1 BEFORE THE CALIFORNIA STATE BOARD OF EQUALIZATION 2 450 N STREET 3 SACRAMENTO, CALIFORNIA 4 5 6 REPORTER'S TRANSCRIPT 7 MARCH 27, 2019 8 9 10 11 ITEM K 12 OTHER ADMINISTRATIVE MATTERS; 13 ITEM K1 14 EXECUTIVE DIRECTOR'S REPORT 15 16 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 Henry Nanjo 13 Equalization Staff: Chief Counsel Board Proceedings 14 Brenda Flemings 15 Executive Director 16 Toya Davis Clerk 17 Board Proceedings 18 ---oOo--- 19 20 21 22 23 24 25 26 27 28 2 1 450 N STREET 2 SACRAMENTO, CALIFORNIA 3 MARCH 27, 2019 4 ---oOo--- 5 MS. DAVIS: Our next item in the 6 administrative session is Item K1, the Executive 7 Director's Report. 8 There are four items in K1. The first item 9 is an organizational update by Ms. Fleming. 10 MS. COHEN: All right. Thank you. 11 Ms. Fleming, welcome. 12 MS. FLEMING: Thank you. 13 I think this is the mic that's working. 14 Thank you, Honorable Members. 15 Good morning. I think it's still good 16 morning. 17 Good morning, Chair Cohen and Honorable 18 Members. I'm Brenda Fleming, the Executive Director. 19 First, I'd like to acknowledge the work that 20 the staff have done. I applaud them for the detail 21 information. 22 And, again, I want to acknowledge Mr. Moon, 23 who arrived with us today to provide some assistance. 24 And all the staff behind the scenes that have 25 assisted. 26 Members, my report this month is going to be 27 a little briefer. I want to allow some time for some 28 of the additional items on the agenda. But there are 3 1 three points that I'd like to raise to your attention 2 and provide updates on. 3 The first one is the office relocation 4 project; the second is some updates on the HR 5 delegation, which we've been talking about; and the 6 third is an update on the increase on our ask about 7 procurement, any possibilities for procurement 8 changes. 9 On the office relocation project, following 10 the February Board Meeting, we continued to engage. 11 As you know, DGS was here in February. So we 12 continued to engage with the Department of General 13 Services regarding alternatives to the Phase 1 of the 14 office relocation project. 15 And, again, noted the Phase 1 aspect of the 16 project is the one that moves the Board Members to -- 17 from the downtown location to Natomas in the summer 18 of 2019 timeframe. 19 We've provided significant information to 20 the Department of General Services in order for them 21 to perform site surveys. And that site survey is 22 their process to identify downtown locations, 23 probably mostly commercial properties. 24 We've had discussion with them about -- so 25 they want to identify those downtown locations and 26 cost estimates. 27 The timeline -- specific timeline for that 28 are pending. 4 1 I'd like to make a footnote, I do 2 recognize -- Madam Chair and Members, I recognize 3 that I've been asked for a specific documented 4 timeline. My apologies, I don't have that fully 5 prepared for you today. I've got partial 6 information. 7 What I'll do, though, is as I continue to 8 get specific input from them, I'll go ahead and just 9 produce what, at least, I have at this point, so that 10 the Members have something to begin to work with from 11 that timeline. 12 And then as more information, more concrete 13 information is forthcoming, I'll make sure that that 14 is updated. So I don't want to leave you in a 15 position of not having the data that you need. So I 16 thank you for your patience, and apologies for that 17 delay. 18 To continue, Members, the Budget Act 19 provisions that you've noted before states that the 20 BOE cannot construct, lease, rent, etc., for new or 21 expanded office space. And shall not relocate any of 22 its offices unless such an action is approved in 23 advance by the Department of Finance. 24 Consistent with these Budget Act provisions, 25 we have submitted a request to the Department of 26 Finance requesting their and the Legislature's 27 approval to proceed with new leases for the Board 28 Member offices, the Sacramento offices downtown. 5 1 In terms of the timeline for this, the 2 Director of Finance cannot -- according to the Budget 3 Act language, cannot grant approval for such 4 construction or leasing until 30 days or more after 5 informing the Legislature of their intent to do so. 6 Our letter was submitted on March 20th, and 7 you were cc'd on that letter. 8 I'm pending a response from Finance. In 9 fact, as recent of this morning, we were playing 10 telephone tag to try to get some input from them and 11 some feedback from them, their response to the 12 letter, and some discussions on the next steps. 