STATE OF CALIFORNIA B u d g e t C h a n g e P r o p o s a l - C o v e r S h e e t DF-46 (REV 08/17)

Fiscal Year 2018-19

Business Unit 3790

Department Department of Parks and Recreation

Priority No. 4

Budget Request Name 3790-048-BCP-2018-GB

Program 2840 - Support of the Department

of Parks and Recreation

Subprogram

Budget Request Description Conservancy Administrative Services Consolidation

Budget Request Summary The Department of Parks and Recreation requests an ongoing increase of $902,000 in reimbursement authority for the State Parks and Recreation Fund and seven permanent positions beginning in Fiscal Year 2018-19, and ongoing, for the consolidation of administrative services work for six state conservancies who are currently contracted under the Department of General Services' Contracted Fiscal Services Unit.

Requires Legislation

• Yes S No

Code Section(s) to be Added/Amended/Repealed

Does this BCP contain information technology (IT) components? • Yes K! No

If yes, departmental Chief Information Officer must sign.

Department CIO Date

For IT requests, specify the project number, the most recent project approval document (FSR, SPR, S1BA, S2/AA, S3SD, S4PFtA), and the approval date.

Project No. Project Approval Document: Approval Date:

If proposal affects another department, does other department concur with proposal? • Yes Q No Attach comments of affected department, signed and dated by the department director or designee.

Prepared By Date Reviewed By Date

Department Director Date Agency Secretary Date

Department of F inance Use Only 1

Additional Review: • Capital Outlay • ITCU • FSCU • OSAE • CALSTARS • Dept. of Technology

PPBA OriginaJ Signed by Stephen Benson

Date submitted to the Legislature ^ Q 2Qjg

Analys is of Problem

A. Budget Request Summary

The Department of Parks and Recreation (Department) requests an ongoing increase of $902,000 in reimbursement authority for the State Parks and Recreation Fund (SPRF) and seven permanent positions beginning in 2018-19, and ongoing, for the consolidation of administrative services work for six state conservancies who are currently contracted under the Department of General Services' (DGS) Contracted Fiscal Services Unit (CFS).

The Department requests the increase in reimbursement authority to provide administrative services to the Sierra Nevada Conservancy, Santa Monica Mountains Conservancy, San Gabriel and Lower Los Angeles Rivers and Mountains Conservancy, Sacramento-San Joaquin Delta Conservancy, California Tahoe Conservancy and San Diego River Conservancy (Conservancies), who are currently contracted with CFS for budgeting, accounting, personnel, and other administrative services.

B. Background/History

The California Natural Resources Agency (CNRA) was approached by the Conservancies to separate from CFS for effectiveness and efficiency issues. CNRA requested that the Department take on the administrative services of the Conservancies because the Department has a strong understanding of the administrative needs through relationships the Department currently has with three other state conservancies: Baldwin Hills Conservancy, San Joaquin River Conservancy, and the Coachella Valley Mountains Conservancy. The Department provides administrative services for these three conservancies from within the offices that provide these same services to meet its own needs.

The Sierra Nevada Conservancy (SNC) is a state agency created by bi-partisan legislation co-authored by Assembly Members John Laird (D-Santa Cruz) and Tim Leslie (R-Tahoe City). Governor Arnold Schwarzenegger signed assembly Bill 2600, the Laird-Leslie Sierra Nevada Conservancy Act, into law in September 2004. The SNC has a broad mission based on the understanding that the environmental, economic, and social well-being of the Sierra Nevada Region (Region) and its rural communities are closely linked and that the Region would benefit from an organization providing strategic direction and bringing attention and resources to the Region to better understand and meet its needs. The mission of the SNC is to initiate, encourage, and support efforts that improve the environmental, economic, and social well-being of the Region, its communities, and the citizens of California.

The Legislature established the Santa Monica Mountains Conservancy (SMMC) in 1980. Since that time, it has helped preserve over 73,000 acres of parkland in both wilderness and urban settings and has improved more than 114 public recreational facilities throughout Southern California. Through direct action, alliances, partnerships, and joint powers authorities, the SMMC's mission is to strategically buy back, preserve, protect, restore, and enhance treasured pieces of Southern California to form an interlinking system of urban, rural, and river parks, open space trails, and wildlife habitats that are easily accessible to the public.

