1 BEFORE THE CALIFORNIA STATE BOARD OF EQUALIZATION 2 450 N STREET 3 SACRAMENTO, CALIFORNIA 4 5 6 7 8 REPORTER'S TRANSCRIPT 9 OCTOBER 27, 2015 10 11 12 13 14 ITEM P 15 OTHER ADMINISTRATIVE MATTERS 16 ITEM P1 17 EXECUTIVE DIRECTOR'S REPORT 18 7. CROS PROJECT UPDATE AND ACTIONS 19 20 21 22 23 24 25 26 27 REPORTED BY: Kathleen Skidgel 28 CSR NO. 9039 1 1 P R E S E N T 2 3 For the Board Jerome E. Horton of Equalization: Chairman 4 5 Sen. George Runner (Ret.) Vice Chairman 6 7 Fiona Ma, CPA Member 8 9 Diane L. Harkey Member 10 11 Yvette Stowers Appearing for Betty T. 12 Yee, State Controller (per Government Code 13 Section 7.9) 14 Joann Richmond 15 Chief, Board Proceedings Division 16 17 For Staff: David Gau Chief Deputy Director 18 19 ---oOo--- 20 21 22 23 24 25 26 27 28 2 1 450 N STREET 2 SACRAMENTO, CALIFORNIA 3 OCTOBER 27, 2015 4 ---oOo--- 5 MR. HORTON: Number 7. 6 MR. RUNNER: Yeah, there's one -- the CROS 7 report. 8 MS. HARKEY: CROS update. 9 MR. HORTON: CROS update. 10 MR. RUNNER: Mr. Gau. 11 MR. HORTON: Let's have that. 12 MR. GAU: Good afternoon, Chairman and 13 Members. I'm David Gau, the Chief Deputy Director, 14 and I'll be providing the CROS update this 15 afternoon. 16 Final proposals were received on October 17 19th, I'm pleased to report, and evaluations are 18 currently under way. 19 During the evaluation period, Board staff 20 continues to achieve the pre-implementation 21 activities. These include documenting all the 22 business rules, the hundreds of interfaces that we 23 have, systems, and more than 5,000 reports and 24 forms. 25 We're crafting a data dictionary, 26 pre-converting more than a billion records, and also 27 fixing a number of large volume of production data 28 errors. 3 1 In response to Board Member Ma's previous 2 question at an earlier update, the Board has spent 3 25,300,000; and that was as of September 30th. And 4 we expend about, each month, 750,000, is our burn 5 rate they call it. So, just to follow up on that 6 inquiry. 7 That really concludes my report, and thank 8 you. 9 MR. HORTON: Members, there was some 10 communication -- I can't recall what it was -- about 11 the possibility of us not having -- I think -- this 12 report. 13 I think the reports should continue to 14 come. There's a lot of activity that is occurring, 15 and I think it's a process by which we make the 16 public aware of what's going on, as well as our 17 collective body aware. And so I think that's 18 important. 19 Let me also compliment Ms. Bridges and the 20 team, the transition team, the new governance team. 21 I believe they've all met with all of the Members. 22 I met with them. Very, very much impressed how you 23 were able to engage and, in a significant way, gain 24 the confidence of the Governor's office, the 25 confidence of all the parties involved, as well as 26 all of the individuals who were interested in 27 participating in the RFP process, received 28 compliments from them as well. 4 1 So, in that regard, as we said, it doesn't 2 happen in a vacuum, so we very much appreciate your 3 leadership and making sure that we cross whatever 4 speed humps we cross and continue to move forward 5 progressively. 6 Member Runner. 7 MR. RUNNER: Yeah, I was going to say, I -- 8 I -- I had a very helpful update from the -- from 9 the team, CROS team, that came on over, and I 10 appreciate that greatly. 11 It was -- again, we're moving into a new 12 phase of which we can know some things and not know 13 some things. And I think that it's -- I think it's 14 exciting to be moving in a way that we actually are 15 close to the process of acquiring things and making 16 the real change. Although I know a lot of 17 programmatic changes have been made already, but it 18 was very helpful and I think outlined where we are 19 right now. 20 MR. HORTON: Member Ma. 21 MS. MA: So, thank you. 22 So I also had the opportunity to meet with 23 the new CROS transition team or leadership team, and 24 I really would encourage continuous reports every 25 month -- 26 MR. GAU: