Board of Supervisors — 2012-10-02

Good morning everybody, I'd like to go ahead and convene this regular meeting of the Santa Barbara County Board of Supervisors. To order it's October 2nd 2012 and we are now going to go right into closed session Mr. Marshall would you go ahead and read our closed session agenda?

Thank you, Madam Chair. You have three items in today's closed session. You have conference with legal counsel anticipated litigation one case. You have conference with real property negotiators. The property is 14450 Terra Vista Drive Gaviota California parcel number 081150034 agency negotiators Bob Nesbitt and Scott McLaughlin negotiating parties Bob Hart and Deborah Hart price in terms of payment Last item is conference with labor negotiators. Thank you Madam Chair.

Thank you and so we'll reconvene here at nine o'clock. ♪♪ Hi, everyone. Yeah. The Santa Barbara County Board of Supervisors. We actually convened earlier and went into closed session, and now we are reconvening. Mr. Allen would you call the roll please? And because we have two of our board members working with us by remote testimony from the BetterAvia building, Jocentano building, we're going to do all votes today by roll call.

Ms. Gray? Mr. Lavagnino? Here. Mr. Carbajal? Here. Ms. Wolk?

Here,

Ms. Farr?

Here thank you would you all

Ms. Gray? Aye. Mr Lavagnino? Aye. Mr Carbajal? Ms. Wolfe?

Aye

Ms. Farr?

Aye Thank you. Now we'll have a report from closed session. Mr Marshall

Thank you, Madam Chair. Your board had three noticed items on the closed session agenda. Your board considered each of the noticed items and one action to report and specifically the Board of Supervisors unanimously authorized County Council to file a cross-complaint to recover workers' compensation payments for injured deputy in the matter of the estate of Flood v. County of Santa Barbara.

Thank you, Madam Chair.

Thank you. All right, and we'll go to public comment. Mr. Allen, do we have any public speakers?

Madam Chair, we have one request to speak. Dave Daniel Diaz.

Morning, Mr. Diaz

Good morning. It's a little political. A little while back I went over to the Republican headquarters in San Roque to ask one simple little question and the people there were extremely polite, I was quite impressed and the question I asked was What percentage of the employed staff that Abel Maldonado has are actually voting American citizens? And they kind of scattered and tried to figure things out. They came back to me and said, well he has this great program that allows immigrants to have working permits. And I said that was not the question.

The question was how many Of his employed staff were voting American citizens, and they cannot answer the question. And hopefully before the election they can give us the percentage of which members are voting and. Abel Maldonado is providing working cards for his staff up there, green cards. Maybe Andy Caldwell should get a bus and come down here and get the immigrant workers at the working zone by the homeless center and take them up there so they all get cards so they can extend and get better work because it seems like a form of discrimination that only the immigrants in the North County are having access to working cards through Abel Maldonado.

Have a good day.

Thank you. Our final request to speak on public comment is Richard Robinson.

Honorable Chairwoman, members. Einstein said that he started the Big Bang. He calls a creator. Unquote. I'm a Republican, 71 years of age. I was born on the campus of former Santa Barbara Superior Court judge presiding court Judge Joseph Lodge. I moved here in 71 My stepmom, Joan Oakley, the Prudential Bass Group. I'm wealthy. Yada yada yada. I choose to be anti-materialistic because of my somewhat...I dismiss it.

Why? Because I'm stupid! I saw affluence I'm a capitalist. The first time I voted, I voted for Barry Goldwater, the GOP. Why? Communism takes over a person's mind when they give up. I hate communism. I was taught to be hardworking, industrious, thrifty, a Christian. I was born, bred, educated and religiously trained to believe. I'm celibate, drug-free, alcohol free.

Smoke-free, gambling free. I don't even buy lotto cards. Why? Because I like being a Christian. Why? St. John the Apocalypse Revelation 21 1 The new heaven and the new earth Life is eternal So as I leave you on this another hot day St. Matthew 64 says one day at a time, don't worry about tomorrow for tomorrow will worry about the things of itself sufficient unto this day is the evil thereof you are facing tremendous obstacles which are one of the best boards of supervisors I've ever seen in my life.

I've been here for 41 years I've never seen such dedication here City Hall It has a lot to do with education, wealth quite frankly. But God is real. He's not a man sitting on a throne on a cloud with a book in his lap taking down our names. Thank you.

