Sequestered in the depths of the state's now-defunct Technology, Trade and Commerce Agency offices, more than 250 state workers and others are quietly and quickly working on one of Gov. Arnold Schwarzenegger's most ambitious projects yet.

The workers, on loan to the governor from other departments forced to make do without them in the midst of a hiring freeze, are attempting to reinvent the bureaucracy to trim costs and cut waste in virtually every corner of state government, all by June 30.

Some are skeptical that this mysterious group promising a dramatic government reorganization can succeed. Others worry that recommendations to eliminate entire departments or boards, tailored to the Republican governor's political agenda, will be thrust at lawmakers with little public scrutiny.

The review is unnerving state work-force leaders already squeamish about Schwarzenegger's proposed budget cuts and pledge against tax hikes.

"The process as far as I can tell is a pretty closed process," said Jim Hard of the California State Employees Association. "We were told by representatives of the governor that they wanted our input, but they have definitely not followed through on that at all."

Schwarzenegger, project executives and those carrying out the California Performance Review say they are confident the results will be substantial and worthwhile.

"It kind of shakes the cobwebs out of government and it gives bright, energetic employees and people a chance to go out and see what is there to improve government and make it better and make it less costly," said Billy Hamilton, the Texas-based "performance review guru" overseeing California's effort.

Among the range of possibilities under consideration are reorganizing the state's executive branch, consolidating agencies that duplicate each other such as some of the state's energy agencies, combining prison functions and reducing the number of state commissions.

The review grew from Schwarzenegger's pledge to "blow up the boxes" in state government by rooting out waste, fraud and abuse and streamlining state operations.

It is yielding some suggestions before the governor releases his revised budget plan in May, but the bulk of them are due to the governor by midsummer.

The governor can enact some of the recommendations by executive order and without legislative approval. Others will be given to the Little Hoover Commission, a state efficiency watchdog agency, and then to the Legislature.

"It's clearly the most sweeping review of a generation. Their ambitions are pretty lofty," said Jim Mayer, head of the watchdog commission, which has been sharing information from its own reviews with the project.

The so-called "CPR" group that has worked since February on the project consists of workers on loan from more than 70 state departments, with large contingents from the Department of General Services, the California Highway Patrol, the Department of Transportation and the Department of Corrections.

At least seven outside consultants have been tapped, including former GOP Gov. George Deukmejian and George Passantino of the Reason Foundation, a conservative think tank focused on shrinking government.

The group is split into 14 subgroups, each charged with raking through stacks of reports from past task forces, the Legislative Analyst's Office and other sources. They also solicited ideas from state workers, who e-mailed, called and wrote more than 1,000 suggestions to improve government.

Sixteen hundred state workers applied for the opportunity to leave their jobs for five months.

Those selected for the task are operating in a deeply private atmosphere. Workers were required to sign agreements that they would not disclose information about the process.

A handful of those involved, handpicked by project leaders to act as spokespersons, discussed the task in general, but did not divulge any detailed plans.

They described the mood of those working on the project as upbeat, even giddy, at the notion that someone has asked them - the troops from the trenches - about how to improve government.

"It's not often people ask you how to fix something," said Sue Sims, a 21-year veteran of state service who works for the California Environmental Protection Agency.

They said they are confident that they aren't simply producing a stack of suggestions that will gather dust at the Capitol like many previous government reports.

"None of us underestimate the capacity for this governor to move forward with some of these recommendations. He's tapped into a lot of frustration on the part of the people of the state in terms of how effectively state government is working," Sims said.

But they also note concern among some co-workers about the covert project and the waves the results are likely to cause.

"There will be some things that will be shocking to some people," said Don Currier, an attorney for the Department of Veterans Affairs. "We are going to change some things across the spectrum in state government to make things more efficient, and people aren't going to like that."

The project has drawn skepticism from leaders, as well.

Sen. Kevin Murray, D-Culver City, said he worries that the group is not spending enough time talking to "real people."

"We shouldn't just be concerned about the middle-class person who's waiting on line at DMV. We should be worried about the poor person who's waiting on line in the social service office," Murray said.

Murray said the group should already be holding statewide public hearings. "I am skeptical that the public will have any input if you are going to do this by June 30," he said.

California is borrowing a strategy used by Texas and the federal government, where public workers and managers studied ways to improve the bureaucracy.

Hamilton said two-thirds of the Texas suggestions were put in place, and have saved the state $14 billion in the decade since the review.

But one budget expert from Texas questioned that success rate, saying that many of the innovations recommended from Hamilton's work never materialized because of changing political guards and stumbling blocks embedded in the state's law.

"Really, you can't blow up the boxes, that's really naive," said Bob Bland, chairman of the public administration department at the University of North Texas. "Whatever this body's vision may be has to be juxtaposed against the existing legal and constitutional restraints."

Still, California's project already has ignited some changes.

The state Department of Consumer Affairs followed advice from the Performance Review to hire temporary workers to help cut a backlog of applications for contractor and nurse's licenses.

"It's sort of like people have been unleashed to do that which is right and that which is new," said agency Director Charlene Zettel. "They've had ideas before, but nobody cared to listen."

By June, the group is expected to deliver about 700 suggestions, ranging from the small to the colossal. One of the key goals, according to the project's co-director, Paul Miner, is to cut costs. But the group also is preparing for a "human capital crisis," with more than a third of state workers becoming eligible to retire in the next half-decade.

That translates to "71,000 employees that could leave state service in the next three years," Miner said. "How do we build a more efficient government that can do more with less; how do we train those lower-management folks who are going to necessarily rise up and lead in a new bureaucracy?"

One representative for workers in a department that loaned several employees to the review said he will wait to decide if it was worth it.

"If they are able to develop systems or procedures that make ... departments more efficient, then it was money well spent," said Lance Corcoran, vice president of the California Correctional Peace Officers Association. "But if nothing comes of it, then it was a bureaucratic waste of money."