Agenda

Monday October 3, 2016
Hilton Sacramento – Arden West

2200 Harvard Street, Sacramento, CA 95815

8:30 – 9:00 Check-In/Registration

9:00 – 9:12Welcome/Introductions

Auditor Controller’s registered for the event included:

  • Jay Wilverding
  • Robert Campbell
  • Joseph Mellett
  • Amy Shepherd
  • Marcia Salter
  • Andrew Sisk
  • Roberta Allen
  • Richard Eberle

9:13 – 9:55Sub-Committee Business

  • Review and approval of the May 2016 meeting minutes presented by Pam Elias - Approval of the minutes received with a second.
  • Treasurer’sReport by Darlene Hoang:
  • Darlene provided a recap of the May 6, 2016 meeting:
  • Event payment $7,710.10 (including $7,664.22 in event costs and $45.88 for presenter gifts).
  • Collected $5,325 in registration fees
  • Used $825 or 16.5% of our $5k for scholarships.
  • 86 people were in attendance
  • 42 counties were represented
  • 11 meeting scholarships were granted
  • 0 hotel scholarships were awarded
  • Guest count was 4
  • Going into this meeting there is $34,023.77 in cash and outstanding registration fees. We anticipate expenses to be approximately $14,800, which leaves an estimated balance of $19,200.
  • Legislative Update - By Bob Campbell. Bob provided an update based upon information received from Matt Siverling:
  • AB 2032 – Disincorporation bill was approved. It is not perfect and was in need of legislative cleanup. Appreciation was stated for Arlene Barrera (LA County) and Pam Elias (Riverside County) for their help with the bill.
  • AB 2031 – Affordable Housing Financing bill
  • AB 2291 Partial payment fee recovery (If we have costs have Tax Collector incorporate our costs).
  • AB 2476 Parcel Taxes Notice (refers to the Assessor)
  • AB 2693 Mello Roos
  • AB 2611 Monthly Payments for Property Tax - bill was vetoed
  • SB 996 Increased total welfare exemption to $10 million – $20k to 1% of $10 million on $5K increase. We may need to be in contact with our Assessors as we roll into next year for the 1/1/17 lien date to see how this will affect our county.
  • Other - Bob mentioned that in the May 2016 version of the “State of California Report to State Legislature Property Tax Apportionments” report, pages 10 and 11, there is an item for legislative consideration, which is talking about that the statute does not allow the counties to charge an administrative cost to recover schools costs. It is suggesting that the legislature should make appropriations for the reimbursement. Bob also mentioned the book is a good tool to learn what the SCO may be looking for in upcoming audits.
  • Technology Update –Hard copy on website
  • Inyo Countysigned with Aumentum
  • Riverside County- Theyhave passed around 600 test cases so far, and there are around 200-300 cases that are pending fixes and/or additional developments before retesting can be completed. Test case total is 1,900, which is approximately a 32% pass rate so far. Final User Acceptance Testing continues with the Riverside project team since the decision of no-go for July 2016. The end user acceptance testing process continues to identify bugs, missed requirements, and in few occasions added scope to the product. Thomson Reuters continues to commit their resources to address the challenges of completing Riverside’s requirements by: adding resources to their development teams; hiring quality assurance experts as part of the leadership team; modifying their processes to align their development towards test and a quality driven development approach. Riverside’s project team also continues to commit resources to collaborate with the vendor in mitigating the challenges in the User Acceptance Testing (UAT) phase. This phase includes adding and dedicating more business subject matter experts (SMEs) to the project team full-time; reviewing test cases and providingdocumentation that is more detailed (and augmented) to assist vendor development teams’ comprehension of the desired operational outcomes of the product. Riverside is also taking the advice of Santa Cruz, Santa Barbara, and another Texas county that went live over a year ago for lessons learned. The quality of the product at go-live continues to be the top priority for Riverside. Currently there is a mitigation strategy by Riverside and Thomson Reuters, and the teams are transitioning into this new operating model over the last few weeks. They do not have sufficient data or metrics to measure the effectiveness of the mitigation strategies yet, therefore next go-live target has not been determined.
  • Santa Clara County– Challenges for an in-house system, emphasis on collections not roll corrections. They had 67K petitions in 7 years that were not able to process. Lessons learned (put in smart newbie). Kim has 10 staff doing Roll Corrections.
  • Property Tax Manual - Roxanne mentioned they would love to have others join. It is a great way to learn.

