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AgendaMonday October 3, 2016

Hilton Sacramento – Arden West2200 Harvard Street, Sacramento, CA 95815

8:30 – 9:00 Check-In/Registration

9:00 – 9:12 Welcome/Introductions Auditor Controller’s registered for the event included:

Jay Wilverding Robert Campbell Joseph Mellett Amy Shepherd Marcia Salter Andrew Sisk Roberta Allen Richard Eberle

9:13 – 9:55 Sub-Committee Business Review and approval of the May 2016 meeting minutes presented

by Pam Elias - Approval of the minutes received with a second. Treasurer’s Report by Darlene Hoang:

o Darlene provided a recap of the May 6, 2016 meeting: Event payment $7,710.10 (including $7,664.22 in event

costs and $45.88 for presenter gifts). Collected $5,325 in registration fees Used $825 or 16.5% of our $5k for scholarships. 86 people were in attendance 42 counties were represented 11 meeting scholarships were granted 0 hotel scholarships were awarded Guest count was 4 Going into this meeting there is $34,023.77 in cash and

outstanding registration fees. We anticipate expenses to be approximately $14,800, which leaves an estimated balance of $19,200.

P R O P E R T Y T A X M A N A G E R S ’ S U B C O M M I T T E E

F R A N K D A V I E S , P R E S I D E N T C H R I S T Y R E D F O R D , 1 S T V P L I N D A S A N T I L L A N O , 2 N D V P P A M E L I A S , S E C R E T A R Y

D A R L E N E H O A N G , T R E A S U R E R

Legislative Update - By Bob Campbell. Bob provided an update based upon information received from Matt Siverling: AB 2032 – Disincorporation bill was approved. It is not perfect

and was in need of legislative cleanup. Appreciation was stated for Arlene Barrera (LA County) and Pam Elias (Riverside County) for their help with the bill.

AB 2031 – Affordable Housing Financing bill AB 2291 Partial payment fee recovery (If we have costs have

Tax Collector incorporate our costs). AB 2476 Parcel Taxes Notice (refers to the Assessor) AB 2693 Mello Roos AB 2611 Monthly Payments for Property Tax - bill was vetoed SB 996 Increased total welfare exemption to $10 million – $20k

to 1% of $10 million on $5K increase. We may need to be in contact with our Assessors as we roll into next year for the 1/1/17 lien date to see how this will affect our county.

Other - Bob mentioned that in the May 2016 version of the “State of California Report to State Legislature Property Tax Apportionments” report, pages 10 and 11, there is an item for legislative consideration, which is talking about that the statute does not allow the counties to charge an administrative cost to recover schools costs. It is suggesting that the legislature should make appropriations for the reimbursement. Bob also mentioned the book is a good tool to learn what the SCO may be looking for in upcoming audits.

Technology Update –Hard copy on websiteo Inyo County signed with Aumentumo Riverside County - They have passed around 600 test cases

so far, and there are around 200-300 cases that are pending fixes and/or additional developments before retesting can be completed. Test case total is 1,900, which is approximately a 32% pass rate so far. Final User Acceptance Testing continues with the Riverside project team since the decision of no-go for July 2016. The end user acceptance testing process continues to identify bugs, missed requirements, and in few occasions added scope to the product. Thomson Reuters continues to commit their resources to address the challenges of completing Riverside’s requirements by: adding resources to their development teams; hiring quality assurance experts as part of the leadership team; modifying




their processes to align their development towards test and a quality driven development approach. Riverside’s project team also continues to commit resources to collaborate with the vendor in mitigating the challenges in the User Acceptance Testing (UAT) phase. This phase includes adding and dedicating more business subject matter experts (SMEs) to the project team full-time; reviewing test cases and providing documentation that is more detailed (and augmented) to assist vendor development teams’ comprehension of the desired operational outcomes of the product. Riverside is also taking the advice of Santa Cruz, Santa Barbara, and another Texas county that went live over a year ago for lessons learned. The quality of the product at go-live continues to be the top priority for Riverside. Currently there is a mitigation strategy by Riverside and Thomson Reuters, and the teams are transitioning into this new operating model over the last few weeks. They do not have sufficient data or metrics to measure the effectiveness of the mitigation strategies yet, therefore next go-live target has not been determined.

o Santa Clara County – Challenges for an in-house system, emphasis on collections not roll corrections. They had 67K petitions in 7 years that were not able to process. Lessons learned (put in smart newbie). Kim has 10 staff doing Roll Corrections.

