Analysis of the 2006-07 Budget Bill Legislative Analyst's Office February 2006

A Perspective on Emergencies and Disasters in California

Summary

In its history, California has experienced a wide variety of disasters. The state has developed a solid emergency management structure to respond to these emergencies. Yet, in order to remain effective, the structure relies on constant training and practice.

The Governor’s budget contains proposals for increased spending of $61 million ($54 million General Fund) in the budget year related to the state’s emergency preparedness and response-primarily for public health and agricultural emergencies. While some of the proposals are warranted, most of the proposals suffer from one or more deficiencies-such as the failure to maximize funds other than the General Fund, poorly designed solutions, and the failure to follow state information technology policy. Consequently, we recommend the Legislature reject many of the administration’s proposals.

We also offer a number of key considerations for the Legislature as it evaluates the state’s emergency preparedness. We comment on recent federal funding changes, reducing risks through land use decisions, and the creation of separate homeland security and public health departments.

Introduction

The State of California has a long history of natural and man-made disasters, from earthquakes to fires to riots. As a result, the state also has significant experience in reacting to disasters. Over time, the state developed a formal emergency response structure to manage information and resources.

The terrorist attacks of September 11, 2001 and Hurricane Katrina in 2005 brought national attention to governments’ planning and response to major disasters. Problems with response times, communication, and resources brought to light holes in the national disaster response structure. In addition, these disasters have reinforced the need for formal planning and prevention efforts.

These recent national disasters have driven California to reexamine the state’s emergency and disaster preparedness and response structure. In this piece, we:

• Provide a broad overview of the state’s existing structure for preparing for and responding to disasters and emergencies.

• Describe and analyze the 2006-07 Governor’s Budget proposals in this area.

• Highlight key considerations for the Legislature as it considers the state’s efforts.

Background

California Disasters

In its history, California has experienced a wide variety of disasters and emergencies. Some of these have been natural disasters-such as earthquakes, floods, fires, and outbreaks of disease or pests. Others are “man-made” disasters-such as riots, hazardous waste spills, failures of levees, and shortages of energy.

Each type of disaster has its own specialized circumstances. For many types of disasters, a state department may be responsible for developing a special response plan. Depending on the type, different governmental entities are involved. Special equipment may be needed to respond. It is beyond the scope of this analysis to provide a detailed overview of each type of potential disaster that the state faces, what activities are being taken to prevent such a disaster, who is in charge, and what plans exist. Rather, we provide a broad overview of the state’s structure to address various types of disasters below.

Phases of Emergency Management

Emergency management officials generally use four phases to describe their discipline:

• In Advance of an Emergency-(1) Prevention/mitigation and (2) preparedness.

• At the Time of an Emergency-(3) Response.

• In the Aftermath-(4) Recovery.

Figure 1 summarizes these phases and provides examples of what activities take place in each phase.

State Preparedness and Response

Of the four stages of emergency management, two stages-preparedness and response-tend to involve the most overlap of governmental entities and responsibilities. Below, we outline the state’s statutory framework for preparing for and responding to emergencies, describe key features of the system, and assess the system’s strengths and weaknesses.

Emergency Services Act

States of Emergency. The Emergency Services Act (ESA) is the statutory framework for the state’s responses to emergencies and disasters (Government Code 8550 et. seq.). The act gives the Governor broad authority to coordinate and access resources to respond to the emergency. The Governor can declare a state of emergency when requested by a local entity or if the Governor determines that a problem will require more than a single entity’s capabilities. In the event of an emergency, the state’s emergency plan is activated and the Director of the Office of Emergency Services (OES) is in charge of response activities (on behalf of the Governor).

Fiscal Powers. Upon declaring an emergency, the administration gains vast new fiscal powers. The administration is authorized to access any available funds from any existing appropriation (regardless of its original purpose). Also, the administration may transfer funds from the state’s General Fund reserve for up to 120 days after an emergency is declared.

Other Powers. The ESA gives the administration many other powers during a state of emergency. For instance, the Governor can issue written orders and regulations that “have the force and effect of law” and take effect immediately. In addition, the Governor is authorized to suspend local zoning, public health, or other ordinances for up to 60 days after an emergency in order to provide temporary housing to victims. The Governor can also commandeer private property and personnel (with reimbursement by the state).

Legislative Role. Under the ESA, the Legislature delegates much of its authority to the administration during an emergency. The administration must notify the Legislature when using some of its emergency powers. In addition, the Legislature has reserved the right to end a state of emergency. It can do so by passing a resolution in both houses with a majority vote. (The Governor can also end a state of emergency through a proclamation.)

Key Features of Response System

The Standardized Emergency Management System (SEMS) establishes the state’s structure and processes that must be followed by state and local entities in response to an emergency. Below, we summarize the keys features of SEMS.

Bottom-Up Approach. The current system relies on a decentralized model with response beginning at the local level. Local governments generally are expected to be the first responders to a disaster, using local resources. It is only when local resources are insufficient to respond that the emergency is elevated to additional levels of government. (There are some exceptions to this general rule. For instance, when state infrastructure or programs are involved-such as highways, wildland fire state responsibility areas, and state-sponsored levees-the state would be the primary responder.)

Incident Command. One of the keys to responding to an emergency is designating an individual who is in charge. The SEMS uses a tactical decision-making structure that evolved from military use. An “incident command” is established at the site of an emergency to designate the individual who is in charge. The incident commander is determined by who has the jurisdictional responsibility and training to address the emergency. (In some cases, multiple individuals may be designated as part of a “unified command.”) The incident commander is then responsible for determining objectives and timelines related to emergency response at the site.

