proposes to use the proceeds from lease-payment bonds that were sold for other projects in the CSU to fund the renovations at Camarillo. The proceeds are apparently excess amounts from eight different bond sales that occurred between 1986 and 1997.
The State Public Works Board is authorized to sell lease-payment bonds for a particular building. It then leases the building to a state agency (in this case, CSU) and uses the lease payments from the agency to retire the bond debt for that building. The bonds are sold to investors on this basis. It is our understanding that this tie between the lease payments (dependent on annual appropriations) for each building and the bond debt payment is a key factor in distinguishing these bonds from general obligation bonds (which require voter approval).
We believe the administration's proposed use of these bond proceeds for this purpose is highly improper. We recommend that the Legislature deny this proposal to broaden the use of lease-payment bonds. Past practice has been to use any excess bond proceeds to reduce the General Fund appropriation for lease payments on the bond debt for the bonds sold for the specific buildings. Consistent with this past practice, the $11.3 million under this item should instead be used to reduce the CSU lease payments under Item 6610-001-0001. If the Legislature decides to fund the proposed project at Camarillo, we would recommend that the Legislature use either existing general obligation bonds or the proposed 1998 bond measure.
California Community Colleges (6870) |
In our Analysis of the 1995-96 Budget Bill (page I-64), we indicated that the Chancellor's Office had ceased preparing systemwide five-year capital outlay plans for the community colleges. We discussed some of the common deficiencies among the five-year plans submitted by the 71 community college districts and indicated that the state should have a systemwide plan in order to more accurately assess the CCC's near-term capital outlay needs. In the Supplemental Report of the 1995-96 Budget Act, the Legislature directed the Chancellor's Office to annually prepare such a plan.
The five-year plan submitted by the Chancellor's Office in 1996 totaled about $750 million. This amount was based on an assumed state funding level of $150 million per year rather than an evaluation of statewide needs. The most recent five-year plan prepared by the Chancellor's Office--covering the period from 1998-99 through 2002-03--totals $3.6 billion. Unfortunately, this plan is essentially a compilation of the individual five-year plans submitted by the districts and still does not evaluate or establish funding priorities for the system over the next five years. The plan has some general deficiencies with regard to the individual district plans that we also identified in 1995-96. Specifically it:
The community colleges have legitimate and significant capital outlay needs. Though much excess capacity exists both on a systemwide basis and on many campuses, enrollment growth at certain districts will require building additional space. The system also has a significant amount of older building space--about 18 million square feet of buildings on the campuses were built or renovated before 1970.
We believe, however, that if the Chancellor's Office evaluated the districts' five-year plans more critically--including addressing the deficiencies noted above--the five-year needs of the system would likely be considerably less than the $3.6 billion identified in the most recent five-year plan. The Chancellor's Office has committed to undertake this task in preparing the systemwide plan for 1999-00 through 2003-04. This plan will be submitted to the Legislature by October 1998.
With the passage of Proposition 13 in 1978, it was determined that many local districts no longer were able to provide their share of project costs. Legislation enacted in 1980 changed the formula for determining the state/district participation for approved projects. The new formula was based on district enrollment and each district's ending budget balances relative to the statewide average. In addition, state funding of up to 100 percent of approved project costs was allowed if districts were unable to contribute their full matching share. From 1979 to 1985, the state's overall share of community college capital outlay projects increased from about 50 percent to 90 percent.
Legislation passed in 1985 repealed the cost sharing formula in the 1980 statute and directed the Chancellor's Office to establish the appropriate state and district shares of project cost. The Chancellor's Office subsequently adopted a regulation stating that a district's share would not exceed 2 percent of the district's general fund revenue for the prior year and in no case would exceed 10 percent of the proposed project costs. In the late 1980s, state funding for approved projects constituted over 90 percent of project costs. Finally, legislation enacted in 1990 repealed any requirement for a district match. The state, since 1990, has thus funded 100 percent of approved community college project costs.
District participation in funding capital outlay would not only help to control costs but, more importantly, would allow more projects to be funded in the state's higher education system. As discussed in the "Overview and Crosscutting Issues" section of this chapter, the state is confronted with multibillion dollar capital outlay needs for higher education and for other types of infrastructure. Addressing the state's needs in the most cost-effective manner not only requires identifying and funding the highest priority projects, but also stretching available state dollars to complete as many projects as is feasible with available state monies. Cost sharing by the local districts would help accomplish this goal.