Property Tax Manual - Roxanne mentioned they would love to have others join. It is a great way to learn.

9:55 – 10:06 Online access to R&T code and Property Tax Law guides, By Barbara Godwin, San Luis Obispo County

Go to the link: www.leginfo.ca.gov . Barbara provided a demo of how to look up, search bills, codes, subscribing to bills, etc.

PTLG - Property Tax Law Guides (done by BOE). In 2010, they quit publishing the free volume. For volumes1 & 2, you can still subscribe for about $203, (the law guides are on DVD for about $43) PTLG is free on BOE website (www.boe.ca.gov) click taxes and fee tab, click property tax page & PTLG link to get to table of contents. Archive tab has other years which list years, and revisions which includes other information, for example the exemptions, Assessor’s handbook etc.




http://www.boe.ca.gov/

http://www.leginfo.ca.gov/

10:06 – 10:40 Board of Equalization/Tax Area Services Section (TASS) - Ric Schwarting (Manager of TASS) & Anna Marie Price (Specialist)

The BOE staff talked about TRA Consolidation – They were promoting the program. They have a presentation available or talk to Anne Price. Track specialist districts come in two types:

1) Service Jurisdiction (not mapped) 2) Taxing jurisdiction (mapped) - Those that share in the 1%, parcel, charges.

Important Dates:Dec. 1 - Boundary changes deadlineFeb. 5 (est.) - Preliminary changes posted to websiteApr. 1 (est.) - Complete database changes on web for 30 days reviewMay 1 (est.) - Posting final data (hard to make changes after the date)

Changes at TASS (BOE): They had fourteen staff, but now they only have seven. Same job – more work. Anna also reviews GIS coordination. Kathy retired after eighteen years and Paul left. The BOE email address is [email protected] . They have a one-day turn around for requests. LAFCO handles special districts and cities. Schools file directly with the BOE. Many maps are digital.

Anna explained the mapping process and how mistakes happen. Ric said to let them know if we find mistakes. Sometimes BOE TASS is forgotten in the process and they need to be notified. They have shape files & polygon’s (BOE had lots of errors for Butte County). PDF is official record. Someday they will have a real GIS System.

(Paper handouts available)

10:40 – 10:57 Break

10:58 – 11:15 Get to Know Contra Costa County, by Bob Campbell.Bob introduced his tax manager - Jennifer Webber. Then he talked about the history, statistics and that they are an original Teeter county.

11:15 – 12:00 Outlook for 2017 by Jean Hurst, Hurst Brooks Espinosa Advocacy

Her presentation was entitled “Capitol Politics” A look at 2017”. See the handout. She talked about the legislation process. She planned to provide a summary of ballot & bills and stated there is a lot going on in




mailto:[email protected]

Sacramento

Quick recap: September 30 was the deadline for legislative bills. 1,059 went to the Governor, 898 were signed and two became bills without his signature, 159 bills were vetoed. Some noteworthy items included:

SB32 - Greenhouse was a priority AB1613 - Directed greenhouse reduction revenues to

disadvantaged communities AB1618 & AB28 - Proposition 63 funds for permanent housing

construction for homeless and mentally ill. The funds are to roll out in 2018.

Minimum wage law making the minimum wage $15 per hour by the year 2022, which was a result of dueling ballot measures.

What did not happen in 2016 legislation session? The Governor vetoed several bills, here are some that were

vetoed:o Diaper tax AB717 and tampon tax AB1561o AB2691 Property tax (monthly property tax payments)o No action to address the states crumbling infrastructure and

transportation systems.o Reforms & CPUC (California Public Utility Commissions) and

Californian Coastal commissions failed to pass legislative muster.

o No movement on affordable housing

2016-2017 State BudgetsState revision focused on “Big Three” personal income tax (up), corporation tax revenue (down), sales tax revenue (down)

November 2016 ballot Largest pamphlet in history 17 State ballot measures Many issues have considerable policy impact (fiscal, public

health, public safety). See Haikus on the presentation for a recap of the state

propositions. Or, you can go to www.calmatters.org and click on California Propositions 2016




http://www.calmatters.org/

2017-18 Legislative sessions 17 Seats turned over in the assembly 6 Seats turned over in the senate Potential Democratic supermajority in both houses