The Legislature created the San Gabriel and Lower Los Angeles Rivers and Mountains Conservancy (RMC) in 1999. The RMC's mission is to preserve open space and habitat in order to provide for low-impact recreation and educational uses, wildlife habitat restoration and protection, and watershed improvements within its jurisdiction. The RMC's territory covers eastern Los Angeles County and western Orange County This vast and varied area includes mountains, valleys, rivers, coastal plains, and coastline.

The Sacramento-San Joaquin Delta Conservancy (SSJDC) is the primary state agency for the implementation of ecosystem restoration in the Delta and supports efforts that advance environmental protection and the economic well-being of Delta residents. The SSJDC collaborates and cooperates with local communities and other parties to preserve, protect, and restore the natural resources, economy, and agriculture of the Sacramento-San Joaquin Delta and Suisun Marsh.

The California Tahoe Conservancy (CTC) was established in 1984 to restore and sustain a balance between the natural and human environment and between public and private uses at Lake Tahoe. Successful partnerships are integral to protecting Lake Tahoe's unique environment. The CTC participates in and supports a range of partnerships with federal, state, regional, local nonprofit and academic agencies and organizations. Thfe mission of the CTC is to lead California's efforts to restore and enhance the extraordinary natural and recreational resources of the Lake Tahoe Basin.

Analys is of Problem

The San Diego River Conservancy (SDRC) was established by the Legislature (AB 2156, Kehoe) to preserve, restore and enhance the San Diego River Area. The SDRC is an independent, non-regulatory agency within the CNRA. The SDRC's 13 member Governing Board consists of both state and local representatives, creating a partnership, which reflects the diversity and dedication to conserving this highly valued resource of statewide significance As an independent government agency, its mission— the restoration and conservation of the San Diego River Area—is accomplished by (1) acquiring, managing, and conserving land; and (2) protecting or providing recreational opportunities, open space, wildlife species and habitat, wetlands, water quality, natural flood conveyance, historical/cultural resources, and educational opportunities.

C. State Level Considerat ions

DGS CFS currently provides fiscal services as well as human resources services for the Conservancies. The cost to the state for these services continues to increase annually. In order to address these rising costs, the Department is proposing to provide these services at a substantially lower cost. The cost reductions in this proposal are in line with the current Administration's direction to achieve efficiencies in state government.

D. Justification

The Conservancies currently contract with DGS' CFS for their accounting and budgeting services (CTC and SNC contract for accounting only), and SMMC, RMC, SSJDC, and SDRC also contract with CFS for HR services. The cost for contracting with CFS for these services has increased significantly in the past four years, as shown in the table below. These cost increases are a significant challenge for these small conservancies because they cannot be absorbed and they rely heavily upon bond funding that limits the amounts that can be used for administrative costs.

Conservancy FY 14/15 FY15/16 FY16/17 FY17/18 4 year %+

SNC $98,000 $176,000 $177,000 $206,000 210%

SMMC *$72,000 *$175,000 *$176,000 *$220,000 306%

RMC *$72.000 *$138,000 *$140,000 *$179,000 249%

SDRC *$30,000 *$66,000 *$67,000 *$80,000 267%

CTC $207,000 $255,000 $257,000 $314,000 152%

SSJDC $150,000 $150,000 *$246,000 *$285,000 190%

Total $629,000 $960,000 $1,063,000 $1,284,000 229%

^Includes HR Costs

This request is being made because of these cost increases and inefficiencies encountered with the use of CFS. CFS does not have the same level of experience and knowledge as the Department in administering grants and dealing with other accounting issues related to bond funds, which is a significant portion of the workload associated with the Conservancies The Conservancies have faced numerous documented accounting-related difficulties resulting in vendors and grantees experiencing significant delays in payment, disruptions to conducting normal business, and delays in month-end and year-end closings with the State Controller's Office. The Department's years of experience and expertise in bond accounting and bond funding procedures, rules, and processes make it better equipped to adequately handle the critical needs of each conservancy.

As stated earlier, the Department currently contracts with three state conservancies and provides administrative services from budgeting, accounting, personnel services, and procurement. The Department's expertise in bond funds, local assistance grant programs, and state conservancy organizational structure provides a solid foundation from which to provide administrative services for the Conservancies Moreover, the Department has been a leading entity within the CNRA in the conversion from CALSTARS to the new FI$Cal system (including for its three existing contracted

PAGE 11-2

Analysis of Problem

conservancies), providing a process and building block for all departments within the CNRA to use as they move to the new accounting system

The Department and CNRA acknowledge that consolidation of administrative services these entities that share similar mission statements focused in preservation, restoration, and environmental health will better serve the Conservancies, their constituents, and the State of California.

