Recognizing the need for planning for future infrastructure investment, the Legislature and the Administration agreed to a process that will result in a five-year capital outlay plan beginning with the Budget Act of 2002. With the enactment of Chapter 606, Statutes of 1999 (AB 1473), California will identify, for the first time, long-term needs for new facilities, as well as replacement of aging infrastructure. In addition, the Administration will analyze all funding sources and propose a plan to fund the most critical of those needs.
Departments are currently identifying their program needs based on a multi-year view of their missions and objectives, and developing plans to address the related capital outlay needs over five years.
The Governor’s 2001-02 Budget proposes $1.9 billion for the capital outlay program, not including funding for transportation, K-12 schools, and State conservancies (the Transportation, Education, and Resource sections describe the funding provided for those programs). Of this amount, $1.4 billion is for continuing phases of previously approved projects and $445.9 million is for new projects. Funding for this program comes from a number of sources including the General Fund, various special funds, general obligation (GO) bonds, lease revenue bonds, and federal funds.
Project funding requests are categorized as follows, and only the highest priority requests are proposed in the Budget:
Continuing Projects—Continuing phases to complete previously approved projects.
Higher Education—Capital outlay projects with emphasis on vital infrastructure, fire-life safety, and future enrollment growth for higher education.
Correctional Public Safety—Projects directly tied to capacity or correctional program requirements (e.g., correctional mental health facilities).
Other Public Safety—Noncorrectional projects directly linked to a public safety concern (e.g., Department of Justice crime labs and Department of Forestry facilities).
Fire and Life Safety—Projects for code violations or other infrastructure integrity concerns that have a direct impact on the safe use of the facility or real property (e.g., potable water systems, asbestos removal, and seismic improvements).
Other Critical Infrastructure—Projects to maintain critical program performance from a structure or piece of real property (e.g., restorations to keep a facility open; facility changes driven by caseload, workload, population pressures, statutory, or other mandatory changes).
Environment/Resource Stewardship—Projects to protect and enhance natural resources for public enjoyment and habitat conservation (e.g., conservancy acquisitions, wetlands restoration, watershed improvement, park projects, and boat ramps).
All Other—Any project not included in the priorities listed above.
Figure CO-1 and Figure CO-2 summarize the proposed 2001-02 capital outlay program by agency and by project category.
Highlights of the 2001-02 capital outlay program contained in the proposed Budget are as follows:
Higher Education: $862.3 million—The Budget includes $511.7 million for the University of California (UC), $207 million for the California State University (CSU), and $143.6 million for the California Community Colleges (CCC) from general obligation bonds and the General Fund.
University of California: $511.7 million—This amount includes $401.7 million to allow UC to continue or complete 20 previously approved projects at nine campuses, the tenth campus at Merced, and one off-campus site. These projects will replace aging facilities, renovate seismically vulnerable buildings, and complete new facilities for enrollment growth. The funding for continuing projects includes $158.6 million to complete the initial site development, infrastructure, and construction of library and laboratory facilities at Merced, and $75 million to continue funding for the three Institutes for Science and Technology.
The amount of $110 million will allow UC to address 20 new projects at the 9 existing campuses, Merced, and 2 off-campus locations. Examples of UC projects include design of facility replacement to begin addressing the accreditation needs of the School of Veterinary Medicine at the Davis Campus; upgrades for seismic, fire, and life safety, such as seismic improvement projects at the Santa Cruz, Los Angeles, and Berkeley campuses; and enrollment growth projects including new engineering and science facilities at the Riverside, San Diego, Irvine, and Santa Cruz campuses. The funding for new projects also includes $1.9 million for planning a classroom and office building at Merced, $10 million for the Heckmann International Center for Entrepreneurial Management as an off-campus outreach of the UC Riverside School of Management, $30 million for new teaching facilities at the UCSF-Fresno Medical Center, and $33 million to initiate a fourth Institute for Science and Technology.