How Bill becomes Law: 2 year Legislative sessions in 2017-18 Then it goes through several committees (i.e. Policy, Fiscal). Then it goes to the floor for votes. Deadlines & rules (about timing etc.) 2/3 vote requirement for urgency measures which take effect

January. 4/5 vote required in rare cases to modify ballot measure. Odd years December 2016 – September 2017 Even years January 2018 – August 2018 (adjoin early in the

even years so they can campaign). Bills in odd year can roll over to an even year Timing for sponsoring a bill is a lot of work (talk to stakeholders,

write policy, write bill modifications, gain support, start early develop fact sheets, talk to committee staff, identify support and opposition approach anthems)

Spot bill intent of legislation to discuss

1st House of 2nd House ofPolicy (March - April) Policy (June - July)Fiscal (April – May) Fiscal (July – August)Floor (May – June) Floor (August – September)

May require house of origins to concur in second house amendments. Then it requires floor vote of house of origin.

Governor has the final say 12 calendar days to sign or veto a bill (except at end of

session he gets one month) Legislative deputy is in the Governor’s office Key state departments If vetoed try again and modify, go to ballot A ballot measure process - expensive (cost millions of dollars)

and is a lot of work. They also have to meet with the LAO.

What is next?




Elections LAO Fiscal Outlook Legislative Convention 12/05/16 Legislative returns to work in Sacrament 01/03/17 Governor releases 2017-2018 proposed Budget release

01/10/17 (per California Constitution)

Question: What do you see is the impact of the upcoming presidential elections regarding Donald Trump or Hillary Clinton in California?

Clinton – no real impact (but she could hire Californian’s) Trump – Do not know. We may have a rough time. Could be

difficult.She ended with talking about how she appreciates what we do.

12:03 – 1:08 Lunch

1:08 - 1:50 California Economic Outlook by Irena Asmundson, Department of Finance

Tax policy – Interesting time Two forecasts

1st January preliminary budget 2nd May revisionDiscussion will be on the May budget

Today: Recessions happen (good times never last) California Economic and revenue trends Structural trends Housing Inequality (rich lots of money and there is high poverty) Demographics

Recessions happen about every 5 years. It has been 7 years. It will be a historical anomaly if it does not happen in the next 3 years.

Important to plan (per Governor). Have a rainy day fund.

U.S. and California unemployment rate recovery slow. California follows U.S. trend but California is usually higher. For example, in 2011, the U.S. had a 10% rate and California had a 12% rate.

Average wages going up




We look at the average instead of median because you have to look at larger populations

Median household income is increasing the last 3 years, but it is still lower than pre-recession.

Personal income up (includes transfer receipts)

California State’s highest revenue source is personal income tax

During the S & P 500 index period of 1990-2016, there were three recessions.

If top 1% of taxpayers not doing well, the revenue suffers.

Construction (residential) permits really have not recovered.

Multifamily permits are healthy. A large portion is expected to be multicounty

Household sizes appear to be going up

Fuel higher in California which is related to housing

Median home sales price of existing single-family homes was $100K in 1980 and $500K in 2016 (these numbers were not adjusted for inflation). Her source was the California Association of Realtors.

Rich people are paying to move here

California has a high poverty rate. In 2015: 14% official poverty rate 19% Supplemental poverty rate (22% in 2014) 49% of people can’t afford a $400 unexpected bill

Demographics California is clearly aging Smaller tax base to support retirees in California Proposition 13 protects retirees (but not for renters) Big inflow of Asians (used to be Latinos)




Question 1– With the minimum wage going to $15 per hour, will businesses leave? It is phased in over time and small business gets more time. The State is a huge employer thru in-home support services etc., Lots will be caught up in the rising tide. Governor can pause the minimum wage twice. In addition, a pause can happen if there is a recession, he can pause the automatic increase.

Slower job growth but will not kill the economy. But we don’t know.

Question 2 – Are there more part time vs full time? Most are becoming full time.

1:50 – 1:54 Christy Redford announcement about the meetings - Please let us know if you have ideas to present at the meetings.