Thank you Mr. Robinson. All right and that concludes public comment.

Madam Chair?

We

have a speaker slip for public comment up here, Mr. David Baskett.

I'm David Baskett, a resident of North County. And I just wanted to say a very short word in support of the North County Jail and the great efforts that the Sheriff has gone through to get supervisors to get funding. Actually,

I'm sorry Mr. Baskett you

No Madam Chair that's it.

Thank you all right so we'll bring it back here then and go to the administrative agenda Mr. Allen do we have any changes?

Madam Chair members of the board yes we published an addendum on Friday which added or amended three items on today's agenda. First off I just want to note that administrative items A2, A3 and A5 these are three resolutions these will not be presented today they're going to be honorary only. Secondly item A17 on the administrative agenda this is from Public Works Come to the board is the Board of Directors of the Water Agency. The recommendations regarding Amendment No. 1 with DUDEC for Engineering and Administrative Services for the Tank Replacement Project for the Kasmalee Community Services District, and we just wanted to note that this is in the 3rd district and not in the 4th district.

And finally, Item A-23 was added to the agenda. This is from General Services. The request of the Board authorized general improvements to the Lompoc Vets Memorial Building funded by the Lompoc Veterans Memorial Building Foundation and the Lompoc Home Depot and this is estimated at $30,000. One final note on item A13 on your agenda today. If I could just read a minor correction into the record, this item comes to the board from the planning and development department. The request is that the board consider recommendations regarding the Caltrans community-based transportation planning and environmental justice grants contract execution authorization These are in the first and third districts, and recommendation A is amended to read as follows.

Adopt a resolution authorizing the director of planning and development to execute all contract agreements with Caltrans for the completion of grants for one, the Mission Park to Mission Canyon Road multimodal improvements, and two, the Los Alamos pedestrian circulation and parking plan. And those are my corrections Madam Chair.

Okay thank you. We have to take a vote, two different votes on the administrative agenda because Supervisor Carbajal you have a conflict on A2 and A3.

Thank you Madam Chair. On the advice of Council, Item A2 and A3 are two honorary resolutions requested by the agency where my spouse is employed and as such I have a conflict and have been advised by Council to recuse myself so I'll leave the room at this point as is protocol with these items

All right, so I will entertain a motion on just A2 and A3 at this time. So moved, Madam Chair. Motion from Supervisor Wolfe. The second from somebody in North County? Supervisor Lavagnino. Second by Supervisor Gray. All right, Mr. Allen roll call please.

Ms. Gray?

Aye.

Mr. Lavagnino? Aye. Ms. Wolfe?

Aye.

Ms. Farr?

Aye, thank you. All right let's get Mr. Supervisor Carbajal back in here he comes all right Yes. Okay, so now let's go to our resolutions to be presented. We have two. The first one Mr. Allen is one that I'm presenting and it's our employees of the month, the child support enforcement team and I see that we have them all here and they're very worthy of this recognition.

So I'm going to ask them to go ahead and all come forward This is an incredible group of people, another group of incredible people that we have in our county that do the work of the county so well week in and week out. And in this case making sure that children are supported in the way they're supposed to be legally. So I'm going to come down and present the resolution. Mr. Allen you can go ahead and read the resolution and all the names of these wonderful people.

Madam Chair, members of the Board. This is item A1. It's a resolution of commendation for the Child Support Enforcement Team's Employee of the Month for Santa Barbara County October 2012. Whereas, the Santa Barbara County Child Support Department has just completed a federal fiscal year and has made preliminary tallies of its annual performance suggesting that Santa Barbara will receive honors from the state for exceeding all six of its performance goals.

And whereas the Santa Maria and Santa Barbara enforcement teams that have been essential to that success by organizing teams around their individual strength to make continual improvements in speed and accuracy of service to their 35,000 customers. And whereas the individual strengths of Amanda Gonzalez, Amy Lopez, Ana Chavez, Angela Bevilacqua, Berta Garfias, Blondie Jones, Carlos Quezada, Carrie Lopes, Molly Motley, Grace Aguilera, Jeanette Brown, Jerry Lasuda, Jose Felix, June Dupree, Lisa Tenore, Lupe Patlin, Mario Lopes, Martin Nava, Nadine De Anda, Patsy Lopez, Rosie Castillo, Sally Castanea Padilla, Sarah Hilario, Sharon Amat, Susana Salgado, Suzy Brown and Vivian Wittenbrock have blended together to form three superb teams devoted to collecting Fair Child Support Orders.