California State University: $207 million—This amount includes $103.7 million for the continuation or completion of 13 previously approved projects at 12 campuses. Funding of $96.6 million will permit CSU to address 14 new projects at 11 campuses. The Budget provides an additional $6.7 million for minor projects at CSU’s 23 campuses. CSU’s funding places priority on vital infrastructure projects such as critical telecommunication infrastructure improvements at 14 campuses. CSU’s funding also includes projects to address existing space deficiencies and 3 projects to address future growth needs at Fullerton, Channel Islands, and San Bernardino.
California Community Colleges: $143.6 million—This amount funds 76 projects at 54 campuses. Funding includes $122.3 million for the continuing phases of 53 previously approved projects at 43 campuses and $21 million to begin 23 new projects at 19 campuses. In addition, the Budget provides $300,000 for systemwide planning and studies. Funding for new projects includes the planning and working drawing phases for the seismic replacement or retrofit of 13 buildings on 11 campuses and the replacement of 4 science buildings to address serious space deficiencies, health and safety concerns, and modernization. CCC’s funding also includes the construction phases to complete 12 seismic projects and the equipment phases to complete 24 additional projects. Additional projects include program expansion, correction of fire and life safety deficiencies, and continuing phases of previously funded projects.
Department of Mental Health: $352.5 million—This amount includes $349.3 million to construct a permanent facility in which to combine and treat sexually violent predators, and $2.5 million to begin new projects. The new projects include constructing a multipurpose building at Atascadero State Hospital, remodeling buildings at the Metropolitan, Patton, and Napa State Hospitals, and installing personal duress alarm systems in four buildings at Patton State Hospital. The Budget also includes $676,000 for minor capital outlay projects.
Department of Transportation: $150.9 million—This amount includes $150.8 million for the continuing phases of previously approved projects at the Eureka District, Los Angeles District, and Sacramento Headquarters offices. The Budget also includes $102,000 for studies, preplanning, and budget packages.
Department of General Services: $130.7 million—This amount includes $34.8 million for continuing projects and $95.9 million for new projects. The new projects include $6.1 million to fund the pre-construction phases for the renovation of several office buildings in Sacramento, including Office Building 8 which currently houses the Department of Health Services; Office Building 10, which houses the Department of Education; and the Annex Building at 1215 O Street, which houses the Department of Food and Agriculture. The new projects also include $39.6 million to purchase the San Diego Suburban State Office Building in Mission Valley; $22.2 million to purchase the potential private use space at the Capitol Area East End Complex; and $28 million to fund additional structural retrofit projects.
California Department of Corrections: $92.7 million—This amount includes $70.9 million for the continuing phases of 11 previously approved projects, and $21.8 million to begin 23 new projects. The proposed new projects include: fire and life safety improvements at Antelope Camp, California Institution for Men, California Men’s Colony, and Deuel Vocational Institution; security improvements at California Correctional Institution and California Institution for Women; infrastructure improvements at Avenal State Prison, California Institution for Women, California Men’s Colony, California State Prison-Los Angeles County, California State Prison-Solano, Chuckawalla Valley State Prison, Mule Creek State Prison, and Pleasant Valley State Prison; a substance abuse facility at Richard J. Donovan Correctional Facility; a mental health facility replacement at California Men’s Colony; a mental health facility expansion at California State Prison-Sacramento; small management exercise yards at California Medical Facility and Mule Creek State Prison; and electrified fences at California Institution for Men-East and California Training Facility.
Department of Parks and Recreation: $68.2 million—This amount includes $26.6 million for continuing phases of 15 previously approved projects, $36.3 million for 24 new projects, $4.8 million for minor projects, and $530,000 for project planning. The new projects include acquisitions, historical restorations, campground and day-use rehabilitation, and watershed restoration.