1:54 - 2:40 California taxpayer Bill of Rights (BOE) (See handout) Todd Gilman (916) 324-2796

(BOE taxpayer Bill of rights Advocate 888-324-2798) 200 – 300 cases per year for property tax side state assessee issues

i.e., base year value issues and parent to child exclusion issues. The Board has limited power but has influence Taxpayers testify to Board Listed taxpayers rights They are ramping up for ballot issues and anticipating what will happen

next on cannabis issues (for recreational use, if it passes) Link: www.taxes.ca.gov (California Tax Services Center) Morgan taxpayer’s bill of rights (SB 143 from 1993)

Mark Sutter has a background with the Morgan Property Tax Payers Bill of Rights section 5904 (RTC 5900-5911). Their groups are:

Active listeners Probe –talk Resolve (by communication) Are limited in power, they have no teeth

Taxpayer issues: Angry, challenging, they can have valid issues but some hide things.

2:58 - 3:23 California State Association of Counties Dorothy Holzem, CSAC




http://www.taxes.ca.gov/

2017 ballot measures this year February she will give us additional information Big issue is transportations ongoing needs. There is a proposal

being drafted for infrastructure. Homelessness and poverty issues - “no place like home” project to

get homeless services for mentally ill. The goal is for wrap around services for mental health issues and housing. More details to come (Health and Housing Services)

Buy right for affordable housing – give approval to residential housing that is affordable

Cap and trade auction proceeds – how to spend PILT payments being made again in the amount of $650K There is still a decade of backlog for mandate reimbursements not

yet paid

AB2691 – Holdum bill (Property tax monthly program)

AB 1952 - Property tax postponement - vetoed

AB 2476 – Daly bill. Notifying taxpayers of parcel tax for owners outside the boundaries (note 60 parcel taxes going to voters)

AB 2801 - Prop 60 & prop 90 expansions

AB 587 – Chow bill. Proposed a three year amnesty program (no penalty, interest etc.) but no corrective action going forward

CSAC active on 80 bills, successful 75% of the time. They took up to eight ballot measures.

This year was nicknamed the year of “Quentin Tarantino” bills since there were lots of bills having to do with drugs, guns and pornography: Prop 53 – Revenue bonds voter approval Prop 55- Prop 30 tax extension, (they support) extends personal

income tax Prop 56 – (they support) Tobacco tax Prop 64 – (they oppose) marijuana issues local controller tax

revisions.

3:25 – 3:57 Removal or Reduction of Direct Charge Levy presentation, by Sally Zutter, El Dorado County (See handout)




Sally presented several scenarios in which a removal/reduction of direct charge may be requested. She talked about our authority to perform such duties, and which statutes allow us to make these corrections.

Sally asked that we think about not removing the charge for assessments such as PACE that were correctly loaded but we are being asked to remove the charge because the homeowner prepaid. To remove the charge using RTC 4832 would not be correct because it is not an auditor error. To remove the charge would reset the penalty for all other districts on the bill. The question came up in regards to scenario 4, what does your county do? Strip it; segregate it, bill separation or other. Under what authority do we use since it is not an auditor error?

3:58 – 4:41 Property Tax Overview (See handout)Linda Santillano, San Bernardino County

Their Auditor-Controller is now Oscar Valdez. In addition, Sonia Hermosillo is temporarily on the Enterprise System and Vanessa Doyle is the interim Division Chief.

San Bernardino County – Their General Accounting Division is their agent for school bonds.

Supplemental is extended three times per year. San Bernardino does not Teeter special assessments or

redevelopment but they do Teeter supplemental. Linda also provided an overview of the property tax processes.

4:41 Adjourn




AgendaTuesday October 4, 2016

Hilton Sacramento – Arden West2200 Harvard Street, Sacramento, CA 95815

8:00 – 8:30 Check in/Registration

8:35 – 8:40 Welcome Back by Frank Davies

8:40 – 8:45 Election of OfficersSecretary – Anthony Helm (Placer)Treasurer – Jeff Emslie (Sacramento)Vice President – Sarah Bloom (Stanislaus)President – Matt Slaughter (San Mateo)

8:45 – 9:15 Board of Equalization /State Assessed Roll by Mike Harris, BOE (No PowerPoint presentation)

Dick (Richard) Reisinger took Ken Thompson’s position as chief of the State Assessed Properties. His phone number is (916) 274-3300

State assesses properties such as timber, private railway, and the State Assessment Roll.

Timber Tax – The timber value is self-reported by timber owners. It is valued when the timber is cut. The funds are allocated to the general fund.

Railroad car tax goes to State general fund. State Assessment Roll – Values are allocated to counties.