13 And so upon adjournment of the Board Meeting 14 today, we'll follow up again to see if we can nail 15 down that conversation. 16 Moving to the next item, request to regain 17 the personnel delegation. So we've had some really 18 good discussions with CalHR and others to just get a 19 sense of what the course of action is; what's the 20 process and the steps for regaining the delegation. 21 There is a process, and I'll give you kind 22 of the high level steps of that. 23 In order to regain the process, CalHR is 24 advising us that it's -- typically it could take a 25 12 to 18-month period. The process involves and is 26 initiated by us sending a letter to the State 27 Personnel Board. The State Personnel Board, then, 28 can give us indication of whether or not they're 6 1 wanting to consider our request or not. 2 I assure you that within a week or so I will 3 have that letter drafted and prepared for us to send 4 to the State Personnel Board to initiate that 5 process. 6 What CalHR also indicated in their advice to 7 us was the range of information material that needs 8 to be provided to get this thing moving. 9 And so that includes a lot of -- as we go 10 through with every category of where the delegation 11 has been -- would have been lost, we go through that 12 category of information and then show, basically, our 13 track record, our policies, show that training has 14 been done. Just an array of information that 15 demonstrates to them, to CalHR, along with the State 16 Personnel Board, that we're doing all the right 17 things. 18 So that material is being prepared. We'll 19 be working with CDTFA on that material. Because 20 they, too, have gone through packaging that 21 information and give theirs back. So we'll -- we'll 22 leverage as much of that as possible. 23 But ours is a little different, again, 24 because we are -- we're the only one that had 25 permanent loss of delegation. 26 I will make a note that I've had previous 27 conversations with the leadership of State Personnel 28 Board regarding the opportunities. And the initial 7 1 conversations have been favorable. 2 So I will continue to aggressively pursue 3 those conversations with the State Personnel Board, 4 etc. 5 Note from a timing perspective, the State 6 Personnel Board has a Board also. And then I'll 7 double check and report back on the frequency of 8 those meetings. 9 So part of the process will be not just 10 sending the initial request to them indicating our 11 interest in regaining the delegation and -- but also 12 scheduling the hearing and the presentation of the 13 information before their Board. 14 I certainly will provide that detailed 15 information for you so that you're fully informed 16 about that process. And also include information on 17 how you can help. We may, in fact, have you, 18 perhaps, be involved in attending some of those 19 discussions. 20 Within the next 30 to 60 days, all of this 21 information, again, will be prepared and processed. 22 In working with CalHR, we'll also work with 23 CDTFA. Because what we've learned during that 24 discussion is that when CDTFA went to pursue getting 25 their delegation back, they involved CalHR. Even 26 writing -- helping to write letters of support 27 validating that CDTFA had done all the right things. 28 So in this case, we will be asking for 8 1 support from CDTFA in the form of letters of support 2 from CDTFA and from CalHR in preparation of 3 submitting that information to the State Personnel 4 Board. 5 Finally, on that point, one of the other 6 things that is just good practice to do -- it's not 7 necessarily a mandated requirement, but it's good 8 practice to make sure that the other control agencies 9 are also kept informed. So because the Department of 10 Finance has an equally strong role in personnel, 11 funding positions, etc, we'll also partner with them 12 to make sure that they're equally informed and 13 included every step of the way. 14 In the interim, Members, one of the things 15 I'd like to continue to demonstrate is that we are 16 being good citizens in this process, if you will. So 17 in that way, we're documenting all of the levels of 18 training that our -- will continue to advance and 19 promote a little bit more to develop processes, 20 practices, policies, training materials, so that all 21 of the management team at the Board of Equalization, 22 including managers in the Board Member offices, are 23 trained and able to actually consistently demonstrate 24 that we're in compliance with State Personnel rules. 