The Department will provide the following services to each of the Conservancies:

Conservancy Serv ices to be Provided

SNC Accounting Services Only

SMMC Accounting, Budgeting, Contracts/Procurement, Personnel Services

RMC Accounting, Budgeting, Personnel Services

SDRC Accounting, Budgeting, Contracts/Procurement, Personnel Services

CTC Accounting Services Only

SSJDC Accounting, Budgeting, Contracts/Procurement, Personnel Services

The Department conducted a workload and staffing analysis necessary to assume these administrative functions for the Conservancies, which resulted in seven new positions. The requested positions are as follows: One Accounting Administrator I Supervisor, two Accounting Officer Specialists, and one Senior Accounting Officer to ensure adequate internal controls and separation of duties; one Personnel Specialist, one Associate Personnel Analyst, and one Associate Governmental Program Analyst, which will allow the Department to provide administrative services to the Conservancies in lieu of CFS at considerably lower cost.

C o s t Ana lys is

Based upon staff and operating costs associated with the Department's assumption of services, the following costs are anticipated.

Conservancy BY C o s t s per Conservancy

SNC $ 89,000

SMMC $192,000

RMC $148,000

SDRC $192,000

CTC $ 89,000

SSJDC $192,000

Total $902,000

Outcomes and Accountability

The Department has adequate internal expertise to implement a hiring and training plan to take on all duties currently being performed by CFS, state and federal tracking, and reporting requirements. The current plan is for the Conservancies to continue their contract with CFS in the first 6-months of 2018-

PAGE 11-3

Analys is of Problem

19 in order to transition all information to the Department. During that time, the Department will work on hiring, training and transitioning in preparation for all administrative functions to transfer over.

The Department will provide the following services to the Conservancies as requested:

B U D G E T I N G

Budget Development

Prepare budget change proposals and finance letters. Prepare capital outlay budget change proposals, five-year plans, reversions, and reappropriations. Prepare Governor's Budget display, salary and wages spreadsheet, write budget bill language and prepare supplementary schedules. Complete all budget letter drills as required by the Department of Finance.

Budget Enactment

Respond to Department of Finance inquiries, track legislative hearings and prehearings dates, attend hearings and prehearings on behalf of Conservancies when conservancy staff is unavailable, and respond to Legislative Analyst Office drills and inquiries form Legislative Staff.

Budget Administration

Set allocations in fiscal systems, identify programs and program costs accounts. Generate and distribute expenditure reports to the Conservancies on a monthly basis, track encumbered grant balances, review allocation balance reports.

Bonds ' •

Assist with various bond related requirements including expenditure and encumbrance reports and send to the Conservancies for final review and signature.

C O N T R A C T S / P R O C U R E M E N T

Assist in the development of payable contract documents, maintain payments records, and review and certify availability of funding. Evaluate contracts for compliance with state requirements, review and process all contracts, provide contracting support, provide training for Conservancy purchasers to ensure delegated procurement, provide support for procurement and systems use in procurement processes.

ACCOUNTING

Fiscal Systems

Provide fiscal data in various databases, set up fiscal codes, set up appropriation symbols based on Budget Act, Complete fiscal month close and order month end reports. Complete year-end close and year-opening processes. Provide Data, setup, and reporting services for current fiscal systems used by the Department.

Procurement

Input expenditure coding into fiscal systems used by the Department, assemble statements and invoices into claim schedules, prepare bond cash letters.

Cashiiering

Prepare all cashiering reports for each fiscal month, post incoming checks to appropriate fiscal systems, establish bank accounts to adhere to state fiscal policy, deposit funds to bank, reconcile bank statements monthly, process and issue refunds, post account receivables, issue salary advances, maintain cashiering archives, complete and return vendors W-9 forms in accordance with Internal Revenue Service requirements.