Mutual Aid System. Some disasters and emergencies require more resources than a single local government can provide. California has a long history of neighboring jurisdictions providing help in these cases. Over time, these “neighbor helping neighbor” policies evolved into formal mutual aid agreements. The state is divided into 58 “operational areas” (with the same boundaries as counties) to coordinate local resources. The state has six formal mutual aid regions layered on top of these operational areas. Many specific types of responders have their own mutual aid agreements. For instance, police and fire departments use the mutual aid system to coordinate responses on a daily basis for events such as severe traffic accidents. Other mutual aid agreements-such as public health and emergency management-are used less frequently. When additional assistance is needed, an incident command alerts the county-wide operational area. The operational area can then manage the need for resources itself or seek assistance through the mutual aid system.

State and Federal Roles. The OES operates the State Warning Center (SWC) to monitor responses to emergencies. When a mutual aid region is unable to provide the necessary resources in response to an emergency, OES staff coordinate assistance on a statewide level. At times, the OES will seek the assistance from other state departments with specific expertise and resources. For instance, in the case of a public health emergency, OES will coordinate with the Department of Health Services (DHS) and the Emergency Medical Services Authority (EMSA). Figure 2 summarizes the state’s major entities that are involved in emergencies and disasters and their roles and responsibilities. When resource demands exceed the state’s ability, OES can seek assistance from the Federal Emergency Management Agency (FEMA) or through a mutual aid agreement with other states.

Strengths and Vulnerabilities of California’s System

Based upon our review of the state’s structure for emergency response, we find that there are many strengths of the system. The system, however, is not without its vulnerabilities. We discuss both below.

Strengths of System. The SEMS provides a solid structure for approaching emergency response. Since local governments are closest to the scene of an emergency, it makes sense that they provide the first level of response. When the situation exceeds their capacity, the system moves outward to neighboring jurisdictions and upward to higher levels of government to supplement their resources. The system of sharing resources helps minimize the need for each jurisdiction to purchase specialized equipment and hire staff for “worst case” scenarios. In addition, since the state often experiences emergencies, it has a lot of practice in implementing incident commands and administering SEMS.

Vulnerabilities of System. Despite these strengths, our analysis indicates that the system also has some vulnerabilities. First, SEMS works best with individuals who are used to its processes, requirements, and lines of command. For instance, personnel must know how to determine who should take the incident command, which entities need to be involved, and when local resources are insufficient to address the problem. That means governments must constantly train their staff and practice responses. The system also works best when responders have established working relationships with each other. Staff turnover or a lack of funding can undermine the level of experience necessary to successfully use the system. Finally, SEMS functions on the premise that-when local resources are overwhelmed-another entity will have, and be willing to share, additional resources. The state has been fortunate not to have experienced the largest-scale of disasters, such as a statewide incident. It is, therefore, simply unknown how the system will respond to simultaneous drains on resources.

Update on Recent Changes

Since September 11, 2001, the federal government has provided the state hundreds of millions of dollars in grant funds to address homeland security (Office of Homeland Security, OHS) and bioterrorism (DHS) priorities. While homeland security and bioterrorism emergencies are only a limited type of the possible emergencies, the influx of federal funding offers the state a rare opportunity to invest in its emergency preparedness. However, our review in the Analysis of the 2005-06 Budget Bill (please see page F-13) found that the state lacked a unified strategic approach with regard to these funds. Among our findings were:

• Homeland Security Lacks a Comprehensive Plan. Both OHS and DHS prepare a variety of reports and plans to meet federal grant requirements. These plans, however, were developed independently of one another, as opposed to taking a comprehensive view of the state’s homeland security problems.

• Slow Expenditure of Funds. Neither department was regularly reporting the status of prior-year grants or what goals the administration was hoping to accomplish with new grants. Our review found that many of the grant programs were having difficulties in spending funds. For instance, as of January 2005, only 31 percent of the $869 million in total federal grants received had been spent.

• Monitoring and Audits Not Performed. Our review found that neither department was conducting audits of local government grant recipients to ensure that the funds were being used consistent with requirements and approved proposals.

• Lack of Statutory Framework for OHS. Since its creation in 2003, OHS has been operating based on executive orders and broader authority under the ESA. Without specific duties, authorization, and powers, we found the office may experience difficulty in accomplishing its objectives.

Legislative Changes. In response to these concerns, as part of the 2005-06 budget package, the Legislature enacted a number of changes to the way homeland security funds are managed. Among the changes adopted were:

• Strategic Plan. The OHS, in collaboration with DHS, is required to develop a strategic plan for the use of the state’s grant funds. The plan is to assess the state’s level of preparedness and develop goals and objectives for making improvements. The plan was due to the Legislature on February 1, 2006. The Legislature had not received the plan at the time this analysis was prepared.

• Annual Expenditure Reports. Similarly, OHS, in collaboration with DHS, is required to provide an annual grant expenditure report. The report is to track prior grants and develop goals for future grants. As with the strategic plan, the first report was due February 1, 2006, but the Legislature has not yet received it.

• Increased Staff for Monitoring. The 2005-06 budget provides both departments with significant increases in staff. For OHS, the budget provides 40 new positions for grant monitoring and other duties. For DHS, the budget provides the extension of 95 positions (that would otherwise have expired) to continue bioterrorism preparedness activities. In providing these staff, the Legislature intended for the departments to provide greater oversight of the grants.

In addition, in June 2005, the Joint Legislative Audit Committee authorized a Bureau of State Audits review of the two departments’ grant programs. That audit is scheduled to be released in the summer of 2006.

Governor’s Proposals

The state receives more than $300 million annually in homeland security and bioterrorism funds from the federal government. These funds are intended to improve the state’s emergency preparedness and response in case of a disaster. While these funds have some federally imposed restrictions on their allocation and use, the state has a great degree of discretion over how to use the funds each year. In addition, many departments’ baseline budgets include funding for emergency planning, training, and response activities.