25 Before I move on, one of the things that 26 you'd asked earlier, and Mr. Nanjo's report, was what 27 can be done to address gaps in the Legal Department's 28 personnel needs. And we'll certainly -- can always 9 1 provide more information on this. But I just 2 summarized it real quick after listening to 3 Mr. Nanjo. 4 I've organized it in four categories. The 5 first one is to fill the existing vacancies. Which 6 is what Mr. Nanjo suggested. And there are vacancies 7 not just in the Legal Department, but throughout the 8 agency. So you want to fill those vacancies. And as 9 we've communicated, we are aggressively pursuing 10 that. We've had the challenges before with this 11 whole process for reasons that I've stated 12 previously. But we're going to continue to pursue 13 that aggressively. Again, I will acknowledge 14 that we've prioritized those with CDTFA, with CalHR, 15 and they are in support. And that's why you're 16 seeing some of the improvements of recent timing. 17 In terms of the next category, one of the 18 other options that you have is to redirect positions. 19 And so I've approved some redirections of positions 20 to give Mr. Nanjo some additional positions. 21 So that's not going to fill all of the 22 problem, the challenges and gaps that are there. But 23 that every -- the way that we word it is every few 24 hands that we get, and every additional -- forgive me 25 for saying it this way -- but every additional butt 26 we get in the seat, gives us additional capacity. 27 And so we'll continue to aggressively pursue that. 28 The third category is the Budget Change 10 1 Proposals. And you'll hear us refer to this as the 2 BCP process. 3 The BCP process is a little bit more 4 complex, a little bit longer term. But certainly it 5 is a vehicle we can use to identify our workload, our 6 workload need. Basically, it's the justification 7 process that allows us to document the correlation 8 between what we're producing for the state of 9 California, the workload that is there, any gaps in 10 that, what the outcomes are going to be, and all the 11 metrics that come along with that. You submit that 12 through the governor's budget process. And so we 13 will have conversations about that workload. 14 I will note, however, when you're looking at 15 the BCPs -- as Mr. Nanjo mentioned, when you're 16 looking at the BCP process, one of the things that's 17 significant is that you -- and we've gone through 18 this, you know, year after year with the Department 19 of Finance. It's difficult to address a BCP asking 20 for more positions and more funding when you have 21 40-plus vacancies. 22 So one of the things that we also strive 23 for, even with BOE 1.0, we strived for then when we 24 had 600 vacancies, is always trying to find the gap 25 between getting the vacancies filled, but 26 concurrently asking for additional work. 27 What we are starting to have internal 28 conversations about is looking at the additional 11 1 vacancies and the workload, perhaps, linked to split 2 roll, and what the -- what the possibilities are 3 there. 4 So we are creatively looking at, you know, 5 not just the immediate workload needs, but some of 6 the things that are on the horizon for us. And we 7 want to make sure that we have full capacity to 8 address that. So those conversations are starting. 9 And, finally, if I could add, the fourth 10 category. And I think you, you know, are totally 11 engaged to this. And we appreciate all the work that 12 you, as our new Members, are participating and 13 engaging with the Legislature. And you know we speak 14 in the spirit of candor here and the spirit of 15 transparency. 16 One of the greatest things that we have 17 difficulty with, in addition to the salaries and 18 classifications, which you know is also one of our 19 top strategic priorities, is really settling down 20 this agency and allowing the agency to stabilize. 21 And so to the extent that we had some 22 history before BOE 1.0, we had vacancies then. So 23 I'm not going to offer that, you know -- that this 24 hasn't existed before. But to the extent that we 25 have been impacted and restructured by Assembly Bill 26 102, and currently having ACA 2 sort of hovering in 27 the ethers, it makes a difference. 28 I personally have talked to attorneys in my 12 1 own -- on a personal level, attempting to like mildly 2 say, "Hey, are you interested in joining the BOE team 3 and advancing some of the important work that we do?" 4 Almost consistently in the number of people I've 5 chatted with have said, "We're not really sure 6 because of ACA 2." 