Report 2011-120 Recommendation 40 Responses

Report 2011-120: California Department of Transportation: Its Poor Management of State Route 710 Extension Project Properties Costs the State Millions of Dollars Annually, Yet State Law Limits the Potential Income From Selling the Properties (Release Date: August 2012)

Recommendation #40 To: Transportation, Department of

To pursue alternatives to its management of the SR 710 properties, Caltrans should prepare a cost-benefit analysis to determine if the State would save money by hiring a private vendor to manage the properties. If such savings would occur, Caltrans should seek an exemption under Government Code, Section 19130 (a), to hire a private vendor.

Annual Follow-Up Agency Response From November 2016

Because the cost-benefit analysis did not lead to a clear preferred option for property management, Caltrans and CalSTA decided to not pursue any of the three alternatives evaluated in the consultant's report. Instead, Caltrans will continue to perform property management activities. As noted in the status to recommendation No. 39, the Affordable Sales Program regulations were recently approved and Caltrans is moving forward with the sale of surplus properties. Selling the properties will allow Caltrans to reduce its inventory and associated property management activity.

California State Auditor's Assessment of Annual Follow-Up Status: Fully Implemented

Annual Follow-Up Agency Response From September 2015

Caltrans and CalSTA are continuing to pursue the goal of eliminating Caltrans' role in managing SR 710 properties. As stated in the status to Recommendation No. 39, Caltrans and CalSTA are currently in the process of submitting proposed Affordable Sales Program regulations to be adopted by the Office of Administrative Law by the end of the year. Caltrans recently submitted a request for proposal for consultant contract management of the sales process. Although the scope of work for the Sales Program does not include property management, the sales effort is directed toward expeditious reduction in property management activity.

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

Annual Follow-Up Agency Response From October 2014

Caltrans and CalSTA are continuing to pursue the goal of eliminating Caltrans' role in managing SR 710 properties. Caltrans and CalSTA are currently in the process of adopting Affordable Sales Program regulations which will result in the sale of surplus properties beginning in 2015. A component of the Sales Program may result in contract management of all or part of the sales process by another entity. If so, the scope of work for the Sales Program may include some elements of property management. Therefore, Caltrans and CalSTA are no longer evaluating any of the three options investigated in the consultant's report.

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

Annual Follow-Up Agency Response From October 2013

Please refer to our one-year response.

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

1-Year Agency Response

In light of the Cost-Benefit Analysis Study, which led to no clear preferred option, Caltrans and CalSTA continue to hold discussions with legislators to pursue the goal of eliminating Caltrans' role in managing the SR 710 properties.

California State Auditor's Assessment of 1-Year Status: Partially Implemented

6-Month Agency Response

Caltrans hired a consultant to perform an independent cost-benefit analysis of the following property management options for the SR 710 properties: hiring a private vendor, establishing a JPA, and transferring the properties to a local transportation entity. The consultant completed the analysis and concluded that none of the options would be deemed favorable to the State from a financial perspective. Caltrans and the agency are reviewing the final report and will work with the Legislature to determine the best option for Caltrans, the State, and the tenants.

California State Auditor's Assessment of 6-Month Status: Partially Implemented

60-Day Agency Response

Caltrans stated it hired a consultant to perform an independent cost-benefit analysis of the following property management options for the SR 710 properties: hiring a private vendor, establishing a JPA, and transferring the properties to a local transportation entity. The local transportation entity would take over ownership and management of the properties and use the proceeds of the sale for local transportation improvements. Caltrans also stated that its first meeting with the consultant would be held in October 2012 to develop a work plan with target dates. (See 2013-406, p. 178)

California State Auditor's Assessment of 60-Day Status: Partially Implemented

All Recommendations in 2011-120

Agency responses received after June 2013 are posted verbatim.