1 BEFORE THE CALIFORNIA STATE BOARD OF EQUALIZATION 2 450 N STREET 3 SACRAMENTO, CALIFORNIA 4 5 6 REPORTER'S TRANSCRIPT 7 MAY 29, 2019 8 9 10 11 ITEM K 12 OTHER ADMINISTRATIVE MATTERS; 13 ITEM K1 14 EXECUTIVE DIRECTOR'S REPORT; 15 ITEM K1(a) 16 ORGANIZATIONAL UPDATE 17 18 19 20 21 22 23 24 25 26 27 REPORTED BY: Jillian M. Sumner 28 CSR NO. 13619 1 1 P R E S E N T 2 3 For the Board of Honorable Malia S. Cohen Equalization: Chair 4 Honorable Antonio Vazquez 5 Vice Chair 6 Honorable Ted Gaines First District 7 Honorable Mike Schaefer 8 Fourth District 9 Yvette Stowers Appearing for Betty T. 10 Yee, State Controller (per Government Code 11 Section 7.9) 12 For the Board of Brenda Fleming Equalization Staff: Executive Director 13 Toya Davis 14 Clerk Board Proceedings 15 16 ---oOo--- 17 18 19 20 21 22 23 24 25 26 27 28 2 1 450 N STREET 2 SACRAMENTO, CALIFORNIA 3 MAY 29, 2019 4 ---oOo--- 5 MS. DAVIS: Our next items are K1 through 6 K4, Other Administrative Matters. 7 The first item is K1, the Executive 8 Director's Report by Ms. Fleming. This item does not 9 require a vote. 10 And Ms. Fleming has come forward at this 11 time. 12 MS. COHEN: Thank you. 13 MS. FLEMING: Good afternoon -- check the 14 time. 15 Good afternoon, Chair Cohen and Honorable 16 Members. 17 Make sure I'm on schedule here. 18 Thank you again for this opportunity to 19 present. I am Brenda Fleming, Executive Director. 20 This month's report, Members, provides an 21 update on our operational priorities. A copy has 22 been provided for your reference. I won't speak to 23 each item in detail, but I would like to highlight a 24 few of them. 25 Okay. So if you have the material in front 26 of you, I'll draw your attention first to Item One. 27 Again, thank you for the vote this morning. 28 In terms of next steps on the state-assessed property 3 1 evaluation process, staff will be allocating the 2 values adopted by the Board today among the 58 3 counties to create the final roll. 4 At the July Board Meeting, you, as the 5 Board, will vote on the adoption of the 6 state-assessed property roll. 7 Staff is also finalizing the private 8 railroad car tax roll for the adoption, also at the 9 July meeting. 10 If I can draw your attention to No. 2, the 11 Web site compliance matter. The state Web site 12 accessibility legislation, which is Assembly Bill 13 434, requires each agency to certify that their Web 14 site is compliant with specified accessibility 15 standards. We're doing this by July 1, 2019. 16 This project is progressing well. No 17 problems or issues are anticipated. 18 I'm highlighting this item, Members, because 19 of its importance, certainly, but also I just want to 20 take this opportunity to acknowledge and thank the 21 staff that are working hard on this item, on this 22 project. Their teamwork and commitment -- looks like 23 the slide disappeared. 24 Their team work and commitment to meet the 25 target is commendable. And I just want to pause to 26 thank everybody for all that they're doing. 27 If I can draw your attention to Item No. 7, 28 which is the county assessment surveys. 4 1 Members, as you know, the county-assessed 2 survey program performs compliance audits on a 3 five-year cycle. 4 I just am going to start to present this 5 information to you on a recurring basis. But we 6 currently have ten in progress. And I'll just 7 quickly list the counties for you. Marin, Modoc, 8 Placer, Merced, Sutter, Trinity, Tuolumne, Fresno, 9 San Mateo and Kern. 10 There are seven on the horizon. Those 11 include San Diego, Lassen, Yuba, Alpine, Del Norte, 12 Butte, and Santa Barbara. 13 Members, to support transparency or 14 transparency objectives and to offer metrics in this 15 area, we'll continue to provide monthly reports of 16 this information, and give you more visibility into 17 this rich work that's being done. 18 If I can draw your attention to Item 9. 19 This is the Certificated Aircraft, Senate Bill 791. 20 Mr. Durham will report on the bill status, of course, 21 later in today's presentation. 