January 1 is the lien date. Companies report on March 1. The value is using a comparative sales approach. The State Board adopts values in May. Values are allocated to each county. This year the Board Roll was $103.3 billion, which is up 3.7% over last year.

Three prior legislative issues they are dealing with:1. AB1559 – (chaptered 9/9/16) Board-wide legislation which

extends taxpayer time from 1 year to 3 years for Timber Tax (& other things) and for catastrophic times.

2. AB2789 – Notice of housing extended from 5 to 7 days – bill defeated

3. SB1394 – private railroad car tax valuation would be based on owner acquisition costs. Bill has not passed.




No current legislation. Ken talked about the Verizon case (before he retired). Last Tuesday,

Board adopted roll corrections, and mailed them to us on Friday.

Other issues: June 21 – PGE (Pacific, Gas and Electric) is not seeking

relicensing for the reactor, which will be shuttered in 2024 & 2025.

SCE (Southern California Edison) – In October 2015, the Aliso Canyon Storage Facility entrance had a methane gas leak. It was capped in February 2016.

In 2010 Electric generation facilities ($8 billion of roll) Due to environmental issues, was to be phased out. They had three options: comply, replace or close. Nine opted to close, and 28 are to be determined.

Question: What is the difference between unitary, utility & Qualified Electric? All are unitary. Non-qualified goes countywide

9:03 – 9:38 State Controller’s Office Update, Scott Freesmeier, SCO

Scott provided a presentation called the “Property Tax Process and Update” (see the handout)

He talked about the property tax process, where we are at, and where we are going.

Property Tax Process looking at: AB8 and Tax increment Jurisdictional charge Property Tax Administration Fees (FY 14/15 remove VLF) ERAF, shift, excess, VLF TEA Supplement Apportionments Unitary and Pipeline Regulated Railway Qualified Electric(ERAF under dispute) RDA, New RDAS during Audit period RPTTF (Observation because of San Diego Lawsuit)

Where are we at? Where are we going? Final reports: 12, Audits in process 14




Next Counties for audits:o Placer, Imperial, San Diego, Ventura, Los Angeles, Marin

and Sierra Oversight Board staffing discussion – Auditor can staff, but they

can delegate in accordance with the law. If delegated and approved by DOF and OB, then it is approved.

Division of Audits Jeffrey Brownfield, Chief - Division of Audits (916) 324-1696 or

[email protected] Elizabeth Gonzalez , Chief - Compliance Audits Bureau (916)

324-0266 or [email protected] Scott Freesmeier. Audit Manager, Property Tax Program, (916)

730-2793 or [email protected]

Links to audit and oversight reports, and more information can be found at www.SCO.CA.GOV. For the audits: go to the State and Local tab, click on local government reports, click on revenue audit reports, then on Property Tax Apportionment and Allocation System Audit Reports.

Question: Christy asked: will the VLF Swap go away? Scott said no, because Schwarzenegger reduced the VLF years ago and this swap would have to be reversed.

Question: Sally asked should ERAF get supplemental. Scott said we are paying supplemental ERAF. However, no answer from legal on the question that was asked 8-10 years ago. No answer for Legal.Sally said ERAF should not get supplemental.

9:38 – 9:45 Website Update, by Marcia Salter of Nevada County

The new design of the website is not yet ready. It should be user- friendly. They will have to figure out how to roll it out and train. It is supposed to have better security. It will be easier to post documents. Very exciting and it was a bargain. It will have the same web address.

The Property Tax Managers group is still leading on website. The Accounting Managers are catching up.

Each County has a site manager.




http://www.SCO.CA.GOV/




9:45 – 10:03 Break

10:03 – 10:41 Statewide Community Infrastructure Program (SCIP)James Hamill, California Statewide Communities Development Authority

CSCDA (California Statewide Communities Development Authority) – Is a JPA (Joint Powers Authority). It is a creation of League of California Cities and the California State Association of Counties in 1988. It provides financing tools for counties to fund programs such as PACE and affordable housing. It is nonprofit financing.

The SCIP (Statewide Community Infrastructure Program) is for local level and infrastructure costs.

Post RDA Economic Development, cities have five basic tools for public and private projects:

1. CFDS & AD’s (they are here)2. Land use zoning 3. Real Estate and Property4. Criteria for Ownership (P3) Structure and infrastructures5. Taxes & revised based financing.

There is a one-time resolution to adopt CSCDA. Then CSCDA takes on the administrative burden.