Now, therefore it is hereby ordered and resolved that this Board of Supervisors recognizes the Child Support Enforcement Teams as its October 2012 Employee of the Month. Passed and adopted today.

Thank you very much. As this is a significant portion of the department, we're going to get right back to work now. But I will note that we serve 15,000 customers with staff that has been shrinking for a number of years. Not only do we have the very difficult challenging legal work that comes up in family law but we are also dealing with people who are very Hurt and distressed by their family situations. And our staff is not only intelligent, but they're also very compassionate and I'm very proud of them. Thank you.

Thank you. All right, and our second and last resolution that we're going to present this morning is A4. I think Ms. Brush, go ahead and come forward. And this is a resolution proclaiming October 2012 as National Arts and Humanities Month and October 5th, 2012 as California Arts Day. And who better to receive this than our own wonderful Jenny Brush? We're going to go ahead and have Mr. Allen read the resolution, then I'll come down.

Madam Chair, members of the Board. This is a resolution acknowledging October as National Arts and Humanities Month and October 5th 2012 as California Arts Day whereas October has traditionally been designated as National Arts and Humanities Month with coast-to-coast collective recognition of the importance of culture in America and designed to encourage all Americans to explore new facets of the arts and humanities in their lives and to begin a lifelong habit of active participation in the arts and humanities And whereas, the Board of Supervisors formed the County Arts Commission in 1977 to support and encourage participation in and access to the arts for all county residents. And whereas through its public gallery exhibitions and dynamic partnerships with art presenters and producers, the Arts Commission provides diverse outreach and education programs to communities throughout Santa Barbara County.

And whereas non-profit arts and culture are a significant industry in Santa Barbara County, one that generates $124 million in total economic activity and supports 3,587 full time equivalent jobs according to the America's for the Arts Arts & Economic Prosperity 4 report released in June 2012. And whereas the County Arts Commission will be participating in the California Arts Council's designated California Arts Day on October 5th to showcase the offerings and contributions of diverse regional arts and cultural organizations in the county. Now therefore it be ordered and resolved that the Board of Supervisors declare October 5, 2012 as California Arts Day honoring artists and cultural organizations for their vital role They play in building community, maintaining and preserving cultural traditions, fostering innovation and enhancing the economy and our quality of life.

Pass it adopted today!

Madam Chair, members of the Board. I just want to take this opportunity to again thank not just the board for their continued support and recognition of the important role that the arts play countywide but I also want to take this opportunity to thank all of the volunteers that are a big part of this infrastructure that we have for art throughout the county. We know great for a long time that the Arts add to our quality of life here I think it's important that we take this opportunity at getting these results from this recent survey to recognize the job, the arts as economic driver for the county.

Santa Barbara County was one of 182 communities that took part in this Americans for the Arts Economic Impact Study completed this last year. I have left with you a handy brochure that has the information nationally, but you can also see that inside we have the very specific contributions of the arts organizations and the impact of their audiences as well and how that affects the community. I think it's important to think of these not just as nonprofits that add so much to enriching our lives but as small business models These are great models because their jobs are local. They spend their money locally, they attract tourists here that spend their money so it's good to start to rethink of a non-profits not just as a very valuable resource but also as an economic driver I wanted to encourage you to come to our Arts and Economic Impact Forum this is the first we've ever done We have Randy Cohen from the Americans for the Arts who will be coming out and giving a detailed PowerPoint presentation on what this means nationally for the arts.

And how they fared in this economic downturn, but also addressing very specifics about Santa Barbara County. We'll also have Kathy Janega-Dykes from the Santa Barbara Conference and Visitors Bureau Tourism and how that's affecting the economy recently, and then also just what they plan to do in terms of working with us to promote arts and culture of the region. So again I thank you for your support and for allowing the arts to thrive in Santa Barbara County. Thank you so much.

Thank you. And I think that even though this is a governmental building, it's always so nice when I come downstairs and you're in the middle of a reception in that wonderful gallery space that we have. So this building is used for that as well, for the wonderful displays that we have. So thank you for all that you do. Okay. Do we have speakers for other items on the admin agenda, Mr. Allen?

