1 BEFORE THE CALIFORNIA STATE BOARD OF EQUALIZATION 2 5901 GREEN VALLEY CIRCLE 3 CULVER CITY, CALIFORNIA 4 5 6 7 8 REPORTER'S TRANSCRIPT 9 NOVEMBER 29, 2016 10 11 12 13 ITEM P 14 OTHER ADMINISTRATIVE MATTERS 15 ITEM P6 16 ADMINISTRATION DEPUTY DIRECTOR'S REPORT 17 2. VACANCY UPDATE 18 19 20 21 22 23 24 25 Reported by: Jillian Sumner 26 CSR No. 13619 27 Kathleen Skidgel 28 CSR No. 9039 1 1 P R E S E N T 2 For the Board of Equalization: Fiona Ma, CPA 3 Chairwoman 4 Diane L. Harkey Vice Chair 5 Jerome E. Horton 6 Member 7 Sen. George Runner (Ret.) Member 8 Yvette Stowers 9 Appearing for Betty T. Yee, State Controller 10 (per Government Code Section 7.9) 11 Joann Richmond 12 Chief Board Proceedings 13 Division 14 15 For Board of Equalization Staff: Chris Holtz 16 Chief Business Management 17 Division 18 Sandra Mayorga Chief 19 Human Resources 20 ---oOo--- 21 22 23 24 25 26 27 28 2 1 5901 GREEN VALLEY CIRCLE 2 CULVER CITY, CALIFORNIA 3 NOVEMBER 29, 2016 4 ---oOo--- 5 MS. RICHMOND: Our next item is P6.2, 6 Vacancy Update. 7 MR. HOLTZ: I also want to introduce 8 Sandra Mayorga. She's our -- our Chief of Human 9 Resources. And we've been asked to give you a 10 report on the status of BOE vacancies, and update 11 you on the development of the BOE plan to reduce 12 vacancies as approved in the concept paper, uh, that 13 was voted on at the August hearing. 14 The BOE -- BOE has been required, beginning 15 with fiscal -- with this fiscal year, to provide a 16 monthly listing of vacancies. Provision 3 of our 17 main budget item requires the collection and 18 reporting of the total number of existing vacancies 19 in the Department; including position title, 20 department or division which the position is 21 assigned, the date the position became vacant, 22 whether the vacant position is in active 23 recruitment. 24 We've now gathered five months of data on 25 that. And the numbers were sent to your respective 26 offices in a PowerPoint chart. They've also been 27 sent to the Legislature, Finance, and the LAO. 28 As of November 1st, there are 613 total 3 1 vacancies existing at the BOE. Of that amount, 354 2 of them are either in active recruitment or they are 3 on paid leave of absence. 4 And this number has -- these numbers have 5 stayed fairly steady. The five months of data have 6 shown the numbers to be fairly constant, as to say 7 that -- that the November numbers are very 8 consistent with each of the months over that time 9 period. 10 So just very briefly I want to address some 11 of the program and budget considerations that we're 12 looking at in developing our spring proposal, which 13 I -- I plan on bringing before you in January at the 14 January hearing. 15 First thing I want to point out is that 16 there's been very positive progress in reducing the 17 number of positions -- full-time positions that are 18 in our temporary help blanket. 19 As you're aware, there have been many 20 issues in managing and addressing positions in the 21 blanket. In 2014/15, the BOE overspent its temp 22 help blanket budget, spending a total of $14.5 23 million on 247 positions in that year. 24 As of July of this year, that expenditure 25 had been cut nearly in half to 7.5 million. 26 Currently there are 102 positions in the blanket, of 27 which only 16 are classified as permanent full time. 28 Those positions need to be pulled out of -- 4 1 out of the blanket and be moved into, uh, per -- 2 those positions that are, uh, vacant right now. 3 By July 2017 we expect temp help budget 4 expenditures to match the historically budgeted 5 amounts of 3.5 million. 6 Now, there are very -- there are many 7 factors that we've seen in our high vacancy rate. 8 These are well known to all parties, both within BOE 9 and external, and -- and they are understandable 10 obstacles for departments that are the size of BOE. 11 And -- and other departments have the same issues. 12 What the Administration and the Legislature 13 want to know is how we're going to overcome those 14 obstacles, where we can reclassify positions to 15 fulfill existing workload, and what controls are in 16 place to manage future positions. 17 And what we've seen are four main areas to 18 address. And I'll -- I'll speak in more detail 19 about them at the January hearing. 20 First, we talk about the temp help blanket. 21 We're identifying the current positions that are not 22 appropriate for blanket funding, and identifying 23 vacancies where they can be moved. 24 Next, the hiring and recruitment process. 25 Which is long and -- and somewhat confusing to 26 applicants that are coming into the state for the 27 first time. Changes are in process to expedite the 28 hiring process through the ecosystem. Departments 5 1 must make renewed progress in accelerating the 2 listing of current vacancies. 3 So we're attacking that from both ends, 4 both from our processing within Human Resources, and 5 accelerating the hiring packages that are coming in 6 from the various departments. 7 Third, we will help identify prior year 8 savings to help redirect these efforts toward needed 9 hiring. In the past fiscal year, BOE reverted 10 $13 million in funding for personal services. 11 Analyses are in progress to determine how this can 12 be managed in a more effective manner. 13 And, finally, we'll be recommending a 14 reevaluation of the staffing model that is used by 15 Field Operations to allocate resources to Audit and 16 Compliance staff, in order to remove any obstacles 17 to hiring and identify ongoing base business needs. 