By Ashley Zavala
After years of failing to provide taxpayers an update on the cost of the California Capitol Annex Project, state lawmakers overseeing the project said Wednesday it is now estimated to cost up to $1.2 billion.
While project leaders pointed to inflation, lawsuits and supply chain issues behind the increase, KCRA 3 is learning major changes made to the project without public input have also had an impact on the price tag.
The cost estimate from project leaders this week represents a $98 million increase from the last cost estimate provided to taxpayers in 2022, which at the time was $1.1 billion. The update comes as those project leaders, Assemblywoman Blanca Pacheco, D-Downey, and State Sen. John Laird, D- Santa Cruz, still refuse to release basic monthly and annual cost records related to the project.
They also did not provide proof to back up the new estimated cost this week.
The project, which voters did not approve, involves the construction of a 525,000-square foot office building and parking garage for California's 120 state lawmakers and governor. It's expected to be complete in October of 2027. Taxpayers are funding the entire project.
Since 2018, project leaders have been requiring everyone involved to sign non-disclosure agreements, forcing people to keep basic information a secret. With the NDA's in place, the project price tag doubled between 2018 and 2022. The last public hearing on the project was in 2021.
With the new estimate, Pacheco and Laird said in an interview that pandemic-related supply chain issues, inflation and litigation delays would have increased the overall cost by 27% or $300 million, but they said there are changes underway to keep the cost overruns low.
Pacheco said they do not plan to ask for more money in the state budget this year and will use existing resources using money that was meant for a west-side visitor's center, cutting some landscaping-related plans of the project and "other project efficiencies."
When asked for proof of the estimate, Pacheco pointed to a two-page executive summary put together by Gilbane, the construction management company that took over the project this year.
"The construction budget needs to be reset," reads one of the main areas Gilbane said needs to be addressed.
The document gives a broad overview of the $98 million cost overrun that includes approximately $15 million as the result of litigation and $44.3 million in project change orders. The document did not provide details on the change orders.
Those project change orders have been approved behind closed doors with no public input.
Project leaders have not been forthcoming with project alterations or details. KCRA 3 has learned about some of them through leaks and sources.
Sources close to the project's finances, who spoke with KCRA 3 on the condition they remain anonymous, said one of the most expensive changes came not from state lawmakers, but from the State Senate's unelected secretary, Erika Contreras.
In 2022, sources said Contreras demanded the project's construction managers to completely change the design so that the State Senate would have more space. It's a decision that could cost California taxpayers up to $70 million, the sources said.
Laird and Pacheco paused for a few seconds when asked about the change.
"That doesn't seem right to me," Laird said before noting neither he nor Pacheco were leading the project in 2022. "There have always been issues between what the allocation is in space between the Assembly and the Senate."
Lawmakers overseeing the project have turned over since it began in 2018. The original visionary of the project, Democratic Sacramento County Assemblyman Ken Cooley, lost his seat in 2022. Assemblyman James Ramos briefly took over before Pacheco. On the Senate side, the project was overseen by Democratic State Sen. Bob Hertzberg until the end of 2022, then Laird took over the role.
The shuffling leadership means the highest-paid, unelected staff have been fundamental in project decisions.
Contreras, the Senate Secretary, is by far the highest paid person at the state capitol. She makes $318,624 a year according to the California State Senate's latest salary records. On the Assembly side, Contreras' equivalent is Chief Administrative Officer Lia Lopez, who makes $286,740.
KCRA 3 pressed Pacheco and Laird about the power they've given staff to make decisions, Laird said, "It is your framing that it is the unelected people do it."
When asked who is ultimately responsible for this project moving forward, Pacheco said, "We're here to provide transparency."
When asked if they're proud of all the decisions that have been made up to this point, Pacheco said, "we inherited this project."
See a full interview Pacheco and Laird in the video below