Accounts Payable

Audit and process purchase orders, contracts, agreement for services, utility bills, rent and leases and open invoices according to State Administrative Manual and Government Code regulations. Input

PAGE 11-4

Analys is of Problem

expenditure coding into fiscal systems, assemble invoices into claim schedules, prepare and forward claim schedules to the State Controller's Office for payment, verify fund availability. Reconcile encumbrance balances monthly, submit annual late payment penalties report to DGS, and maintain accounts payable archives Review and approve procurement documents, encumber procurement documents including grants, monitor year-end accruals.

General Ledger

Reconcile all appropriations activity monthly, remit incoming cash to State Treasurer's Office, and post journal entries on behalf of the Conservancies. Prepare year-end statements, prepare year-end accruals, monitor invoices against year-end accruals, verify fund availability and notify other units before claim schedules are sent to the State Controller's Office, order month end remittance reports and submit to State Controller's office, prepare and fonward cash letters to the State Controller's office for payroll paid from bond funds. Monitor cash to ensure allotments are not overspent, provide copies of journal entries to the Conservancies, and prepare cash letters and certification letters for bond funds.

Revolving Fund

Audit travel expense claims, process requests for revolving fund checks audit airline invoices, issue checks from the revolving fund for travel advances, input expenditure coding into fiscal systems, assemble travel expense claims into claim schedules, prepare and forward claim schedules to State Controller's Office for reimbursement to the revolving fund.

Banking Service

Deposit cash, checks, and wire transfers to bank, process adjustments and withdrawals, process remote deposits, order and view bank statements online. Establish bank accounts with the Conservancies employer identification numbers to minimize potential deposit errors.

P E R S O N N E L S E R V I C E S

Selection

Aid in the recruitment process, advertise vacant positions.

Transactions and Benefits

Key in all employment history, appointments/separations, and payroll transactions through the State Controller's Office. Orient all new employees to civil service regarding benefits and responsibilities with regard to civil service employment, process benefits, coordinate all aspects of payroll including the release of payroll, coordinate non-industrial disability issues. Coordinate probationary reports, appraisal and develop plans and career development plans. Maintain leave balances and official personnel files

Timekeeping

Provide staff to coordinate timekeeping and to be point of contact for t imekeeping issues.

Classification and Pay

Assist with the analysis of appropriate classification allocation, aid in the Form 700 process for conservancy employees and assist with hiring packages.

Performance Management

Provide guidance regarding the progressive discipline process and assist with punitive and non-punitive action document preparation.

Training

Communicate training availability and communicate mandatory training for employees. Provide basic training on human resources related roles and functions.

Position Control

PAGE 11-5

Analys is of Problem

Establish new positions and maintain position control databases for each of the Conservancies'. Reconcile the annual schedule 8, establish new payroll headers, and reestablish vacant positions as permitted.

Risk Management

Assist with worker's compensation issues including claims management, settlement processing, and payment of claims Assist with health and safety issues and requirements. Assist with return to work issues and assist with family medical leave act, employee assistance program and catastrophic leave programs.

F. Analys is of All Feasible Alternatives

Alternative 1: Approve the request for $902,000 in ongoing reimbursement authority and seven permanent positions beginning in 2018-19, and ongoing, for the consolidation of administrative services

' work for the Conservancies who are currently contracted with the DGS' CFS Unit. This proposal will provide administrative services to the Conservancies at considerably lower cost to the Conservancies. The Department's experience and expertise with CMVC, SJRC, and BHC will allow the Department to set a baseline to provide administrative support to the newly contracted conservancies.

Alternative 2: Deny this proposal and augment the Conservancies' budgets to help continue CFS services and the increased contracting costs. This alternative provides fiscal relief to Conservancies who have had to reduce program costs to pay for increasing costs of the CFS contract. However, this alternative does not address the service effectiveness or efficiency issues experienced by the Conservancies. Additionally, it does not address the issues with meeting bond tracking and bond reporting requirements.

Alternative 3: Deny this proposal and do not augment the Conservancies' budgets in order to cover the increased costs of doing business with DGS' CFS for administrative services.

G . Implementation Plan

The Department plans to take on administrative services support for the Conservancies in 2018-19. The Conservancies will need to continue their contract with CFS for an estimated 6-month window in order to transition their records over to the Department. The Department will be working diligently on hiring, training and transitioning in that time period.

H. Supplemental Information

None.

I. Recommendation

Alternative 1: Approve the request for $902,000 in ongoing reimbursement authority and seven permanent positions beginning in 2018-19, and ongoing, for the consolidation of administrative services work for the Conservancies who are currently contracted with the DGS' CFS Unit.