18 And as -- as we've stated throughout the 19 presentations, we're continuing to work closely with 20 the Department of Finance on this issue, and 21 integrating that together with the new workload 22 proposals that we're bringing forward. 23 And, um, we'll be integrating that also in 24 the spring with the various audit reports that are 25 coming due, and our facilities plan that's due to 26 the Legislature in February. 27 So in the springtime we anticipate a 28 convergence of all of these various plans and 6 1 reports. And that will be the -- our presentation, 2 along with Department of Finance, that will shed a 3 lot more transparency on the process that we use in 4 filling vacancies. As well as some of the other 5 issues that are part of the supplemental reports and 6 the ongoing audits. 7 And I'd -- I'd be happy to answer any 8 questions that you -- you have on the current 9 vacancy issues. 10 MS. MA: Uh, Mr. Runner. 11 MR. RUNNER: Yeah. One of the -- one of 12 the issues that we've dealt with in the past that 13 we're having on doing -- ongoing issues that we've 14 got to deal with, and that is the -- the issue of 15 our -- of, uh, staying on budget versus our 16 vacancies. 17 Have we established how many vacancies we 18 have to maintain in order to stay on budget? 19 MR. HOLTZ: At this point, I -- I don't 20 have a definitive number of vacancies that we would 21 need to stay on budget. 22 But what I -- what I do emphasize to people 23 when I'm talking about, you know, keeping vacancies 24 open, and kind of the salary-savings mentality -- 25 MR. RUNNER: Right. 26 MR. HOLTZ: -- is that, um, the state seems 27 to be moving beyond that. We -- we don't budget for 28 salary savings anymore. We are moving toward more 7 1 of a -- a true budgeting model. And looking at 2 position transparency, rather than the old 3 government codes where we eliminate positions that 4 are vacant for more than six months. And, uh, just 5 budget an extra 5 percent in order to meet salary 6 savings. 7 If we were to budget an extra 5 percent, 8 um, that's a little less than half of what we 9 currently have as far as total vacancies. But we're 10 moving away from that. And I know that -- 11 MR. RUNNER: You say "we're." Who -- who's 12 the "we're" there? 13 MR. HOLTZ: When I say "we're" -- 14 MR. RUNNER: We're, I mean, who's the 15 "we're" there? 16 MR. HOLTZ: I'm talking about Finance and, 17 uh, all of the state departments -- 18 MR. RUNNER: So is -- is -- is -- in our 19 discussion -- 20 MR. HOLTZ: -- that are dealing with those 21 issues. 22 MR. RUNNER: -- our current discussions 23 with Finance, are they -- are they open to 24 adjusting, um, our budget to ensure that we don't 25 have to -- that we don't have to do the plan that 26 allows -- that makes us keep vacancies in order to 27 balance our budget; is that what you're -- is that 28 what you're saying? 8 1 MR. HOLTZ: That's what I'm saying. And 2 that Finance is open to what they really want. And 3 what the legislature wants is transparency, and the 4 work in -- in partnership. 5 And, yes, Finance is moving away from that 6 model. And in -- the -- in all of our 7 discussions -- 8 MR. RUNNER: Now, that's a pretty big 9 adjustment -- 10 MR. HOLTZ: -- everything has been -- 11 MR. RUNNER: -- that they're gonna have to 12 make, though, when it comes, then. Are they 13 prepared -- do you believe they're prepared to do 14 that in their upcoming budget? 15 MR. HOLTZ: In the upcoming budget, it -- 16 it's been -- you know, it's been a challenge in 17 prior years' budgets. They replace their -- 18 MR. RUNNER: Okay. So -- 19 MR. HOLTZ: -- they replace the salary 20 savings with the budget transparency of these -- 21 MR. RUNNER: So -- so if they're not 22 willing -- if -- if we can't get there in this -- in 23 this next budget year, '17/'18, are we prepared, 24 then, to determine where it is that we should hold 25 these vacancies? What are the best places for us to 26 hold these vacancies? 27 Because what I'm concerned about is that 28 if -- if we've gotta hold vacancies, I'd just as 9 1 soon have -- have us be strategic about it. 2 Where do we hold these vacancies? Where 3 does it make sense to not -- not -- to -- to, you 4 know -- to work with less people in order to get the 5 job done? 6 And -- and I heard you make mention of 7 the -- of the -- of a -- of a field staffing model. 8 But it seems to me that what went in -- and we've 9 talked about this before. In order for us to have a 10 plan to hold vacancies, that's gonna require some 11 kind of a staffing model at the headquarters. 12 MR. HOLTZ: What we're seeing with issues 13 involving the staffing model and issues involving 14 ongoing budgeting related to keeping positions 15 vacant, is that staffing model is setting a certain 16 percentage, about 75 to 80 percent, of the workload 17 for the field, and then staffing to that workload. 18 Not going to, say, 85 or 90 percent. 19 Then positions are filled through an 20 attrition process. Rather than filling current 21 vacancies that are outside of that staffing model, 22 they are filling positions. Once a position becomes 23 vacant in the field, that position is then 24 determined to move to a field office that has the 25 workload, and then filled. 26 So the process of filling positions out in 27 the field right now is restricted by the staffing 28 model. And that has to be evaluated so that 10 1 restrictions can -- 2 MR. RUNNER: The restriction is waiting 3 for -- 4 MR. HOLTZ: -- can come off. 5 MR. RUNNER -- for attrition? 6 MR. HOLTZ: The restriction is waiting for 7 attrition and budgeting towards a lower audit and 8 compliance workload in the field than would be -- 9 would be available under full staffing if all 10 vacancies were -- were filled. 