SACRAMENTO – A team of bureaucrats picked by Gov. Arnold Schwarzenegger is quietly preparing a comprehensive reorganization of state government larger than any attempted in California history.

The plan, expected to be complete by April 30, would close down whole departments and consolidate others. Up to 200 state boards and commissions and 1,500 political appointees would be eliminated.

Administration officials declined to specify reorganization proposals. But interviews with those who have been briefed or interviewed by planners suggest several likely recommendations:

• Consolidate most energy regulation under a newly created energy secretary picked by the governor. Regulation now resides in various appointed, semi-independent commissions.

• Create a new Department of Public Health, which would coordinate various prevention, advocacy and information programs. Eliminate a statewide health-planning department.

• Consolidation of the Department of Corrections and the California Youth Authority into a single prisons department. Close several prisons.

The plan will be submitted to the Legislature under a special law requiring lawmakers to act in 60 days or it will automatically go into effect. Legislators may not amend the plan, only approve or disapprove it.

Previous governors have used the law to reorganize individual departments or state agencies. But "this will likely be the largest reorganization attempted" since Gov. Edmund G. (Pat) Brown created the reorganization process in the 1960s, said Jim Mayer, executive director of the Little Hoover Commission, a good- government panel that is legally required to review the plan for one month before it is sent to the Legislature.

Mayer said his staff is trying to "clear the decks" of existing work because all hands will be needed to evaluate the massive reorganization plan.

The plan is being drafted by a team dubbed the California Performance Review – about 265 employees on loan from various state agencies.

Review leaders told legislative staffers April 7 that Schwarzenegger believes state government, growing incrementally over the years, has become unwieldy, outdated and unable to respond quickly to a changing economy. By eliminating and streamlining bureaucratic layers, the reorganization will smooth the way for efficiency recommendations in a June report.

Leaders did not say whether layoffs will result. But project coordinator Paul Miner said the plan will help cope with an upcoming wave of state employee retirements, suggesting many retirees will not be replaced.

Schwarzenegger has officially booked an anticipated $150 million in first-year savings from the review's efforts. But Billy Hamilton, a deputy comptroller from the state of Texas hired to help oversee the review, said savings could be much higher.

"Can we beat that by a little or a lot? I think we'll do very well," he said.

The reorganization is emblematic of Schwarzenegger's governing style: impatient, action-oriented and preferring to work behind the scenes until a completed plan can be dropped on legislators' desks under a very tight deadline.

The entire plan has been drawn up in less than three months. As late as the end of March, review staff - who work in the abandoned Sacramento offices of a recently shut-down trade and technology agency - were still getting their cubicles organized into team groupings.

"We're getting a lot of kooks calling who either just want to get someone they don't like fired or they're just a little bit different," said review director Will Semmes of thousands of anonymous e-mails and phone calls recommending changes. "It's separating the wheat from the chaff."

The reorganization plan will come to the Legislature at the peak of June budget negotiations. Lawmakers will have to absorb its wide-ranging proposals in the midst of frantic budget horse-trading and the near mania that seizes the Capitol before the legislative session ends Aug. 31.

Though review staff have ranged widely in seeking input, interviewing many in the public and private sector, details have been kept secret.

Orange County Register requests for a tour of the review's offices or an interview with Miner were declined. Miner's thoughts about the project were gleaned from a videotape of the April 7 legislative staff briefing.

When a Register reporter made an unannounced visit to the review's Sacramento headquarters, rank-and-file employees said they are forbidden to talk to the media.

Hamilton, who commutes to California about every other week, returned a call to his Texas office and talked at length about how the review works and how he has conducted similar efforts in other states and in Washington, D.C. He declined to discuss details of the reorganization.

"In an effort to look like he's an action hero in politics, (Schwarzenegger) is bordering on trampling some fundamental precepts of a democracy," said Sen. Jackie Speier, D-Hillsborough, who chairs a Senate government oversight committee. "We have to make sure that public scrutiny happens."

At the April 7 briefing, several legislative aides voiced reservations about lawmakers' inability to amend the plan and its stated focus on making government - which is charged with regulating industries and guarding public safety and health - run more like a business. One slide depicting government organization was labeled, "California State Bureaucracy: An Anti-Customer Maze."

Hamilton replied that government can be structured so that even regulation meets taxpayers' and businesses' needs.

"You can regulate people in a way that doesn't amount to what we often find with our audits, which is, 'Gotcha,' " he said.

Asked about the review in a recent interview with the Register, Schwarzenegger described a sweeping effort: "First, we look into it and find out exactly what are the problems that we have because it's so deeply rooted. I mean, it's been going on such a long time. Then, we would turn it into reality, the whole thing." Pressed about why he chose to rush an entire plan onto lawmakers' desks this year, he said: "Look, there would be a big battle. Obviously, this is not going to be just like you make a decision. ... We have to then sit down and lay out the whole plan and really work together as we do with everything. Let everyone be a part of it. And just really reform it."

WHAT HAPPENS NEXT
• Team members will complete a government reorganization plan this month and a list of efficiency recommendations in June.

• The reorganization plan will be reviewed for one month by the Little Hoover Commission, a 13-member good-government panel based in Sacramento whose members include Assemblywoman Pat Bates, R-Laguna Niguel. It then will be sent to the Legislature, which will have 60 days to accept or reject the plan without amending it. The efficiency recommendations will be drafted into separate legislation, written into the budget or enacted later.