Department of Forestry and Fire Protection (CDF): $61 million—This amount includes $52.1 million for continuing phases of 37 projects, $5.9 million to begin 3 new projects, and $3 million for a minor capital outlay program. The 3 new projects are the relocation of the Aviation Management Unit (AMU) to an existing facility at McClellan Park, the relocation of CDF’s South Operations Area Headquarters to a site at March Air Force Base, and the relocation of one fire station.
Department of Water Resources: $31.9 million—This amount includes $23.3 million General Fund and $8.6 million from local reimbursements for the continuing phases of 11 previously approved flood control projects.
Department of Youth Authority: $22.6 million—This amount includes $16.8 million for the continuing phases of 5 previously approved projects, $1.5 million for 3 new projects, and $4.3 million for minor capital outlay projects and master planning. The proposed new projects include funding for a 50-bed Specialized Counseling Program for sex offenders at N. A. Chaderjian Youth Correctional Facility, renovation of the central kitchen floor and blast chillers at the Northern California Youth Correction Facility, and a new central kitchen at Preston Youth Correctional Facility.
Department of Food and Agriculture: $21.9 million—This amount includes $20.7 million to continue the replacement of three agricultural inspection stations, $719,000 for preliminary plans for a new Greenhouse at the Meadowview Complex in Sacramento, and $539,000 for an additional Medfly Rearing Facility in Hawaii.
Department of Justice: $15.9 million—This amount includes $933,000 to complete the Hawkins Data Center computer room fire suppression system and $15 million to begin development of a new DNA laboratory.
California Conservation Corps: $12.1 million—This amount includes $11 million for two continuing projects, $738,000 for two new projects, and $337,000 for a minor capital outlay program. The new projects include a residential facility relocation study and a residential facility replacement due to a lease expiration.
California Science Center: $11.1 million—This amount includes $10.5 million for the pre-construction phases of the Science Center Phase II "World of Ecology" project. The total project cost is estimated at $110 million, of which approximately $83.5 million is to be funded by private sources and other governmental agencies, and $26.5 million is to be funded by State funds. The Budget also includes $609,000 for minor capital outlay projects at the Science Center.
Department of Motor Vehicles: $10.1 million—This amount includes $9.8 million from a combination of State Highway Account, Motor Vehicle Account, and Motor Vehicle License Fee Account funds to fund the working drawings and construction phase for the continuation of field office replacements at San Ysidro and Stockton. The Budget also requests authorization to enter into a lease with a purchase option to secure a new office building located in South Sacramento. In addition, the Budget includes $200,000 to continue the hazardous materials abatement and renovation project at the Department’s Sacramento headquarters and $100,000 for studies, preplanning, and budget packages.
California Highway Patrol: $9.7 million—This amount includes $7.4 million for the continuing phases for the replacement of two area offices due to facility damage resulting from a fire and to address serious space deficiencies at another office. The Highway Patrol will use $2.2 million to initiate the acquisition and planning phases for the construction of a new replacement facility at Santa Fe Springs and for preliminary plans to renovate the San Diego area office. The Budget also includes $120,000 for studies, preplanning, budget packages, and options and appraisals.
Department of Boating and Waterways: $8.5 million—This amount includes $5 million for various phases of three Boating and Instruction Safety Centers (BISC) and the construction phase of one Boating Facility renovation, $135,000 for project planning, and $3.4 million for a minor capital outlay program.
Department of Veterans Affairs: $5.4 million—This amount will fund major and minor projects at the Yountville Veterans’ Home, including $3.7 million for the continuing phases of previously approved projects, $198,000 for a new project to renovate a 1.25 million gallon capacity water system, and $1.5 million for minor projects.
Department of Developmental Services (DDS): $5.4 million—This amount will fund the continuing phases of a previously approved project to make fire and life safety renovations at the Agnews Developmental Center. By January 2001, DDS expects to relocate all of its forensic clients to Porterville. Forensic clients are those developmentally disabled persons who are committed to a developmental center by the courts. This increase in clients at Porterville has resulted in the need for additional space in which to provide necessary services, such as treatment and recreation activities. Although not proposed in the Budget, capital outlay funds may be requested through a Finance Letter to fund the construction of a treatment and activity building for the forensic population at Porterville.