We therefore recommend that the Legislature reestablish a cost-sharing requirement for community college capital outlay projects. In order to give districts a fiscal incentive to consider the scope and cost of all projects for which they request state funds, we believe that districts should be responsible for a significant share of project costs. We recommend limiting a district's matching share to 50 percent. We recognize that, given the great variation in size and fiscal resources of the districts, any cost-sharing arrangement will have to take into account the relative capacity of districts to provide matching funds. Under a system that considers each district's fiscal capacity, some districts would provide a match that is less than 50 percent.
To meet their matching requirements, districts could either set aside a portion of ongoing general fund revenues--for one year or over several years--or borrow the needed funds and pay off such debts over time with ongoing revenues. Districts also have other options for meeting their match requirements besides using current revenues, such as general obligation bonds or Mello-Roos bonds.
We therefore recommend that, beginning in 1999-00, the Legislature require districts to match state funding for capital outlay projects. This will give districts a year to plan for the new funding system.
In our crosscutting issue, "Funding Higher Education Capital Outlay," we recommend that the Legislature discontinue the approach of allocating equal shares of each higher education bond measure to each of the segments. Instead, we recommend that projects from all three segments be evaluated and funded based on how effectively they meet statewide priorities. We provide criteria for establishing statewide funding priorities that focus:
Figure 25 (see next page) shows the 34 community college projects proposed for 1998-99 that, based on our analysis, meet one of the criteria we have identified. These projects have a total budget-year cost of $100.5 million and a future completion cost of $53.2 million. For 11 of these projects, the preliminary plans have not been completed. In addition, we have concerns with the proposed funding level for two of the projects and need further information to assess the merits of another of the projects listed below. We discuss all of these issues later in this analysis.
As discussed in our crosscutting issue, "Funding Higher Education Capital Outlay," about $65 million in currently authorized general obligation bonds are available for appropriation by the Legislature for 1998-99. We recommend that the Legislature appropriate $55 million of this amount for the highest priority projects throughout higher education. The remaining $10 million would be available for potential augmentation of approved projects. Based on our review of all projects in higher education and using the priority-setting criteria we have identified, we recommend the Legislature fund the following community college projects from existing bond funds:
Figure 26 (see page 98) lists the seven community college projects that do not meet the priority criteria we have discussed earlier. Four of these projects add instructional capacity and three are new library projects. In general, these projects would either (1) increase a district's instructional capacity to more than 95 percent of that justified by projected district enrollment at the time the project is planned for completion or (2) increase the districts' library space above 70 percent of the state standard for community college libraries.
| Figure 25 | |||
| Community College Projects Meeting Priority Criteria | |||
| (Dollars in Thousands) | |||
| Campus | Project | BudgetAmount | Future Cost |
| Priority No. 2--Necessary Equipment | |||
| Cabrillo CCDa/ Cabrillo College | Code Compliance | $77 | $0 |
| Chabot-Las Positas CCD/Chabot College | Chemistry/Computer Science Renovation | 349 | 0 |
| Chabot-Las Positas CCD/Las Positas College | Math/Design Building Renovation/Addition | 357 | 0 |
| Citrus CCD/Citrus College | Cosmetology Addition/Remodel | 85 | 0 |
| Compton CCD/Compton College | Math/Science - Health and Safety | 2,396 | 0 |
| Contra Costa CCD/Diablo Valley College | Physical Science Remodel | 412 | 0 |
| Contra Costa CCD/Diablo Valley College | Music Remodel/Addition | 279 | 0 |
| Foothill-DeAnza CCD/Foothill College | Child Care/Development Center | 135 | 0 |
| Long Beach CCD/Long Beach City College | Science/Math Building D | 946 | 0 |
| Los Angeles CCD/East Los Angeles College | Child Care/Development Center | 269 | 0 |
