Minutes
Monday October 26, 2015
Hilton Sacramento – Arden West
2200 Harvard Street, Sacramento, CA 95815
8:30 Check-In/Registration – Meet and greet, coffee, tea and continental breakfast
9:00 Welcome/Introductions and a special welcome to the Auditor-Controller’s at the conference (Jay Wilverding, San Joaquin; Richard Eberle, Yuba; Marcia Salter, Nevada; Bob Campbell, Contra Costa). There was also an announcement that the next meeting is scheduled for February 3 & 4 in Ontario, California.
9:15 Sub-Committee Business:
Review & Approval of May 2015 Meeting Minutes
Pam Elias, Riverside County
Treasurer’s Report
Darlene Hoang, Los Angeles County
Election of Officers for 2016
President – Frank Davies, Orange County elected
1st Vice Pres. – Christy Redford, Napa County elected
2nd Vice Pres. – Linda Santillano, San Bernardino County elected
Treasurer – Darlene Hoang, LA County elected
Secretary – Pam Elias, Riverside County elected
Other Positions will remain the same for next year as follows:
Legislative Liaison – Ed Price, Santa Barbara County
Technology Liaison – Kim Le, Santa Clara County
Property Tax Manual Chairperson – Roxanne Nored, Placer County
Meeting Coordinator – Glen Lastimosa, San Bernardino County
Meeting Support – Sonoma County – Dawn Calahan
9:30 Updates:
· CALSACA Website - Marcia Salter, Nevada County. Marcia stated they were able to get approval for additional funding last week for the website upgrades. They will be moving forward next month on the project. Ed Price and Frank Davies to be contacted to assist with the process. If anyone else is interested in assisting, please contact Marcia Salter. In February 2016, they plan to show us the new site.
· Legislative - Ed Price, Santa Barbara County. Ed provided an index of bills that were provided to the Auditor-Controller’s in the legislative interest package. In particular, he mentioned AB169 (public records bill), AB313 (enhanced infrastructure financing districts), AB851 (city dissolution/disincorporation), AB1157 (property taxation of certified aircraft assessments), SB184 (local government omnibus bill), SB107 (redevelopment dissolution simplification bill), SB222 (local agencies; school bonds; G.O. bonds; statutory liens), SB272 (Calif. Public records act).
· Technology - Kim-Anh Le, Santa Clara County – Kim talked about some of the new system options that counties are either using or looking into such as Aumentum (Thompson Reuters); Megabyte; Grant Street; and re-hosting from COBOL to a Microsoft platform (Oracle).
o Riverside County – CREST go-live date has been revised with TR to the summer of 2016. Exact window of the cut over time frame (4 weeks) is to be finalized with business operations. Remaining milestones leading up to go-live are:
§ 1) Quality Improvement Phase (Pre-UAT): Validate and preliminarily ‘pass’ all critical and high severity test cases (1,667 cases) to ensure high quality of the system going into Formal and Final UAT. Target completion date of phase: Jan of 2016. Status: 55% test cases preliminary validated, currently on track to hit the target completion date. Area of testing focus in next few weeks relevant to ACO: Levy and Redevelopment
§ 2) Final End User Acceptance Test (UAT) Phase: Validate and pass all test cases (~2,200 cases) with minimum to zero Critical/High severity defects outstanding. Target date: Feb 1, 2016 – May 31, 2016.
§ 3) Implementation Phase: Mainframe freeze, data extraction, data import, configuration validation, data validation, and Aumentum system on. Target date: July ~ Sept 2016 (will need 4 weeks window).
