The Department of Transportation (Caltrans) occupies 453 facilities, including 397 maintenance stations, 11 traffic management centers, 10 material laboratories, 22 equipment shops, and 13 general offices. The budget proposes $8,937,000 from the State Highway Account of the State Transportation Fund for five office projects and statewide studies, preplanning, and budget packages.
We recommend deletion of $1.9 million from the State Highway Account in the State Transportation Fund for working drawings for this project because the scope of the project has increased by over 30 percent and preliminary plans cannot be finished until mid-to-late in the budget year. Further, the department should provide the Legislature justification for the proposed increase and the impact of these increases on the project cost. (Delete $1,931,000 from Item 2660-311-0042 .)
The budget includes $1,931,000 from the State Highway Account in the State Transportation Fund to develop working drawings for a new office building for Caltrans District 11 in San Diego. The 1999-00 Budget Act appropriated $1,667,000 for preliminary plans for a 200,000 gross square feet (gsf) replacement office building for 704 employees and a 634-space parking lot for District 11. The total estimated cost of the project was $45,184,000. Caltrans now indicates that because of increased workload and staff, the building must accommodate 956 employees (a 36 percent increase) and provide an 815-space parking lot (a 29 percent increase). The department, however, has not provided any information to substantiate such a large increase in less than one year. In addition, no information has been submitted identifying the required increase in the size of the building or the impact on the project cost. Clearly, these changes will significantly increase the cost of the project. The department should provide justification for the proposed increases and a revised budget for legislative consideration prior to budget hearings.
In addition, preliminary plans for this project have not yet started and completion of the plans cannot occur until mid-to-late in the budget year. Consequently, funds for working drawings do not need to be appropriated for 2000-01. Therefore, we recommend that the Legislature delete the $1,931,000 request for working drawings. Adoption of this recommendation would make project funding more consistent with the revised scheduled.
We withhold recommendation on $406,000 from the State Highway Account for construction for seismic improvements to the Redding building until preliminary plans and a cost estimate are available to the Legislature and it can be verified the project is within the previously approved scope and budget.
The budget includes $406,000 from the State Highway Account to construct seismic improvements to the Caltrans' office building in Redding, Shasta County. Preliminary plans and working drawings for this project were funded in the 1999-00 Budget Act. When these funds were approved, the preliminary plans were to be completed in February 2000 and the working drawings in June 2000. However, the latest project quarterly report (September 1999) received December 1999 from the Department of General Services (DGS) does not provide schedule information for the preliminary plans and working drawings for this project. With no indication that DGS has started work on the preliminary plans and the current status of the work, there is a question whether the preliminary plans will be completed in time for the Legislature to consider this request for construction funding during current budget hearings.
We have previously recommended the Legislature not fund subsequent phases of project work until preliminary plans are completed and it can be verified that a project is within scope and budget. We continue to recommend this policy and accordingly withhold recommendation on this project until completed preliminary plans and a cost estimate are available for review.
We recommend the Legislature delete the $4.4 million from the State Highway Account for preliminary plans to construct a new office building in Los Angeles because Caltrans has not shown that the proposal is cost-effective compared to renovating the existing building. (Delete $4,465,000 under Item 2660-311-0042 .)
The Governor's budget requests $4.5 million from the State Highway Account to develop preliminary plans for a new 603,500 gsf office building on state-owned property in Los Angeles to replace the existing Caltrans' District 7 headquarters office building. The total project cost is $154 million.
The District 7 headquarters is currently located in a state-owned building at 120 South Spring Street in Los Angeles. The building was constructed in 1941 and an annex added in 1951. Documentation submitted by Caltrans indicates there are functional fire and life safety and handicapped accessibility deficiencies in the building. The building was seismically strengthened in 1994 following the Northridge earthquake.
Over the past several years, there have been several estimates of the costs to renovate this building:
Also in March of 1999, DGS recommended that Caltrans retain DGS to do an in-depth infrastructure study that would include updated costs. The DGS was then retained by Caltrans to prepare an "economic analysis" of alternatives, which was completed in December 1999. The two alternatives DGS considered in this economic analysis were (1) leasing space in a privately owned building and (2) build-to-suit projects financed by a lease-with-purchase option arrangement with a private developer, lease-payment bonds, or pay-as-you-go funding. This economic analysis, however, did not consider renovation as an alternative.
Recently, Caltrans has indicated that total estimated renovation costs are about $91 million. The department, however, has not provided any information to substantiate this conclusion. In addition, Caltrans does not indicate what would be done with the existing building if a new building is constructed, and no funds are included in the proposal for demolition of the existing building.
As discussed above, there have been a wide array of estimates of the costs to renovate this building--none of which are verifiable. Thus, at this time, the Legislature does not have the information it needs regarding (1) the cost to renovate the existing building; (2) the total cost to construct a new building, including action on the existing building; and (3) an economic analysis that includes renovation of the existing building. Thus, the Legislature does not have the information it needs to consider a proposal for construction of a project costing over $150 million. Consequently, we recommend the Legislature delete the $4,465,000 requested for preliminary plans under Item 2660-311-0042 (6). A proposal for renovation of the existing building or construction of a new building accompanied by the necessary information may warrant legislative consideration.