Infrastructure:
Enabling California to Perform
Public infrastructure is integral to delivering public services, fostering economic growth and enhancing the quality of life. Infrastructure is comprised of eight core activities: Housing, Transportation, Water, Energy, Infrastructure finance, Research and Development, Planning and Assets Management.
California has an immense inventory of public infrastructure. The state owns almost 2.5 million acres of land, 200 million square feet of built space, 20,000 owned and leased structures, and 15,000 miles of highways. Local governments own thousands of schools, water treatment facilities, streets, jails, libraries, and parks.
- Case Study: Moving to coordinated healthy housing policy
- Housing and infrastructure are like red and white blood cells. For healthy communities to survive there must be a balance between the two. Changes in infrastructure such as transportation, water, and energy directly affect housing just as changes in the demand for housing directly affects infrastructure. Housing efforts are increasingly under siege from other statewide mandates, regulations and requirements, such as water standards, transportation constraints and prevailing wage requirements. In addition, housing production is often thwarted by local opposition from anti-sprawl and not-in-mybackyard (NIMBY) groups.
Compared with other infrastructure needs such as transportation, energy and water, California has neglected to effectively develop, prioritize and implement statewide policies for housing and growth. The link between housing, jobs and infrastructure should be the focus of statewide efforts to address both housing and infrastructure needs in equal measure.
California is in dire need of a coordinated statewide housing policy. There are currently four separate state entities active in subsidizing housing: the Department of Housing and Community Development (HCD), the California Housing Finance Agency (CalHFA), the Tax Credit Allocation Committee (TCAC) and the California Debt Limit Allocation Committee (CDLAC). Each of these entities is accountable only to its separate boards or governing bodies. They administer programs targeted at specific housing needs. Many of these individual programs require separate application, administration and monitoring processes. This ineffective administration increases costs and reduces the number of units actually constructed. Each of the four groups also relies on a variety of funding sources. For example, CalHFA focuses on single family housing through its first-time homebuyer and mortgage insurance programs using tax-exempt bonds, while HCD and TCAC predominately subsidize multifamily housing projects with federal and state monies and tax credits. These disparate programs need to be consolidated and streamlined, placing a greater emphasis on meeting statewide policies and goals.
The state’s population is growing. This will require a broad range of new public infrastructure projects to maintain our current standards. Under the current system this would add billions of dollars in construction, operation and maintenance costs. However, California also needs to manage its budget more efficiently and reduce the deficit.
Infrastructure management needs to be more productive. This means both finding ways to deliver more from our current resources and ways to deliver the same for less.
- Reorganization
- Water,
- Transportation,
- Boating and Waterways,
- Energy,
- Housing, Buildings, and Construction,
- Telecommunications,
- Planning, Programming, and Evaluation,
- Finance, and
- Research and Development.
- Streamlining processes and the way the state works
Current infrastructure decision-making involves 25 separate state departments, agencies and commissions as well as many more local and special interest groups. Each of these bodies has a role in deciding what, where and how infrastructure should and should not be built.
The reorganization will consolidate these 25 entities into one new integrated department, the Infrastructure Department. This will have overall decision-making and policy setting authority of the 25 entities and creates one clear line of accountability to the Governor. The new integrated department will also have responsibility for ensuring California’s infrastructure supports the intelligent growth and economic development in the state.
The infrastructure reorganization includes creation of an appointed Infrastructure Authority. The Infrastructure Authority will be comprised of nine members who have the responsibility of overseeing all facets of the state’s infrastructure. The Authority will consider infrastructure investments on a programmatic level, and have the ability to ensure appropriate funds are available for infrastructure improvements and maintenance. The Secretary of Infrastructure will chair this Authority as well as oversee the Infrastructure Agency. The Secretary of Infrastructure supervises nine Undersecretaries who will lead each of the state’s Infrastructure Divisions.
