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 OCTOBER 23, 2012 10 11 12 13 ITEM P OTHER ADMINISTRATIVE MATTERS 14 ITEM P1 EXECUTIVE DIRECTOR'S REPORT 15 1. CROS PROJECT UPDATE AND ACTIONS 16 17 18 19 20 21 22 23 24 25 26 27 REPORTED BY: Kathleen Skidgel 28 CSR NO. 9039 1 1 P R E S E N T 2 3 For the Board Jerome E. Horton of Equalization: Chairman 4 5 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 Government Code 13 Section 7.9) 14 Joann Richmond 15 Chief Board Proceedings Division 16 17 For the Staff: Eric Steen CROS Project Director 18 19 ---oOo--- 20 21 22 23 24 25 26 27 28 2 1 5901 GREEN VALLEY CIRCLE 2 CULVER CITY, CALIFORNIA 3 OCTOBER 23, 2012 4 ---oOo--- 5 MR. HORTON: Ms. Richmond. 6 MS. RICHMOND: Our next item is item P, Other 7 Administrative Matters. P1, Executive Director's 8 Report. P1.1, CROS Project Update and Actions. 9 MR. HORTON: I don't know if the Executive 10 Director's present, but we do have a visitor with us, 11 according to her name tag at least, who is not a visitor 12 anymore. 13 MR. RUNNER: She has a real name tag. 14 MR. HORTON: The Executive Director, 15 Ms. Cynthia Bridges. 16 Welcome, sir. 17 MR. STEEN: Thank you. Honorable Members, Mr. 18 Chairman, Eric Steen, Project Director for the CROS 19 Project. 20 MR. HORTON: All I want is the percentage. 21 MR. STEEN: I'll tell you what, I will give you 22 a percentage at the end of my report; how about that? 23 MR. HORTON: Okay. 24 MR. STEEN: All right. I promise. 25 It's my pleasure to give you an update on the 26 CROS Project. Um, tomorrow, in fact, marks my one-year 27 anniversary with the Board, I'm excited to report. 28 MR. HORTON: Oh, congratulations. 3 1 MS. STEEL: Congratulations, sir. 2 MR. HORTON: Welcome. That's great. 3 MR. STEEN: Right. 4 MR. HORTON: You survived a year and did it 5 well. 6 MR. STEEN: I went back and looked at the video 7 from last year. I looked a lot younger actually. 8 It was my second day on the job that, uh, 9 Mr. Gau presented me to the Board. And, uh, at that 10 meeting -- it was actually here in this room -- um, I 11 made a commitment to ensure success and accelerate 12 progress and to craft a quality solution. So I would 13 like to just review some of the progress we've made over 14 the last year in light of that commitment. 15 Um, and most importantly and most 16 significantly, a recent milestone is that we 17 completed -- we finalized the RFP and submitted that to 18 the Department of General Services and the Technology 19 Agency. And the Department of Finance has, uh, approved 20 our cost and compensation model; and I anticipate that 21 they will formally approve it in writing, uh, very soon. 22 Now, the obvious question is, how long now 23 before that RFP goes out to the vendor community? How 24 long until we release it? Um, as a point of reference, 25 the Franchise Tax Board, when they got to this point in 26 their project with the EDR project, it took six months 27 for that RFP to be released to the, um, vendor 28 community. 4 1 Now, we're doing a few things differently. 2 Typically, General Services, their, uh -- their Office 3 of Legal Services and their Procurement Division reviews 4 the RFP sequentially. In this case, they have agreed to 5 review it concurrently. So that will expedite the time. 6 Also, we gave General Services an advance draft 7 of the RFP, so they're familiar with the content and 8 what it contains. And they've also complimented us on a 9 couple of occasions on the quality of the RFP. 10 So, I don't anticipate, um, a lot of 11 significant changes in the RFP. So, hopefully, all of 12 those factors will expedite this period of time while 13 we're waiting for, um, the -- their approval to release 14 this to the bidders. 15 I'll also say, because of the parallel 16 initiatives, we have a multi-threaded approach which 17 allows us to make progress on the project even while 18 we're awaiting, um, formal approval of the RFP. 19 So, I'd like to ask if there are any questions 20 about the RFP at this point before I move on? 21 MR. HORTON: Members? 22 Hearing none, please continue. 23 MR. STEEN: Thank you. 24 Um, again, I just want to highlight a couple of 25 the -- a few of the things that we've accomplished over 26 the last year. We did establish the parallel 27 initiatives which mitigate risk and accelerate, uh, 28 revenue and success. Um, we'd implemented the people and 5 1 the processes and the technology that support these 2 initiatives. We've made tremendous progress there. 3 We, uh -- and, in fact, we drafted an SPR and a 4 BCP which secure the approval of the control agencies 5 for these initiatives and the funding that supports, um, 6 this effort. Previously we redirected the resources for 7 the CROS Project. So that was a major milestone. 8 Um, we crafted a, uh -- a solution vision, 9 which is part of the RFP, but we also presented it 10 across the organization to achieve buy-in. And, um, as 11 you know, we crafted an RFI, which is a draft of the 12 RFP, and submitted that to the -- to the vendor 13 community and the control agencies; and that helped us 14 improve the quality of the RFP which we've now, of 15 course, given to the, uh -- to the Department of General 16 Services. 17 Um, and lastly, I'm pleased to report that the 18 CROS team has partnered with PSTD to analyze online 19 cigarette sales data. And as a result, we've 20 accelerated revenue collection in the order of 21 $1.4 million. So, we have really something positive to 22 report there. I mean, prior to having a vendor come on 23 board, we're actually accelerating some revenue already. 24 So that's a -- a big win for the BOE and for the -- for 25 the project. 26 And I did promise you I'd give you a percentage 27 complete, so I'll give you that now. 28 I'm 100 percent committed to making the same 6 1 type of progress in the next 12 months that we made in 2 the last 12 months. 3 MR. HORTON: Excellent. 4 MR. STEEN: Thus ends my report. If there's 5 any other questions, I would be happy to entertain 6 them. 7 MR. HORTON: Questions, discussion, Members? 8 Hearing none, we'll receive and file your 9 report. Thank you very much. 10 MR. STEEN: Thank you. 11 ---oOo--- 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 7 1 REPORTER'S CERTIFICATE 2 3 State of California ) 4 ) ss 5 County of Sacramento ) 6 7 I, KATHLEEN SKIDGEL, Hearing Reporter for the 8 California State Board of Equalization certify that on 9 October 23, 2012 I recorded verbatim, in shorthand, to 10 the 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 7 constitute a complete and accurate 14 transcription of the shorthand writing. 15 16 Dated: November 7, 2012 17 18 19 ____________________________ 20 KATHLEEN SKIDGEL, CSR #9039 21 Hearing Reporter 22 23 24 25 26 27 28 8