The California Performance Review: A Prescription for Change Established by Executive Order S-5-04 To Create the First 21 st Century Government in America Governor Arnold Schwarzenegger

We can cut costs. We can improve customer service. We can conserve and better manage taxpayer dollars. We can manage government more strategically. We can take advantage of new technologies and modern ways of doing business. Prognosis: Guarded Optimism

Performance & Policy Reform – –Top-to-bottom review of government services. CPR developed concrete recommendations to improve performance, increase accountability and reduce costs. Organizational Reform –Customer-service will dictate government form and structure, not the other way around. We will create an environment conducive to accountability, innovation, entrepreneurship, and strategic thinking. 2 Principal Elements of the CPR Report

Human-Capital Crisis –34% of the state workforce is eligible for retirement and will likely retire within the next five years. River of Red Ink –The fiscal crisis is not merely a current-year dilemma. Structural deficits are projected for years to come unless we respond and innovate today. People Demand Superior Performance –In this on-demand world, we have no patience for delay and bureaucracy. People demand superior performance, but they have low expectations of today’s government. Why California State Government Must Change

CPR started with over 2,300 ideas to improve performance: –These ideas came from CPR, previous performance reviews, public and private research, LHC, LAO, the legislature, state agencies and the public. –Following extensive analysis, the ideas have been consolidated into over 250 issues. –These issues drive more than 1,200 recommendations for improvement and change. CPR Element 1: Performance & Policy Reform

Procurement –We recommend leveraging the State’s purchasing power to get better pricing and properly planning our purchasing for efficient buying. Education –We recommend aligning educational outcomes with the needs of the economy in order to prepare students for achieving their goals after they leave California’s education system. CPR Performance & Policy Issue Examples

Asset Management –We recommend maximizing the utility of our real estate assets by focusing them on programs requirements. We recommend efficiently managing the state’s 200+ million square feet of buildings. Health & Human Services –We recommend streamlining the eligibility and application process for recipients of aid. CPR Performance & Policy Issue Examples

Improve Efficiency of State Infrastructure Programs Adopt Construction Performance and Warranty Specifications. Adopt New Project Delivery Methods. Reduce Builder’s Bonding and Insurance Costs. Promote High Occupancy Toll (HOT) Lanes and Value Pricing to Reduce Congestion and Increase Revenues.

Save Taxpayer Infrastructure Dollars Ensure Taxes Collected for Transportation are Used for Transportation Projects. Coordinate State and Local Efforts to Receive Federal Funds Earmarked for Priority Projects.

Improve Management of State Infrastructure Programs Link Infrastructure Planning and Programming with Performance Measures. Adopt Life-cycle Costing for Infrastructure Projects. A Sustainable Economy Requires a Healthy Infrastructure. Improve the CEQA Process.

Align state programs by function. Maintain the identities of key programs. Consolidate administrative services. Focus on customer service. Increase program quality and efficiency. CPR Element 2: Reorganization Making Government Make Sense

California’s infrastructure is divided between 32 different agencies : Infrastructure investment not treated as a unified program Assessment and documentation of state infrastructure needs are inadequate Programmatic goals are not clearly defined No criteria for setting statewide priorities No stable funding source State/Local needs are not articulated California’s Infrastructure is Fragmented

Infrastructure is scattered across state government

Combine all infrastructure agencies Remove administrative duplication, inefficiency, and inconsistency State infrastructure assets will be managed to maximize their use and their capture of revenues Resources spent on delivering and maintaining infrastructure rather than overhead Open and accountable – to the people –Inclusive process –Customer service orientation –Improve business climate CPR Recommendation: Infrastructure Department

California Infrastructure Department

California Labor & Economic Development Department

A window of opportunity is open for California. The time for change is now End Waste Governor Schwarzenegger’s California Performance Review