| Mt. San Antonio CCD/Mt. San Antonio College | Learning Technology Center | 1,472 | 0 |
| San Francisco CCD/San Francisco City College | Remodel Allied Health | 251 | 0 |
| Santa Clarita CCD/College of the Canyons | Remodel Old Library and Labs | 912 | 0 |
| Santa Monica CCD/Santa Monica College | Replace Science Building (FEMA) | 3,645 | 0 |
| Ventura County CCD/Moorpark College | Math/Science Secondary Effects | 130 | 0 |
| Subtotals | ($11,715) | ($0) | |
| Priority No. 3--Critical Deficiencies in Utility Systems | |||
| South Orange County CCD/Irvine Valley College | Fire Safety Access Road | $2,119 | 0 |
| Subtotals | ($2,119) | ($0) | |
| Continued | |||
| Priority No. 4--Improvements for Undergraduate Academic Programs | |||
| New Construction or Renovations That Increase Instructional Capacity | |||
| Contra Costa CCD/Diablo Valley College | Business Language Building | $5,320 | $1,146 |
| Contra Costa CCD/Los Medanos College | Vocational Technology Addition | 1,969 | 287 |
| Desert CCD/College of the Desert | Math/Social Science Buildings | 5,373 | 657 |
| Gavilan CCD/Gavilan College | Health Occupations Building | 2,423 | 206 |
| San Jose-Evergreen CCD/Evergreen College | Biology/Nursing Addition | 9,173 | 513 |
| San Luis Obispo CCD/Cuesta College | Art/Music Laboratories Addition | 5,596 | 622 |
| San Luis Obispo CCD/Cuesta College | Learning Skills Center/Classroom Building | 10,221 | 3,384 |
| Sonoma County CCD/Criminal Justice Center | Phase 1 Facilities | 838 | 11,930 |
| South Orange County CCD/Irvine Village College | Learning Resources Center Secondary Effects | 597 | 563 |
| State Center CCD/Madera Center | Off-Site Development | 1,825 | 0 |
| State Center CCD/Madera Center | Off-Site Development, Phase I Facilities | 11,090 | 847 |
| Libraries | |||
| Citrus CCD/Citrus College | Library Addition/Reconstruction | $570 | $8,048 |
| Redwoods CCD/College of the Redwoods | Library and Media Services | 10,872 | 1,097 |
| Renovation of Instructional Buildings--Enrollment Shifts (Other) | |||
| Glendale CCD/Glendale College | Science Buildings Reconstruction | $342 | $4,011 |
| State Center CCD/Fresno City College | Lab/Office Space Reconstruction, Secondary Effects | 2,081 | 597 |
| Buildings 30 Years or Older | |||
| Coast CCD/Orange Coast College | Science Buildings Reconstruction | $14,443 | $2,128 |
| Subtotals | ($82,733) | ($36,036) | |
| Priority No. 6--Administrative, Research and Support Facilities | |||
| Faculty and Administrative and Offices | |||
| Sierra Joint CCD/Sierra College | Student Services Center, Secondary Effects | $3,076 | $0 |
| Support Facilities | |||
| Mt. San Jacinto CCD/Mt. San Jacinto College | Business and Technology, Secondary Effects | $857 | $0 |
| Subtotals | ($3,933) | ($0) | |
| Totals | $100,500 | $36,036 | |
| aCCD: Community college district. | |||
We have recommended the 95 percent level for instructional space for several reasons. First, at 95 percent of needed capacity, a district has a reasonably sufficient amount of instructional space especially compared to other districts with significant space deficiencies. In addition, we believe that a balance is needed between providing additional space and meeting other needs (such as upgrading older instructional facilities and renovating existing space).
| Figure 26 | |||
| Previously Approved Projects
That Do Not Meet Priority Criteria | |||
| (Dollars in Thousands) | |||
| Campus | Project | Amount | Cost toComplete |
| Antelope Valley CCD/Antelope Valley College | Business/Multi-Media Center | $8,299 | $1,494 |
| Contra Costa CCD/Diablo Valley College | Library Building Addition | 4,156 | 781 |
| Los Rios CCD/Folsom Lake Center | On-site Development | 4,997 | -- |
| Los Rios CCD/Folsom Lake Center | Instructional Facilities, Phase 1A | 13,390 | 1,917 |
| San Diego CCD/San Diego City College | Learning Resources Center | 15,748 | 2,758 |
| Sequoias CCD/College of the Sequoias | Music Building | 3,572 | 404 |
| West Valley-Mission CCD/Mission College | Learning Resources Center | 7,783 | 545 |
| Totals | $57,945 | $7,899 | |
In the case of libraries, as discussed in our analysis of the community colleges' 1997-98 capital outlay program, technological advancements are changing the space requirements for libraries. We recommended a 70 percent threshold based on recently completed community college library projects. As a result of this issue, the Legislature adopted language in the Supplemental Report of the 1997-98 Budget Act directing the Chancellor's Office to undertake an assessment of the existing library space standards.