I'm sure we have one request to speak on item a 18 from John human. And this item comes to the board from the sheriff. The request that the board consider recommendation during the renewal of contracts with satellite tracking of people for electronic monitoring services

missing human.

Thank you Madam Chair and Supervisors of Santa Barbara County. I have one question, what is the legal criteria to place a person under electronic monitoring? Thank you.

Thank you. Perhaps that's something that the Sheriff can answer later on during his presentation. All right, no other requests to speak. If not... Madam Chair? Yes.

This is Joni Gray in Santa Maria. I'd like to speak on A23. All right.

Mr. Allen would you read that into the record?

Madam Chair?

Yes, Miss Supervisor Lavagnino?

On A20 and A21 as well

please. A20, A21 and then A23 okay.

Madam Chair members of the board First off, item eight, let's go in order. Item A21. A20

and

21? A20 and A21, those come to the board from Supervisor Lavagnino. These are appointments. A 20 is appointment of Steve Hernandez to the Advisory Board on Alcohol and Drug Problems. And A21 is the appointment of Elizabeth Ann Hawley to the Advisory Board on Alcohol and Drug Problems. Okay,

Supervisor Lavagnino?

Even if you want to come up here just for a second, just so people see who you are. I've had so much trouble trying to find folks that would step into this position and I'm just very appreciative Mr. Hernandez is here today. So I just want people to know who he is and just want to let him know how excited I am to have him part of the team and looking forward to some great work. Thank you.

Thank you, and our thanks also to Mr. Hernandez. We appreciate you volunteering in this important role. Thank you for being there.

Thank you for having me here.

All right, and then item A23?

Madam Chair, Item A23 is from General Services. The request is that the Board authorize general improvements to the Lompoc Veterans Memorial Building funded by the Lompoc Vets Memorial Building Foundation and the Lompoc Home Depot, and this is estimated at $30,000.

Supervisor Graham.

Thank you Madam Chair. This is actually a donation that's way, way beyond what it says that it is. Tomorrow 150 volunteers will come to the Lompoc Veteran Memorial Building. They're going to be totally redoing the kitchen which if you've been there you know that in itself is quite a job. I believe that the stove is from 1930-something so we have a whole big job And Home Depot is going to be managing this and also supplying the different kinds of supplies that are needed. There were stacks and stacks of bark where they're going to be redoing the landscaping, Hundreds of plants and just a whole bunch of work's going to go on. It starts tomorrow at 8 AM with the official kickoff, and I'd like to invite people because this is one of those kinds of things where you see a $30,000 gift, and what you're really probably getting is a $200,000 gift of my being just conservative on my guests.

So thank you.

Ms. Gray? Aye. Mr. Carbajal, Ms. Wolfe, Ms. Farb.

Thank you that goes ahead and completes our administrative agenda we'll go right into our departmental agenda and at one point it looked like we were going to withdraw this item but somebody wants to speak to it Mr. Heumann is here so why don't we go ahead and read that item into the record and then we'll turn to Public Works

Madam Chair, members of the Board. Item number one is from Public Works. It's a hearing to consider recommendations regarding an appeal of the Hearing Officer decision regarding violations under Chapter 23 Article 3 Abandoned Vehicles.

OK. Does somebody from Public Works just want to come forward just to make a couple of comments about where we are with this? And then we'll have Mr. Heumann speak.

Good morning, Madam Chair. Last time you saw this item was on August 14th. We did meet with Mr. Hooman on August 21st onsite. We had initially thought that three of the vehicles were inoperable. Mr. Hooman proved that two of the vehicles were in fact operable and he's moved those two vehicles in such a way now that the third vehicle which is inoperable It can't be seen from the public right away. We're not sure about private property, but from our perspective he is in substantial compliance right now with the county's ordinances so that's why we've asked for this item to be removed.

Okay, so from Public Works' perspective this issue has been solved?

It's closed at the moment.

It's closed, okay thank you so we just had the one speaker on this item? Yes Madam

Chair.

All right Mr. Heumann why don't you go ahead and come to the microphone then

Madam Chair, Supervisor Santa Barbara County thank you for this opportunity. Notice is hereby given this day of October 2nd 2012 that there are violations of the California Penal Code that appear to have occurred as follows section 134 preparing false documentary evidence chapter 13 crimes against elders dependent adults and persons with disabilities subsection 368 section B1 Section 368 subsection C.

