Governor Schwarzenegger Announces $27 Million in Savings from DGS Renegotiated Contracts

Governor Arnold Schwarzenegger today announced the Department of General Services (DGS) has saved the state $27 million on commercial leasing rates through a targeted effort to renegotiate the terms on 1,200 of the state’s commercial leases. DGS estimates that its efforts will eventually achieve $80 to $100 million in savings over the life of the leases.

“In these economic times, state government has to run as efficiently as possible to be able to continue providing critical programs and services to the people of California,” said Governor Schwarzenegger. “Today’s announcement means that the state is saving real dollars that can be directed to other vital areas. My Administration will continue to tighten its belt and cut costs just like every other California family and business is doing.”

The Governor has called for a reduction of state spending and issued an executive order last month directing all state departments to develop and submit to the Department of Finance plans to decrease their future spending on contracts and purchases by at least 15 percent. The order also called for a reduction of state spending through eliminating the funding of contracts entered into by state agencies and departments after March 1, 2009 for all goods and services excluding those necessary for public safety.

Governor Schwarzenegger is continuing his efforts to make government more efficient and cost effective through rooting out and eliminating waste, fraud and abuse.

On Friday, the Governor ordered the state’s motor vehicle fleet to be reduced by 15 percent following reports of waste and abuse regarding vehicles permitted to be taken home by state employees. The abuse was reported to the newly created Waste Watchers Web site. An internal Department of Transportation audit available on the Reporting Transparency Web site confirmed similar findings showing a lack of justification for many home storage vehicle permits. By executive order, the Governor directed each state agency and department to conduct an immediate survey of its fleet and identify the first phase of surplus vehicles to be sold at the DGS “Garage Sale” in late August.

The Governor has also proposed to achieve additional savings through rooting out waste, fraud and abuse in some of the state’s most costly programs such as CalWORKs, In Home Support Services (IHSS) and Medi-Cal. The Governor’s Administration estimates that with simple reforms such as requiring twice-yearly face-to-face meetings between CalWORKs recipients and county workers to measure progress, increasing the number of fraud investigators in IHSS and modernizing the enrollment processes for CalWORKs, IHSS and Medi-Cal, the state will save billions of dollars over time and achieve sufficient savings this budget year to mitigate harsher cuts to schools, health care and other services.