BILL ANALYSIS Ó ------------------------------------------------------------ |SENATE RULES COMMITTEE | SB 224| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 445-6614 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ CONSENT Bill No: SB 224 Author: Pavley (D) Amended: 4/14/11 Vote: 21 SENATE NATURAL RES. AND WATER COMMITTEE : 9-0, 4/26/11 AYES: Pavley, La Malfa, Cannella, Evans, Fuller, Kehoe, Padilla, Simitian, Wolk SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8 SUBJECT : Public contracts: Department of Water Resources SOURCE : Author DIGEST : This bill exempts certain contracts from review and approval by the Department of General Services (DGS), including any contract of a type specifically mentioned and authorized to be entered into by the Department of Water Resources (DWR) under the Water Code, and any contract entered into by DWR that is not funded by money derived from state tax sources, rather than by money derived from federal and local sources. ANALYSIS : Existing law: 1. Provides that all contracts entered into by any state agency for goods, services, or other specified activities are void unless and until approved by the CONTINUED SB 224 Page 2 DGS. 2. Exempts certain transactions and contracts from that law, as specified. This bill exempts from DGS reviewing: 1. Any contract of a type specifically mentioned and authorized to be entered into by DWR under the Water Code. 2. Any contract entered into by DWR that is not funded by money derived from state tax sources, but rather, is funded by money derived from federal and local sources. Background Under current law, all state contracts must be reviewed and approved by DGS, with some notable exceptions. For example, all of California Department of Transportation's (CalTrans) contracts are exempt from the DGS review. DGS tries to get back to the contracting department within 10 working days as to whether or not DGS has issues with the contract. If they do, there will be additional time required to work out the details of the contract issues - sometimes just days, sometimes over a month, depending on the issue with the contract. DGS also charges the contracting department for DGS's time - the DGS fee for contracts for last fiscal year was 1.6 percent of the value of the contract. Some of the DWR contracts are exempt from DGS review. They are: Construction Contracts Architecture and Engineering Contracts State Water Project Contracts While those contracts cover a large part of DWR's contract activity, it still leaves a significant number of contracts subject to DGS review. These include contracts for CONTINUED SB 224 Page 3 procurement, energy, subscription services, bond funded grant programs, and miscellaneous service contracts. Last fiscal year, DWR spend about $ 21.7 million for non-construction contracting. FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes Local: No SUPPORT : (Verified 5/5/11) Alameda County Flood Control and Water Conservation District Zone 7 Alameda County Water District Burbank Water and Power Calleguas Municipal Water District Castaic Lake Water Agency Cucamonga Valley Water District Desert Water Agency Eastern Municipal Water District Kern County Water Agency Las Virgenes Municipal Water District Metropolitan Water District of Southern California Mojave Water Agency San Bernardino Valley Municipal Water District State Water Contractors Three Valleys Municipal Water District Tulare Lake Basin Water Storage District ARGUMENTS IN SUPPORT : According to the author: "Each year, the Department of Water Resources (DWR) enters into hundreds of contracts, often valued in the millions. Despite having an extensive contracting operation staffed by dozens of experienced attorneys and contract specialists, DWR must still have many of its contracts reviewed and approved by the Department of General Services (DGS). This additional level of review delays the execution of contracts and adds unnecessary costs to each contract. "SB 224 will provide DWR the same exception to DGS's contract review that has been given to CalTrans. In doing so, SB 224 will eliminate costly contract delays and unnecessary bureaucratic review." CONTINUED SB 224 Page 4 CTW:kc 5/10/11 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END **** CONTINUED