9:55 – 10:06 Online access to R&T code and Property Tax Law guides,

By Barbara Godwin, San Luis Obispo County

  • Go to the link: . Barbara provided a demo of how to look up, search bills, codes, subscribing to bills, etc.
  • PTLG - Property Tax Law Guides (done by BOE). In 2010,they quit publishing the free volume. For volumes1 & 2, you can still subscribe for about $203, (the law guides are on DVD for about $43) PTLG is free on BOE website ( click taxes and fee tab, click property tax page & PTLG link to get to table of contents. Archive tab has other years which list years, and revisions which includes other information, for example the exemptions, Assessor’s handbook etc.

10:06 – 10:40 Board of Equalization/Tax Area Services Section(TASS) - Ric Schwarting (Manager of TASS) & Anna Marie Price (Specialist)

  • The BOE staff talked about TRA Consolidation – They were promoting the program. They have a presentation available or talk to Anne Price.Track specialist districts come in two types:

1) Service Jurisdiction (not mapped)

2) Taxing jurisdiction (mapped) - Those that share in the 1%, parcel, charges.

  • Important Dates:

Dec. 1- Boundary changes deadline

Feb. 5(est.) - Preliminary changes posted to website

Apr.1 (est.) -Complete database changes on web for 30 days review

May 1 (est.) - Posting final data (hard to make changes after the date)

  • Changes at TASS (BOE): They had fourteen staff, but now they only have seven. Same job – more work. Anna also reviews GIS coordination. Kathy retired after eighteen years and Paul left. The BOEemail . They have a one-day turn aroundfor requests. LAFCOhandles special districts and cities. Schools file directly with the BOE. Many maps are digital.
  • Anna explained the mapping process and how mistakes happen. Ric said to let them know if we find mistakes. Sometimes BOE TASS isforgotten in the process and they need to be notified. They have shape files & polygon’s (BOE had lots of errors for Butte County). PDF is official record. Someday they will have a real GIS System.

(Paper handouts available)

10:40 – 10:57Break

10:58– 11:15Get to Know Contra Costa County, by Bob Campbell.

Bob introduced his tax manager - Jennifer Webber. Then he talked about the history, statistics and that they are an original Teeter county.

11:15 – 12:00Outlook for 2017 by Jean Hurst, Hurst Brooks Espinosa Advocacy

  • Her presentation was entitled “Capitol Politics” A look at 2017”. See the handout. She talked about the legislation process. She planned to provide a summary of ballot & bills and stated there is a lot going on in Sacramento
  • Quick recap: September 30 was the deadline for legislative bills. 1,059 went to the Governor, 898 were signed and two became bills without his signature, 159 bills were vetoed. Some noteworthy items included:
  • SB32 - Greenhouse was a priority
  • AB1613 -Directed greenhouse reduction revenues to disadvantaged communities
  • AB1618 & AB28 - Proposition 63 funds for permanenthousing construction for homeless and mentally ill. The funds are to roll out in 2018.
  • Minimum wage law making the minimum wage $15 per hour by the year 2022, which was a result of dueling ballot measures.
  • What did not happen in 2016 legislation session?
  • The Governor vetoed several bills, here are some that were vetoed:
  • Diaper tax AB717 and tampon tax AB1561
  • AB2691 Property tax (monthly property tax payments)
  • No action to address the states crumbling infrastructure and transportation systems.
  • Reforms & CPUC (California Public Utility Commissions) and Californian Coastal commissions failed to pass legislative muster.
  • No movement on affordable housing
  • 2016-2017 State Budgets

State revision focused on “Big Three” personal income tax (up), corporation tax revenue (down), sales tax revenue (down)