The 2006-07 Governor’s Budget contains proposals for increased spending of $61 million ($54 million from the General Fund) in the budget year related to the state’s preparedness and response to emergencies and disasters. (The Governor also proposes augmentations to current-year public health spending.) These proposals are summarized in Figure 3 and described in more detail below.

Department of Health Services and the Emergency Medical Services Authority

The Governor’s budget plan proposes to augment state and local public health capacity to prevent and respond to disease outbreaks and disasters. This includes about $48 million (about $46 million from the General Fund) and 60 new positions for the budget year, as well as $12 million (all from the General Fund) and seven positions in the current year. Figure 4 summarizes the Governor’s proposals in this area.

Strengthen Scientific Expertise and Capabilities. The Governor’s budget plan includes multiple proposals to bolster California’s scientific expertise and capabilities in regards to communicable diseases. Specifically, the plan includes proposals to: (1) strengthen the infectious disease laboratory infrastructure and provide training for public health laboratories; (2) enhance laboratory capability to identify chemical and radiological agents contaminating food, water, and the environment; (3) develop a program for prevention and control of health care and community infections; (4) expand state and local capacity to conduct communicable disease surveillance; and (5) train existing public health field investigation staff to respond to infectious disease threats and outbreaks.

Strengthen State and Local Preparedness and Response. The Governor’s budget plan also includes numerous proposals to strengthen state and local pandemic influenza preparedness and response. These include a proposal to: (1) provide funding to local health departments to support local pandemic influenza planning; (2) implement three medical disaster response teams; (3) purchase and stockpile antivirals, vaccines, and medical supplies; (4) bolster DHS’s pandemic influenza planning effort; and (5) purchase personal protective equipment for ambulance units.

Develop Public Education and Media Campaign. Finally, the Governor’s budget plan includes a proposal to develop and maintain a public education and media campaign for emergency preparedness and pandemic influenza. Specifically, the proposal includes funding for: (1) outreach to other state agencies and private organizations to assure that they are addressing the impact of public health emergencies; (2) print, radio, and television advertisements; (3) a telephone hotline; (4) a contract with a public relations firm; and (5) five new staff positions to coordinate the activities.

California Department of Food and Agriculture

The California Department of Food and Agriculture (CDFA) attempts to minimize and control livestock diseases and contamination of the food supply at the production level. The Governor’s budget proposes a $7.2 million increase to the department’s General Fund budget and 39 positions to address threats to food production. The proposal includes funding to: (1) expand laboratory capacity at the University of California at Davis (UCD); (2) conduct community outreach; (3) develop a number of information technology (IT) projects; and (4) expand staff in related areas. The specific proposals are summarized in Figure 5. The proposals assume ongoing General Fund support of $5.5 million in future years. The 2005-06 Governor’s Budget proposed $2.7 million in General Fund spending for many of the same activities. The Legislature rejected that proposal based on a lack of justification, the failure to coordinate the proposal with other state entities, and the availability of other fund sources.

Office of Homeland Security

Creation of Independent Entity. As noted above, OHS lacks a statutory framework. Currently, OHS is included within OES for budgetary purposes. In 2005, the administration proposed the creation of OHS as a separate state entity. In anticipation of administration-sponsored legislation to implement this proposal, the Governor’s budget creates a new budget item (0685) for OHS. The budget assumes an effective date of January 1, 2007 for this legislation. Consequently, the office’s funding for 2006-07 is split evenly between OES’s budget and the new budget item.

Mass Transit Security Grant Program. The Governor’s budget proposes $5 million in 2006-07 to establish a state grant program for mass transit operators, with ongoing support of $1 million in subsequent years. The design of the program would resemble a similar federal grant program. Only transit systems in designated urban areas would be eligible for funding. Resources would be allocated according to a formula based on ridership, track miles, number of stations, and threat risk. Unlike the federal program, however, construction and administration costs would be eligible activities. Funding for the program would come from the state Antiterrorism Fund, which receives its support from the sale of California memorial license plates. The proposal would use virtually all of the resources in the fund on an annual basis. (The fund currently has a comparatively large fund balance due to minimal spending in prior years.)

Expansion of Administrative Staff. The budget requests an expansion of OHS’s administrative staff by $444,000 ($344,000 from federal funds and $100,000 from the Antiterrorism Fund) and nine positions. These positions would provide fiscal services, information technology support, and legal staff.

Science and Technology Unit. The administration proposes $465,000 in federal funds and five positions to establish a science and technology unit at OHS. The staff would be responsible for researching new technological and scientific developments.

Office of Emergency Services

The administration proposes to increase staff at the State Warning Center (SWC), which serves as the central information point during state emergencies. The budget proposes increased funding of $617,000 (General Fund) and nine new positions. The department intends to maintain at least three staff at the center twenty-four hours a day.

Other Proposals

Although not specifically identified as part of the administration’s emergency preparedness package, the Governor’s budget includes several other proposals that would affect the state’s emergency preparedness and response. For instance, the Governor’s Strategic Growth Plan would provide bond funding for infrastructure that could help prevent emergencies, such as projects related to flood control. In addition, as part of a $38 million flood management proposal, the Department of Water Resources (DWR) requests $2.3 million to improve the department’s ability to predict and respond to flood events. Finally, the California Highway Patrol (CHP) proposes a $491 million multi-year project to modernize its radio system. We review these proposals in detail in the 2006-07 Analysis.

Proposals Focused on Science are Reasonable

Below, we analyze the Governor’s proposals. We find that many of the proposals focused on science are warranted.