7 So we just have to be mindful in the spirit 8 of transparency to make sure that the industry and 9 the Legislature understands that, to the degree that 10 we have it hanging out there, it is a significant 11 recruitment challenge. That and the salaries. So I 12 hope that addresses the topic that Mr. Nanjo 13 provided. 14 So clearly in this area more work is needed 15 on this next item, which is the procurement 16 delegation. 17 The objective is to get approval for some 18 degree of what we call procurement threshold, which 19 is a lower level of a threshold that says if you have 20 a number of departments and you've got a layer of 21 managers, most of the time when you're doing 22 procurement, you have that escalation. You know, 23 this person approves it, you've got to review. And 24 then there's escalated levels of approval. 25 What we're trying to seek is if we can get 26 some low-level threshold available to us. So 27 something like $500, $1,000. Something low. So when 28 you're looking for just basic procurements, we can 13 1 try to get basic supplies. 2 And the intent is to not have to go through 3 the timeline, the process, to get all of the higher 4 levels, upper managements' approvements, to allow us 5 to get something opened a bit. 6 We've had some conversations about it. 7 Honestly, Members, it has left me with more 8 questions, quite frankly, than I have answered. And 9 I'd like to pursue challenging that a little bit 10 more. 11 So I don't have much specifics on that, 12 because I'd like to circle back and see if I can 13 understand some of the nuances there a little bit 14 better, and see if we can find some alternatives. 15 MS. COHEN: Thank you. Does that conclude 16 your presentation? 17 MS. FLEMING: Not quite. 18 MS. COHEN: Okay. 19 MS. FLEMING: I just wanted to summarize by 20 saying -- saying that, in general, for the topics 21 I've presented, and we've been discussing these since 22 January, my intent is to make sure that you are -- 23 we're presenting this information in a public 24 setting. That you show, and we're showing, too, that 25 progress is being made. So also make sure we 26 understand that we do rely on these other control 27 agencies as our partners to provide the information. 28 So we're making progress for sure, as you've 14 1 indicated. But there's definitely more work to be 2 done. We'll continue to pursue it aggressively. 3 And, again, I'll just note that I will 4 ensure that we come back before the next meeting and 5 have more absolute, more concrete information on your 6 timeline, so that you have the information that you 7 need as you are, you know, moving in your circle, so 8 that you have a sense of what we need. And then you 9 can do your part to assist this. 10 I thank you for your patience in that area. 11 And that concludes this month's report. 12 MS. COHEN: Thank you. I appreciate that 13 report. I can imagine we've got a lot of questions, 14 comments and feedback to give you. So I'm going to 15 start with my right. 16 Mr. Vazquez, would you like to start first? 17 MR. VAZQUEZ: Yes. 18 Well, actually, I shared this also with the 19 attorney's presentation as well. And it sounds like 20 there's obviously a layer. And I'm assuming you're 21 running against the same issues when you're trying to 22 hire somebody, the process that it takes. 23 So the only -- so, in your opinion, the only 24 way we can fast track this is to -- is to be able to 25 get direct contact through HR. Or actually -- well, 26 before, I guess, you had HR under -- here in BOE, 27 right? 28 MS. FLEMING: Correct. So -- 15 1 MR. VAZQUEZ: And now with the elimination, 2 that's created this other layer. 3 MS. FLEMING: There's two -- there's two 4 challenges that exist in terms of our ability to 5 accelerate hiring. 6 One is the loss of delegation. Which, you 7 know, goes back to, you know, the November 2017 8 timeframe when SPB indicated that there was the 9 investigation, and our delegation was taken away. 10 The second is in the statute. It requires 11 BOE to get into -- under AB 102, requires BOE to get 12 its administrative services from CDTFA. So not only 13 is there a loss of delegation -- so before we were 14 able to go through -- process our recruitment 15 packages submitted to our internal HR organization, 16 and move it forward. 17 Some things still needed CalHR approval. So 18 your -- that's just the normal state process. But 19 having lost the delegation, then we now have to 20 prepare within our program. 21 So I'll use Legal as an example. So Henry's 22 team prepares their recruitment packages. And as 23 they approve those packages, those are then submitted 24 to CDTFA's HR. There's a series of reviews that go 25 through there. And then supplementally, they go to 26 CalHR. 