These crimes shall become evident through the diligent study of records contained within the written communications between Brad Spencer and John Heumann as related to abandoned vehicle abatement cases, AVA001-2012, AVA002-2012 and AVA003-2011. Attention should be given to the language of special word usage by John Heumann, the victim Which is defined in California Penal Code Section 7, words like knowingly and malice. Due to said county possible conflicts of interest both a state prosecutor and federal prosecutor should without fail as a matter of duty guarantee Brad Spencer is taken to trial before a jury so the people of California as jurors will have an opportunity to evaluate his alleged crimes. Please save all questions for the prosecutors.

Thank you.

All right, Mr. Marshall do we just go ahead and have a motion then to withdraw this item from the agenda or we've already heard it so what action do we need to take?

I think if the department's recommendation is still to withdraw it then I would believe that's their position. I think you should just simply have a majority vote to accept department recommendation to withdraw

Okay, that is the motion made by Supervisor Carbajal. Staff's recommendation and we have a second. Second by Supervisor Wolf. Mr. Allen roll call please.

Ms. Gray?

Aye.

Mr Lavagnino? Aye. Mr Carbajal? Aye Ms. Wolfe? Aye Miss Farr? Aye Thank you

All right, we'll go right on to departmental agenda item number two from the Auditor-Controller's office. Mr. Allen would you read that into the record please?

Madam Chair and members of the Board, Item 2 is from the Auditor-Controller. It's a hearing to receive and file the County of Santa Barbara's Comprehensive Annual Financial Report and financial highlights for the fiscal year ending June 30th 2012

Madam Chair, members of the board, Theo Filotti, Assistant Audit Controller sitting in for Bob Geist today. I also have with me Betsy Schaefer who is our Financial Reporting Division Manager. Today we're going to present to you our CAFR and our brief slides today will go through our comprehensive annual financial report. And in your packet today, you should have a copy of it. This is what it looks like, the big thick book.

If you don't mind having it ready, we may just refer to a couple pages during the presentation Number one, what is the CAFR? Comprehensive Annual Financial Report. What we're going to also cover is we're going to review some fund balance categories and also we're gonna go through the financial highlights real briefly. We'll do some future governmental accounting standards board pronouncements particularly in regards to the pension which your board had prior questions on and then we'll go through some questions at the end A little bit of background on the CAFR, what is it?

It stems from having the government code requirement for the Board of Supervisors to have our financial statements audited annually. The CAFR itself expands a little bit and provides additional information beyond the financial statements themselves. Our department contracts and administers the contract with an independent CPA firm, Brown Armstrong, to get that audit done.

Just in general over the years, the expanded reporting requirements put on us by the GASB have actually added a lot of complexity to the CAFR itself and you can tell by the thickness of the document. This year for 11-12 we've received an unqualified or clean opinion on our audited financial statements and what that means is that our financial statements are fairly presented in all material respects and they present fairly the financial position of the County of Santa Barbara Next. Just a few highlights, the CAFR itself is broken into three major sections. The introductory section which is a letter of transmittal and some economic data.

The meat of it is the financial section where we have our independent audit report, the financial statements themselves and then the disclosures which are the notes to the financial statements. Additionally there's a statistical section which includes presentation of 10 years of historical data both financial and economic data. Introduced last year was one of the GASBs, GASB 54 which changed the components of fund balance.

What we have this year in our CAFR are fund balances are broken out into these components and now we have two years to be able to compare these couple of changes in the fund balance In the past, we had reserved fund balance. We had designated fund balance and we had unreserved fund balance. Now we have non-spendable fund balance which usually is made up of items that can't be spent long term receivables and reserves that are not allowed to be touched. We have restricted fund balance which is made up of fund balance that has restrictions for spending put on by entities outside of the county whether it be legal or grant requirements Again, outside the county restrictions and then we have committed fund balance where your board has earmarked for specific purposes certain amounts of fund balance.

And then we also have assigned fund balance which is similar to designated just at a lower level and then unassigned fund balances are general fund residual fund balance. I've got a couple Thank you, Mr. Chairman and members of the board. I've got further detail on the next couple of pages and these are pages 85 and 86 in your CAFR if it's hard to read up here.

