Overview of Exemption Process for Frozen Capital Projects
COMMITTEE ON CAPITAL DEVELOPMENT
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07:58 AM -- Overview of the Governor's Exemption Process for Capital Projects Subject to the January 15 Spending Freeze
Ms. Lisa Esgar, Deputy Director, Governor's Office of State Planning and Budgeting (OSPB), provided an overview of the exemption process for capital projects identified in the Governor's January 15, 2009, spending freeze. Committee members received OSPB's capital construction freeze guidelines and the list of frozen projects, prepared by OSPB (Attachment D). Ms. Esgar said this exemption process is similar to the process implemented with the October 2008 capital spending freeze. According to Ms. Esgar, OSPB identified potential projects for the January 2009 spending freeze based on the State Architect's December 2008 report of the status of all active capital projects, and projects that were not under construction were frozen. Then, on January 29, 2009, OSPB gave agencies guidelines that allow them to request an exemption if a project: (1) was already under construction on January 15, 2009; (2) involves urgent life-safety issues; or (3) cannot be shut down and fulfill all legal obligations without additional expenditures. Ms. Esgar explained how OSBP estimated budget savings from the list of projects. She told the committee that exemption requests are due to OSPB on February 6, 2009, and OSPB will communicate with the CDC as soon as possible about the total savings from the capital spending freeze. Ms. Esgar noted that OSPB will also ensure that expenditures reported by agencies match the accounting records in the State Controller's office, before OSPB proceeds with a final list of frozen projects.
Representative Riesberg re-stated his understanding from Ms. Esgar's presentation, that agencies are expected to file a request for an exemption if they feel they meet one of the exemption criteria. Committee members were provided with a status report on the Homelake Domiciliary Renovation project, prepared by the Department of Human Services (DHS) (Attachment E), and Senator Schwartz described some of her concerns with freezing the project's appropriation, as noted on Attachment E. Representative McFadyen commented on the need to continue another DHS project, the Suicide Risk Mitigation project, to address issues raised in a prior lawsuit and to avoid future lawsuits. In response to questions from the committee, Ms. Esgar clarified that she will first provide the CDC with a list of projects for which an exemption has been requested, then a list of projects approved by OSPB to be exempted from the spending freeze, and an updated final report of the uncommitted balance of remaining frozen projects.