11 MR. RUNNER: Again, I -- my -- my question, 12 I guess, is still the same. And that is, we have a 13 staffing model that we're apparently deciding not to 14 fully -- fully fulfill in the field. But yet we 15 have no staffing model for the headquarters. 16 So my question is, maybe it's more 17 important for us to fill the vacancies in the field, 18 and hold more of those vacancies at headquarters. 19 And I -- I don't know what process we're doing to 20 evaluate that. 21 MR. HOLTZ: Um, at this point the -- we're 22 advocating, reevaluating the staffing model to 23 remove those restrictions, rather than putting more 24 restrictions on headquarters and less on field, or 25 vice versa. 26 MR. RUNNER: Do you not need -- you -- 27 apparently you're not feeling the need to have a 28 staffing model at headquarters? 11 1 MR. HOLTZ: Um, when -- when we have a -- a 2 budget reversion of 10 to 13 million dollars 3 annually in personal services, um, there has to be a 4 second look in how we are filling current vacancies 5 and -- and doing existing workload that we have 6 identified for those dollars. 7 MR. RUNNER: But how do you -- how do you 8 do that if you haven't done any kind of prioritizing 9 in regards to where we maintain those vacancies? 10 For instance, I don't know -- I don't know 11 right now whether or not we should be maintaining 12 vacancies in -- in -- in -- in -- in legal; is that 13 the best place for us to do that? Or if we should 14 be doing it in other -- some as -- other aspect 15 of -- of -- of -- of headquarters. 16 So I don't -- I don't know. And I don't 17 know if we've ever -- I -- I -- I -- well, I don't 18 -- I -- I guess I do know. 19 I do know we haven't -- I don't believe 20 we've stepped back to say, "Where should we maintain 21 these vacancies in order so that they make the least 22 amount of impact on the mission that what we're -- 23 the mission that we have?" 24 MS. MAYORGA: If I can interject just for a 25 moment. On your comment of the staffing models in 26 headquarters -- 27 MR. RUNNER: Uh-huh. 28 MS. MAYORGA: -- I can tell you in the 12 1 Business Tax and Fee Department, that we are 2 currently working on a model for our collectors and 3 our auditors. 4 The collectors' one is a little further 5 along -- 6 MR. RUNNER: Uh-huh. 7 MS. MAYORGA: -- because we have more data 8 to be able to do something similar like the field 9 has. Um, and we're also working on the audit model 10 as well. 11 MR. RUNNER: So -- so why would we be doing 12 staffing models based upon departments and divisions 13 as opposed to an overall staffing model for 14 headquarters? 15 MS. MAYORGA: I -- we're -- we approached 16 it this way because it's the type of work. So we're 17 grouping like work and doing a model for what does 18 it take to do collections for this many accounts, 19 given that it takes this much to work at -- 20 MR. RUNNER: I guess -- I guess the bottom 21 line for me on this discussion is, I guess I don't 22 feel comfortable right now that we are aggressively 23 looking at what our staffing model should look like; 24 what our staffing level should be in our current -- 25 in -- and where we maintain vacancies when it comes 26 to the headquarters. 27 And so I would ask for us to do that. I 28 would ask for us to say, "Where are our priorities?" 13 1 I -- I don't know whether vacancies should be held 2 at Legal; I don't know whether vacancies should be 3 held at Outreach; I don't know what vacancies -- I 4 don't know the answer to that. 5 And I don't even know how many we're 6 supposed to have in order to maintain the budget. 7 Because I think we're clear on what they'd like to 8 do in the future. 9 But clearly, as we look at the upcoming 10 years, '17 and '18, we're still gonna have to 11 maintain vacancies. 12 And so I think that, to me, is something 13 that I think we need to see do. I think I've asked 14 for that before. And so I think we need to -- I 15 think that needs to be a priority, then. Not -- 16 again, not by department and not by division, but 17 overall where's that gonna be. 18 So I think in order for us to do that, I 19 think that's important for us as we come back and 20 continue to talk about vacancies. 21 MS. MA: And so how do we know when 22 someone's hired within our, like, staff? Like, how 23 do we know? 24 Maybe, Sandra, when we're hiring someone, 25 if we're moving them out of the blanket, or hiring 26 someone new, how do -- who keeps track of all that? 27 MS. MAYORGA: That's kept, um, track by HR. 28 MS. MA: Okay. 14 1 MS. MAYORGA: Typically we receive a 628, 2 which is our request for personnel action from -- 3 from the particular program to request to move an 4 employee out of the blanket into a funded position. 5 So HR receives the hiring request from the 6 program areas, and that information is conveyed back 7 to the departments. 8 MS. MA: So maybe, Mr. Runner, you know how 9 we're getting reports from other folks about all 10 sorts of things, you know, contracts, or, you know, 11 articles. You know, maybe we need to get a better 12 sense of when someone moves out of the blanket; who? 13 where? what position? 14 If someone is hired new, where are they 15 going? Because I have the same concern in the 16 field, is that our field is always asking for more 17 people. Yet, they don't seem to be getting more 18 people. And then we keep hearing about different 19 people getting hired, you know, at different levels. 