Legislative Analyst's Office Analysis of the 2001-02 Budget Bill

Department of Transportation (2660)

The Department of Transportation (Caltrans) occupies 458 facilities, including 404 maintenance stations, 11 traffic management centers,
10 material laboratories, 22 equipment shops, and 11 general offices. The budget proposes $150.9 million from the State Highway Account of the State Transportation Fund for the following projects:

• Eureka Office Building: seismic retrofit, $5.1 million.
• Sacramento headquarters office: seismic retrofit, $8.9 million.
• Los Angeles office building: replacement, $136.7 million.
• Statewide planning, $102,000.

Preliminary Plans Not Complete

We withhold recommendation for seismic retrofit work for the Eureka office building ($5.1 million) and the Sacramento headquarters office ($8.9 million) because preliminary plans have not been completed. (Withhold recommendation on Items 2660-311-0042 [2] and [3].)

The department advises that preliminary plans for the Eureka office building project are not scheduled for completion until February 2001 and for the Sacramento headquarters office until March 2001. We recommend the Legislature not fund working drawings and/or construction for projects unless preliminary plans are complete and a cost estimate has been prepared to verify the project is within the scope and budget approved by the Legislature. Accordingly, we withhold recommendation on these projects pending completion of preliminary plans. If preliminary plans are completed in time to review prior to the conclusion of budget hearings, the projects may warrant legislative consideration.

Los Angeles Office Building: Replacement

We recommend deletion of $136.7 million for the new District 7 headquarters building in Los Angeles because preliminary plans are not complete and there are uncertainties about the project that need to be resolved before proceeding further. (Delete $136.7 million in Item
2660-311-0042 [4].)

The District 7 headquarters is currently located in a state-owned building at 120 South Spring Street in Los Angeles. Information previously submitted by Caltrans indicated there are space, functional, fire and life safety, and handicapped accessibility deficiencies in the building. In recognition of these problems the Legislature appropriated $4.2 million in the 2000-01 Budget Act to develop preliminary plans for a 603,500 gross square feet replacement building on state-owned property adjacent to the existing building. The act also included language that authorized, but did not require, the building to be procured by the design-build delivery method.

The Governor's budget includes $137 million for working drawings and construction for the Los Angeles project. The Department of General Services (DGS) is proceeding using the design-build process and reported in December that the preliminary plan phase of the project (which in the design-build process consists of preparing a "design-build solicitation package") was 15 percent complete.

The preliminary plans—or solicitation package—are not completed and the Legislature has no information to determine if the project is within the legislatively approved scope and budget. For instance, there are several uncertainties about the project which should be resolved before proceeding.

• The DGS indicates that a land exchange agreement is being developed with the City of Los Angeles that would exchange existing Caltrans facilities for land which the city is purchasing on 1^st Street. The Legislature has no information about this proposed agreement.
• The DGS advises that the Los Angeles City transportation department has requested space in the new building. The Legislature has no information about the amount of space being proposed for the city department, under what terms and conditions it would be provided, and how a building that was proposed to the Legislature as being big enough only for Caltrans' needs can now accommodate this nonstate activity.
• The DGS advises that Caltrans plans to seek a budget augmentation for public art, but there is no information about the nature and estimated cost of the art, or an explanation of why the art cannot be provided within the project budget approved by the Legislature.

We recommend the Legislature not approve further funding until these issues are resolved.