22 But just to give you an update, that our 23 staff continue to prepare for the January 1, 2020 24 operative date should the bill pass. 25 If I could draw your attention to Item 10, 26 which is the BOE strategic plan for 2019 to 2022. As 27 reported last month, the four goals include; invest 28 in our employees, restore our agency infrastructure, 5 1 expand our customer service, and improve our 2 operational efficiencies. 3 Members, at the July Board Meeting, we'll 4 come back to you with an outline of the plan and 5 start to get you more exposure to it as it's 6 continued to be developed. 7 If I can draw your attention to No. 12. 8 We've got some good news for you. On May 10th, 2019, 9 the Department of Finance approved the Board's 10 offices to remain in the downtown Sacramento corridor 11 in collaboration with the Department of General 12 Services and CDTFA. 13 Staff are completing the site surveys, which 14 will be used to determine cost and time estimates to 15 get you moved in. 16 We are working with each Member to address 17 the specific details that meet your specific needs. 18 Concurrently to the downtown corridor 19 offices for Members, the office design plans for the 20 Natomas facility are also being revised to 21 accommodate the remaining BOE staff that are going to 22 move to the Natomas location. 23 Cost and time estimates are pending, again, 24 working with DGS and CDTFA. And absolutely, we'll 25 keep you apprised of all the progress and activities. 26 If I could draw your attention to No. 13, HR 27 Delegation. At our last meeting, Members, with 28 CalHR, which is the March 2019 timeframe, CalHR has 6 1 indicated that they're in support of our plan to have 2 our delegation reinstated. 3 They've outlined a go-forward plan that 4 involves reviewing our policies, our management 5 practices, and training plans to ensure that we're in 6 full compliance. 7 Once the compliance objectives are met, 8 CalHR stated that they would be more than open to 9 write us a support letter to the State Personnel 10 Board advocating for our restored delegation. 11 And absolutely, again, we'll keep you 12 informed of our progress. 13 If I could draw your attention to Item 14, 14 Recruitments. 15 Members, there are 36 vacancies in our 16 program area; 24 of the 36 are in progress, are 17 actively in some stage of the recruitment process. 18 The balance of the 12 are in the 19 pre-recruitment process. Which means managers are 20 preparing the packages and the materials to submit. 21 There are currently 11 vacancies in the 22 Board Member offices. And we'll be working with you 23 to support getting those filled. 24 In closing, I'd like to pause as usual -- to 25 just pause to thank Ms. Leslie Davis for joining us 26 again today. We appreciate the partnership with 27 Ms. Davis, the California Assessors Association, and 28 all of the county assessors, as we focus on doing our 7 1 due diligence. 2 And finally, as always, I want to 3 acknowledge the work performed by my staff. Their 4 professionalism, their subject matter expertise, and 5 their commitment to public service in the tax 6 industry is very valued and appreciated. So I just 7 wanted to acknowledge all of the work that they're 8 doing. 9 Members, that concludes my report for this 10 month. 11 MS. COHEN: Thank you. 12 Colleagues, are there any questions for the 13 Executive Director? 14 MR. GAINES: Yes. 15 MS. COHEN: Okay. Mr. Gaines. 16 MR. GAINES: Yeah. Thank you. 17 I just really wanted to just comment, if I 18 could. Because a lot of progress is being made, and 19 I'm very encouraged by it. First, by the recruitment 20 efforts. It's nice to see that moving along more 21 quickly. And it's actually moving faster than I've 22 anticipated given that you've mentioned that 24 of 23 the 36 vacancies are in progress. 24 So maybe just to expand on that, could you 25 tell us what that time line would be if you get all 26 of those vacancies filled? I know it's a long 27 process. 