Strengthening Public Health Scientific Expertise. Numerous reports and studies have indicated that California’s scientific and technical infrastructure in regards to public health preparedness is an area that needs improvement. For example, a Little Hoover Commission report found that California needs to substantially improve and modernize its capacity in disease reporting and laboratory diagnostics. Furthermore, the commission indicated that California’s laboratories are understaffed and that their scientific expertise needs to be developed. Given that this is an area of weakness in the state’s efforts to prepare for and respond to a disaster (whether it be pandemic influenza, another communicable disease, or an act of terrorism), we find that most of the administration’s health proposals categorized as “strengthening scientific expertise and capabilities” are justified.

Homeland Security Unit. Likewise, the administration’s proposal to create a science and technology unit within OHS using federal funds appears reasonable. The unit would coordinate information related to scientific and technologic research.

Purchasing Equipment and Supplies. Additionally, we find the following DHS and EMSA proposals to be reasonable: (1) administer three medical assistance teams; (2) purchase and stockpile antivirals, vaccines, and medical supplies; and (3) purchase equipment for ambulance units. These proposals would provide tangible benefits to the state, and the resources generally could be used to address a many types of disasters.

Many of Governor’s Proposals Are Flawed

While some of the Governor’s proposals have merit, most of the proposals suffer from one or more deficiencies-such as the failure to maximize funds other than the General Fund, poorly designed solutions, and a failure to follow state IT policy.

Failure to Maximize Use of Other Fund Sources

The state receives more than $300 million annually in homeland security and bioterrorism funds from the federal government. With a focus on terrorist threats, the grants have some restrictions on their use. A portion of the funds are required to be allocated to local governments and some activities are ineligible for funding. In addition, the grants are funded on a year-to-year basis.

Despite these limits, the grants provide the state with its largest source of funding for high priority state emergency preparedness activities. To the extent possible, the state should use these funds as its first choice for emergency preparedness activities. Once these funds are exhausted, the state should look to other sources of funds, if appropriate-like state special funds or user funding. Given the state’s overall budget situation, the state General Fund should be the funding source of last resort. Yet, as we discuss below, many of the administration’s proposals use the General Fund as the funding of first resort-missing opportunities for alternative funding sources.

Overdue Reports Would Assist Legislature. As noted earlier, OHS, with DHS’s assistance, is required to provide the Legislature a homeland security strategic plan and grant expenditure report. To date, the Legislature has not received those reports. The reports would assist the Legislature in determining how the proposed augmentations fit into the state’s overall strategy and whether federal funds are available or are already budgeted for these activities.

Pandemic Influenza Activities Overlap Bioterrorism. As we discussed in the 2005-06 Analysis, the goal of federal bioterrorism funding is to ensure that all state and local public health organizations are prepared to respond to bioterrorism, outbreaks of infectious diseases, and other public health threats and emergencies. The department claims that most of the federal funding has been directed towards bioterrorism-related activities which are dissimilar to pandemic influenza preparedness and response activities.

Our review, however, finds that some of DHS’s proposed General Fund spending this year-particularly as its relates to pandemic influenza planning-appears to fall within the parameters of federal funding. In addition, the requests would allocate General Fund monies using the same process that the department has used to allocate federal funds. As noted earlier, this process currently is undergoing an audit due to questions about its effectiveness in getting funds spent in a timely manner. Until the Legislature receives the above-mentioned reports, it will not be in a position to evaluate whether DHS has maximized its use of federal funds for the programs it has identified as having a high priority.

Most Agriculture Activities Appear Eligible for Federal Funds. As noted above, CDFA’s current request is an expansion of a proposal rejected by the Legislature last year. One of the reasons that the Legislature rejected the prior request was the department failed to account for the availability of homeland security grant funding. This year, the request references several instances of the receipt of federal funds offsetting the need for General Fund support. The CDFA reports that it exhausted all additional federal funding options.

Our review, however, indicates that most of the department‘s proposal is consistent with federal funding parameters for the largest grants received by the state. Moreover, the federal government recently placed an emphasis on supporting agricultural-related prevention with its grants. Eligible activities under federal grant guidelines include conducting public education campaigns, promoting business emergency preparedness, conducting vulnerability assessments, and developing security plans. Eligible equipment purchases include agricultural terrorism prevention, response, and mitigation equipment.

The OHS reports that agricultural terrorism is one of the state’s 15 funding priorities for the coming year. The OHS is in the process of reviewing and prioritizing state agency funding needs in anticipation of submitting a consolidated grant application to the U.S. Department of Homeland Security. By proposing General Fund spending, the administration has indicated that it deems CDFA’s activities to be a spending priority. We find little reason, therefore, why most of CDFA’s proposals could not instead be priorities within the federal application.

New Health Funds Available. We also note that after the Governor’s budget plan was developed, the federal government awarded California $9.6 million (including $2.9 million for Los Angeles County) for pandemic influenza preparation. An additional $250 million is to be allocated nationally in the future. At the time this analysis was prepared, DHS could not provide information on whether these new federal funds could be substituted for the General Fund resources included in its 2006-07 budget proposals.

Funding Already Dedicated to Water Security. The administration’s proposal to assist local agencies in planning, training, and responding to water contamination with $1.5 million in General Fund resources fails to account for funding that is already available for these purposes. Federal bioterrorism funding, a grant from the U.S. Environmental Protection Agency, and Proposition 50 bond funds are already available for purposes outlined in the Governor’s budget request. During the last three years, the state has appropriated more than $37 million from these funding sources for water protection activities, which calls into question whether this separate new program is warranted. Furthermore, $2 million in Proposition 50 bond funds remain available that could be used in place of General Fund resources proposed in the budget plan.

Industry Should Contribute to Costs. A number of the administration’s proposals could be fee-supported in that they are regulatory-based and/or provide direct benefits to industries. For instance, components of DHS’s and CDFA’s proposals would directly benefit food processors and manufacturers.

