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 JULY 17, 2013 10 11 12 13 14 ITEM P 15 OTHER ADMINISTRATIVE MATTERS 16 ITEM P4 17 PROPERTY AND SPECIAL TAXES DEPUTY DIRECTOR'S REPORT 18 4. FIRE PREVENTION FEE PROGRAM UPDATE 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: David Gau Deputy Director 18 Property & Special Taxes Department 19 Liz Houser 20 Deputy Director Administration Department 21 22 ---oOo--- 23 24 25 26 27 28 2 1 5901 GREEN VALLEY CIRCLE 2 CULVER CITY, CALIFORNIA 3 July 17, 2013 4 ---oOo--- 5 MR. GAU: Okay, thank you. 6 My last item is an update on the fire 7 prevention fee. First of all, for the '11 and '12 8 fiscal year, which we've completed, just a couple, 9 uh, statistical updates. 10 Total billings, uh, as of last Friday we 11 had were about 777,000, and we had a generated 12 revenue of 77.1 million. During the year we had 13 about a little over 90,000 appeals; about 90,400. 14 U, and as you're -- as you're aware, uh, on 15 July 1st, 2013 CalFire, uh, provided word to us that 16 we should commence the fire prevention fee billings 17 again for fiscal year 2012/'13. 18 We plan on starting these, the mailing of 19 the billings this Friday, June -- July 19th. And 20 similar to the '11 and '12 billing cycle, we 21 anticipate billing about 10,000 bills per day. And 22 we will be doing it again in the alphabetical county 23 order. We anticipate that we will be completed with 24 these billings for the '12/'13 year in about 25 November of this year. 26 We've also posted the, uh, billing cycle on 27 our website so that the counties are aware of when 28 those will be hitting the mail. 3 1 The '12/'13 -- '12/'13, uh, information 2 also, as far as what we've done to kind of improve 3 the project, is, uh, we have all the data files 4 we've received; they're ready for the billings. The 5 administration departments have hired their staff; 6 they're currently on board. 7 This year we've color-coded the envelopes 8 for processing of mail and receipts of checks coming 9 in. We believe that color-coding will significantly 10 improve the payment processing time, uh, in the 11 administrative area. 12 And then also, some of the other 13 improvements we've made to the actual billing is 14 we've prominently displayed that, uh -- encouraging 15 people to pay electronically, electronic payment 16 option. We've provided a cut-along-this-line thing 17 so that they can submit that back with their check 18 and keep the bottom for a receipt. We've 19 highlighted the assessor par- -- excuse me -- the 20 assessor's parcel number and also made the property 21 location description more visible. 22 Lastly, we have created an informational 23 insert that will accompany the -- each billing 24 document that provides general information regarding 25 the fee. And then lastly, we have a letter to 26 assessors that's currently in process to inform the 27 county assessors and their staff that the billings 28 are going to start, because they do get calls as 4 1 well. 2 At this time, I'd be happy to answer any 3 questions. 4 MR. HORTON: Discussion, Members? 5 Hearing none, just a question of 6 curiosity -- 7 MR. GAU: Sure. 8 MR. HORTON: -- that just came to mind. 9 May have been asked and answered before. But, what 10 happens if the funds aren't used in any fiscal year? 11 MR. GAU: The funds by CalFire? 12 MR. HORTON: Yes. Absorbed, shall I say. 13 MR. GAU: Yeah, I would -- I would -- I see 14 Liz coming. That's in a budget kind of area 15 question. I would defer to my experts. Thank 16 you. 17 MS. HOUSER: Good evening, Members. 18 MR. HORTON: Sorry to catch you 19 off-guard. 20 MS. HOUSER: Liz Houser, Admin. Deputy. 21 For this fund, for the fire fee, uh, for 22 the first fiscal year there was actually a loan from 23 the General Fund. Right now we've billed one cycle. 24 So, um, we completely expended the loan between us 25 and CalFire because the loan is simply enough to 26 cover our processing. 