These projects are now before the legislature because it has the opportunity to review projects after completion of preliminary plans or working drawings to assure conformance with current needs and priorities. The Legislature has previously approved preliminary plans and working drawings for the projects in Figure 26. Given the limited availability of funds and the many statewide capital outlay needs, however, we believe the Legislature should reevaluate the need for these projects using the criteria we have identified. On this basis, we recommend the Legislature delete the requested $58 million for these projections in 1998-99. If enrollments in these districts increase beyond current projections, these projects may warrant legislative consideration in the future.
Our analysis indicates that the amounts proposed in the budget for 11 projects previously funded for preliminary plans and working drawings are consistent with prior legislative action and meet the criteria we have identified. These projects, which total $56.2 million, are listed in Figure 27 (see next page). The preliminary plans for these projects, however, had not been completed at the time this analysis was prepared. Therefore, we recommend approval contingent on completion of preliminary plans that are consistent with the legislatively approved scope and cost.
The budget proposes $571,000 to prepare preliminary plans and working drawings for a 13,000 assignable square foot (asf) library addition and for renovation of the existing 20,000 asf library. The estimated future cost for construction and equipment is $8 million. After completion of the library addition, the campus will have about 60 percent of the state space standards for libraries. Our analysis indicates that the project is justified, but we have a concern with the proposed construction budget of $242 per asf for the new library building. We believe that for about 3,000 asf of the new building, including reading rooms and group study areas, the proposed costs are at a level that exceeds the normal cost guidelines for community college libraries. The construction budget for this project should be consistent with state budgeting practice for other community college libraries. We therefore recommend a reduction of $26,000 from the amount proposed for preliminary plans and working drawings. The estimated future construction costs ($212 per asf for the library addition), based on our recommendations, would be $6.6 million--about $431,000 less than proposed by the district.
| Figure 27 | |
| Items 6870-301-0574 and 6870-301-0658
Preliminary Plans Not Completed | |
| (In Thousands) | |
| Location/Project | Amount |
| Item 6870-301-0574 | |
| Coast Community College District (CCD)/Orange Coast College--Art Center | $14,443 |
| Contra Costa CCD/Diablo Valley College--Business Language Building | 5,320 |
| Contra Costa CCD/Los Medanos College--Vocational Technology Addition | 1,969 |
| Desert CCD/College of the Desert--Math/Social Science Buildings | 5,373 |
| Gavilan CCD/Gavilan College--Health Occupations Building | 2,423 |
| Mt. San Jacinto CCD/Mt. San Jacinto College--Business and Technology, Secondary Effects | 857 |
| Redwoods CCD/College of the Redwoods--Library and Media Services | 10,872 |
| San Jose-Evergreen CCD/Evergreen College--Biology/Nursing Addition | 9,173 |
| Sierra Joint CCD/Sierra College--Student Services Center, Secondary Effects | 3,076 |
| South Orange County CCD/Irvine Valley College--Learning Resources Center Secondary Effects | 597 |
| Subtotal | ($54,103) |
| Item 6870-301-0658 | |
| South Orange County CCD/Irvine Valley College--Fire/Safety Emergency Access | $2,119 |
| Total | $56,222 |
The budget proposes $3.6 million to equip a new 62,000 asf science building at Santa Monica College. Construction of this building is scheduled for completion in March 1999. The district's original science building (24,000 asf) was severely damaged in the Northridge earthquake. The Federal Emergency Management Agency (FEMA) agreed to provide disaster assistance funding for the new larger replacement building. The estimated cost of the building (excluding equipment) is $27.2 million, of which FEMA is funding $22.6 million (83 percent) and the state is funding the remaining $4.6 million. (The state matching funds are from an allocation of $75 million in higher education bond funds that were appropriated to the Department of Finance following the earthquake.) According to the Chancellor's Office, FEMA will not share in the cost of equipping the new building.