But just to point out, we have our non-spendable assets or fund balance here. And then here we have a description of the restricted fund balances what they are and the amounts and then in the particular funds. And probably one to highlight probably here is the largest one which is the flood control district which has a large amount of restricted fund balance because those property taxes can only be spent for that specific purpose The next slide has our committed fund balance and these are the commitments that your board has chosen to set aside. You can see that the majority of them are all in the general fund and that the largest is the strategic reserve, and at June 30 last year that was roughly $22 million.

The next slide takes us to our financial highlights, and that's this document here that you also have in your packet. What that does is pretty much summarizes the county's CAFR and information out of the county's CAFR into a more user-friendly and readable format other than the thick book and the technical wording in the CAFR. Our theme for this year's highlights is emerging growth. And we get that from seeing two consecutive years of growth in our sales tax at both the state level and the local level, and then also two years of continued growth of transient occupancy tax at our local level.

Just another example of this continuing growth is in July, we just received July's Prop 172 distributions from the state and that had an 8% growth just for the month of July. And that is on top of a 9.2% growth that we had in the prior year 11-12. Both these documents are submitted to the Government Finance Officers Association for Certificates of Achievement.

Our CAFR has won the award for 21 years, and our Highlights has won the award for 15 years. These external reviews actually add quality and consistency to our documents and make our products better. I have here a list and it's on page 58 of your CAFR of a number nine, actually nine of them which are GASBs that we will have to incorporate and implement into our comprehensive annual financial report over the next several years. In particular the two highlighted at the bottom, number 67 has to do with financial reporting for pension plans and this is a GASB that SB CSRS will have to implement This is specifically for the plans themselves. And then they will actually implement that out in looks like 15, no 13-14 year and then the subsequent year after that we will implement GASB 68 which is accounting advanced reporting for pensions but on the employer side not on the pension fund itself.

What I have on the next slide is sort of an example of comparing what we have now under GASB 27, which is the current promulgation and then GASB 68 which will be in the future. So for the county pension liability Basically, the liability itself is not reported on the face of the financial statements. Now, the liability is reported in a subsequent area of the CAFR which is the acquired supplementary information. So while it's not on the face this year, in the future when GASB 68 comes into play we will actually put that liability on the face of our financial statements and it will reduce our net assets and I'll have a sample of that for you in the next slide.

And then our county pension expense. Currently, our pension expense is based on a contractually required contribution to SB serves and in the future it'll be a pension. The expense will be based on a proportionate share of total fund expense but right now the expense is the same we are already putting our proportional share of our expense as Gatsby 68 will have us do in the future. We're currently doing that right now.

Here is an example of what the liability would be, and you can see there that for the total pension fund it has 100% of liability. Therefore, the NA, that would be 100%. And the county's estimate based on 63012 or 1011 contributions is we have 91.5% of SB CSRS assets liabilities belong to the county. And then the remaining 8.5% belong to the other special districts that participate in SB CSRS. The expense of the pension, the fund as a whole is $110 million and then our 91.5 percent would be $100 million and that's already reported in our financial statements as an expense.

The effect, your board had asked a couple of questions in a prior board meeting and those were what would be the effect on the net assets of the county of implementing this new GASB 68. And if I could refer you to page 30 of your CAFR, what we have there is the balance sheet for the whole county And it indicates that when we take our liabilities and subtract them for our assets, that we have about $778 million of net assets. And what we would do in the future would be to add this $679 million liability for the pension liability to the liabilities and therefore reduce our net assets of 778 by the 679 and leave us with approximately a hundred million of net assets. So we would still be positive, but it will take a big chunk out of our net assets.

Another question you ask is what's the effect on the budget of this new GASB? And basically there is no effect of the GASB itself on the budget because we already include all of our expense in our financial statements and our budget. And then lastly you'd asked a question about the effect on the bond ratings of this new And the answer to that is there should not be any effect of putting this liability on our balance sheet because we already report the liability in the, not on the face of the balance sheet but in the contents of the CAFR. So the rating agencies already take that liability and the percentage of funding of that liability into consideration when they do our rating for both our annual TRAN and also for any COP issues that we might go out for.

Basically that's it for the presentation. We'd ask that you approve the CAFR and then if you have any questions I'm happy to entertain them.