Yes. 27 MS. MA: -- keeping us in the loop. 28 We do work with a control agency, just 5 1 making sure that they are also on the same schedule 2 that we on -- we are on. Obviously our burn rate 3 is -- is really high every month, and if we're not 4 meeting our schedule and our deadlines, then that is 5 going to start concerning me. 6 So, I know we're going out -- we're in a 7 process right now. And then if you could just maybe 8 tell us like when we're expected to kind of move on 9 to the next phase of this blackout period so that we 10 are all in the loop and we're all kind of keeping 11 track, not only here, but the people who are 12 watching outside also. Because, you know, it is an 13 important project and we are expending money, and I 14 want to just make sure that the public, as well as 15 all of us, are all on the same page. 16 MR. GAU: Certainly. We'll be back every 17 month. 18 MR. HORTON: Okay, thank you. 19 Let me encourage, as well, further 20 discussion of the burn rate conversation. 21 MR. GAU: Yes. 22 MR. HORTON: There are different 23 perspectives historically in looking at that. And, 24 to the extent that it may be some ben -- there's 25 some benefit to the organization with the 26 expenditures that we have as you come forward. 27 Member Harkey. 28 MS. HARKEY: Yeah. I would just like to 6 1 extend a -- a gracious thank you to Ms. Bridges for 2 coordinating and getting us back on track with 3 CalTech. There was a bit of a mess with that, but I 4 think we've got the understanding. We always did 5 have a good program moving forward, it's just the 6 communication was lacking. 7 And we've got a great team in charge, and 8 so I -- I appreciate the updates. I think -- I 9 think it's going to be a fabulous amenity, for lack 10 of a better term, for the BOE. It's something we 11 really need. We're on the old ISIS program now and 12 it's very confusing and creates a lot of problems. 13 Very few people understand the whole 14 process, and I think it's going to be, in another, 15 let's hope, five years or less, we'll have our -- 16 have our system up and running and we'll be fully 17 coordinated. 18 I have great hopes. I know, you're choking 19 but -- but I -- I really do have great hopes. I 20 think -- I think -- 21 MR. GAU: So do we. 22 MS. HARKEY: -- just getting -- getting on 23 track, we've got a -- I don't know who's pulled down 24 the website in the internal BOE. But if you can see 25 all the people that are tasked with duties here and 26 all the knowledge, the institutional knowledge we 27 have, and all of the departments that came forward 28 and working through all of the kinks we presently 7 1 have in our present system and trying to be sure 2 that they get it right once we start moving towards 3 the new one. 4 I -- I think there's just been a ton of 5 work done. And I didn't know when I first came 6 here, and so I'm very appreciative of the staff, 7 very appreciative of Ms. Bridges for squaring us 8 away with CalTech, and very thankful for CalTech for 9 coming to the table and understanding where we are 10 and what we're about and letting us move forward. 11 And thanks very much to all of you. 12 MR. GAU: Very good. Thank you. 13 MR. HORTON: Thank you very much. The 14 Board will receive and file. Appreciate your effort 15 as well, David. 16 MR. GAU: See you next month. 17 ---oOo--- 18 19 20 21 22 23 24 25 26 27 28 8 1 REPORTER'S CERTIFICATE 2 3 State of California ) 4 ) ss 5 County of Sacramento ) 6 7 I, KATHLEEN SKIDGEL, Hearing Reporter for 8 the California State Board of Equalization certify 9 that on October 27, 2015 I recorded verbatim, in 10 shorthand, to the best of my ability, the 11 proceedings in the above-entitled hearing; that I 12 transcribed the shorthand writing into typewriting; 13 and that the preceding pages 1 through 8 constitute 14 a complete and accurate transcription of the 15 shorthand writing. 16 17 Dated: November 9, 2015 18 19 20 ____________________________ 21 KATHLEEN SKIDGEL 22 Hearing Reporter 23 24 25 26 27 28 9