20 And how are we supposed to monitor that -- you know, 21 monitor that? 22 And I think that's what Mr. Runner was 23 saying, is -- is if we don't have a plan where we 24 all wanna stick to the plan, then somehow we all 25 need to be aware of who's getting hired and where 26 they're being put in the agency. 27 And if that's easy for you to, uh -- since 28 you're letting them know as well, and maybe you let 15 1 us know as well, so that we just can figure out, you 2 know -- if there's ten people being hired in 3 headquarters, then, you know, we can say, "Well, 4 where are the people in the field?" 5 But if there are people being hired in the 6 field, then we can tell our field staff, "No, we've 7 been getting people in the field; nobody's been 8 hired at headquarters." 9 Because there's always this conspiracy that 10 people are getting hired, and nobody really knows 11 the information. And only a couple people really 12 have the data. And by that time, you know, there's 13 a lot of discomfort, and, you know, angst at our 14 district level offices. 15 And, so, yeah. I mean, so maybe that's one 16 solution -- 17 MR. RUNNER: Well, I think the other -- 18 MS. MA: -- is to be able to know when 19 people -- yeah -- when people are getting out of the 20 blanket; where they're going. 21 And if new people are being hired; where 22 they're also going as well. So there's 23 transparency. 24 MR. RUNNER: Right. 25 MS. MA: Right. That's all people want to 26 know is what is going on. 27 MR. RUNNER: Well, and -- and my -- my 28 concern is that not only do we know what's going on, 16 1 but is it strategic? Are we indeed doing it in the 2 way -- or -- I mean, do -- is it just, you know, 3 whoever happens to fly the -- fly the vacancy first 4 is gonna be the one that we fill? 5 As opposed to being strategic, somebody 6 saying, "You know what? We're not gonna fly that 7 one. We're gonna keep that one vacant. Because 8 it's more important for us to have this position 9 over here." 10 And I don't -- I don't -- I don't -- I 11 don't sense we've got that strategy. Maybe we do. 12 Do we? 13 MR. HOLTZ: Well, I -- that strategy is 14 what we're building. 15 MR. RUNNER: Okay. 16 MR. HOLTZ: And -- and what we'll be coming 17 back to you with in January. 18 MR. RUNNER: Okay. Good. Thanks. 19 MR. HORTON: Well, I -- I agree with 20 Mr. Runner. I mean, I think there needs to be a 21 comprehensive approach to -- to addressing this 22 concern, um, and evaluate the work studies; do a 23 work study in all the areas. The agencies been 24 around long enough to be able to make that 25 assessment. And it should be innate in the process 26 of determining where the position should be and how 27 many positions should be there on a comprehensive 28 basis. 17 1 The field is supported by Administration. 2 Administration is fully aware of the workload and 3 what needs to be there relative to the field. 4 But I also feel that we need to make a 5 policy decision as an organization as to whether or 6 not we're gonna operate in a zero sum gain 7 environment, and say that what we're currently doing 8 is adequate for the state of California, or can we 9 do a better job of educating the taxpayer? Which, 10 thereby, increases the funding to the state of 11 California. Or additional audits, or preliminary 12 audits, or managed audits, and things of that 13 nature. What can we do to be more efficient? 14 We currently audit somewhere around less 15 than one percent of the entire universe. Their 16 pres -- there's a presumption that the Board of 17 Equalization actually generates the $62 billion that 18 we administer. Simply not true. Our organization 19 generates somewhere around 600 to 700 million 20 dollars. 21 Our activity is more on the compliance side 22 than it is on the audit side. We serve to enhance 23 compliance. That's the reason we have the highest 24 compliance rate in the nation when it comes to the 25 taxes that we administer. 26 And so should there be more auditors out 27 there? Studies have indicated that there should be. 28 That the percentage that we actually review should 18 1 be increased. 2 Not to say that they should all be audits, 3 but maybe first time reviews, like you do in the 4 auditing world where you review it the first year 5 and you say if there's a problem, you just allow 6 them to correct it without assessing anything. To 7 say, "Just go in and correct it; report the proper 8 amount. And we're not gonna assess your liability 9 as long as you correct this error." 10 As opposed to a three-year audit where we 11 wait three years, and -- this is just an example, by 12 the way -- we wait three years, and then we assess a 13 three-year compound audit with compound interest, 14 which forces the taxpayer -- could very well force 15 the taxpayer out of the business. 16 So I think that this -- the question is; 17 can we be more efficient; more effective; not as a 18 field agency, but as a -- as a one Board of 19 Equalization, as an organization in general. 20 And I haven't seen that analysis. I 21 haven't received that sort of advice. And I don't 22 know that the Board of Equalization has articulated 23 their views as to what we should be doing as an 24 organization. 25 We've done so in a mission statement, which 26 is very general. And I think the mission 27 statement's in -- in our policy and serves as a 28 guidance. But now we're getting down into the 19 1 detail as to how do we reflect our mission and our 2 hiring practice and so forth. 3 But that takes me to, uh, you -- you shared 4 with us that we had 613 vacancies, 354 act -- in 5 active recruitment or paid absence. Where are the 6 other 259? 