28 MS. FLEMING: Yeah, it is a -- it is a long 8 1 process. 2 It's hard to tell, you know, when they'll 3 all be filled. Because, quite frankly, what happens 4 often is as we're filling the vacancies, it's kind of 5 a little bit of a musical chair. So we don't always 6 look at it as the numbers specifically dropping 7 unless we are bringing more people from outside as 8 part of the recruitment process. 9 So the average process for a specific 10 recruitment can be anywhere from two to four months. 11 And a lot of it depends on the candidates' pool. How 12 many qualified candidates are there, whether or not 13 you find somebody that's successful, or some group 14 that's successful. Sometimes we have to go through 15 multiple iterations of that. 16 We will continue to just advance it as 17 quickly as we possibly can. But typically, per 18 recruitment, it could be anywhere from two to four 19 months. 20 MR. GAINES: Okay. I remember hearing some 21 stories about five to six months. So -- 22 MS. FLEMING: Yeah. 23 MR. GAINES: I just want to confirm that 24 it's happening faster. 25 MS. FLEMING: We're seeing some 26 improvements, yes. 27 MR. GAINES: And we're filling those 28 positions. I know that you have some people 9 1 retiring -- 2 MS. FLEMING: Yes. 3 MR. GAINES: -- as others are being hired. 4 But my hope would be that the vacancies would be at a 5 greatly reduced number. 6 I don't know, kind of, what the -- I don't 7 know how many typical vacancies you would have within 8 the BOE because of maybe someone moving to another 9 job, or someone retiring. 10 MS. FLEMING: Mm-hm. 11 MR. GAINES: But that number -- I know we 12 have 11 at the Board level, too, right? So it's 47. 13 MS. FLEMING: Forty-seven. Mm-hm. 14 MR. GAINES: With 24 in progress for rank 15 and file. And I don't know how many are in progress 16 for BOE Members. 17 MS. FLEMING: None of them at this point are 18 in recruitment. 19 MR. GAINES: Okay. 20 MS. FLEMING: So we'll circle back with 21 you -- 22 MR. GAINES: Okay. 23 MS. FLEMING: -- to get some of those 24 moving. 25 MR. GAINES: Okay. 26 MS. FLEMING: Yes. 27 MR. GAINES: All right. Yeah, that would be 28 very helpful. Because I've had -- I've been very 10 1 fortunate in that that I basically inherited a team. 2 MS. FLEMING: Mm-hm. 3 MR. GAINES: So my colleagues, I know they 4 need a full team also. 5 MS. FLEMING: Absolutely. Absolutely. 6 MR. GAINES: Also, the HR delegation, I'm 7 encouraged that that is making progress. 8 MS. FLEMING: Mm-hm. 9 MR. GAINES: Do you think we're in a 10 position that we would get that by the end of the 11 year? 12 MS. FLEMING: I wish I could tell you 13 specifically the exact timeframe. I know when we've 14 had conversations -- in our last conversations and 15 regular ongoing conversations with CalHR, the typical 16 process is anywhere between nine and twelve months, 17 Mr. Gaines. 18 And so, ideally, I'd like to be there by the 19 end of the year or first quarter of 2020. I can't 20 nail it down. A lot of it has to do with our ability 21 to complete these tasks to meet the objectives. 22 There's specific material that we have to 23 have in place that really demonstrates, as for 24 forensic evidence, demonstrates that we're actually 25 -- got our policies in place, that we're adhering to 26 the policies. And you just want to show the material 27 that memorializes that it's actually occurring. 28 So as we get down to a little bit more of 11 1 that detail, I absolutely will keep you informed. I 2 wish I could tell you, you know, specifically. 3 Because once we get all that documentation and it's 4 reviewed by CalHR, the next step is then still to 5 submit the actual request to the State Personnel 6 Board. And then we'll be in line with what their 7 cycles are. 8 So if I can get that nailed down -- 9 MR. GAINES: Sure. 10 MS. FLEMING: -- I'll come back with more 11 specific information as I can. 12 MR. GAINES: Sure. 13 Are there other -- are there other 14 administrative delegation authorities that we need to 15 get back that we're working toward other than HR? 16 MS. FLEMING: HR is the primary one. It's 17 the most significant. Of course the delegation as it 18 relates to procurement -- 19 MR. GAINES: Yeah. 20 MS. FLEMING: -- for the Members, is not 21 just a loss of delegation, it was changed in statute. 