27 So CDTFA helps to process for it according 28 to AB 102. That's the administrative services. But 16 1 the actual approval for any portion of the steps in 2 that process actually go to CalHR. 3 So that, just in and of itself, the more 4 layers you go through and the more hands that touch 5 it, you know, you have a number of questions. 6 Because Analyst I looks at it and has one 7 interpretation; Analyst II is the next clearing, you 8 know -- clearing step, and maybe has additional 9 questions. And so just the process itself. 10 The ideal would be to look at the most 11 cost-effecient manner of doing it possible. Just, 12 you know, in terms of how you're using state 13 resources. But also just efficiencies that allows us 14 to get the positions filled. Because in the tax 15 program, specifically, you want those bodies 16 available to do the work that's bringing revenue to 17 the state and to the local governments. 18 MR. VAZQUEZ: So in this clean-up bill that 19 we have out there with Senator Ben West. So I know, 20 you know, we just tackled this one little -- I think 21 it was a couple words or phrases. 22 MS. FLEMING: Right. 23 MR. VAZQUEZ: Is that going to streamline it 24 for you, or do we need to add more language to that? 25 MS. FLEMING: Well, at least for now, 26 that -- that should -- that helps us to address a 27 specific challenge that we're having with CalHR. 28 Their interpretation was, Well, you don't 17 1 really need, you know, a set of staff that we've got 2 vacancies for, as we've discussed prior. We've got 3 those vacancies, but they were reluctant to give 4 approval to fill those vacancies. Because the 5 interpretation was that CDTFA provided the 6 administrative service. But even with that, we just 7 needed some clarifying language. 8 And that's the intent of that clean-up 9 language to provide that clarification. But there's 10 still material that the program area has to produce 11 and provide to CalHR. 12 So we think that will help significantly. 13 And in our conversations with them, we think that 14 would help significantly. They're understanding -- 15 definitely understanding it better than they were 16 historically. 17 MR. VAZQUEZ: So we don't need to add any 18 more to that? 19 MS FLEMING: I don't think at this time -- 20 there's going to be other things that we'll probably 21 need to add over time. But I think for now, that 22 would be a significant step. 23 MR. VAZQUEZ: Okay. Thanks. 24 MS. COHEN: Ms. Stowers, on your end? 25 MS. STOWERS: I'm sorry, no questions. 26 MS. COHEN: No questions? Okay. 27 How about the gentlemen on this end? 28 Senator? 18 1 MR. GAINES: Yes, I do. 2 MS. COHEN: Please. 3 MR. GAINES: Thank you very much, Executive 4 Director Fleming. I appreciate this update. 5 And, you know, I know timelines are 6 important. But I also know there's a lot of things 7 out of your control. So we're dealing with a lot of 8 agencies which have their own timelines. So I want 9 to be respectful of that. 10 And I'm glad that you're cooperating with 11 CDTFA. Because if we can get a favorable letter from 12 them while also coordinating with CalHR, we're moving 13 in the right direction. We're getting to the point 14 where we're going to get more independence back. 15 We'll have that administrative authority, and we'll 16 be able to fill these positions faster. 17 But I'm encouraged that that message is 18 getting delivered, and it's already happening to a 19 certain degree. Not nearly as fast as we would like 20 to see it, but it's better than it was. 21 MS. FLEMING: Indeed. 22 MR. GAINES: And so I wanted to thank you 23 for that. 24 You also mentioned the prioritization of 25 vacancies versus Budget Change Proposals, BCPs. And 26 I agree with that. I think our focus needs to be in 27 filling these positions. 28 MS. FLEMING: Filling the positions. 19 1 MR. GAINES: Number one priority. 2 And then on the procurement issue, you 3 mentioned that it's really not enough, right? 4 I guess I would rely on you in terms of what 5 is the proper level? What -- what is the proper 6 level for you to operate the Board of Equalization in 7 terms of a procurement amount? 8 MS. FLEMING: So there's a range. I mean, 9 because in procurements, of course, in that lane, if 10 you will, you've got goods and services, you know, 11 contracts. It really depends on the category. 12 What I could do to be more thorough on that 13 is, you know, really provide you more information on, 14 you know, how that whole thing works. 