These Infrastructure Divisions are:
This new organization will allow the state to research, plan, and ultimately fund infrastructure with a comprehensive view. The state will be able to examine competing proposals across infrastructure within a context of its overall infrastructure needs, priorities, and funding capabilities; and, with the Authority’s ability to generate and manage revenue streams, adequate funding for lifecycle costs of the state’s infrastructure needs will be addressed for existing infrastructure as well as when approving new.
The reorganization will also realign the Division’s roles and responsibilities with the primary work that it was created to do as well as what it does best. For example, currently the planning for infrastructure occurs at the agency or department level. Each department creates its own vision of the state’s future from various sources. As a result, California is relatively strong on project planning by individual agencies but weak on statewide planning and strategy. The reorganization will leverage these strengths, and abolish the weaknesses by coordinating all infrastructure planning into a single Division, and then adopting individual projects based upon an overarching statewide priority and need across all infrastructure.
Additionally, the reorganization will reduce the amount of duplication found within the current departments and establish clear lines of accountability.
Case Study: Creating accountability in state energy policy.
State government mismanagement contributed significantly to the energy crisis that
California endured in the fall and winter of 2000-2001, and has continued to put the
state at a competitive disadvantage and slow down our economic recovery.
The electricity crisis of 2000-2001 serves as an illustration of how state government can do a great disservice to the people by failing to fulfill its basic obligation to provide for the security of its citizenry. Government inaction, mismanagement and jurisdictional turf battles combined to help bring about a meltdown in the infrastructure and systems that provide Californians with a basic necessity of life.
Over the years, California lawmakers and regulators have created numerous bureaus, departments and commissions that regulate or monitor various aspects of the systems on which we rely to bring us an uninterrupted supply of electricity for use in our daily lives. California’s energy regulatory framework and its energy policies have been fragmented. State government agencies don’t work together or coordinate their regulatory policies, and often pursue contradictory approaches to the regulation and delivery of electricity to the people of the state.
For instance, California created one agency to plan for and grant licenses to build powerplants to provide the electricity needed to meet the increasing demands of our growing population and support our economic engine. A different state bureaucracy manages and authorizes the construction and upgrading of electric transmission lines. These separate bureaucracies often do not coordinate their activities and planning. As a result, the electricity transmission system has not kept pace with shifting patterns of consumption. It has been increasingly difficult to transmit power from where it is generated to places in the state where it is most needed.
All energy facilities and related infrastructure approvals should be consolidated into one approving authority. Regulatory functions should be separated from policy, planning and program management responsibilities.
With reorganization, infrastructure decisions and investments will be improved, and efficiencies realized by removing duplication and contradiction.
In addition to reorganization, recommendations were developed to focus on processes that removed duplication of effort, streamlined accountabilities, reduced costs at no drop in service and increased service with no increase in cost.
A number of the recommendations address the state’s ability to use advanced tools and methods in the delivery of infrastructure products and services. For example, the vast majority of new infrastructure projects are delivered using virtually the same method; Design-Bid-Build. In these models the state contracts with a single entity at an agreed price to handle all aspects of the project including operations and long term maintenance. In this way the entity is unlikely to make decisions in upfront costs that will reduce building costs but lead to high maintenance costs as they are contracted for both elements. This method has proven to be more timely and oftentimes more efficient.
Other recommendations address strengthening fiscal management tools, techniques and policies. For example, Governor’s Executive Order S-10-04 states that the management of the state’s vast infrastructure assets is disjointed and inefficient. Several recommendations propose establishing better processes and organizational structures to make sure the state is truly managing its assets portfolio in a way that benefits programs and minimizes cost.
Improving services to customers and making decisions transparent by moving the authority and accountability for infrastructure business decisions to the lowest level are a key focus of other recommendations. For example, there is a specific recommendation that proposes moving all decisions that impact a project’s scope, cost or schedule to the Project Manager and then holding them accountable for those decisions. Other recommendations propose the development of certification processes wherein approvals such as new schools that are currently centralized, or at a statewide level could be devolved to other levels of government or the private sector.
The specific issue recommendations coupled with the implementation of the reorganization proposal will give the state the ability to deliver to the people of California an infrastructure that is meeting their needs.