Legislative Analyst's Office Analysis of the 2002-03 Budget Bill

Department of Parks and Recreation (3790)

The budget proposes $50 million for capital outlay for the Department of Parks and Recreation (DPR). This amount includes $39.2 million from the Safe Neighborhood Parks, Clean Water, Clean Air and Coastal Protection Bond Act of 2000; $6.4 million from the Off-Highway Vehicle (OHV) Trust Fund; $2.5 million from the Habitat Conservation Fund; $248,000 from the Environmental License Plate Fund; and $1.5 million in federal funds.

Projects Without Completed Preliminary Plans

We withhold recommendation on $12.4 million for seven projects because preliminary plans are not complete. (Withhold recommendation on $1.9 million from Item 3790-301-0005 [1], $307,000 from Item 3790-301-0005 [4], $1.7 million from Item 3790-301-0005 [5], $2.4 million from Item 3790-301-0005 [6], $3.4 million from Item 3790-301-0005 [12], $2.5 million from Item 3790-301-0005 [19], and $150,000 from Item 3790-301-0005 [22]. )

Preliminary plans for the seven projects shown in Figure 1 are not scheduled to be completed until June 2002 at the earliest. We generally recommend that the Legislature not approve funds for working drawings and construction of projects until preliminary plans are available for review. These plans permit the Legislature to verify that projects are within scope and budget.

If preliminary plans, or substantially completed preliminary plans and an updated cost estimate are provided during budget hearings, and they are consistent with legislatively recognized scope and cost, these projects would warrant legislative approval.

No Preliminary Plans for Border Field State Park Project

We withhold recommendation on $6.4 million for construction for the Sediment Basins and Road Realignment project at Border Field State

Park because the preliminary plans have not been approved. (Withhold recommendation on Item 3790-301-0005 [23] and Item 3790-301-0005 [29].)

The budget proposes $6.4 million for construction for Border Field State Park, Sediment Basins and Road Realignment. We understand that preliminary plans and working drawings for this project were financed by a nonprofit organization using a grant from the State Coastal Conservancy. However, the project has not been previously approved by the Legislature. Furthermore, the State Public Works Board (SPWB) apparently has not reviewed the project because budget bill language (provision 2 under Item 3790-301-0005) specifies that the SPWB must approve the preliminary plans and working drawing before the requested funds can be spent. The Legislature should also have this information before approving construction funds for this project. We are also concerned about the proposal to provide construction funds for this project without any engineering studies or plans having been provided to verify the project's feasibility and provide a basis for the funding requested.

Accordingly, we withhold recommendation on this project pending receipt of information that defines the scope of the project and provides a basis for verifying the need and cost.

DPR Support Budget Does Not Appear to Accurately Offset Capital Outlay Project Management Costs

We recommend that the Department of Parks and Recreation report at hearings on how it calculates its project support and project management costs for its capital outlay program and provide a more accurate accounting of these costs.

Beginning with the 1999-00 Budget Act, DPR's support budget has contained budget bill language stating the Legislature's intent that the salaries, wages, operating expenses, and positions associated with implementing specific DPR capital outlay projects be funded through capital outlay appropriations and reflected in the operating budget as an offsetting payable from the capital outlay appropriation (provision 2 under Item 3790-001-0001). Currently, the support budget for DPR shows the offset for DPR staff costs for its capital outlay projects, but not newly authorized DPR project management costs.

Current law authorizes the Department of Finance (DOF) to delegate to DPR the authority to exercise the same responsibilities granted to the Division of the State Architect and Real Estate Services Division in the Department of General Services to plan, design, construct, and administer contracts and professional services for legislatively approved capital outlay projects. Based on DPR's assertion that it possessed the necessary expertise and personnel to develop and manage its own capital outlay projects, DOF and DPR signed a memorandum of understanding (MOU) in July 2001 to authorize DPR to exercise this project management authority. The MOU is to remain in effect until January 1, 2005, or until it is modified or terminated by DOF.

The DPR’s support budget, as shown in the 2002-03 Governor’s Budget, has an offsetting payable from its capital outlay budget of $1.7 million. This is the same amount identified for 2001-02. Given the newly delegated responsibility for project development and management, DPR’s offsetting payable should have increased in 2001-02 and 2002-03—providing an additional reduction to DPR’s General Fund support appropriation. Consequently, we recommend that DPR report at budget hearings on how it calculates its project support and project management costs for its capital outlay program and provide a more accurate accounting of these costs for both 2001-02 and 2002-03.