Minutes

Tuesday May, 12 2015
Hilton Sacramento – Arden West

2200 Harvard Street, Sacramento, CA 95815

8:30 – 9:00 Check-In/Registration

9:00 – 9:10Welcome/Introductions/Announcements

9:10 – 9:20Sub-Committee Business:

Review &Approval of February 2015 Meeting Minutes

Pam Elias, Riverside County

Treasurer’s Report

Darlene Hoang, Los Angeles County

Subcommittee Annual Report for 2014

9:25 – 9:45Updates:

  • CALSACA Website - Marcia Salter, Nevada County. Marcia announced that the website upgrade was approved at the spring SACA conference. Ed Price and Frank Davies have agreed to help with the upgrade. Marcia thanked Frank for providing the Subcommittee annual report at the conference.
  • Legislative– Carol Orth, Alameda County. Highlights included: AB2 (community revitalization low and mod); AB? Disaster Relief for Napa; AB83 information practices act; AB 169 Public Records and internet; AB 204 Los Angeles County oversight board postponement; AB237 parcel taxes; AB313 Enhanced IFD; AB402 Local Agency services contract; AB? VLF calculation 15/16; AB476 Hox Exemption increase $7k to $25k (State may not reimburse); AB654 DOF exempt from rule making; AB712, AB 806 Successor Agency to RDA Finding of Completion (FOC) amend contract bill; AB 867 Assessment actions parcel tax (could be related to State Fire tax fee); AB1009 tax override rate in redevelopment areas – funds go where voters approved (i.e. pensions); AB? Certified Aircraft bill (Assessor); AB1215 California Open Data Standards; SB 25 VLF; SB840 Heavy Equipment (ERAF) bill.
  • Technology -Kim-Anh Le, Santa Clara County.
  • Kim attended the Accounting and Reporting meeting last week. The attendance was about 40 people.
  • She also said there are about 10 counties talking the Grant Street Company for systems.
  • County of Riverside – Pam Elias provided an update of the Aumentum system progress for the three departments (Assessor/Treasurer Tax-Collector/Auditor-Controller). To date the system delivered the desired level of quality during the most recent round of User Acceptance Testing (UAT), the County did not sign-off on the current version of the Aumentum for the February 2015 Go-Live window – TR acknowledges the decision and agrees to the CREST’s assessment of the product. CREST and TR have formed a good working relationship with open communication at all levels, Thomson Reuters continues to exhibit a strong commitment and investment to making the product viable to meeting the County’s expectations, and the product has shown progress. To this point of the project, CREST still believes Thomson Reuters will be able to deliver a final Aumentum product meeting the County’s needs and requirements. CREST is near completion of current testing phase and identified issues that requires ‘fix’ in the 10.01 release of Aumentum in preparation for tentative restart of another round of UAT for tentative summer go-live window. CREST will require a retest of our 1,800 test scenarios to help ensure final delivery of a quality product for go-live. CREST and TR are currently assessing the possibility of late year go-live window; however the probability of go-live is very low due to amount of outstanding defects. Going forward, they are quantifying the level of efforts and time required by vendor to address all uncovered and remaining defects before the product is ready for a restart of User Acceptance Test phase. Assessing all remaining development and/or configuration items, efforts, and schedules. Completing remaining data conversion work items and address any data defects outstanding. Revised key milestones for all remaining work efforts and completion dates leading up to UAT restart point. Establishing clear understanding of UAT entry criteria, target, expectation, and success factors for County sign-off on go-live. Establishing a new baseline schedule and milestones for new target go-live date.
  • Santa Barbara County – They are still working with the Aumentum. There is a backlog of processes including Roll Corrections.
  • Santa Clara County – Is working on an in-house system.
  • Orange County – Started with Sierra Systems for the As-Is/To-Be requirements. They hired Tata to design and develop their system. They are now in litigation with Tata. Depositions are in process.
  • Property Tax Manual – Roxanne Nored, Placer County. The Tax Manual committee met on May 11, 2015 to review the manual updates. Roxanne expressed gratitude to Carlos and Barbara for their extra efforts with the process. Sally will be taking over the editing process from Barbara.

10:05 – 10:50Direct Charges – Tim Seufert, NBS. Tim talked about the difference between community facilities districts (CFD) vs. business improvement district (BID). CFD is a special tax that requires a 2/3 vote and the BID is an assessment district that has a majority protest ballot with a 50% approval or property owners needed. He also talked about AB2109 parcel tax reporting and R&T 163. (See presentation)

10:50 – 11:00Break

11:00 – 11:35Annexations/Jurisdictional Changes – RicSchwarting, BOE, Nikki Smith and Anna Marie Price. They have eight analysts. Ric talked about what they do and important dates to remember. Anna talked about the TRA consolidation process and displayed a graph of counties that may benefit from starting the consolidation process. Some counties have cities that are nearing the maximum number of TRAs which is 1,000. Bakersfield in Kern County is in need of TRA consolidation. Anna explained the process, the benefits and maintenance required. The R&T code referenced for TRA consolidation was 95 (g). (See presentation or contact the BOE for additional information)

11:35 – 12:00DOF Update – Chris Hill, Derk Symons.

