California’s State Lands Commission is doing a poor job of managing its more than 4,000 leases, leaving millions of dollars of potential state revenues on the table, the State Auditor’s office reported today.
The commission – which consists of the lieutenant governor, the state controller and the state finance director – is responsible for managing lands that California acquired from the federal government at statehood, including the beds of navigable rivers and lakes, submerged land along the State’s coast, and school lands granted to the State for the benefit of public education.
The audit found the commission has missed chances to generate millions of dollars in revenues for the state’s beleaguered General Fund — as much as $8.2 million for just some of the leases in the sample of 35 reviewed. Specifically, the audit found the commission:
“We agree with many of the Bureau’s recommendations and, in fact, are implementing or plan to implement most of them,” commission executive director Curtis Fossum wrote to the auditor’s office Aug. 1. “We do appreciate the efforts of the Bureau in providing constructive criticism and analyses of past and present practices, as well as its recommendations, which we look forward to implementing where feasible and appropriate. Many of the recommendations suggested by the Bureau are practical and achievable if the Commission is provided the opportunity to acquire and retain adequate staff to address these areas.”
Former state Sen. Dave Cogdill, R-Modesto, who had chaired a Senate Select Committee on Surplus Property, called for this audit last year, citing various anecdotes of waste. Among those examples was USS-POSCO, a steel company that continued to occupy 490 acres of state-owned land in Pittsburg for 12 years after the lease expired. The property originally was leased at $235,137 per year, but the commission only collected a total of $66,784 in back rent during the 12 year period even as California’s land prices peaked.