535 members today have coverage everywhere Created 13 years ago, $350 million issued in bonds to date 70 local agencies signed up to use the SCIP Program Public/Private partnership (between developer and public agency Finance range is from $250K to $20 million or higher. Program Mechanics: impact fee reimbursement program, impact fee

pre-funding program, acquisition funding, CFD financing. School fees not financeable thru the program (it is not what the money

is to be used for) Members –no fees, no liability, but must adopt a skip resolution which

assigns staff to monitor the program Requirements

o Financed thru SCIPo Valid entitlements (Property Assessed)o No violation of the laws (for funds spent)o 1 to 2 day funding turn around

SCIP Contact information (See handout for all contacts)




James Hill 925-476-56441700 N. Broadway, Suite 405Walnut Creek, CA 94596Phone (925) 476-5644

Question - Is there disclosure? Yes, proactively educate title companies & real estate agencies so they can educate homebuyers. They are supposed to disclose at list price. State looking at this closely, since it goes on too often. Need to be proactive.

Question – What is the authorization for County placing these on the tax roll? These are 1915 bonds which are allowed. Counties may state in resolution to state we do not allow financing of xyz.

Question – What type of amortization? Straight Amortization will be used for payments. There are no balloon or spike payments. It is pre–payable with a 3% pre-payment for 5 years.

10:41 – 11:44 Enhanced Infrastructure Financing Districts and Community Revitalization Investment Authorities by Larry Kosmont and Joseph Dieguez of Kosmont Companies.

(See the handout entitled “How to Form and EIFD - Kosmont 10-4-16” or The EIFD Manual: How to Form Enhanced Infrastructure Financing Districts)

They provided an overview of the EIFD formation and what cities and the county can expect.

They provided some background about how the EIFD came about and other

related information. Some of the need was due to reducing greenhouse gas bills (AB32 (newer), SB375, SB350, SB32, and AB197 (newer)). SB32 requires State to reduce greenhouse gases can use EIFD & CRIAS. EIFD (Enhanced Infrastructure Financing District) (bills: SB 628 and AB313). CRIA (Community Reinvestment Investment Authority) (bills: AB2 and AB2492) – Tool for affordable housing. Other agencies must say yes, you can use our tax increment. Need at least 15 cents (on the dollar?) to be worth it. Cities ask for support (Financial, political, governance, administrative). Counties – Return on Property Tax increment fulfillment of county statewide economic development & environmental policies (Job creation, sustainable infrastructure greenhouse gas reduction). Counties can also take the lead on EIFD or CRIA. EIFD’S – Now deal making paradigm in California.

CRIAs have a qualification test. EIFD does not focus on affordable housing (25% must be used for affordable housing)




Lower income Higher crime rate etc.

City of La Verne Case Study (started in late 2015) and is very far along in the process it is an EIFD in LA County. It is almost 400 acres (noncontiguous area).

For EIFDs - The contribution rate can vary. They are filed thru BOE. They are subordinate to other existing obligations.

Questions:

Question – If LA County Board does not approve, will it make forward? We would have to re-structure since it would take longer to finance.

Question – Has Kosmont communicated with Los Angeles County Auditor-Controller? No. L.A County said they could see serious concerns about how this would work given the fact they are working with an old system. Larry Kosmont said he was glad they asked that question and he said Kosmont would like to sit down with them and the sub-committee to talk about this. Yes, there is a need for discussion.

Question – Since it’s in a City, will sales tax be used? Not in La Verne but yes for others. La Verne doesn’t have that much retail (sales tax)

Question – When using an antiquated property tax system, and looking at the statutes, have you looked at how debt would be handled? Yes, in Rialto, we worked with HDL to understand debt structure, but there is no general model.

Question – Residual is subordinate. Are you anticipating non-frozen base? Split after overlap is up for discussion. Many items to consider for discussion. We are involved in about 30 of these. Assuming same base year but not assuming same distribution rate. Growth of assessed value is not assumed the same. Want to be conservative.

Question – List of 30 plus agencies? List to be provided.

Question – LA County stated that one of the cities mentioned is a TEA city that only received 7%. Are they using all of their 7%? We would have to look at that.




Question – Post ERAF? Yes

Question – Is residual distribution separate for county? Negotiating as a package that separately addresses that.

Requesting a sub-committee to be formed with Counties.