22 And so honestly, I'm just revisiting, like, how we 23 might go about approaching that one. 24 So primarily at this point concentrating on 25 the HR. Because we've got to figure out what would 26 be those options for the procurement delegation. 27 MR. GAINES: First things first. 28 MS. FLEMING: Because I recognize for 12 1 Members -- I was talking to one of our Members this 2 week, and the delays in getting some of that 3 procurement activity occurring, because of the 4 process of Members going through the Department of 5 General Services. It goes through too many hands to 6 get a basic order processed for you. 7 And so the challenge with that is you look 8 how many hands touch the process, or the basic 9 subscription. If you see how many hands touch it, 10 that gets to be a costly process. 11 MR. GAINES: Sure. 12 MS. FLEMING: Where the actual expenditure 13 is not that much. 14 So we're still working through trying to 15 determine how best to approach that. But right now 16 we're constrained by the legislation. 17 MR. GAINES: Okay. And we're working in 18 concert with CDTFA on these matters also? 19 MS. FLEMING: CDTFA, DGS are recurring 20 conversations. 21 MR. GAINES: That's great. That's 22 wonderful. 23 I'm grateful, in the office relocation, that 24 we got permission from Department of Finance. And I 25 know that all of us are working on consolidating 26 space. I would imagine probably saving hundreds of 27 thousands of dollars a year for our constituents in 28 terms of this right-sizing what we need as Members of 13 1 the BOE. 2 MS. FLEMING: Absolutely. 3 MR. GAINES: So I want to thank you for that 4 effort. I know that we're working on consolidating 5 space down in Southern California. And then also 6 here in Sacramento. And I'm just really encouraged 7 that we'll have access to the Capitol. Because how 8 important it is for us as we're following the law, AB 9 102 -- 10 MS. FLEMING: Exactly. 11 MR. GAINES: -- that we're communicating 12 with the Legislature and the administration on what 13 we need to do, giving them updates on how we're 14 working very diligently to make sure that we're 15 operating the BOE in the right fashion. 16 MS. FLEMING: Exactly. Exactly. I concur. 17 MR. GAINES: So thank you very much. 18 MS. FLEMING: Thank you. Thank you for that 19 support and your patience as we work through these 20 processes. 21 MS. COHEN: Are there any other Members with 22 comments? 23 Mr. Vazquez. 24 MR. VAZQUEZ: Just to echo the comments that 25 were made. And actually this little sheet is real 26 helpful. Because I know we've been talking about 27 benchmarks. And I think it kind of lays it out. And 28 I'm looking forward to working with you on some of 14 1 these as we move forward to hopefully meet these 2 target dates. 3 MS. FLEMING: Very good. Thank you. I 4 appreciate that. 5 Members, any other comments? 6 MS. COHEN: Yes. Question about Item 15 on 7 your list, Split Roll System Proposal. 8 Could you revisit your presentation? What 9 did you say about that? I don't recall. 10 MS. FLEMING: Okay. So this month I didn't 11 give the specific updates on it, but -- 12 MS. COHEN: Oh, okay. So I didn't -- 13 MS. FLEMING: I'll just give you the 14 general -- yeah -- no, you're fine. 15 MS. COHEN: Okay. 16 MS. FLEMING: Absolutely. You're right on 17 point. 18 But I'll just -- just for general comments, 19 for split roll, and I've got -- between Leslie Davis, 20 etc., in the audience on this, if I misspeak, you 21 guys please come up and correct me. 22 Really what we're doing at this point, of 23 course, the split roll legislation is a proposition 24 that's going to be on the 2020 ballot. 25 MS. COHEN: Great. 