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Analysis of the 2004-05 Budget BillLegislative Analyst's Office
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The California Department of Corrections (CDC) operates 32 prisons and 38 fire and conservation camps throughout the state. The prison system also includes 16 community correctional facilities (it is planned that this number will be reduced to 10 by July 2004) operated by private firms, cities, and counties under contract. CDC's total inmate population increased by approximately 1,000 between November 2002 and November 2003. The number of inmates housed in community correctional facilities declined by about 1,300 in the same period. The budget includes requests totaling $18.8 million from the General Fund. Proposed expenditures include:
In the 2003 California Five Year Infrastructure Plan, the department identified a need for $1.1 billion of capital outlay between 2003-04 and 2007-08 (see Figure 1). Of this amount, $282 million was approved in the 2003-04 Budget Act and $18.8 million is proposed in the 2004-05 Governor's Budget.
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Department of
Corrections |
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(In Thousands) |
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2003-04 |
2004-05 |
2005-06 |
2006-07 |
2007-08 |
Total |
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Needs
Identified by Department of Corrections |
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Critical
infrastructure |
$278,769 |
$99,998 |
$70,719 |
$6,133 |
$35,452 |
$491,071 |
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Enrollment/caseload/
population |
36,395 |
329,000 |
1,091 |
7,909 |
— |
374,695 |
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Facility/infrastructure
modernization |
16,719 |
50,766 |
37,393 |
54,118 |
6,765 |
165,761 |
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Program
delivery changes |
22,680 |
8,251 |
7,434 |
— |
4,034 |
42,399 |
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Workload
space |
556 |
8,066 |
12,483 |
13,930 |
22,158 |
57,193 |
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Totals |
$355,419 |
$496,081 |
$129,120 |
$82,000 |
$68,409 |
$1,131,119 |
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Projects
Scheduled for Funding |
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Critical
infrastructure |
$245,618 |
$36,926 |
$83,411 |
$22,152 |
$6,000 |
$394,107 |
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Enrollment/caseload/
population |
34,893 |
330,302 |
— |
— |
— |
365,195 |
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Facility/infrastructure
modernization |
1,526 |
12,039 |
32,680 |
30,682 |
47,636 |
124,563 |
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Program
delivery changes |
— |
8,365 |
290 |
7,434 |
— |
16,089 |
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Totals |
$282,037 |
$387,632 |
$117,672 |
$71,772 |
$71,818 |
$930,931 |
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General
Fund |
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$314,709 |
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General
obligation bonds |
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7,551 |
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Lease-revenue
bonds |
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608,671 |
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Approved
in 2003-04 and Proposed in 2004-05 |
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Totals |
$285,838 |
$18,840 |
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We recommend the Legislature approve $7.3 million for working drawings and construction of three projects, contingent on receipt and review of substantially complete preliminary plans, cost estimates and schedules to verify the projects are consistent with prior legislative approval.
The Governor's budget includes $7.3 million for working drawings and/or construction of three projects for which the Legislature has approved preliminary plans funds in prior years. The projects and funding requested in the budget are shown in Figure 2. We recommend the Legislature approve the requested amounts subject to verification that the projects meet prior legislative intent as to scope and cost. We recommend the department submit substantially complete preliminary plans, cost estimates and current schedules for these projects for review prior to budget hearings.
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Department of
Corrections |
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(In Thousands) |
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Project
Description |
Phasea |
Budget
Amount |
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California
Institution for Men-East, Chino: electrified fence |
C |
$5,417 |
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California
Institution for Men, Chino: Cell security lighting/RC central
facility-phase II |
C |
669 |
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Chuckawalla
Valley State Prison, Blythe: heating, ventilation, and air conditioning
system |
WC |
1,234 |
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Total |
$7,320 |
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a
P = preliminary plans; W = working drawings; C = construction |
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We recommend the Legislature delete budget bill language that allows the department to use funds appropriated for budget packages and advance planning—for preparation of project preliminary plans. (Amend Provision 1 of Item 5240-301-0001.)
The budget includes $1 million for working drawings and construction of a 19 station hemodialysis clinic located at the California Substance Abuse Treatment Facility and State Prison at Corcoran. While we have no issues with the merits of this project, we are concerned about the use of planning monies to fund preliminary plans on future projects.
Item 5240-301-0746(1) of the 2003-04 Budget Act appropriated $1 million to the department for "Statewide: Budget Packages and Advance Planning." Provision 1 of that item provides that these funds may be used for "….budget package development, environmental services, architectural programming, engineering assessments, schematic design, and preliminary plans." This same provision has been included in prior budget acts and is included in the 2004-05 Budge Act.
With one exception, all of the services listed in Provision 1 may be needed in order to provide the administration and the Legislature with sufficient information to make informed decisions about funding a project. The exception involves preliminary plans. Funding the preparation of preliminary plans constitutes a commitment to proceed with a project. Permitting these planning funds to be used for preparation of preliminary plans allows the administration to make a commitment to a project without it first being subjected to legislative consideration. It puts the Legislature in the position—as with this hemodialysis facility at Corcoran—of being asked to fund working drawings and construction of a facility that it has not yet had an opportunity to review.
In order to maintain the Legislature's options when considering capital outlay proposals, we recommend that Provision 1 of Item 5240-301-0001 of the budget bill be amended to delete authorization for funds appropriated under Schedule (1) to be expended for preparation of preliminary plans.
Recommend the Legislature adopt supplemental report language directing the department to report at budget hearings on the reason for the large number of capital outlay reappropriations that have been required in recent years.
The CDC's annual capital outlay budget has averaged around $140 million over the past five years, ranging from a high of nearly $300 million to as low as $22 million. The current budget proposes a further decline in capital spending to its lowest point in the past five years ($18.8 million). To develop and administer its capital outlay program, the department employs a staff of about 260. In addition, the department has retained a private construction management firm for many years to provide assistance in such areas as program development, consultant selection, contract administration, design management, quality control, design reviews, bid and construction phase services. Since July 2000, this construction management firm has been awarded about $14 million in contract work and it has about five technical staff dedicated full-time to CDC projects.
In light of what appears to be substantial capital outlay resources for design and project management, we are concerned with the ability of CDC to complete its projects in a timely manner. In the last five years there have been 111 capital outlay reappropriations for the department's projects, a number of them being projects that have been reappropriated more than once. This is evidence that projects are not proceeding on schedule and is symptomatic of problems in the capital outlay program management. We believe this problem is of sufficient importance that the department should report at budget hearings and explain why such a large number of reappropriations have been needed, what improvements to its management processes and structure may be needed, and its plans for implementing those improvements.