27 MR. HORTON: Mm-hmm. 28 MS. HOUSER: Now, the fund itself, these 5 1 are generally continuously appropriated funds that 2 can be used in future years. But at this point on 3 the fire fee, uh, the amount collected has not 4 exceeded planned expenditures. Because we had a 5 loan the first fiscal year. 6 MR. HORTON: Are these categorical funds or 7 are they -- 8 MS. HOUSER: For the total fire fee that's 9 collected, the 77 million, when they put together 10 the budget for last year, '12-'13, they did a loan 11 from the General Fund to fund not only our costs but 12 CalFire's costs and also to fund the, um, portions 13 of the budget that the fire fee is intended to pay 14 for. 15 So as we collect the fire fee funds, the 16 first monies in will reimburse the loan, and then 17 future year's collections will be used to reimburse, 18 um, those costs. So first -- the first things that 19 gets reimbursed is the actual cost of collection for 20 us and the cost of administration for CalFire. And 21 then the remainder of the funds, which is a large 22 percentage of it, probably about 68 million, will 23 actually be utilized to fund CalFire essential 24 services that they've identified that can be used 25 for these funds. So when they build the base 26 budget, they're counting on these funds being 27 utilized to pay for those costs, starting July 1. 28 MR. HORTON: So, I mean, after we -- 6 1 MS. HOUSER: So there shouldn't be any 2 money left over. 3 MR. HORTON: After we backfill, um, X 4 number of years down the road, what happens? 5 MS. HOUSER: So as we move forward, once we 6 pay off the loan, so let's just move forward two 7 fiscal years, and we're billing one cycle a year. 8 MR. HORTON: Mm-hmm. 9 MS. HOUSER: And that money -- so we'll 10 start July 1, we'll know what the projected billed 11 amount is going to be, just like with our other 12 special funds. 13 So when the, uh, governor's approved budget 14 will -- will book that money as money that's coming 15 in, just like we book sales tax or income tax that's 16 coming in. So they'll plan or project on that money 17 to come in. And they'll plan expenditures against 18 that fund source. Most of these expenditures, from 19 my understanding, are going to be CalFire 20 expenditures. 21 So they plan the expenditures against the 22 fund source. In January we do mid-year projections 23 to make sure that we're on track, and they make 24 adjustments as needed. 25 MR. HORTON: I mean, there's a rumor that 26 state government plans to absorb all that you give 27 them, but, um, I don't know if that's true. But in 28 the event there's an excess, does the -- does the 7 1 statute provide for that money to go somewhere? 2 MS. HOUSER: Um -- 3 MS. YEE: Well, it reverts back to the 4 Fund, it's a special fund. But I guess I had a -- 5 MR. HORTON: Oh, okay. Special fund. 6 MS. YEE: Can I ask a question about this? 7 So with this new fire fee, do the proceeds of the 8 fire fee -- was there a new fund set up for the fire 9 fee? 10 MS. HOUSER: Yeah, we actually have a 11 separate fund that it goes into. 12 MS. YEE: That's continuously appropriated? 13 MS. HOUSER: I believe it was, but let me 14 double-check that, Ms. Yee. Because there was a 15 portion of one -- because we had several funds at 16 that last minute. But there was a portion of one of 17 them that was continuously appropriated. So let me 18 go double -- I want to double-check that one. 19 MS. YEE: Okay. 20 MR. HORTON: Wow. 21 MS. YEE: I mean, generally, the funds that 22 aren't expended revert back to the Fund. But to the 23 extent that it's a continuously appropriated fund, 24 it just continuously -- yeah, I mean -- 25 MR. HORTON: Yeah. 26 MS. YEE: -- the legislative oversight is 27 less. 28 MR. HORTON: Typically when it's -- well, I 8 1 won't get into it, but it's -- 2 MS. HOUSER: Let me verify and I can report 3 back. But at this point the fire fee fund doesn't 4 have an excess. 5 MR. HORTON: Yeah, I know. 6 MS. YEE: Right. 7 MR. HORTON: All right. Thank you. We, 8 uh -- we'll receive and file your report. 9 Appreciate it. 10 ---oOo--- 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 9 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 July 17, 2013 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 9 constitute 14 a complete and accurate transcription of the 15 shorthand writing. 16 17 Dated: October 4, 2013 18 19 20 ____________________________ 21 KATHLEEN SKIDGEL, CSR #9039 22 Hearing Reporter 23 24 25 26 27 28 10