Report 2014-107 Recommendation 6 Responses

Report 2014-107: Judicial Branch of California: Because of Questionable Fiscal and Operational Decisions, the Judicial Council and the Administrative Office of the Courts Have Not Maximized the Funds Available for the Courts (Release Date: January 2015)

Recommendation #6 To: Administrative Office of the Courts

To justify maintaining its headquarters in San Francisco and its additional space in Burbank, the AOC should conduct a thorough cost-benefit analysis of moving its operations to Sacramento. If the analysis determines that the financial benefits of consolidating its operations in Sacramento outweigh the costs of such a move, the AOC should begin the process of relocating to Sacramento.

1-Year Agency Response

An independent cost-benefit analysis was conducted. The analysis provided comprehensive quantitative and qualitative data and identified potential risks and benefits on consolidating operations that were weighed from a financial perspective but also, necessarily, an operations and service delivery perspective.

A 10-year horizon was used to account for lease expirations and payoff of a lease revenue bond in 2021.

Impacts on workforce, budget, real estate, working relationships, business continuity, productivity, and long-term effectiveness and efficiency of staff operations in meeting customer needs and public service obligations also were presented as key considerations.

Decisions Summary

- Terminate at expiration, or earlier as appropriate, office leases for Burbank, Governmental Affairs, and eight real estate/facilities management field offices.

- Consolidate operations into two locations: Sacramento and San Francisco, and consolidate field office staff in courthouse hubs.

Considering fiscal data only, cost-savings of up to $18 million may be realized over the 10-years. The SF location will see the most rent savings when the lease revenue bond is paid off. However, final determinations were based on what would allow the judicial branch to:

- Maintain without disruption ongoing key statewide work on initiatives such as stable funding and self-help assistance.

- Keep staff attrition to manageable levels.

- Have sustainable fiscal savings, the bulk of which are not from potential one-time labor costs.

Impacted programs/employees were advised of closures/consolidations on November 6. Implementation is under way with efforts to mitigate service impacts and employee layoffs.

The report is posted on the California Courts public website.

  • Completion Date: November 2015
  • Response Date: January 2016

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

6-Month Agency Response

To ensure objectivity, a consultant has been retained to oversee this analysis. The analysis will be completed in the third quarter of 2015.

  • Estimated Completion Date: Third quarter of 2015
  • Response Date: July 2015

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

60-Day Agency Response

Council staff is gathering pertinent facilities, lease, human resources and market data. This data collection* will be completed in the second quarter of 2015.

  • Estimated Completion Date: Second quarter of 2015*
  • Response Date: March 2015

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

All Recommendations in 2014-107

Agency responses received are posted verbatim.