  • November 2016 ballot
  • Largest pamphlet in history
  • 17 State ballot measures
  • Many issues have considerable policy impact (fiscal, public health, public safety).
  • See Haikus on the presentationfor a recap of the state propositions. Or, you can go to and click onCalifornia Propositions 2016
  • 2017-18 Legislative sessions
  • 17 Seats turned over in the assembly
  • 6 Seats turned over in the senate
  • Potential Democratic supermajority in both houses
  • How Bill becomes Law:
  • 2 year Legislative sessions in 2017-18
  • Then it goes through several committees (i.e. Policy, Fiscal).
  • Then it goes to the floor for votes.
  • Deadlines & rules (about timing etc.)
  • 2/3 vote requirement for urgency measureswhich take effect January.
  • 4/5 vote required in rare cases to modify ballot measure.
  • Odd years December 2016 – September 2017
  • Even years January 2018 – August 2018 (adjoin early in the even years so they can campaign).
  • Bills in odd year can roll over to an even year
  • Timing for sponsoring a bill is a lot of work (talk to stakeholders, write policy, write bill modifications, gain support, start early develop fact sheets, talk to committee staff, identify support and opposition approach anthems)
  • Spot bill intent of legislation to discuss

1stHouse of2nd House of

Policy (March - April)Policy (June - July)

Fiscal (April – May)Fiscal (July – August)

Floor (May – June)Floor (August – September)

May require house of origins to concur in second house amendments. Then it requires floor vote of house of origin.

  • Governor has the final say
  • 12 calendar days to sign or veto a bill (except at end of session he gets one month)
  • Legislative deputy is in the Governor’s office
  • Key state departments
  • If vetoed try again and modify, go to ballot
  • A ballot measure process - expensive (cost millions of dollars) and is a lot of work. They also have to meet with the LAO.
  • What is next?
  • Elections
  • LAO Fiscal Outlook
  • Legislative Convention 12/05/16
  • Legislative returns to work in Sacrament 01/03/17
  • Governor releases 2017-2018 proposed Budget release 01/10/17 (per California Constitution)
  • Question: What do you see is the impact of the upcoming presidential elections regarding Donald Trump or Hillary Clinton in California?
  • Clinton – no real impact (but she could hire Californian’s)
  • Trump – Do not know.We may have a rough time. Could be difficult.

She ended with talking about how she appreciates what we do.

12:03 – 1:08Lunch

1:08 - 1:50 California Economic Outlook

by Irena Asmundson, Department of Finance

  • Tax policy – Interesting time
  • Two forecasts
  • 1stJanuary preliminary budget
  • 2ndMay revision

Discussion will be on the May budget

  • Today: Recessions happen (good times never last)
  • CaliforniaEconomic and revenue trends
  • Structural trends
  • Housing
  • Inequality (rich lots of money and there is high poverty)
  • Demographics
  • Recessions happen about every 5 years. It has been 7 years. It will be a historicalanomaly if it does not happen in the next 3 years.
  • Important to plan (per Governor). Have a rainy day fund.
  • U.S. and California unemployment rate recovery slow. California follows U.S. trend but California is usually higher. For example, in 2011,the U.S. had a 10% rate and California had a 12% rate.
  • Averagewages going up
  • We look at the average instead of median because you have to look at larger populations
  • Median household income is increasing the last 3 years, but it is still lower than pre-recession.
  • Personal income up (includes transfer receipts)
  • California State’s highest revenue source is personal income tax
  • During the S & P 500 index period of 1990-2016, there were three recessions.
  • If top 1% of taxpayers not doing well, the revenue suffers.
  • Construction (residential) permits really have not recovered.
  • Multifamily permits are healthy. A large portion is expected to be multicounty
  • Household sizes appear to be going up
  • Fuel higher in California which is related to housing
  • Median home sales price of existing single-family homes was$100K in 1980 and $500K in 2016 (these numbers were not adjusted for inflation).Her source was the California Association of Realtors.
  • Rich people are paying to move here
  • California has a high poverty rate. In 2015:
  • 14% official poverty rate
  • 19% Supplemental poverty rate (22% in 2014)
  • 49% of people can’t afford a $400 unexpected bill
  • Demographics
  • Californiais clearly aging
  • Smaller tax base to support retirees in California
  • Proposition 13 protects retirees (but not for renters)
  • Big inflow of Asians (used to be Latinos)
  • Question1– With the minimum wage going to $15 per hour, will businesses leave? It is phased in over time and small business gets more time. The State is a huge employer thru in-home support services etc.,Lots will be caught up in the rising tide. Governor can pause the minimum wage twice. In addition, a pause can happen if there is a recession, he can pause the automatic increase.

Slower job growth but will notkill the economy. But we don’t know.

  • Question 2 – Are there more part time vs full time? Most are becoming full time.

1:50 – 1:54 Christy Redford announcement about the meetings - Please let us know if you have ideas to present at the meetings.

