Legislative Analyst's Office Analysis of the 2003-04 Budget Bill

Department of General Services (1760)

The Department of General Services (DGS) is responsible for providing a broad range of support services to state departments and performing management and oversight activities related to these services. It provides these services through three programs: statewide support, building regulation, and real estate services.

The Governor's budget proposes total expenditures of $837 million from various funds (including $3 million from the General Fund) to support the DGS activities in 2003-04. This is a General Fund decrease of $14 million, or 82 percent, below estimated current-year expenditures due to a shift of costs to the Service Revolving Fund. Expenditures for building regulation and statewide support services are $396 million in the budget year, which represents a decrease of $22 million, or almost 5 percent, below estimated current-year expenditures.

Withhold Recommendation on Employee Parking Lot

We withhold recommendation on the expenditure authority increase of $233,000 for the lease costs of employee parking lots pending the outcome of the administration's request for a federal waiver of leasing highway rights-of-way at fair market value.

The budget proposes an increase in expenditure authority of $233,000 for the Motor Vehicle Parking Fund (MVPF). The purpose of the request is to (1) lease a parking lot for the tenants of the East End Project in downtown Sacramento and (2) pay for proposed increases in lease costs of some state parking lots.

Parking Lots Leased From the Department of Transportation (Caltrans). The DGS leases several parking lots on highway rights-of-way owned by Caltrans. Based on federal regulations, Caltrans must lease these lands at fair market value. According to the Department of Finance (DOF), DGS has not been leasing these lands at fair market value and, therefore, the state may be in violation of federal regulations.

Administration Requesting Waiver of Federal Regulations. According to DOF, Caltrans is requesting a waiver of the fair market value lease requirement. If the federal government approves the waiver, the need for an expenditure authority increase would be reduced. For this reason, we withhold our recommendation of this request, pending the outcome of the administration's waiver request.