§ Currently CREST (County of Riverside Enterprise Solutions for Taxation) and (Thompson Reuters) TR are ramping up with resources for the final push to complete the project. CREST currently stands at approximately 40 FTEs and will bring onboard ~12 more staff and testers. Partnership continues to be strong between TR and CREST teams as all resources focuses on reaching the testing and defect resolution targets set forth on a weekly basis. The partnership result in many project level process changes where both TR and CREST redefined new the ways implementation is conducted, planned and executed. The changes and the experiences will greatly improve the quality of the Aumentum product leading up to go-live as well as in post go-live operations.
o Santa Barbara County – They are currently on version 9.4. Santa Cruz is on 9.2. Version 10.0 will have much more functionality. With all the versions, TR has a lot of lines of code to juggle. Santa Barbara went live one year ago. Their Tax-Collector converted their 2014 bills into the new system. There have been challenges with the corrections and supplemental billing. They did their first apportionment in May 2015 with some pre-apportionments and reconciliations. They are still waiting to close out the Fiscal Year. Teeter has some challenges. They are still working with Simpler Systems for reporting which has been working well. Last Friday they ran their first negative supplemental billing which covered back to May 2014 (a big window to process). In their system they are not doing AB8 increment or redevelopment. The system can process the simple roll corrections. The system is a two-department system with the Tax-Collector and the Auditor-Controller. Assessor had gone with Colorado Custom Ware but unfortunately the company went belly up. This has added additional challenges to the processing since they need to write special interfaces to obtain the data. Santa Barbara is using their own product to do that and using spreadsheets. They have to pay a lot of interest due to the delay in the refunds. It is a 3% rate. They are using the claim forms (no W-9 unless over $600)
o Tehama County –Switched to Megabyte from the Crest Software Corporation system (unrelated to the Riverside CREST). They have many challenges and lack training. Other counties have offered to assist them.
· Other: Qualified Electric – Kim announced that there would be a lunchtime meeting to discuss the qualified electric issues. Those that needed to attend were the 14 counties that have QE which are: Imperial, Kern, Orange County, Riverside, San Bernardino, San Diego, and San Mateo (they indicated they have none), Solano, Tulare, Fresno, Los Angeles, Marin, Contra Costa and San Francisco.
· White Paper – Frank announced that Howard Newens from Yolo County had asked Ed Price and Frank Davies to put together a white paper of the challenges and issues with property tax. The paper was written and shared with the County Auditor-Controller’s last week. It is available for us to read on CALSACA.
10:17 BOE – Ken Thompson, Chief State-Assessed Property Division, Board of Equalization. Phone (916) 274-3300 email: . Jack McCool, Supervisor, phone 916-274-3296, email: . See handout. Ken talked about the debt service determination from RT 100 (b) (2), the history and RT 100.95 allocation recipe and Senate Bill analysis. Ken will be retiring in August 2016. Ken also talked about other legislation such as the airline legislation to State-Assessed property which did not pass but has been kicked to next year. The other bill SCA5 split roll was discussed. The governor is not in support of this bill and the BOE has at least two issues with the bill (1) The distribution to tax property tax out of the county where it is generated and (2) Taking the exemption to 500K will cut the unsecured roll way down. The issue of the SBE debt service rate being higher for PG&E does not seem to matter to the company since they seem to pass it on to the rate payers. Ken said the rates have been computed correctly for the counties he looked at but the legislation was supposed to be a simple solution to a difficult problem.
10:35 Break
10:42 “Local Governments and Disaster Planning”, Disaster Cost Recovery Lessons Learned – Todd Rydstrom, Deputy Controller, San Francisco City/County. See handout. Contacts are Tracy Schulze, Auditor-Controller Napa County 707-253-4551 or Todd Rydstrom 415-554-7500.
11:35 DOF Update/SB 107 – Chris Hill. Chris talked about SB107, an urgency bill that takes effect immediately. He provided a brief overview and highlights.
· Annual ROPS - February 1 we are transitioning to the annual ROPS. The first is due Feb 1, 2016. April 2016 is the meet and confers. May 1 is the determination of the enforceable obligations. The Successor Agencies are allowed a onetime correction/amendment which is due October 1.