The budget proposal is based on equipping the 40,000 asf of space by which the new building exceeds the size of the former science building. The Chancellor's Office maintains cost guidelines that are used to determine the amount of eligible funding (on a per-square-foot basis) for different types of building space. The new building contains a mixture of classrooms, offices, and various types of science laboratories and support space. In determining the amount of eligible state funding for some of the science laboratories, however, the district and the Chancellor's Office did not use the cost guideline for science areas (about $59 per square foot) but instead used a guideline for computer laboratories and data processing space (about $169 per square foot). The district indicates that the reason for using the higher amount is because certain laboratories in the building will use computers and other high technology equipment in their instruction.
We understand that methods of instruction, both in the sciences and in other curricula, are changing with the introduction of more technology into classrooms and laboratories. In these cases, the existing cost guidelines for certain functions, such as science instruction, may not be adequate. However, districts should not unduly receive additional state funds by unilaterally declaring a function as "high tech" and applying a higher cost guideline. We believe that the Chancellor's Office needs to review how changes in instructional delivery affect equipment needs. Any appropriate changes can then be incorporated into the equipment cost guidelines so that all district requests for equipment are evaluated on an equal basis.
Recommendation. For the Santa Monica project, we recommend a funding level of $2,904,000 for equipment--a reduction of $741,000. Our recommendation is derived from applying the current cost guideline for science laboratory space plus adding $1 million for the cost of all computers that the district has requested for the science laboratories.
The budget includes $838,000 to prepare preliminary plans and working drawings for a 40,000 asf training center for criminal justice education and training programs. The estimated future cost for construction and equipment is $11.9 million. The center would be constructed on a new site that the district purchased with $2.1 million in state funding from the 1993-94 Budget Act. The project includes an indoor firing range, a defensive tactics training room, an emergency medical care lab, a driver training course, and "mock ups" of a commercial and residential building in which students would engage in activities such as simulated pursuits and arrests.
In general, the scope and cost of the project appear to be appropriate. However, at the time this analysis was written, the district had not provided a detailed cost estimate to support its request of almost $1.8 million for utility and site development work. In addition, the district's estimate assumes that the cost of the "mock up" buildings will be almost $1.1 million ($198 per square foot). This amount appears to be excessive for buildings that, according to the district, will not have heating or air conditioning and will have limited plumbing, electrical, and architectural features. We therefore withhold recommendation on the budget request pending discussions with the district and the Chancellor's Office regarding these matters.
Military Department (8940) |
The department's proposed capital outlay program for 1998-99 totals $16.8 million--$9.5 million from the General Fund and $7.3 million from federal funds. This amount includes:
The budget includes $5.7 million from the General Fund and $7.3 million in federal funds to construct an 86,000 gross square foot armory in the Los Angeles area. In the 1995-96 Budget Act, the Legislature appropriated $1 million from the General Fund and $147,000 in federal funds to (1) select a suitable site and (2) prepare preliminary plans. In the 1996-97 Budget Act, the Legislature approved $5.8 million from the General Fund and $140,000 from federal funds to acquire land and prepare working drawings. The 1997-98 Governor's Budget initially proposed funding for construction, but this proposal was withdrawn because of delays in the project related to problems in acquiring a site for the armory.
The Department of General Services, which is managing the project for the Military Department, indicates that a site has been selected in the City of Azusa and that escrow should close in February. Due to the delay in acquiring the site, the preliminary plans for the armory have not been completed. We therefore recommend approval of the construction funding contingent on the completion of preliminary plans that are consistent with the legislatively approved scope and cost.