Department of Fish and Game: $5.1 million—This amount includes $3.5 million for two continuing major projects, $450,000 for project planning, and $1.2 million for a minor capital outlay program. The two major projects include reconstruction of a fish barrier to prevent nonnative fish migration into golden trout habitat and seismic retrofit of a historic fish hatchery building.
State Special Schools & Services: $2.6 million—This amount includes $2.5 million for two continuing projects to renovate space at the Fremont School for the Blind and construct a pupil/personnel facility at the Fremont School for the Deaf. The Budget also provides for the equipment phase to complete the middle school facility at the Riverside School for the Deaf.
Military Department: $3.5 million—This amount includes $294,000 for two continuing projects, $1.7 million for three new projects, $975,000 for minor capital outlay projects, and $545,000 to develop a master plan. The proposed new projects include funding to replace and modernize the electrical distribution system at the Los Alamitos Airfield, replace the water distribution system at Camp San Luis Obispo, and demolish obsolete, contaminated buildings at Camp San Luis Obispo.
Department of Health Services: $2.2 million—This amount is for the continuing phase of the previously approved project to construct a Phase III office building at the Richmond Laboratory Complex.
Air Resources Board: $2.2 million—This amount is for the construction phase to renovate the Board’s mobile source research and development measurement laboratory. These renovations will address operating deficiencies currently affecting the laboratory’s testing abilities.
Judicial Council: $2 million—This amount includes $1.3 million for continuing projects and $653,000 for renovation of the 2nd and 3rd Appellate District Courts of Appeal in Los Angeles and Sacramento, respectively, to accommodate newly created judgeships.
Office of Emergency Services: $1.3 million—This amount is for a fire and telecom shop at OES’s Headquarters Facility.
Department of Toxic Substances Control: $900,000—The Budget redirects $900,000 from existing funds for the acquisition of land for the development of a new pretreatment plant at the Stringfellow federal Superfund site.
Franchise Tax Board: $447,000—This amount is for one new project for fire alarm modifications at the Franchise Tax Board’s central office.
The General Fund debt service cost displayed in Figure CO-3 represents the combination of the annual cost of general obligation bonds and lease payments for lease-revenue bonds. Total annual costs for bonds is $2.8 billion in 2000-01, and is estimated to be $3.1 billion in 2001-02
General Obligation Bonds—California currently owes $19.3 billion in principal on outstanding non-self liquidating general obligation (GO) bonds as of the end of calendar year 2000. The State General Fund cost for the payment of interest and redemption on these bonds is $2.3 billion in 2000-01 and is estimated at $2.6 billion in 2001-02.
Lease-Revenue Bonds—The State also uses lease-revenue bonds to supplement the GO bond program. The lease-revenue method of financing projects has been used for higher education facilities, State prison construction, general-purpose office buildings, and other types of projects when a lease can be created that provides a marketable security for the issuance of the bonds.
Outstanding lease-revenue bonds totaled $6.6 billion as of December 1, 2000, and are estimated to total $6.5 billion as of June 30, 2001, and $7.1 billion as of June 30, 2002. The State General Fund cost for lease payments (principal and interest) was $530.6 million in 1999-2000 and is estimated to be $532.7 million in 2000-01 and $532.4 million in 2001-02.
A common measure of bonded indebtedness is the ratio of net tax-supported debt to General Fund revenues. Using this measure, California’s General Fund debt ratio for 2000-01 is 3.7 percent and would rise to a maximum of 4.2 percent in 2002-03. California’s General Fund debt ratio has declined since its peak of 5.4 percent in 1994-95 primarily because General Fund revenue has increased more rapidly than debt payments, as depicted in Figure CO-3. These statistics are based on GO debt, which relies on the General Fund for repayment (i.e., excludes self-liquidating GO debt), and on lease-revenue debt.
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