TAX COLLECTOR S OFFICE FEASIBILITY TASK FORCE Financial Sub-Committee. Margaret Lezcano (District 3 Appointee) Conrad Santiago (Mayor Appointee)

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1 TAX COLLECTOR S OFFICE FEASIBILITY TASK FORCE Financial Sub-Committee DATE: October 11, 2012 MEMBERS PRESENT: Margaret Lezcano (District 3 Appointee) Conrad Santiago (Mayor Appointee) MEMBERS ABSENT: Sheila LaFont (District 4 Appointee) Christina Pinto (Mayor Appointee) OTHERS PRESENT: CALL TO ORDER: Stephanie Taub, Assistant Manager, Fiscal & Business Services Fred Winterkamp, Manager, Fiscal & Business Services Yuan Cochran, Fiscal Analyst, Fiscal & Business Services Jay Wallace, Management & Budget Analyst, Office of Management & Budget Cindy Valentine, Orange County Tax Collector s Office Carl Johnson, Orange County Tax Collector s Office 3:10 pm DISCUSSION A. Elect Sub-Committee Chairperson With two Sub-Committee members absent, the two members present both agreed to have a Sub-Committee Chairperson. Conrad Santiago suggested Margaret Lezcano be the Sub-Committee Chairperson. With no objection, Margaret Lezcano was elected the Financial Sub-Committee Chairperson. B. Possible requests for Financial Information Ms. Taub suggested the first discussion item: possible requests for financial information from Tax Collector s Office. She indicated that the committee needs to let the Tax Collector Office staff know what is needed prior to the presentation. 1. A detailed three-year budget presentation (i.e., FY11, FY12 and FY13) including an overview of the budget process, a discussion of all sources of revenue and expenditures plus the computation of unused fees, and an overview of the year-end closing and auditing process.

2 a. The revenue portion of the presentation should include detailed itemization of all compensation in fees, commissions or other remuneration for taxes collected on behalf of all entities (locally and for State agencies). b. The expenditures portion of the presentation should include detailed itemization of personal services, operating expenditures and operating capital outlay. In addition, provide a detailed expenditure list for FY2011 for the expenses in accounts 3151/4654/6451 related to E.D.P. and 4453/4653 related to Office Space. c. The portion of the presentation addressing unused fees (aka net income or unexpended budget) should include a detailed explanation of the annual computation of unused fees and a list of all agencies receiving such unused fees along with their respective amounts Ms. Taub provided two documents to all members and staff: Budget Summary 2011 and Audited Financial Statement Ms. Valentine indicated that her office can provide the most recent budget summary if needed. Mr. Santiago asked if the purpose of the notion is to make the operational tax collection more cost efficient. Ms. Taub indicated that is one of the criteria set up by the Mayor. Sub-Committee Chair Lezcano stated that one of the criteria during the charter review was financial efficiency; she then asked if either Ms. Taub or Mr. Wallace was part of Charter Review. Ms. Taub indicated she was not part of charter review. Mr. Wallace indicated he was called to one of the meetings. Sub-Committee Chair Lezcano stated that the charter review says the financial aspect of any potential changes in it was not going to be a driver. Ms. Taub indicated her understanding of charter review. Sub-Committee Chair Lezcano asked when the financial committee reviews the financial audits, what will the members be comparing them to? Mr. Santiago indicated that in the ed materials the members have received, it was mentioned that three counties consolidated tax collection into county operation; he then requested data showing the actual operating expenses, and the three counties operating expenses before and after incorporating tax collection service. Ms. Taub indicated that the staff will look into whether the requested data is available. Sub-Committee Chair Lezcano reiterated that this is the information she mentioned earlier for comparison purposes. Mr. Santiago asked if the County is in the position to provide pro forma projections. Ms. Taub stated that she was not sure if the County could. Sub-Committee Chair Lezcano stated that was brought up because it is related to financials. She further stated that a gentleman from Tallahassee at the first meeting may have the information needed since he works for a group that represents all tax collectors. Ms. Valentine added that she believes the gentleman is Tim Qualls from Florida Tax Collector Association. Sub-Committee Chair Lezcano indicated she wonders what kind of data the association has available. She then asked Mr. Santiago, from numbers perspective, what kind of helpful information the committee should request from Orange County Tax Collector s Office. Mr. Santiago asked to confirm if 2.7% of tax collection is to cover up operating expenses. Ms. Valentine and Ms. Taub both stated the number sounds low. Ms. Taub stated that from her understanding, the Tax Collector s Office receives fees from providing certain services, and a small percentage is retained as commissions, and the remaining is used to cover expenses and roll back to the BCC or State agencies. Mr. Santiago stated that he was trying to understand the 2