| Analysis | |
| Crosscutting Issues | |
| Financing Priority Capital Outlay Projects | |
| 1. Achieving a Better Balance for Infrastructure Finance.Recommend that the Legislature dedicate a portion of annual General Fund revenues to a special account to provide a "pay-as-you-go" funding source for capital outlay. Further recommend that in 1998-99 the Legislature substitute General Fund appropriations for the new lease-payment bonds proposed in the budget for specific capital outlay projects. | H-15 |
| Funding Higher Education Capital Outlay | |
| 2. Priorities and Criteria for Funding Higher Education Capital Outlay. Recommend the Legislature adopt specified criteria and priorities as the basis for capital outlay funding decisions for higher education. Recommend the Legislature appropriate funds on a project-by-project basis and not allocate available funds to the three segment on the basis of an arbitrary allocation or formula. | H-18 |
| Assessing Seismic Risk in Higher Education Buildings | |
| 3. The University of California (UC) and California State University (CSU) Should Use the Department of General Services' (DGS) System for Seismic Risk Evaluation. Recommend that prior to funding any further seismic retrofit projects, the Legislature direct UC and CSU | H-27 |
| to evaluate all projects for seismic retrofit using the DGS' seismic risk evaluation method. | |
| Office of Emergency Services | |
| 4. Headquarters and State Operations Center.Recommend a reduction of $2.2 million for working drawings and construction of the headquarters facility because a cost increase for the project is not justified. We also recommend that increased General Fund revenues be used to fund construction from the General Fund instead of lease-payment bonds in order to avoid future debt-service costs. (Increase Item 0690-301-0001 by $23,638,000 and delete $25,841,000 under Item 0690-301-0660.) | H-31 |
| Department of Justice | |
| 5. Crime Laboratory Replacement. Recommend approval of amounts proposed for preliminary plans for the Fresno and Santa Rosa laboratories, but recommend that supplemental report language recognize reductions of $116,000 and $674,000, respectively, for the future costs of working drawings and construction so that these projects will be budgeted consistent with budgets for the other laboratory projects. (Estimated future savings of $790,000.) Also recommend reduction of $871,000 to acquire property for the Fresno laboratory because the department is planning to locate the laboratory on the campus of California State University at Fresno. (Reduce Item 0820-0301-0001 [3] by $871,000.) | H-35 |
| Department of General Services | |
| 6. Seismic Retrofit Projects. Withhold recommendation on $52.6 million to structurally strengthen 18 state buildings pending review of refined scope and cost estimates for each project that will be available in the spring. | H-38 |
| 7. Reappropriation of Funds for Local Assistance. 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. | H-39 |
| Department of Forestry and Fire Protection | |
| 8. Statewide: Construct Telecommunication Towers and Vaults, Phase 2. Recommend the Legislature delete the department's request for $9,148,000 to construct telecommunication towers and vaults because the department has not specified which facilities it proposes to construct or provided cost estimates to justify the amount of this proposal. (Reduce Item 3540-301-0001 [32] by $9,148,000.) | H-40 |
| Department of Fish and Game | |
| 9. Napa-Sonoma Marsh Wildlife Area--Water Control Structures. Recommend deletion of $300,000 appropriation (and corresponding $155,000 reimbursements) because of insufficient documentation of the scope and cost of the project. We also recommend deletion of Budget Bill language exempting the project from the Public Contract Code. (Delete $300,000 from Item 3600-301-0200 [3] and $155,000 reimbursement from Item 3600-301-0200 [5].) | H-42 |
| 10. Fisheries Restoration Project. Recommend deletion of $550,000 (and the associated budget language making these funds available for ten years) because no specific project has been proposed and no construction cost estimate has been submitted to support the proposal. (Delete $550,000 from Item 3600-301-0786 [1].) | H-43 |
| Department of Parks and Recreation | |
| 11. Capital Outlay Projects. Recommend deletion of the Department of Recreation's (DPR's) request for authority to spend $4 million of reimbursement funds on capital outlay projects because specific projects have not been identified. (Delete $4,000,000 from Items 3790-301-0001 [6] and [9].) | H-44 |
| 12. Fresno Area/Southern San Joaquin Valley--Acquisition. Recommend deletion of the $3 million request for acquisition of an off-highway vehicle recreation site in the Fresno area because a specific location has not been identified. (Delete $3,000,000 from Item 3790-301-0263 [6].) | H-45 |
| 13. Oceano Dunes State Vehicular Recreation Area: La Grande Tract--Acquisition. Recommend deletion of the $2.2 million request for an inholding at Oceano Dunes State Vehicular Recreation (SVRA) because it is currently operated and managed as part of Oceano Dunes SVRA by the DPR under terms of an agreement with its owner, San Luis Obispo County. (Delete $2,200,000 from Item 3790-301-0263 [8].) | H-46 |