  • Derk said the DOF has completed: 106 meet and confers; 339 Finding of Completions (FOC); 313 Long Range Management Plans received (223 approved, 90 in review and 70 not yet submitted).
  • Chris Hill provided an overview of the legislative process as it relates to the RDA dissolution simplification trailer bill (from January). The annual ROPS will be in February 2016. The bill has the framework for the last and final ROPS which is available after a Successor Agency has an FOC. The last and final proposal needs to be sent to the oversight board and the DOF. It remains operative until the debts are paid down. There are roadblocks for the trailer bill which include city concerns that their points are not being addressed (i.e., re-entered agreements). ABx1 26 nullified all agreements on 2/1/2012. Eleven cases for agreements were litigated. The Sacramento court said the agreements are still good. This is a point of contention. The trailer bill invalidates agreements. Discussions continue. Thursday the revision to the trailer bill will be released at 10:00 a.m. The revision will address stranded bond proceeds. The legislature confirmed that debt after 12/31/2010 cannot be extended. The bill also clarifies that loans attached to an RDA and city qualify for repayment. The city loans need to be repaid using the LAIF rate cap when approved for repayment. Glendale used the operative LAIF rate and the Sacramento court agreed but the DOF appealed. In the trailer bill the last and final will have a 2% LAIF rate. Some cities want options for repayment plans, which is okay but not until they have an FOC. As for tax overrides for pensions and state water projects it is administrations interpretation that an RDA is entitled to a share for bonded funds. To not pay violates the bond covenant.
  • The oversight board consolidation for AB204 is for Los Angeles County. The DOF did not weigh in on the bill yet. Other counties have concerns.
  • For the Low and Moderate Income Housing Funds (LMIH) the concern is if you are an RDA and did not make a SERAF or you borrowed, those are binding repayments. According to the DOF, RDAs with no Low and Mod, that now want Low and Mod is illegal.
  • AB8 bailout – the state also assumed the Health and Welfare for Stanislaus and Trinidad.
  • Newly incorporated cities in Riverside County that did not receive VLF swap may receive some legislative relief in the bill. The Governor vetoed a bill on this issue last year. The cities came to the State again. The Governor does not want an ongoing cost to the State.
  • Legislation updates by Chris Hill:
  • AB974 is a reprisal of the stranded bond proceeds. It is to be spent for greenhouse gases; however this could be a violation of the bond covenant.
  • AB1009 is a property tax override is to go to the entity that levied the override unless it is pledged?
  • AB2 – creates community revitalization authority like RDAs but cannot sweep school funds.
  • SB25 – Roth bill to get VLF swap funding for newly incorporated cities.
  • Oversight Board Staffing – The trailer bill originally stated the Auditor Controller’s Office would staff but the May revision will allow for sub contracting duties or consulting with a city, or the AC can perform the duties, or use a private entity (although not particularly addressed).
  • The DOF is preparing a ROPS template and will ask for our feedback.

12:00 – 1:00Lunch

Agenda, Cont’d

Tuesday May 12, 2015
Hilton Sacramento – Arden West

2200 Harvard Street, Sacramento, CA 95815

1:00 –2:00Lean Government – Paul Stamper, Process Improvement Manager, Ventura County. Paul talked about process improvement vs. project management. Process improvement and Lean Six Sigma are improving the process, lowering the cost and processing faster. Lean Six Sigma is often used for hospitals and healthcare agencies. The seven deadly words “we have always done it that way”. It is important to simplify convoluted systems. Don’t blame others just make the processes more efficient. Empower those that are closest to the process to help identify the solutions. Managers need to let go of the control. A balanced budget is not the same as an efficient one. Recognize waste and remove it. The eight wastes are: defects, over productions, waiting, non-utilization of people or talent, transportation, inventory, motion and extra or over processing. Remove 40% of the extra steps. Prado principle is that 80% of the results come from 20% of the effort. Averages do not tell the story, it is in the variation. Focus on the customer, change is uncomfortable. Seventy percent of U.S. employees are not engaged at work. If the engagement is improved, it will lessen defects, absenteeism, and turnover. Remember to train and empower staff. Reward good work and offer incentive systems. Beware that some people will game the system. Challenge rules vs. follow rules. It is important to have a foundation of trust and loyalty. Provide value to customers.

2:00 – 2:05Unitary/ERAF updates by Kim Le. Imperial County is in their first year for Qualified Property. Qualified property is not to be allocated to ERAF. For additional updates contact Kim Le.

2:06 – 2:35SCO Update – Scott Freesmeier, Reggie Nidoy.