1:54 - 2:40 California taxpayer Bill of Rights(BOE) (See handout)

Todd Gilman (916) 324-2796

(BOE taxpayer Bill of rights Advocate 888-324-2798)

  • 200 – 300 cases per year for property tax side state assessee issues i.e., base year value issues and parent to child exclusion issues.
  • The Board has limited power but has influence
  • Taxpayers testify to Board
  • Listed taxpayers rights
  • They are ramping up for ballot issues and anticipating what will happen next on cannabis issues (for recreational use, if it passes)
  • Link: (California Tax Services Center)
  • Morgan taxpayer’s bill of rights (SB 143 from 1993)

Mark Sutter has a background with the Morgan Property Tax Payers Bill of Rights section 5904 (RTC 5900-5911). Their groups are:

  • Active listeners
  • Probe –talk
  • Resolve (by communication)
  • Are limited in power, they have no teeth

Taxpayer issues: Angry, challenging, they can have valid issues but some hide things.

2:58 - 3:23California State Association of Counties

Dorothy Holzem, CSAC

  • 2017 ballot measures this year
  • February she will give us additional information
  • Big issue is transportations ongoing needs. There is a proposal being drafted for infrastructure.
  • Homelessness and poverty issues - “no place like home” project to get homeless services for mentally ill. The goal is for wrap around services for mental health issues and housing. More details to come (Health and Housing Services)
  • Buy right for affordable housing – give approval to residential housing that is affordable
  • Cap and trade auction proceeds – how to spend
  • PILT payments being made again in the amount of $650K
  • There is still a decade of backlog for mandate reimbursements not yet paid
  • AB2691 – Holdum bill (Property tax monthly program)
  • AB 1952 - Property tax postponement - vetoed
  • AB 2476 – Daly bill. Notifying taxpayers of parcel tax for owners outside the boundaries (note 60 parcel taxes going to voters)
  • AB 2801 - Prop 60 & prop 90 expansions
  • AB 587 – Chow bill. Proposed a three year amnesty program (no penalty, interest etc.) but no corrective action going forward
  • CSAC active on 80 bills, successful 75% of the time. They took up to eight ballot measures.
  • This year was nicknamed the year of “Quentin Tarantino” bills since there were lots of bills having to do with drugs, guns and pornography:
  • Prop 53 – Revenue bonds voter approval
  • Prop 55- Prop 30 tax extension, (they support) extends personal income tax
  • Prop 56 – (they support) Tobacco tax
  • Prop 64 – (they oppose) marijuana issues local controller tax revisions.

3:25 – 3:57Removal or Reduction of Direct Charge Levy presentation, by Sally Zutter, El Dorado County (See handout)

  • Sally presented several scenarios in which a removal/reduction of direct charge may be requested. She talked about our authority to perform such duties, and which statutes allow us to make these corrections.
  • Sally asked that we think about not removing the charge for assessments such as PACE that were correctly loaded but we are being asked to remove the charge because the homeowner prepaid. To remove the charge using RTC 4832 would not be correct because it is not an auditor error. To remove the charge would reset the penalty for all other districts on the bill. The question came up in regards to scenario 4,what does your county do? Strip it; segregate it, bill separation or other. Under what authority do we use since it is not an auditor error?

3:58 – 4:41Property Tax Overview (See handout)

Linda Santillano, San Bernardino County

  • Their Auditor-Controller is now Oscar Valdez. In addition, Sonia Hermosillo is temporarily on the Enterprise System and Vanessa Doyle is the interim Division Chief.
  • San Bernardino County – Their General Accounting Division is their agent for school bonds.
  • Supplemental is extended three times per year.
  • San Bernardino does not Teeter special assessments or redevelopment but they do Teeter supplemental.
  • Linda also provided an overview of the property tax processes.

4:41Adjourn

Agenda

Tuesday October 4, 2016
Hilton Sacramento – Arden West

2200 Harvard Street, Sacramento, CA 95815

8:00 – 8:30Check in/Registration

8:35 – 8:40Welcome Back by Frank Davies

8:40 – 8:45Election of Officers

Secretary – Anthony Helm (Placer)

Treasurer – Jeff Emslie (Sacramento)

Vice President–Sarah Bloom (Stanislaus)

President – Matt Slaughter (San Mateo)