7 MR. HOLTZ: The other 259 are neither in 8 active recruitment or leave of absence. 9 MR. RUNNER: That's a good guess. 10 MR. HOLTZ: So they have either recently 11 become vacant, or they have been vacant for, in 12 general, more than six months. 13 MR. HORTON: And can you break that down as 14 to how many have become recently vacant as opposed 15 to those that have been vacant for more -- you're 16 saying of this 259, some have been vacant for more 17 than 6 months. We haven't been carrying vacancies 18 for years? 19 MR. HOLTZ: Some vacancies we've been 20 carrying for years. Of -- 21 MR. HORTON: And would those -- 22 MR. HOLTZ: -- of -- 23 MR. HORTON: -- vacancies fall into this 24 category of 259? 25 MR. HOLTZ: That's correct. 26 MR. HORTON: Okay. So -- so there are 27 vacancies that we've been carrying for years; how 28 many -- how many vacancies are they? 20 1 MR. HOLTZ: Um, of the vacancies that are 2 not in recruitment as of November 1st, 91 of those 3 have been vacant for more than six months. 4 In general, I've seen vacancies that 5 generally range from six months to two years. 6 MR. HORTON: You're still not answering my 7 question. If 91 has been vacant for 6 months, they 8 fall within -- within that category. 9 The 168 remaining, have they been vacant 10 for years? over six months? 11 MR. HOLTZ: Out of the 600 -- 613, 259 of 12 them have been historic vacancies that are not in -- 13 in recruitment or leave of absence. 14 MR. HORTON: You're reverting back to the 15 259 -- 16 MR. HOLTZ: Right. 17 MR. HORTON: -- we've somewhat gotten 18 beyond that. 19 We started at 259, you said six months -- 20 have been vacant for a six-month period of time, 21 which is reasonable -- left us 168. 22 Are they -- have they been vacant for 23 longer than six months? 24 MR. HOLTZ: No. Those -- those positions 25 have been vacant for less than six months. And they 26 have obviously become our -- our new vacancies. 27 They're in the process of submitting their -- 28 MR. HORTON: So -- so the 91 that had 21 1 been -- 2 MR. HOLTZ: -- entire package. 3 MR. HORTON: -- vacant -- my apologies. 4 Ninety-one have been vacant for more than 5 six months. How much longer have they been 6 having -- have they been vacant? six months? a 7 year? six years? 8 MR. HOLTZ: The amount of time that they've 9 been vacant ranges from six months to two years. 10 There's one position that has been vacant for four 11 years. 12 MR. HORTON: Four years. 13 MR. HOLTZ: But that's just one. The 14 longest of the positions other than that has been 15 two years. 16 MR. HORTON: And we're -- we're sort of 17 finance budget based on mid-level funding; which one 18 of these positions are -- how many of these 19 positions are held vacant in order to address our 20 excess over mid -- mid-level funding. 21 MR. HOLTZ: At this point, we don't have 22 that data of how many of them are -- are held open 23 to fund the top step funding for -- for the 71 24 percent of the employees that we have that are being 25 paid above that mid step. 26 MR. HORTON: Okay. So, um, I think it's 27 important that in the int -- in the interest of full 28 transparency, I think it's important that you sort 22 1 of delineate these various different categories. 2 And you provide a description of what those 3 categories entail, and then provide what you believe 4 the solutions on how do we address those, uh -- 5 those different, uh, categories of vacancy. 6 And I think that's where, you know, 7 the -- the general public, the Department of 8 Finance, the Legislature and so forth, we go before 9 them and we say we have 613 vacancies, 354 in 10 recruitment, 259 are -- are not in recruitment. 11 That says you're not doing anything with 12 the 259. You're just not recruiting; you're not 13 doing anything. You're just letting them sit here. 14 And I think we ought to be clear that that's not the 15 case. 16 And -- and I'm, for one -- I'm actually 17 okay with saying that mid -- mid-level funding for 18 this agency is not appropriate funding for the state 19 of California. 20 And because of the funding mechanism, as 21 Mr. Runner indicated -- because of the funding 22 mechanism, we're forced to leave X number of 23 positions vacant in -- or terminate employees, which 24 we can't terminate them. These employees have 25 seniority and so forth. They're our highest paid 26 employees. And so we ought to tell that story. We 27 ought to say what the 259 is. 28 And the ones that are vacancies for less 23 1 than six months, that's saying to -- to me that it 2 takes six months to get them in the recruitment 3 process. 4 Which is that what you guys are saying? 5 MR. HOLTZ: That's -- that's, uh, very 6 close to the case. It takes three- to- six months, 7 that we're seeing, to fill a vacancy on average 8 in -- in BOE. 9 MS. STOWERS: That's from advertising, 10 inve -- interviews, and selection? 11 MR. HOLTZ: That's right. That's from the 12 time that it becomes vacant, to the time that the 13 person starts at BOE -- 14 MS. STOWERS: Is -- is -- 15 MR. HOLTZ: -- three to six months. 16 MS. STOWERS: Is it, um -- do you know why? 17 MR. HOLTZ: There's -- there's two ends to 18 the -- to the spectrum on that. 19 No. 1, that the various departments 20 sometimes are waiting to issue those hiring packages 21 to our HR Department. 22 The other issue is that HR, in many cases, 23 is going through, by hand, for certification 24 process. And it's taking time for the listing to go 25 through in the HR processes. And I -- 26 MS. MAYORGA: Yeah, I think I can speak to 27 that. 28 There's various issues, um, that may be 24 1 impacting the length of our vacancies. 