PAGE 11-6

B C P Fiscal Detail Sheet B C P Title: Conservancy Administrative Services Consolidation

Budget Request Summary

B R Name: 3790-048-BCP-2018-GB

F Y 1 8 C Y B Y BY+1 BY+2 BY+3 BY+4

Personal Services Positions - Permanent 0.0 7.0 7.0 7.0 7.0 7.0

Total Positions 0.0 7.0 7.0 7.0 7.0 7.0

Salaries and Wages Eamings - Permanent 0 436 436 436 436 436

Total Salaries and Wages $0 $436 $436 $436 $436 $436

Total Staff Benefits 0 239 239 239 239 239 Total Personal Services $0 $675 $675 $675 $675 $675

Operating Expenses and Equipment 5301 - General Expense 0 128 128 128 128 128 5302 - Printing 0 4 4 4 4 4 5304 - Communications 0 10 10 10 10 10 5306 - Postage 0 4 4 4 4 4 5320 - Travel: In-State 0 1 1 1 1 1 5322 - Training 0 4 4 4 4 4 5324 - Facilities Operation 0 14 14 14 14 14 5346 - Information Technology 0 : 4 4 4 4 4 5368 - Non-Capital Asset Purchases - 0 58 0 0 0 0

Equipment 0 58 0 0 0 0

539X - Other 0 0 58 " 58 58 58 Total Operating Expenses and Equipment $0 $227 $227 $227 $227 $227

Total Budget Request $0 $902 $902 $902 $902 $902

Fund Summary Fund Source - State Operations

0995 - Reimbursements 0 902 902 902 902 902 Total State Operations Expenditures $0 $902 $902 $902 $902 $902

Total All Funds $0 $902 $902 $902 $902 $902

Program Summary Program Funding

Support of the Department of Parks 0 902 902 902 902 902 and Recreation

0 902 902 902

Total AH Programs $0 $902 $902 $902 $902 $902

B C P Title: Conservancy Administrative Services Consolidation B R Name: 3790-048-BCP.2018-GB

Personal Services Details

Positions 1303

Salary Information

Personnel Spec (Eff. 07-01-2018) Accounting Officer (Spec) (Eff. 07-01-2018) Accounting Administrator 1 (Supvr) (Eff. 07-01-2018) Sr Accounting Officer (Spec) (Eff. 07-

01-2018) Assoc Pers Analyst (Eff. 07-01-2018) Assoc Govtl Program Analyst (Eff. 07-01-2018)

Total Positions

4546

4549

4567

5142

5393

Salaries and Wages

1303

4546

Personnel Spec (Eff. 07-01-2018) Accounting Officer (Spec) (Eff. 07-01-2018) Accounting Administrator I (Supvr) (Eff. 07-01-2018) Sr Accounting Officer (Spec) (Eff. 07-

01-2018) Assoc Pers Analyst (Eff. 07-01-2018) Assoc Govtl Program Analyst (Eff. 07-01-2018)

Total Salaries and Wages

4549 -

4567 -

5142 -

5393 -

Min

C Y

Mid Max C y B Y BY+1 BY+2 BY+3 BY+4 0.0 1.0 1.0 1.0 1.0 1.0

0.0 2.0 2.0 2.0 2.0 2.0

0.0 1.0 1.0 1.0 1.0 1.0

0.0 1.0 1.0 1.0 1.0 1.0

0.0 1.0 1.0 1.0 1.0 1.0

0.0 1.0 1.0 1.0 1.0 1.0

0.0 7.0 7.0 7.0 7.0 7.0

B Y BY+1 BY+2 BY+3 BY+4 0 45 45 45 45 45

0 119 119 119 119 119

0 77 77 77 77 77

0 65 65 65 65 65

0 65 65 65 65 65

0 65 65 65 65 65

$0 $436 $436 $436 $436 $436

Staff Benefits 5150350 - Health Insurance 5150450 - Medicare Taxation 5150500 - OASDI 5150600 - Retirement - General 5150800 - Workers'Compensation Total Staff Benefits

Total Personal Services

0 76 76 0 6 6 0 27 27 0 116 116

_0 14 14_ $0 $239 $239 $0 $675 $675

76 76 76 6 6 6

27 27 27 116 116 116

14 14 t4 $239 $239 $239 $675 $675 $675