TO: Department Directors and Autonomous Agency Heads
FROM: Governor Jennifer M. Granholm
DATE: January 24, 2007
SUBJECT: Reduction of State Expenditures for Acquisition of Space for State Operations

The economic conditions currently facing the citizens and government of this state and the resulting fiscal difficulties for our state budget are detailed in Executive Directive 2007-1. Given the severity of the state budget constraints, I am issuing this Directive now, which has as its objective reduction in expenditures by departments and agencies within the Executive Branch of state government. While I recognize that resources are already scarce, and that greater efficiencies already have been achieved in the administrative operations of state departments and agencies, it is critical to implement additional efforts to reduce costs and curtail spending. Accordingly, I direct:

I. REDUCTION OF STATE EXPENDITURES FOR ACQUISITION OF SPACE FOR STATE OPERATIONS

A. The Director of the Department of Management and Budget shall implement policies and procedures to ensure that prior to the consideration, negotiation, or approval of a lease of real property for use by a state department or agency within the Executive Branch of state government an analysis is first performed to ensure that more cost-effective space is not available at a state-owned facility or in a facility leased by this state under a lease-to-own arrangement.

B. By April 25, 2007, the Department of Management and Budget shall review all existing contracts for the use of leased facilities not owned by the State of Michigan or occupied by this state under a lease-to-own arrangement. The Director of the Department of Management and Budget shall report to the Governor by March 30, 2007 on any more cost-effective alternative space and consolidation of state agencies and department within state-owned facilities or facilities leased by this state under a lease-to-own arrangement. The Director may recommend cancellation or non-renewal of existing leases, among other options.

C. Not later than February 15, 2007, the Director of the Department of History, Arts and Libraries and the Director of the Department of Management and Budget shall present a plan to the Governor to close and relocate the Library of Michigan Law Library currently located in the G. Mennen Williams Building in Lansing to the Library of Michigan located within the State Library and Historical Center in Lansing. The report shall include projected cost savings.

II. ENFORCEMENT

A. State department directors and autonomous agency heads are directed to closely and regularly monitor activities relating to the use and acquisition of leased space to ensure close compliance with the spirit of this Directive and the efficient expenditure of tax dollars.

B. The Department of Management and Budget ("DMB") and the State Budget Office shall review department and agency activities on a regular basis to ensure compliance with this Directive.

C. In exercising general supervisory control over the functions and activities of all administrative departments, boards, commissioners, and officers of the state, and of all state institutions, as required under Section 3 of 1921 PA 2, MCL 17.3, the State Administrative Board shall monitor compliance with the requirements of this Directive.

D. Violations of the requirements of this Directive shall be reported to the Director of the Department of Management and Budget and to the Secretary of the State Administrative Board.

E. The State Administrative Board may take action to enforce the requirements of this Directive as authorized under 1921 PA 2, MCL 17.1 to 17.3.

III. MISCELLANEOUS

A. The restrictions established under this Directive apply regardless of the funding source.

B. Nothing in this directive shall be construed to restrict or modify Executive Order 2002-20.

C. Departments and autonomous agencies shall continue to comply with Executive Directive 2003-22 when considering and procuring space for state operations.

D. This Directive is effective immediately.
I extend my sincere appreciation for your assistance and the continued hard work of state employees as we respond to the state's difficult fiscal condition.

_____________________________
JENNIFER M. GRANHOLM
GOVERNOR