2 What we've noted is that there's a number 3 of positions that are typically vacant for three- 4 to- six months before we even receive a hiring 5 request from the program. So that can add to the 6 vacancy. 7 Once we receive the actual request for 8 personnel action, inter-personnel, it takes us about 9 42 to 45 days to go through the advertisement. 10 Um, there's, you know, various civil 11 service laws and rules that require that we post 12 certain vacancies and have advertisement periods. 13 We order certs, send out contact letters, work with 14 the program in reviewing the position allocation. 15 It's taken anywhere, again, from 42 to 45 days for 16 that process. 17 Once we complete that process, then the 18 hiring packages are submitted to the program for 19 scheduling of interviews. So then there's another 20 component to the -- to the back end. 21 So what we found is from end to end 22 process, from the time we receive a completed 23 request for personnel action into our office, to the 24 time we actually hire an employee in the program, 25 it's taken anywhere from 10 to 17 weeks. So about 26 four months. 27 So if you add in how long has a position 28 actually been vacant prior to the package being 25 1 submitted to HR, along with the whole hiring 2 process, then you are looking at about a six-month 3 time frame. 4 So there -- 5 MR. HORTON: Are -- are we talking about -- 6 let -- let -- let me walk through an example, and 7 then you can kind of give me some guidance -- 8 MS. MAYORGA: Okay. 9 MR. HORTON: -- if you could. 10 Let's say, for example, an audit position 11 becomes a vac -- vacant -- 12 MS. MAYORGA: Mm-hm. 13 MR. HORTON: -- and there's an existing 14 hiring list for auditors that's out there already -- 15 MS. MAYORGA: Correct. 16 MR. HORTON: -- or G -- AGPA, or whatever 17 the position might be, the -- the district can't 18 just pick someone off the list, or start the hiring 19 process and interview folks off the list and hire 20 someone; they -- can they? Or is it -- 21 MS. MAYORGA: They can't. 22 What starts the process is the 628 process. 23 That's the request for personnel action. That's 24 submitted to HR. And that's where they request, um, 25 to fill their vacant position -- 26 MR. HORTON: Let's say they made their 27 request -- 28 MS. MAYORGA: Okay. 26 1 MR. HORTON: Can they hire off the list? 2 ---o0o--- 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 27 1 ---oOo--- 2 MS. MAYORGA: Yes, they can. But within 3 that process, there's various different components. 4 So once we receive the package from the program, 5 we're looking at, you know, the package where it 6 typically takes anywhere from 3 to 5 days and we're 7 posting that job vacancy. So we're getting that 8 vacancy posted on behalf of the program. 9 So at that time we're ordering the 10 certification list for the program, sending out 11 contact letters if that's the wish of the program. 12 We have to wait for those Return of Contact Letters 13 and -- so that we can get -- capture the entire, um, 14 eligible candidate pool for us to forward to the 15 hiring manager for interviewing. 16 So there's various different processes. We 17 like to refer to our workflow within the hiring -- 18 hiring workflow process. So we have what's called, 19 you know, a request for personnel action. We have 20 our job posting process. We have our application 21 review process. We have the actual hiring selection 22 and interview process that's done in the -- in the 23 program. And then we have the final, um, approval 24 process. 25 So it's -- we have a flow chart that we 26 have out on eBoe. We've been tracking -- 27 MR. HORTON: I understand that process. 28 But the process that -- the example that I'm 28 1 discussing is you've got a list. 2 MS. MAYORGA: Mm-hmm. 3 MR. HORTON: The, um, individual has 4 decided to leave the Board of Equalization. Uh, 5 we're noticed of the termination. 6 MS. MAYORGA: Mm-hmm. 7 MR. HORTON: Which tells us we got a 8 position to fill. 9 MS. MAYORGA: Right. 10 MR. HORTON: That won't start the process, 11 the fact that we've been notified. You have to wait 12 'til the -- in the -- in the -- in the example that 13 I gave -- 'til the District Administrator fills out 14 some forms. 15 MS. MAYORGA: That's correct. 16 MR. HORTON: And what's involved in this 17 package? Is it like -- 18 MS. MAYORGA: What's involved in that the 19 package -- 20 MR. HORTON: -- "We want to hire" or -- 21 MS. MAYORGA: It -- it's a request to fill 22 a vacancy. It could be a straight refill. They 23 have to submit, um, the request to hire. There may 24 be additional approvals at the department level, you 25 know, with their deputies. If they are monitoring 26 vacancies based on, you know, how many vacancies 27 that they have to keep, you know, vacant, they may 28 determine when they send in the request for 29 1 personnel action. 2 MR. HORTON: And when they send you this 3 630 -- 4 MS. MAYORGA: 628. 5 MR. HORTON: -- 628, you now authorize them 6 to hire? 7 MS. MAYORGA: Yes. 8 MR. HORTON: And what is -- what's the next 9 step? 10 MS. MAYORGA: Then we're -- we're going to 11 post their vacancy. We're going to order their 12 certification list. We're going to get their, um, 13 vacancy posted on the jobs. 14 MR. HORTON: How long does that take? 15 MS. MAYORGA: Um, again, the end-to-end 16 process for HR is about 42 days, for that review 17 process. It's actually -- 18 MR. HORTON: You're no longer reviewing? 