  • Scott reported that the Government Code for the SCO audit is GC 12468.
  • Scott talked about the audit process, report process and the audit scope.
  • He spoke about the supplemental 5% administrative fee process. We need to have a system in place.
  • The SCO has completed 4 audits, 6 are in process and 8 in the coming up (Fresno, Contra Costa, Placer, Siskiyou, Imperial, Monterey, San Diego, Santa Barbara)
  • Annual SCO report for the legislature should be done this month.
  • Reggie reported on RDA asset transfer reviews.
  • They looked at 402
  • Final reports have been issued for 360 agencies
  • Reports in process 42 (39 are in draft)
  • Total dollar findings $5.9 billion
  • Anticipated completion date June 30, 2015
  • Agencies on a pilot program: Davis, Morgan Hill, Ontario, Montclair, Oakland, Irvine, Suisun City, El Cerrito, Beaumont and?

2:35 –3:30BOE State Assessed Property –Ken Thompson, Jack McCool, BOE

  • BOE contacts:
  • Jack McCool, Supervisor (916) 274-3296
  • Ken Thompson, Chief (916) 274-3300
  • Mike Harris, Manager at BOE
  • Jack provided a history of the BOE. In 1849 the control was with the local Assessor but in 1879 the BOE assumed responsibility for the railroad properties. In 1933 the assumed responsibility for the public utilities.
  • California Constitution, Section 19 of Article XIII defines that the Board shall assess properties.
  • The BOE handles the Board Roll, Roll Corrections and Escaped assessments (which are added to the current roll and should be using the current tax rate)
  • Qualified Electric – legislation was from SB1317 in 2006 which was for electrical generation plants in service after 1/1/07. It was codified in R&T 100.95. The tax rate area is 000-095. Fourteen counties have qualified electric properties. The majority of the properties are in the County of Los Angeles. The BOE provides supplemental property information to identify the tax rate areas and value that belong to the TRA 000-095.
  • Key dates for the BOE:
  • 5/27/15 Board Adopts the unitary AV
  • 7/26/15 Preliminary roll available
  • 7/28/15 Board roll adopted
  • 7/29/15 Final Board roll sent to Auditors and Assessors (sent US mail and email)
  • Ken Thompson presentation:
  • He provided statistics on the allocation of values and the highest state assessed property counties by proportion
  • He will be asking each county to provide their unitary rate to the BOE by September 1, 2015. The simplified rate has created a lot of disparities. Some counties have close to a 1% rate and others are close to 2%. Variances are caused by the growth differences in counties. The rate is a Constitutional statute issue (Section 19 of Article XIII). The BOE wants to use the rate to estimate the debt service tax by County. They are not looking at the statute issues of the rate.
  • Litigation issues:
  • Verizon 2007-2014 years are in litigation. Still looking for a court date. Maybe January 2016.
  • Sprint case is currently at the Court of Appeal.
  • City annexations can be an issue when they are annexing State Assessed properties and the BOE has not been notified.
  • SB661 commercial aircraft bill which requires the BOE to value the property.
  • SB480 – Taxation of qualified heavy equipment. Ken state he did not think this bill would pass.
  • Ken is retiring August 2016.

3:30 – 3:45Break

3:45 – 4:30California Fair Political Practices Commission Overview – Lynda Cassady, Technical Assistance Division Chief CA Fair Political Practices Commission

  • See Handout
  • Form 700
  • public document
  • retention = 7 yr minimum
  • 2 classifications tailored to type of job (all or limited types of disclosures)
  • Certain things are reportable and non-reportable. There are detailed instruction on the form and online. Examples were given.
  • Can amend at any time. No fee or fine to amend.
  • Behested Payment report discussed
  • Agency Gifts, tickets, and Travel
  • Conflict of Interest
  • Fundamental purpose to avoid and ensure you’re working for the gov’t agency and not yourself or private company/people.
  • Anyone can file an enforcement complaint against you anonymously
  • Agency Mass Mailings with Public Funds
  • how you can spend public funds on mass mailings
  • State Lobbying
  • Fines
  • 200 pieces
  • no featuring of photos or use of words “you/I”
  • Revolving Door
  • after leaving office, limited on what you can do
  • FPPC provides only written advice
  • 1 year ban before can appear
  • life ban on influencing
  • Honoraria
  • Banned. Can’t get paid for presenting.
  • Independent Expenditures
  • Limits
  • Campaign Reporting/Reporting
  • don’t accept contribution if within 60 days you don’t have the person’s name/address/occupation/employer
  • don’t accept cash
  • watch for money laundering (e.g. employees of a large company are giving money from the company to contribute individually to your campaign)
  • report subvendors
  • file timely (small fine, but the headlines aren’t pretty)
  • run for office – fill our 4 forms multiple times
  • FPPC has a staff of 6 people + online help.
  • FPPC doesn’t do
  • Brown Act
  • Conduct of Elections
  • Qualification for ballot
  • use of gov’t funds

4:30 – 4:45Roundtable/Discussion Items

4:45Adjourn