15 Certainly it would be reasonable to have a 16 level of delegation. I just -- as -- as we had BOE 17 1.0, we would allow from the Executive Director's 18 office down, at different levels, hierarchically 19 management levels, we would provide an opportunity 20 for managers and supervisors to -- let's say you go 21 up to $1,000, $2,500, $5,000, etc. So incremental 22 levels of procurement threshold that -- also all of 23 that is not coming up to the Executive Director's 24 level to approve. Certainly to the degree that we 25 get, you know, any contracts or procurements over 26 $500,000, we are required -- me, as Executive 27 Director, I'm required to bring that to the Board. 28 So that's one example of, you know, how it 20 1 gets escalated. 2 MR. GAINES: What was that number again? 3 MS. FLEMING: $500,000 -- 4 MR. GAINES: Okay. 5 MS. FLEMING: -- is the threshold for any 6 contracts that we would pursue would come to the 7 Board. 8 So, typically, I could say it could be, you 9 know, $2,500 that you get one level of supervisorial 10 approval. And, again, just incremental amounts. So 11 I think would be reasonable. And typically, you 12 know, procurements at that level, you, you know -- to 13 borrow Henry's term, kind of garden variety orders. 14 And, again, that helps even from an 15 efficiency. Because if all of the procurements that 16 come through the state agency had to go all the way 17 up to the Executive Director, and in this case, all 18 the way up to DGS, you can see how that's a lot of 19 workload that then ends up going -- you know, 20 traveling up to the top. 21 So DGS gets overwhelmed with all the work 22 that they have to do for us. And I acknowledge that 23 the legislation is there, that, you know, has 24 restrictions on Board Member purchases. But that 25 work still goes to the Executive Director's office. 26 If we could just get some level of relief, for lack 27 of a better way of describing it, I think it would be 28 helpful. 21 1 So just for some of the basic -- 2 MR. GAINES: We want the transparency. 3 That's good. 4 MS. FLEMING: We want the transparency. And 5 as a check there, you know, we would still be 6 required to go through DGS. So you do have some 7 controls there, some checks and balances. 8 MR. GAINES: Right. 9 MS. FLEMING: So it's not like we're just 10 using, you know, personal credit cards to go and 11 purchase, you know, something extraordinary. You 12 still have a process, the state process. Which we 13 are more than happy and have been consistently 14 applying. 15 MR. GAINES: You want those controls in 16 place. 17 MS. FLEMING: Yes. 18 MR. GAINES: So what can we do to help you 19 get the proper level procurement so that you're 20 not -- your day's not filled up with signing off on 21 small incremental procurements for particular 22 departments? 23 I know you've trying to hire a Deputy 24 Director also. So what would be that right number 25 for the Board of Equalization? 26 MS. FLEMING: I would, you know -- 27 MR. GAINES: Or I know you listed ranges, 28 so -- 22 1 MS. FLEMING: Sure. 2 So I think off the top of my head, I don't 3 have a specific number. The number that I've just 4 been tinkering with just for the set of examples in 5 all these discussions has been, you know, $1,000. 6 But even up to $2,500 would be, I think, a reasonable 7 amount to allow us to get some things for us. 8 I was talking to Chief Durham, and he -- one 9 of the numbers that was given to us was in the 10 hundred dollars range. And his face told me a lot. 11 Because I don't think we could order one ream of 12 paper for a hundred dollars. So that ends up being 13 inefficient. 14 I guess what I'd say is, you know, up to 15 1,000 to $2,500 allows just better efficiencies. 16 Because you can process it; you can move it on. And 17 the cost of trying to get, you know, supplies of 18 paper would be certainly more cost effective and 19 efficient. We don't want to have to have that many 20 hands touch that level of approval. 21 So, again, I would suggest that just as you 22 continue to have your -- your partnership and 23 conversations with the Legislature, just continue to 24 do what you're doing, and share that story about, you 25 know, the impact that all of this is having in terms 26 of the implementation of AB 102, and how it's 27 operationally been, you know -- has taken root. 28 Your help, most importantly, comes from 23 1 helping them to understand that. 2 And so your question, Vice Chair, is really 3 getting to understand what kind of language would 4 they be open to considering that gives us some of 5 that flexibility. It really is about raising some of 6 the -- the typed constraints that is just really -- 7 really definitely impacting our ability to function 8 as a whole agency. 