Regarding the DHS food contamination proposal ($1.4 million), the department already inspects, surveys, and oversees food processors and manufacturers for food contaminants on a fee-supported basis. Because the new activities proposed by DHS are an expansion of its current fee-supported duties to prevent food-borne illness and consumer injuries, these new costs should be fee supported.

Similarly, CDFA proposes to conduct security assessments of dairies, farms, ranches, and agricultural production facilities (two components totaling $1.1 million). The CDFA already assesses regulatory fees on these industries, and the proposed activities are consistent with other inspection activities. In addition, the federal government has already (1) developed model food security plans for producers and (2) funded the development of a course at UCD to enhance agricultural production security. These federal activities may make CDFA’s activities unnecessary.

Finally, the DHS request to develop and maintain a $1.4 million program for the prevention and control of health care infections would directly benefit health care facilities. This new program would help health care facilities reduce the number of costly infections. For example, according to DHS, in California’s 450 hospitals, health care-associated infections account for an estimated 300,000 infections, 13,500 deaths, and $675 million in excess health care costs annually. Therefore, we believe imposing fees on these facilities to support the Governor’s new programs in this area is a reasonable approach.

Some Proposals Ill-Conceived

Media Campaign Is Not Justified. The administration is proposing an ongoing DHS public education and information campaign regarding general emergency preparedness and response and pandemic influenza preparedness and response. We question the need for this campaign, given that the state already has developed emergency preparedness and influenza media campaigns. For example, OES’s “Be Ready!” campaign was launched in April 2005 to address these same issues. In addition, the state already has sufficient public relations staff at DHS and the Health and Human Services Agency (HHSA) that could supplement these efforts with free public service announcements.

Finally, based on our discussions with the administration, it is unclear why five new permanent staff positions are needed to implement a campaign, especially given that the proposal includes contract funding for public relations. The department was unable to specify what these positions would do after the media campaign was developed.

Surveillance Would Be Ineffective. The CDFA proposes to establish a program to increase outreach and surveillance in urban and rural areas to detect agricultural diseases and provide education about preventing their spread. The department proposes to visit specialty markets, auctions, swap meets, feed stores, shows, and fairs. Because of the vast number of these venues across the state, we are skeptical that a ten-member surveillance and education team would have even a minimal effect on disease detection. The state already has a network of local agricultural commissioners, public health officials, and UC cooperative extension offices. These entities have an established presence in every county and would be better able to target local efforts.

IT Projects Fail to Follow State Policy

Agriculture IT Projects. Within its proposals, CDFA proposes to fund five IT projects. The department’s projects include upgrading communication and data management systems, enhancing notification systems, developing an animal identification and movement tracking system, and developing a database for its emergency response office. In addition, within its proposal to enhance laboratory capacity is funding to develop an IT system. Collectively, these proposed projects total $2.2 million in 2006-07.

Required Documents Not Prepared. The CDFA has not submitted feasibility study reports (FSRs) for any of these proposed IT projects. Under state policy, FSRs are required for IT projects to ensure that such projects address business needs, contain realistic budget assumptions, and appropriately manage risks. Because of the importance of FSRs for project planning and budgeting, the Legislature stated its intent in the 2005-06 Budget Act (Control Section 11.05) not to approve funding for information technology projects without FSRs approved at the time of the budget request.

Homeland Security and Emergency Services Overlap

The administration has proposed that OHS and OES be separate entities, both reporting directly to the Governor. Although OHS is currently budgeted within OES, the two entities largely have been operating independently of one another. Although homeland security and emergency services can be distinguished from one another in some respects, the activities tend to overlap. For instance, although OHS administers the federal homeland security grants, many grant activities are related to overall emergency planning and response (overseen by OES). Given the current structure, it is likely that federal grant funds allocated by OHS have been used for more narrow homeland security purposes than if OES allocated the grants. The OES would be more likely to integrate the federal funds with existing emergency preparedness activities.

In addition, as noted earlier, the state’s emergency response system depends on solid working relationships among participants. Separating grant administration from day-to-day emergency response means that local governments have to forge relationships with two separate state entities.

Fill Vacancies Before Adding More Positions

In two instances, the administration is proposing adding new positions to offices that have a number of vacant positions for similar duties.

Homeland Security Slow in Hiring Staff. The 2005-06 budget provides OHS with a four-fold increase in staffing-bringing total authorized personnel from 13 to 53. These additional staff are intended to handle the office’s growing duties, such as administering grants, reviewing dangers to infrastructure, developing the homeland security strategic plan, and related administrative duties. The Governor’s budget proposes an additional nine positions for administrative duties within its grant management unit. The administration asserts that the increased positions are justified based on growing workload. Yet, OHS reports that it still has 22 unfilled positions on its existing staff-an overall office vacancy rate of 42 percent.

Warning Center Staffing. Similarly, the Governor’s budget requests four new emergency services coordinators and four new emergency notification controllers for OES to improve staffing coverage at the SWC. The department already has a total of 51 authorized positions in these two classifications. Yet, according to data from the State Controller’s Office, 33 of the existing 51 positions are currently unfilled-a vacancy rate of 65 percent.

Antiterrorism Fund Should Be Used to Fill Funding Gaps

Funding for Mass Transit Security. In 2005-06, California received approximately $19 million in federal support for transit security. A comparable level of federal funding is expected to be available to the state in 2006-07. Mass transit systems also are eligible recipients under many other federal homeland security grants. In addition to these funds, the administration proposes a new $5 million grant program for mass transit operators using state monies from the Antiterrorism Fund.

Program Would Only Make Marginal Improvements. Like other local entities, mass transit operators have large security concerns. For example, the Bay Area Rapid Transit (BART) district estimates $250 million in necessary security improvements. Spread statewide, the proposed $5 million program would provide only minimal resources to address these demands. In some cases, however, additional funds would help provide some flexibility for activities that are ineligible for federal funding, like minor construction projects.