19 MS. MAYORGA: Well, no. Within that -- 20 MR. HORTON: You've got -- they're 21 notified -- 22 MS. MAYORGA: Within that process is 23 actually ordering of a certification list, sending 24 out contact letters, reaching out to the eligible 25 candidates, and waiting for the return of those 26 applications. So we have some waiting -- we have 27 some process -- 28 MR. HORTON: 42 days. 30 1 MS. STOWERS: 42 days. 2 MS. MAYORGA: -- timelines that's built in. 3 MR. HORTON: Okay. And then -- then they 4 interview? 5 MS. MAYORGA: Then what we do is we -- we 6 get the, um, the hiring packet and we forward that 7 to the hiring supervisor. And at that time they 8 have a list of eligibles that they can start to 9 begin to schedule their interview process. 10 MR. HORTON: And how long does that 11 generally take? 12 MS. MAYORGA: Again, we've done some review 13 on end-to-end, just looking at averages. We're 14 looking at, again, anywhere from 10 to 17 weeks, 15 about a four-month process. Depending on some of 16 our field and district offices, we have really 17 hard-to-recruit areas where we can go out and 18 advertise several times and not get the -- a viable 19 candidate pool. 20 So it just really depends on -- it could 21 depend on a geographical area or classification. 22 Some can take a little bit longer. Whereas, some 23 can be hire -- you know, positions can be filled 24 very quickly, within an eight-week period. So it 25 just really depends on the classification. 26 MR. HORTON: It's sort of conflict -- I 27 mean, the field offices are telling me, and what I 28 hear from the other Members, is that given the 31 1 vacancy, they can fill the vacancy much faster than 2 six months, um, that we can get these vacancies 3 filled. 4 So maybe there's a study of what these 5 positions are and whether or not there are existing 6 lists that are already out there that tells us that 7 we need to do more testing. Currently, for some of 8 these positions, we only test every two years. And 9 so the list becomes old and you're down to number 18 10 on the list and that makes it complicated itself. 11 So maybe we need to, you know, accelerate 12 our testing process so that we have a backfill of 13 individuals that are interested in working with the 14 Board of Equalization, and then we can just pluck 15 'em off the list. 16 But, I mean I don't want to -- I don't want 17 to micromanage your department. I just would 18 suggest that you come back and -- or you guys get 19 together and kind of look at the intricacies of 20 these various different positions and try to figure 21 out how to expedite that. 22 And these positions that you can't fill, 23 just tell us, that, you know, 91 positions, we 24 are -- we have -- we're -- we need the salary 25 savings in order to -- to compensate the employees 26 that are above the midrange and at this level, and 27 those positions will only be filled as these 28 individuals retire, um, and then we can fill those 32 1 positions. 2 And we need to have that discussion with 3 Department of Finance as to whether or not it is 4 smart for a revenue-generating agency to fill all of 5 its positions if in fact the estimate is true, that 6 for every position we generate X amount of revenue 7 for the state of California. So if you have 259 8 positions that are vacant, depending on where those 9 positions are, that represents lost revenue to -- to 10 the state of California. 11 Thank you, Madam Chair. 12 MR. RUNNER: Real quick. Again, what 13 I'm -- what I'm -- a little bit of what I'm hearing 14 here is, again, the fact that we are -- during the 15 process, at least what I just heard described, um, 16 that once a vacancy opens up, that then there's this 17 process to go ahead and fill the vacancies and a 18 vacancy is filled then. 19 And then there was a concern that I just 20 heard in regards to the fact that unless there's 21 some kind of restriction on -- by the -- by the -- 22 the deputy of that department or -- or -- or area, 23 uh, that it needs to be made -- that a vacancy needs 24 to be maintained. That tells me that somebody's 25 made a decision in regards to where to maintain 26 vacancies. 27 Uhm, and again, I -- I -- I'm not -- I'm 28 unaware of that. I'm unaware of where it is that 33 1 we've decided to maintain vacancies. Uhm, I'm -- 2 I'm -- and I'll be very honest, I'm concerned that 3 we're trying to maintain vacancies, for instance in 4 the field, when I don't think we should be 5 maintaining vacancies in the field. 6 I think we should -- and I especially don't 7 think we should be maintaining 'em if we haven't 8 taken a hard look at the headquarters. 9 And so when I -- I was almost just kidding 10 a little bit when I said, well then I guess it's 11 whoever gets to go ahead and post their vacancy 12 first will get the one filled, uhm, because I 13 don't -- it seems to be the lack of a plan. So I 14 think that's, to me, what is important for us to 15 deal with out of this conversation. 16 Uhm, because I think it is -- see, I think, 17 for instance, coming up into the budget discussions 18 with the Legislature, coming up in this next -- 19 well, just a few months from now, we're going to 20 have to explain to them why it is that we have 21 vacancies. And we have -- and we need to view it 22 very clearly because otherwise they'll just say, 23 "Why don't you fill these people? Why don't you 24 fill these? Why don't you take care of these?" 25 And if they -- and when -- when -- 26 eventually they'll just slash them down, when, to 27 me, it's a very simple issue; and that is, we 28 just -- our pay is over -- over the midpoint, so we 34 1 have to maintain vacancies. And I think we need to 2 be that clear for them. And I think we need to 3 continue to work with them and Finance in regards to 4 figuring out how do we then get budgeted to the 5 point to where we don't have to maintain vacancies. 