9 And so my top priority -- one of the top 10 priorities, classification and pay, and just getting 11 this organization back to a whole state. 12 MR. GAINES: Sure. 13 MS. FLEMING: And with your support, we'll 14 continue to make progress. 15 MR. GAINES: And how was -- how would that 16 work for Members? Let's say we wanted to get a 17 subscription to the Sacramento Bee. 18 MS. FLEMING: Yes. 19 MR. GAINES: That's probably, what, 350 to 20 $400 a year? 21 MS. FLEMING: Correct. 22 MR. GAINES: So with a $100 threshold, how 23 does that work? 24 MS. FLEMING: Slowly. 25 MR. GAINES: What is the process? 26 MS. FLEMING: It's a very slow process. In 27 fact we've got -- one of our Members currently is 28 trying to get probably a dozen subscriptions renewed. 24 1 And we started the process end of January, beginning 2 of February timeframe. And we're still waiting. 3 So it does take a while. The dollar amounts 4 are not extraordinary. So certainly having some 5 threshold would help. Again, because all the 6 procurements right now for Board Members directly, 7 anything for you is required by a statute to go 8 through the Department of General Services. 9 So, again, back to -- to agree that we can 10 get relief in that area. Even if the legislation 11 says, you know, still go through General Services, 12 but with some threshold versus just everything has to 13 go through -- 14 MR. SCHAEFER: Excuse me. Couldn't we 15 subscribe monthly? 16 MS. FLEMING: I'm sorry, sir. 17 MR. SCHAEFER: Couldn't we subscribe 18 monthly? 19 MS. FLEMING: That would be one approach. 20 But we tend to -- I mean, there's recurring payments 21 for it. But you try to look for the most effective 22 way possible. 23 MR. GAINES: Okay. Great. Thank you. 24 MS. FLEMING: What we don't want to do is 25 have to go to the newsstand and grab them daily. 26 MR. GAINES: If you just keep us updated -- 27 MS. FLEMING: Absolutely. 28 MR. GAINES: -- of anything that we can do, 25 1 we will rely on you to inform us. 2 Thank you. 3 MS. FLEMING: Thank you. 4 MS. COHEN: Mr. Vazquez. 5 MR. VAZQUEZ: Yes. One other quick 6 question. 7 Are you developing, like, a cost-effective 8 proposal that would -- for the BOE, HR functions that 9 we, maybe, all could work towards? 10 MS. FLEMING: A cost effective -- can you -- 11 MR. VAZQUEZ: For example, you're mentioning 12 now, we got this extra layer, right? 13 MS. FLEMING: Mm-hm. 14 MR. VAZQUEZ: Is there something, as we're 15 looking at this -- because I imagine -- well, 16 actually, I'm hoping that if somehow we can eliminate 17 that, and you going just directly. Whether it's 18 bringing back the HR functions back under BOE -- 19 MS. FLEMING: Mm-hm. 20 MR. VAZQUEZ: -- or contracting it out, 21 or -- I don't know what other ideas you're looking at 22 to streamline this thing. So we're not sitting here 23 six months from now. And you're telling us we've 24 still got 40 vacancies, right? 25 MS. FLEMING: Right. 26 So from -- that's an interesting question. 27 I think going back to what the process is, at this 28 point, sir, we're working through that process to get 26 1 the delegation back. 2 So I think that's going to be our first and 3 most significant step. Because without the 4 delegation, you're just -- you're limited. So the 5 state's process at this point is, you know, you've 6 got to go back to the State Personnel Board and 7 request that. 8 As a part of doing so, when I made reference 9 to the material that we'd have to provide, you can 10 look for those inefficiencies and just exhausting, 11 you know, levels of the use of state resources. 12 So there's not necessarily a cost component 13 of it other than just, you know, the length of the 14 process and the different layers of what we're going 15 through. 16 I'm not sure if that addresses your 17 concern. 18 MS. COHEN: Does that answer your question? 19 MR. VAZQUEZ: Not really. 20 MS. FLEMING: Yeah. 21 MR. VAZQUEZ: I guess my frustration is, you 22 know, as you're talking -- well, I've heard it from a 23 couple departments now, and even when I've been out 24 and about talking to folks. It's out -- you know, 25 and I'm hearing that I guess your hands are pretty 26 much tied right now. 27 MS. FLEMING: Yeah. There's a state 28 process. So let's start with the state process, I 27 1 think, is the first and most significant step to just 2 get some relief from it. 3 Again, the services that we get from -- from 4 CDTFA, there's no cost for that. Those are 5 interagency agreements. It's done by statute. So -- 6 MR. VAZQUEZ: I would argue there is a 7 cost. 8 MS. FLEMING: There's a cost. There's a 9 human cost. 10 MR. VAZQUEZ: Right. 