Proposal Conflicts With Legislative Intent. The Antiterrorism Fund is the state’s only dedicated fund source for homeland security activities. The monies can be used to fund activities that are ineligible for federal funding. The proposed use of the Antiterrorism Fund for mass transit security would deplete the fund’s resources. When the Legislature established the fund, it specified that one-half of the funds should be used by the Office of Criminal Justice Planning (now part of OES) and the other one-half of funds should be used by other departments. As such, using almost the entire fund balance for a single program is inconsistent with the original intent of the fund-to address multiple departments’ homeland security requests.

Most Current-Year Proposals Should Wait for Budget

As noted above, DHS is proposing almost $12 million in additional current-year funding. The administration intends to introduce legislation to appropriate these funds. Many of the current-year proposals are complex and would have implications for other components of the state’s overall emergency preparedness. Given the number of concerns we have raised, we believe the regular 2006-07 budget process would give the Legislature the best opportunity to fully evaluate most of the proposals. (In the section below, we outline our specific recommendations.)

LAO Recommendations

Based on our review, we recommend rejecting many of the administration’s proposals. Our recommendations are summarized in Figure 6 and discussed in more detail below. In total, we recommend rejecting $48 million of the administration’s $61 million budget-year spending. These recommendations would reduce General Fund spending by $45 million in 2006-07. More than one-half of the amount recommended for rejection could be funded using federal dollars.

Reject Most Public Health Requests. We have no objection to DHS’s and EMSA’s requests for current-year funding to purchase vaccines and equipment for ambulance units ($2.8 million), which would provide equipment and supplies. However, for the reasons outlined above, we recommend that the Legislature reject the remaining $8.8 million of the current-year request.

Regarding DHS’s budget-year request, we recommend approval of $7.2 million in General Fund spending for developing scientific expertise, roughly two-thirds of the amount requested. In addition, we recommend approval of the proposals to address the potential for food contamination and the health care infection control program. However, we would replace the $2.8 million in General Fund support for these two requests with support from user fees. We also recommend deleting DHS’s $1.5 million General Fund request for water security because these activities likely are eligible for federal and Proposition 50 bond funds.

Regarding preparedness and response activities, we recommend deleting $18.6 million in General Fund support for two pandemic influenza components of the DHS request because federal bioterrorism funding is already available for these purposes and because forthcoming federal bioterrorism grants could be used in the future for these activities. We recommend approval of EMSA’s request for $1.8 million in reimbursements for medical assistance teams.

Finally, we recommend deleting the proposed $14.3 million in General Fund resources for a media campaign because it is duplicative of other state efforts.

Reject Entire Food and Agriculture Request. We recommend deleting the entire $7.2 million request from CDFA. As with last year’s proposal, the current request fails to maximize the use of available federal funds. In addition, the surveillance program is unlikely to be effective, required IT planning has not occurred, and industry activities could be funded through fees.

Homeland Security Should Be Part of OES. We recommend rejecting the proposal for a separate budget item for OHS. The OHS and OES have overlapping activities and need to work closely together. The OHS should be established as a division within OES. The Legislature should provide specific statutory authorization for OHS and delineate the office’s duties and powers (within OES). Such an approach would make it clear that OES is in charge in case of disaster preparedness and response.

We recommend approving the request for a science and technology unit. We also recommend approving a scaled-down mass transit security funding program of $2.5 million. The mass transit program should be funded on a one-time basis, so that uses for the Antiterrorism Fund can be evaluated on an annual basis. Consistent with legislative intent, the remaining $2.5 million could be used to fill in the gaps of departments’ requests that are not eligible for federal funding. Given that OHS is still filling positions from last year’s significant expansion, it is premature to add additional administrative staff. We therefore recommend deletion of the $444,000 and nine administrative positions requested.

Emergency Services Should Fill Vacant Positions. Before submitting requests for additional positions, OES should fill existing positions and then reevaluate its workload. Consequently, we recommend deleting the request for increased staff at the SWC.

Other Key Considerations

The Governor’s proposals described above are aimed largely at two specific potential disaster areas-public health and agriculture. There are a number of other emergency and disaster issues that the Legislature may wish to consider, which we highlight below.

Federal Funding Trends

Since September 11, 2001, the federal government has provided state and local governments nationally with billions of dollars in homeland security and bioterrorism grant funds. While California has received over $1 billion from these allocations, many observers have noted that the state has received a proportionately smaller share of funds than other states, based on population. While California has more than 12 percent of the nation’s population, a 2004 report by the Public Policy Institute of California found that the state was receiving less than 8 percent of the national homeland security funding. The federal government has since made a number of changes in its funding amounts and allocations-some changes benefiting the state and others reducing state funding. We discuss these changes below.

Reduced Grant Amounts. Due to federal budget reductions, the overall level of federal funding for state and local governments has declined in the past couple of years.

Emphasis on Risk. Partially offsetting the reduction of overall funding, the federal government has increased its emphasis on risk-based allocations. Given California’s large size and high-risk targets, this policy change will tend to shift a proportionately larger share of funds to the state. The President’s proposed 2006-07 budget (for the federal fiscal year starting in October 2006) would continue this trend.

Shift to Urban Grants. The federal government has also shifted a greater percentage of funds from the State Homeland Security Grant Program to the Urban Area Security Initiative Grant Program. The state program provides funds to the state and all local governments. The urban area program, however, concentrates funding to only the major metropolitan areas deemed to be at the highest risk of terrorism. This change can have mixed effects for California. Those urban areas that are deemed high risk, like Los Angeles and the Bay Area, have received proportionately more funding. Other areas, like Sacramento and San Diego, were recently dropped from the list of high-risk areas.