6 Because when we don't -- when we maintain 7 vacancies, we basically cannot do all the job and 8 the collection that we're supposed to do. So I 9 would assume for every vacancy we hold right now, 10 that's less revenue that we can collect. 11 And so I think somehow we need to continue 12 to tell that story out there. Meanwhile, I'm still 13 convinced that we need to -- well, again, we need to 14 be strategic as to where we hold these vacancies 15 right now because I'm not optimistic that that 16 problem's going to get solved next year. 17 But again, I'm concerned that we have not 18 the plan that, again, I hear from my field folks 19 saying they're trying to maintain positions, they're 20 trying to fill positions, they're trying to deal 21 with these. They're trying to meet their staffing 22 model and they can't do it. 23 But yet -- again, I'm a little biased -- it 24 seems like a lot of the positions in headquarters 25 gets filled and there's no staffing model to 26 determine what the priority of that staff is. So 27 that's why I think it's important. 28 MS. MA: Okay, so I'd just like to add on 35 1 to that. Um, can you send us the existing staffing 2 model? Because the last one I saw I could not 3 comprehend, nor could, you know, my Assistant Chief 4 of Field when I asked him, "What does this mean for 5 our district office?" So I'd like to see what 6 staffing model we're talking about now. 7 And then, number two, uh, in this list 8 where it says "Vacancies in Recruitment," what is 9 the breakdown? Vacancies in recruitment -- 10 MR. HOLTZ: Mm-hm. 11 MS. MA: -- 279 -- 12 MR. HOLTZ: Yes. 13 MS. MA: -- July through November. Um, do 14 you have a breakdown of like where -- 15 MR. RUNNER: Who's holding the vacancies? 16 MS. MA: Who -- 17 MR. HOLTZ: As far as which -- which 18 department or division and what positions -- 19 MS. MA: Yeah. 20 MR. HOLTZ: -- those are? Um, I can -- I 21 can definitely sort those for you and get those to 22 your respective offices. But -- 23 MS. MA: Okay. 24 MR. HOLTZ: -- that -- that's included in 25 the report that we send out every month to you and 26 to the, uh -- to the Legislature. 27 MS. HARKEY: Yeah, it's a big 28 spreadsheet. 36 1 MS. STOWERS: Can we get that? 2 MS. MA: Okay. I -- I don't know what 3 spreadsheet or information. 4 MS. HARKEY: We get it. 5 MR. HOLTZ: On -- for our monthly report 6 that we send out to the Legislature, to Finance, and 7 to Board Members, we have a listing of the positions 8 that are vacant, the position numbers, the -- what 9 division and location they are at. 10 MS. MA: Okay. 11 MR. HOLTZ: What the -- the minimum and 12 maximum salary range is, how long they've been 13 vacant, whether they're in recruitment or whether 14 they're on leave of absence. And all that 15 information is put into one spreadsheet. 16 But we can definitely sort that to where we 17 can show you where -- where the locations are for 18 various vacancies and what criteria that you would 19 like to see. 20 MS. MA: Yeah, so like -- 21 MR. HOLTZ: We can definitely work with 22 your offices on that. 23 MS. MA: -- out-of-state offices, district 24 offices, headquarters, legal. I don't know whatever 25 other -- 26 MS. HARKEY: They've got it all in this 27 huge thing. 28 MS. MA: Yeah, I mean -- 37 1 MS. HARKEY: Probably more than you choose 2 to get. 3 MS. MA: -- I don't need to know, like, 4 maybe we can categorize it into a couple of 5 different categories, then we can see where we're 6 actually recruiting. Right? I mean that's part of 7 George being able to see what's happening. 8 MR. HOLTZ: Okay. 9 MS. STOWERS: Just -- just kind of a 10 clarification. So this spreadsheet that you're 11 talking about, you've been passing that out to the 12 district members? 13 MS. HARKEY: Sending an email. 14 MR. HOLTZ: We've been -- we've been 15 distributing that to Board Members and staff, to 16 Legislative consultants, to Finance. 17 MS. STOWERS: Okay. Let me clarify. Um, 18 perhaps I'm not reading all my emails, but -- 19 YStowers@sco.ca.gov -- please make sure I get those 20 reports because there seems to be some confusion 21 that they go to the -- going to the districts and 22 Controller Yee is a state-wide official for this 23 Board. 24 MR. HOLTZ: Absolutely. I will make 25 certain of that. 26 MS. MA: Thank you. Okay. 27 MS. HARKEY: Got it. 28 MS. MA: Anything else? No? 38 1 Okay. So no vote on this right, Ms. 2 Richmond? 3 MS. RICHMOND: Correct. 4 MS. MA: Okay. Thank you, all. 5 ---oOo--- 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 39 1 REPORTER'S CERTIFICATE 2 3 State of California ) 4 ) ss 5 County of Sacramento ) 6 7 I, Jillian Sumner, Hearing Reporter for 8 the California State Board of Equalization certify 9 that on November 29, 2016 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 27 14 constitute a complete and accurate transcription of 15 the shorthand writing. 16 17 Dated: January 18, 2017 18 19 20 ____________________________ 21 JILLIAN SUMNER, CSR #13619 22 Hearing Reporter 23 24 25 26 27 28 40 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 November 29, 2016 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 28 through 39 14 constitute a complete and accurate transcription of 15 the shorthand writing. 16 17 Dated: January 6, 2017 18 19 ____________________________ 20 KATHLEEN SKIDGEL, CSR #9039 21 Hearing Reporter 22 23 24 25 26 27 28 41