| Health and Welfare Data Center | |
| 14. Acquisition of Leased Facility. Recommend deletion of $5.2 million from the General Fund because the state first needs a policy regarding whether consolidation of the state's data centers is appropriate. (Delete $5,236,000 under Item 4130-301-0001.) | H-47 |
| Department of Health Services | |
| 15. Richmond Laboratory, Phase II. Recommend a reduction of $7.2 million because the budget proposal is not consistent with the amount for construction previously approved by the Legislature. Also recommend that increased General Fund revenues be used to finance projects instead of lease-payment bonds in order to avoid future debt- service costs. (Approve $108,416,000 in a new Item 4260-301-0001 and delete $115,668,000 under Item 0690-301-0660.) | H-49 |
| Department of Mental Health | |
| 16. Further Expansion at Atascadero. Recommend deletion of $984,000 for preliminary plans because consideration of the addition is premature pending consideration of other options for accommodating growth in the judicially committed caseload. (Delete $984,000 from Item 4440-301-0001 [1].) | H-51 |
| 17. Atascadero, Initial 250-Bed Addition. Withhold recommendation on $33 million to construct the addition, pending review of the consultant's study on housing sexually violent predators and a decision regarding long-term housing options for Judicially Committed/Penal Code patients. If the Legislature decides to provide the construction funds in 1998-99, we recommend increased General Fund revenues be used to fund construction instead of lease-payment bonds in order to avoid future debt-service costs. | H-54 |
| Department of Corrections
Prison System Expansion |
|
| 18. Prison System Expansion. The administration's plan for accommodating inmate population growth relies solely on expanding the prison system. This approach is similar to past proposals that the Legislature has rejected. We continue to believe that a solution to the state's inmate housing problem must be balanced, including both (1) development of additional capacity and (2) policy and program changes to reduce the growth rate in the inmate population. If the Legislature wishes to expand the use of leased prison facilities, as the administration is proposing, it should consider both the short- and long-term benefits of this approach to housing the state's inmates. The department should not advertise for new leasing contracts until the Legislature, through the budget process, determines how this proposal fits with its overall plan for addressing the inmate housing gap. Proposals for funding new state prisons should be considered as part of the budget process. | H-56 |
| Other Issues | |
| 19. Previously Funded Projects. We recommend approval of $18.2 million for 21 projects, contingent on completion of preliminary plans that are consistent with the scope and cost as previously approved by the Legislature. | H-63 |
| 20. Minor Capital Outlay. We recommend approval of $2.5 million, a reduction of $3 million for minor capital outlay because the department cannot undertake and complete all of these projects in the budget year. (Reduce Item 5240-301-0001 [24] by $3,000,000.) | H-64 |
| Department of the Youth Authority | |
| 21. Master Key System. Recommend approval of $1.1 million for working drawings and construction pending completion of preliminary plans that are consistent with the scope and cost as previously approved by the Legislature. | H-67 |
| 22. Statewide, Personal Alarm Systems.Recommend approval of $609,000 for working drawings pending completion of preliminary plans and receipt of construction bids for a similar alarm system project. | H-67 |
| University of California | |
| 23. Projects Meeting Statewide Criteria. Recommend the Legislature approve $65.7 million for 13 projects that meet the criteria for the priorities we have identified for funding higher education capital outlay. Further recommend the Legislature approve $2.2 million from existing bond funds and $63.5 million from the proposed 1998 bond measure. | H-68 |
| 24. Projects Needing Reevaluation. Recommend the Legislature delete $41.7 million for nine projects related to seismic retrofitting of University of California (UC) buildings because (1) the seismic risk of these buildings needs to be reassessed using the Department of General Services' method and (2) the projects need to be rescoped to include seismic retrofit work only. (Reduce Item 6440-301-0574 by $2,149,000 and delete subitems [1], [5], and [7]; reduce Item 6440-302-0574 by $38,421,000 and delete subitems [3], [4], [6], and [7]; and delete Item 6440-301-0658 for $1,084,000.) | H-70 |
| 25. Projects Not Meeting Funding Criteria.Recommend the Legislature delete $43.7 million for four projects because they do not meet the priority criteria. (Delete Item 6440-301-0574 [2] for $21,028,000, Item 6440-301-0574 [8] for $935,000, Item 6440-301-0574 [9] for $347,000, and Item 6440-301-0574 [10] for $21,362,000.) | H-73 |