Other Funding Considerations. To date, the state has played a somewhat passive role in how local governments use their federal funding. Allocations generally are made to counties on a population basis. A local committee then determines the use of the grant funds within the county. This system allows local communities to spend the funds on what they deem to be their highest needs. However, this system also may hinder efforts to achieve statewide objectives.

Reducing Risks Through Infrastructure

Investing in infrastructure has been a major component of the state’s prevention/mitigation phase of emergency management. For example, most of the state’s buildings and bridges have been retrofitted to seismic safety standards. As the Legislature continues to evaluate the Governor’s proposed infrastructure plan, it may wish to consider how that plan affects the state’s emergency management. We discussed above the infrastructure demands facing mass transit agencies to upgrade their security. Below, we provide two additional examples-flood control and hospital seismic safety-of how infrastructure decisions can affect the state’s emergency preparedness.

Flood Control. The state is responsible for the operation and maintenance of the Central Valley flood control system, which contains approximately 1,600 miles of levees. The Central Valley levees were constructed largely by local interests early in the twentieth century to protect agricultural lands. The levees were not constructed to meet modern engineering standards and were not designed to provide protection to the urban areas that have since developed behind them.

In addition to the state’s responsibility for flood control in the Central Valley, the state has an important interest in the levee system in the Sacramento-San Joaquin River Delta (although it is not directly responsible for most of this levee system). This is because the operation of the State Water Project, which supplies drinking water to over 20 million people in Southern California, relies on the continued operation of the Delta levee system. If one or more Delta levees were to fail (as occurred in June 2004 at Jones Tract), the State Water Project pumps would have to be shut down to prevent salt water from the San Francisco Bay from being drawn into the drinking water system. The Delta levee system has similar design deficiencies as the Central Valley system, as well as the continuing erosion of Delta islands (which puts increasing pressure on the levees protecting them) and the potential that an earthquake in the Bay Area could cause multiple levee failures.

The DWR has estimated that billions of dollars are necessary to restore and/or upgrade these flood management systems.

Hospital Seismic Safety. Following the 1994 Northridge earthquake, California significantly amended its hospital seismic safety requirements through the passage of Chapter 740, Statutes of 1984 (SB 1953, Alquist). Chapter 740 mandates that acute care hospitals classify their buildings into one of five categories according to the risk of damage in an earthquake. By January 2001, hospitals were required to submit to the Office of Statewide Health Planning and Development (OSHPD) evaluations of their buildings’ seismic vulnerability and their plans to replace or retrofit each building used for acute care. The next major deadline for hospital seismic compliance is January 2008, when hospitals must ensure that all acute care buildings do not significantly jeopardize life in the event of an earthquake. Hospitals may also apply to OSHPD for an extension of up to five years to meet the 2008 standards.

The evaluations submitted to OSHPD in 2001 placed about 37 percent of the state’s acute care hospital buildings in the riskiest category for structural safety. However, there is no data since 2001 regarding how many of the riskiest buildings have been brought into compliance with the 2008 deadlines, nor any existing requirements for hospitals to submit additional information prior to that deadline. Given the lack of information on the progress of hospitals across the state relative to the established deadlines, the Legislature should consider directing OSHPD to survey hospitals’ status. A survey could determine the number of hospitals that still have noncompliant buildings and their current stage in the construction, retrofit, or closure process.

Reducing Risks Through Land Use Decisions

By influencing land use decisions, the state may be able to reduce the damages associated with disasters. We discuss two such approaches below.

Land Use Planning and Flood Control. As was mentioned above, the state is responsible for the operation and maintenance of the Central Valley flood control system. In addition to the state’s financial responsibility for operating and maintaining the state system, the state has been found liable for the flood damage that occurs when a deficient levee fails. While the state system was principally designed to protect agricultural land uses, there has been heavy population growth in the Central Valley in recent decades. Much of this development is protected by levees that are inadequate for urban flood protection.

While the state is ultimately responsible for this risk of catastrophic floods in the Central Valley flood control system, the state has little say in the land use decisions that allow development behind inadequate levees. There have been several proposals made to more closely tie land use decision-making to the public safety and financial risks of future floods, including:

• Mandating that property owners in all floodplains purchase flood insurance.

• Limiting the availability of state funds for local flood control projects in cases where local jurisdictions are approving development in flood-prone areas.

• Enacting a fee on new development in flood-prone areas to pay for additional flood protection.

• Requiring local governments to certify that new development will be protected by an adequate level of flood control.

While none of these proposals would eliminate future flood risks, they may have the effect of discouraging development in the most flood-prone areas of the Central Valley by making consideration of flood risks a part of land use decision-making.

Encouraging Fire-Safe Local Planning Decisions. The increasing presence of homes in areas of high fire risk is expected to result in the continued increase in state expenditures for wildland fire protection. Although the costs associated with wildland fires are often borne by the state, as with flood risks, the state has little say in the local land use decisions that put these homes in high-risk wildland fire areas.

We think the state should encourage local governments to make fire-safe planning decisions-local planning actions that account for and reduce the risk from wildland fires. These could include making land use decisions that locate development in a way that minimizes the risk of wildland fires, developing fuel management plans, and making sure that building codes and designs address the risk from wildland fires. We discuss in greater detail opportunities to provide incentives for fire-safe planning decisions in our April 2005 report, A Primer: California’s Wildland Fire Protection System (see pages 20 to 21).

Communication During Emergencies

Immediate and reliable access to information is fundamental to public safety agencies’ ability to respond to emergencies and disasters. To effectively manage such incidents, communication systems must allow officers from one public safety agency to communicate with officers from other agencies-known as “interoperability.” Achieving interoperability statewide has been an ongoing effort that has been hindered by both technical and policy considerations. For instance, limited radio frequencies available to public safety agencies has hampered progress. In addition, some safety agencies have been reluctant to cede control over purchasing decisions.

