Analysis of the 2005-06 Budget Bill Legislative Analyst's Office February 2005

Department of Corrections (5240)

The California Department of Corrections (CDC) operates 32 prisons and 40 fire and conservation camps comprising about 3,000 structures having 37 million gross square feet of building space. The CDC also contracts for a variety of community-based services including 12 community correctional facilities and various community reentry programs. The department completed construction of one new prison in 2004—California State Prison-Kern County at Delano II—which is scheduled for occupancy in mid-2005. The CDC's total inmate population increased by about 2,000—from 162,000 in December 2003 to 164,000 in December 2004.

For 2005-06, the budget requests $47.2 million for CDC's capital outlay program, including $18.3 million from the General Fund and $28.9 million from lease-revenue bonds. The proposed funding would provide:

• $36.7 million to continue work on seven projects.
• $4.5 million to begin design of seven new projects.
• $5 million for minor projects and $1 million for budget planning.

Projects at Centinela State Prison Should Be Combined

We recommend the Legislature defer action on two projects proposed for improving the wastewater treatment plant at Centinela State Prison pending the department's revised budget proposal for a combined project that reflects the savings that can be achieved in design, bidding, and construction through consolidation of the two projects.

The budget proposes two projects to correct deficiencies at the Centinela State Prison's wastewater treatment plant.

• $207,000 from the General Fund to develop preliminary plans for a new headworks (intake structure) for the plant, with an estimated future cost for working drawings and construction of almost $3 million.
• $275,000 from the General Fund to develop preliminary plans for various other improvements at the plant, with an estimated future cost for working drawings and construction of about $2.8 million.

Our review of the projects' schedules shows that the two projects are planned to proceed concurrently and would take almost identical time for construction. Discussions with the department further indicate that combining the two projects could achieve some savings. In fact, CDC engineers estimate that about 5 percent of the total cost of the projects could be saved by combining the two projects for design and construction purposes. This could result in cost savings of $300,000 or more. Savings are expected to come in areas such as field investigations, engineering, construction mobilization, and construction inspection.

In order to realize these estimated savings, we recommend the Legislature defer action on the two projects pending the department's revised budget proposal for a combined project that reflects the lower cost resulting from the consolidation of the two projects.

Projects Recommended for Approval Contingent on Review of Preliminary Plans

We recommend the Legislature approve $36.7 million for working drawings and construction of seven 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 $36.7 million for working drawings and/or construction of seven projects for which funds have been appropriated in prior years for development of preliminary plans and/or working drawings. These projects are summarized in Figure 1. We recommend, in general, that the Legislature not approve additional funds for projects until substantially complete preliminary plans and cost estimates have been submitted to the Legislature and reviewed in order to verify the projects are consistent with the approved scope and within budget. Accordingly, we recommend the Legislature not approve funding for these seven projects unless substantially complete preliminary plans and cost estimates are submitted to the Legislature in time for review before budget hearings.

Bond Funds Should Be Used Instead of General Fund

There is about $2.5 million in uncommitted prison construction bond funds that can be used to fund capital projects in 2005-06. We recommend these funds be used in order to free up General Fund money in the budget. (Delete $1,308,000 from Item 5240-301-0001 [11] and add $1,308,000 from a new Item 5240-301-747 [1]; and delete $925,000 from Item 5240-301-0001 [14] and add $925,000 from a new Item 5240-301-751 [1].)

Information from the Department of Finance on the condition of prison bond funds shows that there are:

• Almost $1.6 million of uncommitted funds remaining in the 1988 Prison Construction Bond Fund.
• Almost $955,000 of uncommitted funds remaining in the 1990 Prison Construction Bond Fund.

Our review also shows that no projects have been planned for these bond funds. As such, they are available to fund some of the capital outlay work proposed in the budget. For 2005-06, the department is requesting (1) $1.3 million from the General Fund to construct a new prescreening facility at the wastewater treatment plant at Wasco State Prison and (2) $925,000 to install a bar screen to remove bulky debris for the wastewater treatment of Pleasant Valley State Prison in Coalinga. Our review shows that these projects are appropriate uses of the remaining bond funds. Accordingly, we recommend that the Wasco State Prison project be funded from the 1988 bond and the Pleasant Valley State Prison project be funded from the 1990 bond. Doing so will reduce the funding required from the General Fund.