Okay, thank you Mr. Fulani. Supervisor Carbajal and then Supervisor Wolfe?

Thank you for this report. It was really well done, easy to follow, easy to read and I think it did a great service not only to us as decision makers but to the public so I want to thank you for your good work and it's always great when we see that the audit did not find any significant findings so that's always music to our ears And I think it also gives us good insight as to the new accounting practices or requirements that are required of public agencies with the CAFR and Gadsby.

And I think it was just very insightful, so I just want to congratulate you on putting together a very good report. Thank you.

Thank you. Supervisor

Wolf? Thank you Madam Chair. I also want to extend my appreciation to you And thank you for following up on those questions that we had. A particular concern for me and I'm sure the other board members was the bond issue, so thank you for addressing that. I do have a question I wanted to run by you and that's in the report on page 88. This is the retained deficit, the internal service funds specifically the workers comp piece And the balance at June 30th, 2012 shows a deficit of and can you just tell me what that exact deficit is?

Chair Farr, Supervisor Wolf. The deficit is as we showed on our other balance sheet it is that the liabilities of the tail claims of the workers comp that we have retained and not transferred to CSAC through their primary insurance coverage. We do not have enough cash in the fund to cover the projected liabilities that the actuary calculates for the claims that are, the tail claims that we have retained and we're trying to eliminate or work down.

Okay so when we did our budget because as I recall this information came to us after we did our budget. What I'd like to know, and maybe this is a question for CEO Waller, is where are we now in addressing this deficit?

Chair, Supervisor, you may recall that when we were discussing the move of risk management to the CEO's office, we identified this as being one of the issues. Our Budget Director Tom Alvarez has been working with the Risk Management I anticipate that we'll be back to your board in the next month with some proposals on, or with findings of his investigation and some proposals on how we move forward with that closing that deficit.

So this number then we are all satisfied that this is the correct number or is it possible that that number may change after the investigation?

I think that we need to say based upon what the actuarial believes, that is the correct number. What we're doing is trying to identify if staff is in agreement with that and then actually how we move forward on removing that deficit.

Thank you very much. And then Mr. Filotti, you mentioned that our strategic reserve is at $22 million and there's just been some other numbers thrown around. One I heard was that we were at around 30 million. Can you address maybe why we're seeing some discrepancies or what you're basing your 22 million on?

Absolutely. What we were, Chair Farr, Supervisor Wolf, what is presented in the June 30-12 CAFR is the balance of the strategic reserve at that point in time $21 million dollars eight hundred twenty one eight or so and then since that time after June thirty the residual fund balance of general fund of about seven and a half million rolled over and as part of the budget adoption Your board said that any residual fund balance and general fund would roll to the, to the strategic reserve. So that is a 12-13 action not an 11-12 action so that seven and a half gets added to the 22-8 to give us that roughly 29-30. So

we are, so where we are right now is about the 30 million? Yes. Okay very good thank you very much.

Questions comments from Supervisor Lavinino, Supervisor Gray Before we go to public comment, I did want to ask something that's in the financial highlights. And I just have to say, let me just put in a plug for this document. Any of us that go out into the community and speak, this is a wonderful publication to bring a stack of because it really does provide a lot of wonderful financial information due with the county and the county budget In a very readable way, but because we're always interested in real estate here and property values because of our need for property tax on page 10.

And looking at the chart that you have there that talks about assessed value growth versus property transfer tax and supplemental tax. What are you seeing there? I know that sometimes what the auditor controller's office says might be different than what Mr. Holland might say, so do you have any kind of a unanimous idea of where we're going here with this?

Chair Farr and members of the board, what this does indicate is that the property transfer tax here on this chart at June 30 through During that period of time, there was a slight uptick. And I believe if we spoke with the assessor now that we would see that property transfer tax and the number of transactions are on a bit sharper increase just in sheer volume and also in dollar volume. And so typically it has been in the past a leading indicator of where the secured property taxes might go or will go.

In the past, we've had some relatively sharp increases. It is our hope that we're at the bottom and that we do start to see an increase now although we believe it will be a much flatter increase or less inclined increase than we have seen in the past.

Okay, thank you All right. If there are no other questions or comments from the board, why don't we go to public comment? Why don't we go to Santa Maria first? Supervisor Lavinino, Supervisor Gray, what speakers do we have there?