1 BEFORE THE CALIFORNIA STATE BOARD OF EQUALIZATION 2 450 N STREET 3 SACRAMENTO, CALIFORNIA 4 5 6 7 REPORTER'S TRANSCRIPT 8 JANUARY 11, 2012 9 ITEM P OTHER ADMINISTRATIVE MATTERS 10 ITEM P5 ADMINISTRATION DEPUTY DIRECTOR'S REPORT 11 ITEM P5.3 2012/13 SPRING FINANCE LETTERS 12 ITEM 5.3.a CENTRALIZED REVENUE OPPORTUNITY SYSTEM 13 ITEM 5.3.b DEPARTMENT OF JUSTICE BILLABLE SERVICES 14 15 16 17 18 19 20 21 22 23 24 Reported by: Juli Price Jackson 25 No. CSR 5214 26 27 28 1 1 P R E S E N T 2 3 For the Board Jerome E. Horton of Equalization: Chairman 4 5 Michelle Steel Vice-Chairwoman 6 7 Betty T. Yee Member 8 9 George Runner Member 10 11 Marcy Jo Mandel Appearing for John 12 Chiang, State Controller (per 13 Government Code Section 7.9) 14 15 Diane G. Olson Chief, Board 16 Proceedings Division 17 18 For the Staff: Liz Houser Deputy Director 19 Administration 20 ---oOo--- 21 22 23 24 25 26 27 28 2 1 SPEAKERS 2 Name Page 3 Randall Cheek 5 Legislative Advocate 4 SEIU 1000 5 6 ---o0o--- 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 3 1 450 N STREET 2 SACRAMENTO, CALIFORNIA 3 JANUARY 11, 2012 4 ---oOo--- 5 MS. HOUSER: My last item is a request for 6 Board approval of two spring Finance letters for fiscal 7 year '12-'13. 8 As discussed at the last meeting, the CROS 9 proposal requests resources for the procurement phase of 10 the project and to begin risk mitigation initiatives in 11 the areas of data conversion and external interfaces. 12 We are also requesting positions in audits, 13 collections, SCOOP, settlements, offers-in-compromise 14 functions, which will generate revenues to offset the 15 initial CROS project costs. 16 The proposal requests 156.7 positions and 17 $22,402,008 in fiscal year '12-'13, rising to 242.1 18 positions and $43,345,000 in fiscal year '13-'14. 19 We are estimating revenue of $38.6 million in 20 fiscal year '12-'13, rising to 66.5 million in fiscal 21 year '13-'14, for an ongoing benefit to cost ratio of 22 1.5 to 1. 23 We have conceptual -- we have conceptual 24 support of this funding strategy from Finance. And the 25 strategy is consistent with the strategy utilized by FTB 26 to fund their EDR project. 27 We do have one speaker on this item. Would you 28 like to have -- Mr. Chairman, would you like to have 4 1 them speak before I go over the next Finance letter? 2 MR. HORTON: Yes, please. 3 MS. HOUSER: Okay. 4 MR. HORTON: Members, this is Mr. Cheek, the 5 Legislative Advocate with SEIU 1000. 6 Welcome, Mr. Cheek. 7 ---o0o--- 8 RANDALL CHEEK 9 ---o0o--- 10 MR. CHEEK: Thank you, Mr. Chairman, good to 11 see you again. 12 MR. HORTON: A pleasure. 13 MR. CHEEK: And Ms. Yee and Senator Runner. 14 Local 1000 would like to speak in favor of this 15 CROS proposal because we feel that this is -- our 16 understanding -- and we appreciate the need to use 17 vendors under certain circumstances when it's in 18 compliance with the general codes. 19 This project is a great example of how vendors 20 should be utilized. They come in, they set up a system 21 and they train civil servants how to run the system. 22 Eventually, there is no longer need for a contract and 23 out -- and no outsourcing of work and State of 24 California employees have the institutional knowledge 25 and the memory to continue the program and save the 26 State of California money. 27 We feel that this is a good project. We 28 support this project and look forward to working with 5 1 you on this -- on this project in the future. 2 MR. HORTON: Thank you very much. Members? 3 MS. HOUSER: The second proposal requests 4 additional funding for the Legal Services budget which 5 provides critical resources necessary for the Department 6 of Justice to effectively litigate the growing and 7 increasingly complex tax and fee related damages claims 8 in cases filed against the State of California. 9 We are requesting a budget augmentation 10 $678,000. We have estimated the impact to revenues from 11 pending litigation at $37 million dollars, or a 12 potential risk factor of 54 to 1. 13 Are there any questions on the spring Finance 14 letters? 15 MR. HORTON: Members? 16 MR. HORTON: If it pleases the Board, I would 17 ask for your vote of approval to move the spring Finance 18 letters to the Department of Finance. 19 MS. YEE: I'm prepared approve both proposals. 20 MR. HORTON: Moved by Member Yee to approve 21 both proposals. 22 Second by Mr. Runner. 23 Objection? 24 Hearing none, such will be the order. 25 MS. HOUSER: Thank you very much. This 26 concludes my presentation. 27 ---o0o--- 28 6 1 REPORTER'S CERTIFICATE. 2 3 State of California ) 4 ) ss 5 County of Sacramento ) 6 7 I, JULI PRICE JACKSON, Hearing Reporter for the 8 California State Board of Equalization certify that on 9 *datetaken I recorded verbatim, in shorthand, to the 10 best of my ability, the proceedings in the 11 above-entitled hearing; that I transcribed the shorthand 12 writing into typewriting; and that the preceding pages 1 13 through 6 constitute a complete and accurate 14 transcription of the shorthand writing. 15 16 Dated: FEBRUARY 8, 2012 17 18 19 ____________________________ 20 JULI PRICE JACKSON 21 Hearing Reporter 22 23 24 25 26 27 28 7