26 MS. FLEMING: And so what we -- what we want 27 to do is do our due diligence to identify how big the 28 bread box is. So should it pass, what is our 15 1 responsibilities? 2 And we've just outlined all of the things 3 that need to be done to prepare for that legislation 4 should it become operative. 5 And so -- and that's kind of the normal work 6 that we would do. 7 And identifying that, you come up basically 8 with your scope, with the details of all the 9 categories of activities that we'd have to be 10 involved in. For example, you'd have to first look 11 at, okay, so what is the legislation, what is it 12 implementing? 13 So we talked about forms earlier. We'll 14 take a look at what forms are needed; what processes 15 are needed to process, you know, the revised version 16 of this legislation; additional staffing; budget 17 needs; contract staff; any technology systems. So 18 it's the full complement. 19 Typically, Ms. Cohen, what happens is we do 20 that work in advance of a budget change proposal. 21 And with the budget change proposal, what it allows 22 us to do, in this case, when it's pending 23 legislation, its passage or failure is uncertain, we 24 prepare that budget change proposal document that can 25 be submitted when the legislation passes. 26 Once it passes, you've got 10 days to submit 27 that package to the Legislature to show them that -- 28 MS. COHEN: Once it passes -- 16 1 MS. FLEMING: Once the measure passes. 2 So in the November timeframe. So you've got 3 what we call a 10-day legislative process. And so 4 what we would do at that time is have all this 5 material available. We have advanced meetings with 6 the Legislature, etc., so that they're aware of it as 7 a part of the budget process. 8 But should the legislation pass in that 9 November timeframe, then we turn around -- and that's 10 pretty standard work for us to then submit that 11 legislative BCP. 12 MS. COHEN: Will you be bringing these 13 ideas -- 14 MS. FLEMING: Yes, ma'am. 15 MS. COHEN: -- and information periodically? 16 MS. FLEMING: Yes, ma'am. 17 MS. COHEN: Is there a way that you can 18 bring it to us monthly, so that we can be a part of 19 the process? 20 MS. FLEMING: What I'll do is, if I may take 21 that into consideration whether or not monthly is the 22 right cycle. Certainly in our one-on-ones, 23 absolutely, we'll present a lot of the information. 24 But we do want to make sure that we're 25 presenting more substantive information. 26 So, yes, I would be willing to bring that 27 information back to the Board and then individual 28 one-on-one meetings. 17 1 MS. COHEN: That would be helpful. 2 MS. FLEMING: Absolutely keep informed. 3 It's a big issue. 4 MS. COHEN: We've talked about having 5 hearings, we've talked about the need to really put 6 those ideas pen to pad, and really put down a robust 7 time line. 8 MS. FLEMING: Time line and a go-forward 9 plan. 10 MS. COHEN: Yes. So that we're working in 11 conjunction, not only with your staff, but also with 12 assessors. 13 MS. FLEMING: Exactly. Exactly. 14 And we're sensitive too. It's like, you 15 know, it's pending legislation, so we don't want to 16 get too far ahead of it. 17 MS. COHEN: Yes. 18 MS. FLEMING: But we don't want to be 19 remised in our duties and not be prepared should it 20 take effect. Because the magnitude of the scope of 21 that. 22 MS. COHEN: All right. Thank you very much. 23 MS. FLEMING: Thank you. 24 MS. COHEN: I appreciate the presentation. 25 Seeing that there are no other questions, I 26 think it's an appropriate time for us to take a 27 45-minute lunch break. And we will reconvene at 28 1:30. 18 1 Thank you. 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 19 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 May 29, 2019 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 19 14 constitute a complete and accurate transcription of 15 the shorthand writing. 16 17 Dated: July 12, 2019 18 19 20 ____________________________ 21 JILLIAN SUMNER, CSR #13619 22 Hearing Reporter 23 24 25 26 27 28 20