11 MS. FLEMING: But in terms of budget 12 portions of it. But there's definitely a human cost. 13 And so as a part of the material we'll 14 provide, we'll show what that -- that -- what the 15 cost is as it relates to the inefficiencies, what the 16 cost is in terms of people working out of class, you 17 know, doing the additional duties, that will be apart 18 of the material. 19 So if you're referring to that, absolutely, 20 that will be a part of the material. 21 MR. VAZQUEZ: Okay. 22 MS. COHEN: Mr. Schaefer. 23 MR. SCHAEFER: Yes. 24 Madam Executive Director, if -- if we do get 25 our delegation back, do we have a process to increase 26 our professional advancement and salaries? 27 MS. FLEMING: There is, sir. Good question. 28 There is a process for getting salaries, 28 1 classifications adjusted and salaries. Again, the 2 agency that we work with there is the State Personnel 3 Board. And as I mentioned at last month's meeting is 4 we're working with them, with the State Personnel 5 Board's leadership, to see what's -- what's needed to 6 move forward. 7 As I mentioned in the opening, one of the 8 things that we do is initiate a letter to the State 9 Personnel Board. And we'll start the conversation 10 with them about, Okay, so here are classification 11 issues, here are salary issues. How do we sit down 12 and start having conversations about the 13 classifications? 14 In the state of California when you're 15 looking at adjustments to classifications, those are 16 exercises, projects within the State Personnel Board. 17 So, again, there's a whole separate process. 18 But there's a project that allows us to say, 19 How do you -- how do you begin to standardize some of 20 the classifications so that it gives the state of 21 California opportunity to kind of streamline it, and 22 then work with labor to attach salaries to that? 23 So we'll be working with the State Personnel 24 Board on that project. There's a lot more detail. 25 And I'm sorry I'm not prepared to give you the detail 26 today. But we are engaging in those conversations 27 with them also. And there has been some 28 conversations we've been having with them for quite 29 1 some time. 2 MR. SCHAEFER: We -- we're in a community 3 that -- where the BOE is very popular, because we've 4 had thousands of employees until recently. 5 And I was at a restaurant for a birthday 6 dinner Monday night and ran into someone whose mom 7 had spent her whole life working for the BOE. 8 But today, you know, we're 160, 180 9 employees; not 4,000. We're a new ball game. I 10 haven't seen anybody want to go furniture shopping. 11 When I look for a motel to stay at, when I 12 go to a trip on official business, I have stayed at 13 Motel 6 and Best Western. You know, not the 14 Waldorf Astoria. I don't even have a credit card 15 where I could charge some stuff to the state. I used 16 to have one when I was a city councilman to charge 17 official stuff to the city. 18 So, you know, we have a -- nobody is hiring 19 their relatives. Nobody is going furniture shopping. 20 We are new people. And I do feel that we should be 21 an attractive place for people to go to work. 22 And I don't want us to look like we're the 23 Titanic, and we're trying to recruit a new crew for 24 the next cruise. You know, people may have some 25 hesitancy to sign on. They've got to realize that 26 the Legislature has put an iceberg out there, and, 27 you know, we've got to get out of the way so that we 28 don't have these inhibitions. 30 1 And there's not an awful lot we can do about 2 it. But I would ask every member of the Legislature 3 to talk positively about our Board, like I hear the 4 Senate Committee that's holding hearings is talking 5 positively. I'm encouraged. 6 And I hope that the people that are looking 7 for a job with the BOE will believe, as we all do 8 that, you know, the sun is rising on a new world, and 9 it's exciting. And they want to be part of it. 10 MS. FLEMING: Well stated. Thank you. I 11 concur. 12 MS. COHEN: All right. Thank you. 13 We appreciate your presentation. And of 14 course we're here to support and continue to do the 15 heavy lift with you and your staff members. 16 Thank you. 17 MS. FLEMING: That is significant, and I 18 appreciate that support. 19 MS. COHEN: No problem. 20 ---oOo--- 21 22 23 24 25 26 27 28 31 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 March 27, 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 31 14 constitute a complete and accurate transcription of 15 the shorthand writing. 16 17 Dated: May 9, 2019 18 19 20 ____________________________ 21 JILLIAN SUMNER, CSR #13619 22 Hearing Reporter 23 24 25 26 27 28 32