06/08/2009 Print Version |
WHEREAS due to developments in the worldwide and
national financial markets, and continuing weak performance in the California
economy, the General Fund deficit for the 2009-2010 fiscal year is estimated to
grow to $24.3 billion; and
WHEREAS the State Controller projects that as of July
29, 2009, California will not have the cash needed to meet all of its payment
obligations; and
WHEREAS the projected budget deficit will require critical
cuts to State programs and services, and additional borrowing from local
governments; and
WHEREAS immediate action is needed to address the
budget and cash crisis facing the State of California; and
WHEREAS immediate action to reduce current spending
must be taken to ensure, to the maximum extent possible, that the essential
services of the State are not jeopardized and the public health and safety is
preserved; and
WHEREAS State agencies and departments under my
direct executive authority must take all available steps to reduce their
expenses to achieve budget and cash savings.
NOW, THEREFORE, I, ARNOLD SCHWARZENEGGER, Governor of
the State of California, in accordance with the authority vested in me by the
Constitution and the statutes of the State of California, do hereby issue the
following orders to become effective immediately:
IT IS ORDERED that except for projects funded by the
American Recovery and Reinvestment Act, or projects funded by bonds, grants or
projects specifically mandated by court orders, or public-private partnerships
that require no direct state expenditures, any funds encumbered on or after
March 1, 2009, for contracts entered into for which goods or services have not
been provided or for contracts proposed to be entered into during the 2008-2009
fiscal year by State agencies and departments, regardless of funding source,
are hereby disencumbered and the funds will revert to their original funding
source if no legal liability will be incurred by the State. If a legal
liability will be incurred by the State, approval to continue encumbering the
funds must be obtained from the Agency Secretary and the Director of the
Department of Finance.
IT IS FURTHER ORDERED that by 30 days after the
passage of a revised budget for fiscal year 2009-2010, all State departments,
regardless of funding source, shall submit a plan to their Agency Secretary
that provides for a reduction of the amount of the department's appropriation
to be encumbered by new contracts, extended contracts or purchases from
statewide master contracts in the 2009-2010 fiscal year by at least 15 percent,
whether the reduction results from cancellation, suspension, renegotiation or
otherwise.
IT IS FURTHER ORDERED that effective immediately and
until a State department's plan is approved by the Agency Secretary, a State
department is prohibited from entering into any new contracts, amending
existing contracts, issuing purchase orders for goods or services, or making
purchases from statewide master agreements or leveraged procurement agreements
for goods or services.
IT IS FURTHER ORDERED that the Director of the
Department of Finance shall establish an exemption process regarding all
contract cost reduction measures contained in this Order that Agency Secretaries
and Cabinet-level Directors shall utilize to determine if an exemption is
justified based on an emergent situation to preserve and protect human life and
safety; avoiding significant revenue loss; achieving significant net cost
savings; maintaining multi-year IT system and service contracts approved by the
Office of the Chief Information Officer; or providing critical services and
functions.
IT IS FURTHER ORDERED that the services and functions
of state government directly related to the preservation and protection of
human life and safety, including but not limited to emergency and disaster
response activities and the provision of 24-hour medical care, shall be deemed
critical and exempt from this Order.
IT IS FURTHER ORDERED that all Agency Secretaries and
Department Directors shall take immediate action to implement this Order to
reduce state expenditures.
IT IS REQUESTED that other entities of State
government not under my direct executive authority, including the California
Public Utilities Commission, the University of California, the California State
University, California Community Colleges, the legislative branch (including
the Legislative Counsel Bureau), and judicial branch, implement similar or
other mitigation measures to achieve budget and cash savings and additional
transparency in state government.
This Order is not intended to create, and does not create,
any rights or benefits, whether substantive or procedural, or enforceable at
law or in equity, against the State of California or its agencies, departments,
entities, officers, employees, or any other person.
I FURTHER ORDER that, as soon as hereafter possible,
this Order shall be filed in the Office of the Secretary of State and that
widespread publicity and notice be given to this Order.
IN WITNESS WHEREOF I have
hereunto set my hand and caused the Great Seal of the State of California to be
affixed this 8th day of June 2009.
ARNOLD
SCHWARZENEGGER
Governor of
California
ATTEST
DEBRA BOWEN
Secretary of
State