| 26. Project at University of California, San Francisco (UCSF) Mission Bay Research Campus Should Not Be Funded. Recommend the Legislature delete $21.4 million for working drawings and construction at Mission Bay of a replacement facility for UC Hall located on the UCSF campus. Further recommend the Legislature clearly delineate that no state funds will be provided for development of the planned research campus at Mission Bay. | H-75 |
| California State University | |
| 27. Projects Meeting Statewide Criteria.Recommend that the Legislature approve $137 million for 20 projects in the California State University (CSU) capital outlay proposal. Recommend further that the Legislature fund ten of these projects (costing $39.5 million) from existing bonds, with the remaining $97.8 million from the proposed 1998 bond measure. | H-80 |
| 28. Reevaluate Seismic Retrofit Projects.Recommend that the Legislature delete $7.7 million for two projects related to seismic retrofitting of CSU buildings because (a) the seismic risk of these buildings needs to be reevaluated using the Department of General Services' assessment method and (b) the project scopes need to be reevaluated to limit the work to seismic improvements only. (Delete Item 6610-302-0574 [1] for $3,743,000 and Item 6610-302-0574 [8] for $3,923,000.) | H-82 |
| 29. Reevaluate Minor Projects and Seismic Studies.Withhold recommendation on $14.2 million for minor capital outlay and $200,000 for statewide seismic studies until the CSU reevaluates these proposals in accordance with the statewide priorities and criteria. | H-84 |
| 30. Delete San Jose Business Building Project.Recommend the Legislature delete the proposed $5.1 million to renovate the Business Building at the San Jose campus because the project does not meet the proposed statewide priority criteria for building renovation and the CSU has not substantiated the need to extensively renovate the building. (Delete Item 6601-302-0574 [20] for $5,135,000.) | H-84 |
| 31. Defer Decision on Moving Ventura
Off-Campus Center to the Vacated Camarillo
State Hospital Site. Recommend that the Legislature
delete the proposed $11.3 million for renovation of
the vacated Camarillo State Hospital for the CSU
Northridge, Ventura Off-Campus Center because
more information is needed to determine the
long-term cost implications of this proposal. Further
recommend the Legislature adopt supplemental
report language directing CSU to complete studies
necessary to evaluate all options for locating the off-
campus center. (Delete Item 6610-301-0660 [1], a reduction of $11,303,000.) |
H-85 |
| California Community Colleges | |
| 32. Five-Year Capital Outlay Plan. The community colleges' five-year capital outlay plan is a compilation of each district's five-year plan. The Legislature still lacks a comprehensive five-year plan reflecting the capital outlay needs and priorities for the community college system. The Chancellor's Office has committed to provide such a plan in 1998. | H-90 |
| 33. Districts Should Share in Project Costs.Recommend that, beginning in 1999-00, the Legislature require community college districts (CCDs) to provide matching funds of up to 50 percent for state-funded projects. | H-91 |
| 34. Projects Meeting Statewide Criteria. A total of 34 projects, with a budget-year cost of $100.5 million, meet one of the priority criteria we have identified for funding higher education capital outlay. Recommend deletion of seven projects and $58 million that do not meet any of our criteria for funding. | H-94 |
| 35. Using Available Bond Funds. Recommend approval of 16 of the highest-priority community college projects using currently authorized bonds that are available for appropriation. | H-95 |
| 36. Projects That Do Not Meet Criteria.Recommend deletion of $58 million for seven projects that do not meet any of the priority criteria we have identified for funding higher education capital outlay. | H-95 |
| 37. Previously Funded Projects. Recommend approval of $56.2 million for 11 projects, contingent on completion of preliminary plans that are consistent with the cost and scope as previously approved by the Legislature. | H-99 |
| 38. Citrus CCD, Citrus College--Library Addition and Remodel. We recommend approval of $545,000, a reduction of $26,000, because the proposed building cost for the project exceeds normal community college cost guidelines. Estimated future savings is $431,000. (Reduce Item 6870-301-0658 [3] by $26,000.) | H-99 |
| 39. Santa Monica CCD, Santa Monica College--Replace Science Building. Recommend approval of $2,904,000, a reduction of $741,000 to equip a new science building because the amount proposed exceeds community college cost guidelines for science equipment plus the proposed cost of laboratory computers for the building. (Reduce Item 6870-301-0658 [6] by $741,000.) | H-100 |
| 40. Sonoma County Junior College District, Criminal Justice Training Center, Facilities Phase 1. Withhold recommendation on $838,000 for preliminary plans and working drawings pending review of the district's cost estimate for site development and for cost of demonstration areas. | H-102 |
| Military Department | |
| 41. Los Angeles Armory. Recommend approval of $13 million to construct the armory contingent on completion of preliminary plans that are consistent with the scope and cost as previously approved by the Legislature. | H-103 |