· The last and final ROPS are to be submitted by the SA, the DOF has 100 days to review. This ROPS will be governing the property tax flow to the RPTTF January and June. There will be no prior period adjustments since they will be budgeted per the last and final ROPS. They are estimating about 50 agencies will qualify. One of the qualifiers is that any litigation must be settled. The SA must be able to schedule out obligations which would be hard to do with variable rates. One option is to refinance bonds. The SA can submit the last and final ROPS 1/1/2016.
· Loans - Types of loans have been expanded by the bill to add third parties if contracted with a city or county and can now get repayment. But there are limitations of $5 million per transaction. Loan transfers to real property for RDA purposes can be an enforceable obligation (no prior limit). Loans for the annual ROPS are to be repaid at 50% each period but the last and final is 15% of residual to repay loan. Under previous law the interest was capped at a 1% rate but with the new law the annual ROPS is 3% and the Last and Final is 4%. Interest is to be computed as simple interest. The DOF will be working with the SAs on loans. The last and final will not be on autopilot with the 15% of residual variance. The DOF will work with us.
· The SCO is not looking at the RPTTF, PPAs and oversight of ROPS.
· The process is still in development.
· Applications for the last and final are due in about 3 to 4 months.
· The SA will have some flexibility as to how they can spend.
· Under current law the SA, with a finding of completion (FOC), has had to repay loans and have a long range management plan and they have to pay the full due diligence amounts. With SB107 Successor Agencies have until December 31, 2015 to enter into a written payment plan with the DOF.
· Stranded bond proceeds can be spent under SB107
· Pension overrides – If pledged to debt service, it goes to the levying entity and is only used for debt.
· Oversight board consolidation – has been postponed to July 1, 2018. Los Angeles County will have five boards that align with their supervisorial districts.
· SB107 addresses the process of winding down in a specified statutory process. SA to send a resolution and the oversight board will approve and send to the DOF. The DOF has 30 days to respond. There are 100 days to settle outstanding issues.
· Administrative fee computations have changed.
12:00 Lunch
1:00 Property Tax Postponement Program – Lindsey Ross, Manager, SCO Property Tax Postponement Section. (See handout) The postponement program was signed into law on 9/28/14. It is for senior citizens, blind or disabled if the eligibility is met. It is a loan program. Loans are funded if funding is available. It is a self funded program. October 1, 2016 they will start accepting applications. The SCO is ramping up now for the program. The public number is 1-800-952-5661. Counties can call Lindsey at 916-322-3881 or Natalie Sidarous, Chief at 916-322-7453 . There are also some FAQs on the website.
1:45 State Department of Education, Christina Kersey. She said they were trying to determine why there were discrepancies between the miscellaneous taxes and the miscellaneous funds on the tax software (J29) reporting forms. Miscellaneous taxes are in-lieu State and Federal. Miscellaneous funds are not necessarily miscellaneous taxes. She also said if we are having trouble with the tax software to let them know.
1:55 Direct Charge Enrollment - In Heaven’s Name, What Am I Doing? – Sally Zutter, El Dorado County. See handout.
3:00 Break
3:15 Host updates
3:20 By The Numbers-SCO Website/Parcel Tax Reporting – by Edward Serafica, SCO and Open Data Website by Dang Nguyen, SCO. See handout.
4:10 Open Discussion/Roundtable: Legislation discussion SCA5, AB851, SB107, AB2
· SCA5 – Frank stated that a work group was established. An issue is that 3% of revenues which is more like 3% of 20% since schools are excluded. It lowers the income tax and keeps mental health funding whole. Taxes from the County are sent to the State. Redevelopment should get tax increment. It could be handled like the railroad base year set-up. It changes the unsecured roll with an exemption. There is also a section that states tax rate areas “in each” that should say”all”. What if a county is not at the TRA level and how will ERAF be handled? The bill does not factor in the future. It also does not address: roll corrections, excess ERAF and large refunds. It would be a complex design for counties to implement. The governor is not in support of this bill. It is possible it could go to the ballot.