11:44-11:44 Frank put a special thank you out there for all the people that helped put the meeting together such as Dawn (Sonoma), Franz (San Bernardino), Glen (San Bernardino) etc.

11:45 – 12:07 Department of Finance UpdateChris Hill, Derk Symons, DOF

Legislative update, bill the Governor signed on vetoed:

He considered 1,059 bills and vetoed 160 or 15.1%. His average veto rate is 13%

AB2691 (Holden) – Monthly property tax for seniors (over 62) or disabled (only secured), bill was vetoed on 9/23/16

AB2291 (Achadjian) - Delinquency tax for permanent installment plan. County can charge administration fee. Approved 9/9/16

SB817 (Roth) Bill to allow newly incorporated cities (after 2011) VLF – Vetoed 9/23/16 estimated cost to the State general fund would be $18 million annually

AB1952 (Gordon) Property Tax postpone program vetoed 09/21/16 (state would have to backfill the program.)

SB909 (Beall) Property Tax postponed – increases eligibility signed 09/21/16

SB1458 (Bates) - Disabled veterans exemption eligibility expansion bill. Approved 9/29/16

AB1891 (Dababneh) - Parcel Tax exemption granted by school districts. Approved 9/22/16

SB1315 (Bates) County Budget bill - Approved 7/1/16 AB1661 (McCarty) - Sexual Harassment prevention training and

education requirement for local agency officials - Approved 9/29/16

SB1012 (Nguyen) requires any Flag of the U.S. or State of California, purchased by the state or local government to be made in the United States.

Triple flip economic recovery bonds were paid off July 2015. There is




no ERAF associated with the lost sales tax anymore.

Derk Symons provided an update on RDA Dissolution: Now that we are going into the annual ROPS, it should be

easier

RDA residual distribution in FY 15-16

$2.1 billion cities $2.6 billion counties $802 million special districts $7.2 billion to schools $12.9 billion total

With the annual ROPS, we can make up the shortfall in first half of the year. If there is a shortfall in the second half of the year, it must go on the next ROPS. The Annual ROPS form to be available by 12/15/16.

RDV Application will be available soon

Property Tax Sales of Asset forms

Question: For the Asset and Low and Moderate Housing payments, do we have to distribute right away? For proceeds, there is no deadline in the statutes. The DOF would like it to be as soon as we can.

12:07 – 1:14 Lunch

1:14 – 2:11 PACE Assessments by Crystal Crawford, Ygrene – (See handout) Crystal said she has spoken to about 40 counties in the last 6 months.

She has been involved with the process since 2009. In 2008, the Governor passed AB811 allowing contractual assessments for energy efficiency improvements.

JPA forms PACE (Property Assessed Clean Energy) Local government authorized program Get contactors licensed Use financing to pay for upgrades Consumer Protection (Certified Contractor’s, local permits, and




customer approval.

In 2009, Sonoma County leads the way. There are now five counties with their own PACE program. CVAG (Coachella Valley Association of Governments) hired Ygrene.

A second bill, SB555 was passed in 2011, which amended the Mello Roos act. Ygrene operates under SB555. They are the only company that operates under SB 555 for PACE.

Gave advantages for property owners (homeowners and commercial)

There was a process for approval and finance, which starts with an application. Once approved and funded the work is completed and they are billed on their tax bill. The residential process is quicker than commercial.

There is consumer protection There are fees schedules with terms and rates Willdan Associates is the tax administrator There is a pre-payment penalty unless financed without one. Fannie Mae and Freddie Mac – have not changed their position

(they would not like to see PACE assessments on property) PACE has first lien. Crystal is also participating in the program. Her loan is $23k

with a $2,000 annual payment.

Question – Late fees? It is whatever the county charges. If it is stripped off, it is whatever the financing agreement states. The Tax Collector fee would be whatever our fee states.

Question – Are you adding the fee? Willdan adds the fee, knowing this; we reduce this amount from the assessment.

Question – 8% rate? What is Ygrenes’ cost? There is a 3% origination fee, which covers her salary, call center, other staff. There are interests rates applied that vary depending on the length of the loan. There is also a quarter-point prepayment penalty.

Question – How long before stripping delinquent tax assessment from the property tax from roll? Have not had this happen yet but is should be immediately.




Question – Stripping assessments off the tax bill if prepaid for PACE/HERO assessment is restricted by the Revenue and Taxation Code for roll corrections. Ygrenes’ cut off is the June 30, after that, it is too late to prepay for that year. Response from the tax managers: Great!

