The budget includes $7.3 million for the Department of General Services (DGS) capital outlay program. This amount includes $818,000 in general obligation bonds for continued management of projects to improve the earthquake safety of state buildings; $2 million from the Petroleum Violation Escrow Account for alternative fuel infrastructure for state automotive fleets in Sacramento, Oakland, and San Francisco; and $4.4 million from the General Fund for:
We recommend deleting $694,000 in funding for four building renovation studies because management of these capital assets is a fundamental responsibility of the department and should be funded from the department's support appropriation. (Delete $244,000 from Item 1760-301-0001 [1], delete $150,000 from Item 1760-301-0001 [4], delete $200,000 from Item 1760-301-0001 [5], and delete $100,000 from Item 1760-301-0001 [6].)
The budget proposes four building renovation studies:
The study of the Central Plant is intended to (1) compare current capacity with future needs to generate and distribute steam and chilled water to state buildings in downtown Sacramento and (2) prepare a master plan for equipment upgrading and replacement for the next 30 years. The Resources Building is 35 years old and the study will survey and make recommendations for upgrade of building fire and life safety, accessibility, waterproofing, air conditioning, plumbing, and electrical systems in order to extend the service life of the building another 30 to 40 years. The study of the 50-year old Education Building and 45-year old Employment Development Department buildings will be similar.
These studies will determine whether or not a capital improvement project is needed and the extent of possible improvements. Development of the department's capital outlay program is the basic responsibility of the department and the activities should be funded on a priority basis through the department's support budget.
Furthermore, these studies should be funded through the Service Revolving Fund rather than the General Fund. The revolving fund is the repository for all rental and property management charges to departments (including those supported by special funds) that rent state buildingsincluding those the department plans to study. Thus, this is the appropriate fund source for these studies.
We recommend the Legislature delete $1.4 million from the General Fund to renovate the Bonderson Building in Sacramento because of the lack of information to substantiate the need or cost of the project. (Delete $1,400,000 from Item 1760-301-0001 [7].)
This $1.4 million General Fund proposal would fund preliminary plans and working drawings for renovation of the Bonderson Building in Sacramento. Estimated future cost is $13.6 million for construction. No information has been submitted to justify the scope and cost of the project. The department indicates the proposal is based on a study performed by a private architectural engineering firm in February 1999. That study, however, recommended additional studies to further define the scope of the renovation, including such work as analysis of alternative exterior cladding systems, analysis of reengineering existing air handlers, and green building opportunities. The department proposes to undertake a further study at a cost of $91,000 from the Service Revolving Fund. We recommend deletion of funding for preliminary plans and working drawings for the project until all needed studies have been completed and complete information justifying the scope and cost of the project has been submitted to the Legislature for consideration.
The department requests $96,000 from the General Fund to renovate vacant space in the Van Nuys State Building to suit a future state agency tenant. We recommend the Legislature fund this work from the Service Revolving Fund rather than the General Fund, and adopt budget bill language specifying funds are not available until the department receives a firm commitment for occupancy. (Delete $96,000 from Item 1760-301-0001 [8] and add expenditure authority under new Item 1760-301-0666 in the same amount.)
The department has been unable to fill 15,000 square feet of vacant space in the Van Nuys State Building since 1996. According to the department, this is the largest single vacancy in state buildings and results in a loss of $277,000 annually in rent. The budget requests $96,000 from the General Fund for preliminary plans and working drawings for tenant improvements for the space. Future cost would be $496,000 for construction, for a total project cost of $592,000. Tenant improvements would include new roofing and cladding system, air conditioning improvements, electrical system upgrading, additional security control, telecommunication upgrades, and fire and life safety corrections.
The DGS indicates that eight different departments (Employment Development, Health Services, Rehabilitation, Consumer Affairs, Industrial Relations, Social Services, Housing and Community Development, and the California Environmental Protection Agency) located in leased space in private buildings in Burbank, Canoga Park, Glendale, Granada Hills, and Woodland Hills are potential tenants for the Van Nuys State Building. The DGS also indicates that it would substantially facilitate moving one or more of these eight departments into the Van Nuys building if DGS had tenant improvement funding appropriated and available for immediate expenditure.
These improvements may be necessary if a tenant is found but the General Fund should not have to pay the improvement cost. These improvements all relate to the maintenance and management of the building and are properly funded from the Service Revolving Fund rather than the General Fund. In addition, the department should not spend these funds until DGS obtains a state department's firm commitment to occupy the vacant space. Consequently, we recommend the Legislature fund this request from the Service Revolving Fund and adopt budget bill language specifying that the funds are not available until receiving a firm commitment for occupancy.