State Efforts. Chapter 1091, Statues of 2002 (AB 2018, Nakano), assigns the Public Safety Radio Strategic Planning Committee primary responsibility for developing and implementing a statewide radio system that facilitates interoperability among all of the state’s public safety departments. The committee is also responsible for assessing the need for new or upgraded equipment and establishing a program for equipment purchase. The California State Interoperability Executive Committee, originally established to meet federal communication guidelines, plays a similar role for the state as it relates to communicating between state, local, and federal agencies.

Buying More Equipment, But Still No Statewide Plan. It is unclear that the state needs two committees working on similar efforts to establish interoperability plans. Moreover, neither committee has significant authority to direct agencies in their purchasing decisions. While the committees continue their work, public agencies across the state are already using allocations from the homeland security grants and other funds to invest in new communication systems without a statewide plan. (We discuss such a state proposal from CHP in the Transportation Chapter of the 2006-07 Analysis.)

Considering Public Health As a Separate Department

Creating a Department of Public Health. Earlier in this piece, we discuss whether OHS should be a separate entity from OES. The Legislature also may wish to consider other organizational issues to ensure that the state is administratively structured in the best possible way to prepare for and respond to emergencies.

For example, the Little Hoover Commission has recommended creating a new Department of Public Health. The rationale for such an approach includes these concerns: (1) the administration of the Medi-Cal program dominates DHS to the point that other functions such as emergency preparedness receive lower priority; (2) public health functions are disorganized because they are distributed among several departments; and (3) the current fragmentation of public health programs among DHS and other state agencies makes it difficult for the state to monitor health trends and use scientific techniques to diagnose problems and craft solutions. A bill pending before the Legislature, SB 162 (Ortiz), builds upon the commission’s recommendations. In order to provide a greater focus to public health programs and emergency preparedness and response activities, the Legislature should further explore a consolidated public health department. Below, we discuss the advantages and disadvantages of such an approach.

Advantages. The main advantage of centralizing public health activities is the greater focus it would provide on improving the state’s health through public health activities and enhancing public health emergency preparedness. Second, a centralization of public health programs may expedite policy and budget decisions. Finally, a centralization of core public health functions in one department may reveal funding opportunities or efficiencies that are not as apparent or achievable when the programs are located in separate departments.

Disadvantages. The consolidation of public health programs could also result in disadvantages. First, as proposed by the commission, the department would be outside of HHSA and on par with HHSA and other cabinet-level agencies in the state government organizational structure, with the public health director reporting directly to the Governor. Our assessment is that the location of a public health department outside of HHSA would probably hinder state efforts to coordinate health-related programs and activities. Second, the separation of DHS public health programs from Medi-Cal could lead to missed opportunities for the integration of public health research and information into health care delivery systems (such as Medi-Cal managed care). Finally, reorganizing departments could mean short-term delays in moving ahead with current emergency preparedness activities.

Emergency Health and Social Services

Recent hurricanes brought California an influx of disaster victims from other states, some of whom ended up on California’s social services programs. Based on this experience, the Legislature may wish to consider revising the state’s social services and health programs for similar circumstances in the future.

Current Federal Law. Federal law provided emergency funding to states that gave cash assistance to evacuees from Hurricanes Rita and Katrina. However, to be eligible for this federal funding, states must have already established an emergency program distinct from its regular Temporary Assistance for Needy Families (TANF) program. (California’s version of TANF is know as the California Work Opportunity and Responsibility to Kids [CalWORKs] program, and currently the state has not established a distinct program for evacuees.) The federal government also permitted states to accept self-certification of identity, residence, citizenship status, and financial situation for purposes of eligibility for Food Stamps for up to four months. With respect to the TANF program, federal law leaves eligibility rules, including authorization for self-certification, up to the states.

Current State Law. The CalWORKs program is designed to help families transition from welfare to work. It has no specific provisions pertaining to displaced disaster victims. (State law does provide for a supplementary benefit program for households affected by California disasters.) Consistent with the federal Food Stamps directives, the Department of Social Services allowed hurricane victims to also self-certify eligibility for CalWORKs for up to four months, even though there was no specific statutory authority to accept self-certification. Because California had no separate program, the 2,500 evacuees became a state responsibility, with no additional federal funding to cover cash grants and other social services.

Creating an Emergency CalWORKs Program. For future disasters, the Legislature may wish to create an emergency CalWORKs program for several reasons. First, by creating a separate program, California could be eligible for future federal reimbursement for cash assistance and other services provided to specified disaster victims or evacuees. Second, in the event of disasters declared by the President and Governor, the Legislature could provide statutory authority to temporarily authorize for up to four months self-certification for certain eligibility requirements. Third, developing a specific short-term assistance program for evacuees to help them obtain shelter and reconnect with their families and assets may better serve the needs of disaster victims, than the current CalWORKs program. Had such a program been in place before Hurricanes Katrina and Rita, California would have been eligible for federal reimbursement for the CalWORKs costs associated with evacuees from these hurricanes.

Creating Emergency Health Programs. For similar reasons, the Legislature may wish to explore whether the state should create standby statutory authority so that victims of a major California disaster could more easily access health coverage under Medi-Cal or the Healthy Families Program. Under emergency circumstances, displaced disaster victims requiring health care assistance might encounter difficulties and delays in obtaining coverage because of a lack of access to personal documents that would establish their eligibility for these programs. Federal authorities have permitted individuals to obtain temporary health benefits with self-certification under such circumstances.

Conclusion

Recent events have brought emergencies and disasters to the forefront of public awareness. The state’s emergency system is relatively solid, although improvements could be made. The Governor’s proposals aim to address some of these weaknesses. However, in most cases, the proposals are flawed. The Legislature should seek how to allocate state and federal emergency-related resources in a more strategic fashion.