Question – Interest Rates? Interest rates are fixed for the life of the loan.

Question – Are your rates high since banks have lower rates on their loans such as 3 1/2%? Yes, but people are not likely to get a 3 ½ interest rate on a second with a 20 year term.

Question – How would someone qualify with reverse mortgage or 15% equity?

Must have a least 10% equity Property taxes must be paid up to date for a 3 year period Mortgage payments must be up to date – no late or default for a

3 year period Property cannot be in bankruptcy Credit report and title report is run during the underwriting

process Reverse mortgage? Property owner must still be on the tittle. All

property owners must sign.

Question – El Dorado has a specific situation - $900 fixed income, reverse mortgage for an elderly woman. Crystal to deal with El Dorado individually.

Question – Concern of predators lending? Contractor conduct must be appropriate; we do not want to see any of this. The situation is not perfect (sometimes contractors may say things). We remedy the situation to kick contractors off if not complying with our code of conduct. We follow local ordinances and rules. We are strict about what contractors can say.

Question – Legislation AB2693 – Consumer protection law that requires a standardized disclosure to know before you owe. Effective 01/01/17

Question – Who can taxpayers call if they have complaints? They can call the Golden State financing authority or their Joint Powers




Authority, They JPA and they can call the county that is participating in the program.

To contact Crystal call (858) 353-6658 or email her at [email protected]

2:11 – 2:33 Common Claims about Proposition 13 by Carolyn Chu, and Brian Uhler, LAO

Brian talked about Proposition 13 equity issues where people are paying different amounts and how it has affected people across income groups. He talked about the effect on land use decisions which it does not have much of an effect.

Commercial vs Residential?

Is commercial owned longer? Does not seem to be true overall, but only measured since 2002

Frequency of reassessment by residential and commercial - residential has a larger tenure than commercial.

Has Prop 13 had an effect on stability? Yes, proposition 13 stabilized the base value for year-to-year assessed valuations.

Local government revenues – how did it change since Proposition 13? Tax revenues declined per person from $790 in 1977/78 to $640 in FY 2014/15.

His charts have been adjusted for inflation

No afternoon break because we were running behind and the group decided to press-on to the end.

2:33 – 3:30 TaxSys: Supporting AB 8 and Apportionment (See handout)

John McCarthy, Bob Dunn, Grant Street

The have been developing a property tax billing and collections system for many years

AB8 and apportionment code presentations -Flexibly for different counties -We are showing our way but we realize counties do things

differently depending on the county.




They have 10 years’ experience of due diligence and preparation Traditional approach models are for one county. We researched,

documented, revised etc. to accommodate many processes and variations thereof.

They have given demos to about 17 counties.

AB8 – Proposition 13 variations - We are building for the whole state not just one county. We have been collecting information for two years.

Known variations between California Counties.

Audience Questions Does your AB8 factor include ERAF? - Do you have more than one ERAF? Do you include RDA in your AB8? Do you have ERAF at TRA or district level? Are you a TEA county? Do you give increment to a city that is in its first year? Do you apportion to the TRA only?

Their system is prepackaged vs a COTS system. It is configurable off the shelf (which is how TaxSys is written).

They presented a demo of their system for AB8. The demo included base year, jurisdictional changes,

calculation of levy, tax equity allocation (TEA) calculations, ERAF, redevelopment, annual tax increment etc.

If one-step is wrong, you need to delete each step and go back to the incorrect step to start again. It does not compute the difference from the gross levy and adjusted gross levy. It computes the of redevelopment increment by TRA. They demonstrated how it then goes thru TEA computations to the gross levy adjustment, and then apply the TEA adjustment. TEA cities are flagged and the County is the TEA donor.

Calculates real growth percentage, which is reflected as a percentage higher or lower than last year. It is multiplying by last year’s ERAF contribution




There was discussion to determine how to ensure the totals do not change. You would create a preliminary modification and someone would approve it to finalize the AB8 factors.

They have numbers that are adjusted for ERAF. If redevelopment is included in the AB8 factor, they must add their contribution factor.

For changes needed, the TaxSys has a toolbox, which is there to assist for things like legislative changes.

Question – Does it show the steps? Yes, there is a summary of data left to right in order of calculation.

3:31 Meeting Adjourned




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