3 correlation between tax collection and expenses. Ms. Valentine indicated that the Tax Collector s Office is working on gathering the information requested in the upcoming presentation. She further stated that the Tax Collector s Office is restricted by Department of Revenue not to increase expenditures over certain amount without detailed explanation. The Tax Collector s Office s budget has changed a little, but mostly has been staying fairly consistent during the years. In the presentation by Kelly Goodwin, more details and explanations will be provided. Sub-Committee Chair Lezcano asked if there is something unique about working with Tax Collector s Office at budget time. Mr. Wallace responded that the Mayor sends out budget guidelines to constitutional officers outlining the budget for the fiscal year, and the same guidelines are followed by County departments. Department of Revenue refers to the guidelines as well. The same procedure applies to other offices such as Property Appraiser s Office. It is not unique to the Tax Collector s Office. Sub-Committee Chair Lezcano suggested that in the upcoming presentation, a pro forma/forward looking financial statement should be included to reflect the impact from budget cuts. Ms. Valentine indicted that the budget cut will impact her office going forward. For example, the rental expense reduction. Mr. Santiago asked if the Tax Collector s Office has separate capital and operating budgets. Ms. Valentine confirmed. She also indicated that these two budget numbers can be provided. Sub-Committee Chair Lezcano suggested that the County staff contact the County real estate staff present at previous meetings to get their perspective on rental expenses. Ms. Taub stated that some real estate staff from the operational sub-committee may be able to help. She further stated that under the 3 year budget presentation, the high dollar amount items, like office space and maintenance are all examples of the details that County staff can look into and provide their comments about, assuming the detailed information is provided by the Tax Collector s Office. Sub-Committee Chair Lezcano mentioned that Mr. Johnson does this kind of financial analysis. Ms. Valentine agreed. Sub- Committee Chair Lezcano wanted to make sure there are no expenses associated with this kind of analysis request. Ms. Taub suggested that detailed explanation be provided on the types of services. Ms. Valentine indicated that detailed information, such as the dollar amount for driver s licenses, amount for tag and title, will be included in Ms. Goodwin s presentation. Sub- Committee Chair Lezcano asked how the revenue components drive the mission of the Task Force. Ms. Taub stated that there may be different regulations for Constitutional and Charter offices. The State can demand certain services be performed by Constitutional offices. That is also why detailed information is more helpful because of the different financial impact on different types of offices. Mr. Santiago asked if information can be provided regarding the success rate of real estate tax collection, as well as a rate comparison among counties to determine the County s efficiency level. Mr. Wallace stated that this has something to do with the property owners, not necessarily tax collection agencies. In some counties the percentages may be relatively high because of tax deed sales. This is related to the nature of property owners. He suspected the results will not be uniform. Sub-Committee Chair Lezcano concluded that wealthier counties will have higher efficiency measures. Mr. Santiago agreed that the results can differ demographically. Ms. Valentine stated that her office has different measurement standards, and one of the standards is the number of parcels that end up in tax deed sale. A discussion was conducted regarding property tax collection rates. Mr. Santiago asked if the operating expenses can be allocated for each source of revenue. Ms. Valentine answered no. A percentage by man hours is a way to measure how much time is spent on each. If a comparison is needed, it is advisable to compare those counties that conduct the same or similar amount of business. Statistics can also be provided by the Tax Collector s Office. Sub-Committee Chair 3

4 Lezcano asked if the Fiscal and Business Services receives information and data from Tax Collector s office, can some of the information be provided in advance so the members can be prepared. Mr. Winterkamp stated that it is common for the presenter to provide presentation information in advance, and it is also possible that the presenter let the audience hear the presentation and think about it, and come back later for questions. Mr. Santiago indicated that he prefers to have the information ahead of time. Ms. Valentine indicated that Ms. Goodwin let her know that if the Task Force members do want something early, the Tax Collector s Office does not have problem getting it to them early; they just need a time frame for it and needs to know exactly what the Task Force members are looking for so they can provide as much information and details. Sub-Committee Chair Lezcano indicated that preferably the information can be provided a week in advance. Mr. Winterkamp stated that the date of the presentation is not determined, and the next Task Force meeting will be two days after the election, so the presentation is probably after November 8 th. He also stated that in the November meeting, the members and staff will discuss if and/or when there is going to be a meeting in December. Ms. Valentine indicated that if the members need information prior to the presentation, the Tax Collector s office will not have a problem providing it. Sub-Committee Chair Lezcano indicated to Mr. Winterkamp about the efficiency measures discussed earlier in the meeting, and the percentage statistics suggested by staff members. She asked if the members should gather the information and pass it along to the staff. Ms. Taub stated that the staff members will be more than happy to collect the information for the Task Force members, after informed by the members exactly what information they require. Mr. Winterkamp concurred. He also indicated that there is a website of Tax Collectors Association. Sub-Committee Chair Lezcano indicated she will be looking it up for Mr. Qualls. Ms. Taub asked if there is anything else the members want to discuss. Sub- Committee Chair Lezcano asked Mr. Santiago if he still wants to see the budgets and audits for the previous years. Mr. Santiago confirmed. Ms. Valentine indicated that the Tax Collector s Office has the budget for all the years, and each budget contains pages for each year. Both members agreed a summary of the budget will be fine. Sub-Committee Chair Lezcano reiterated there had been discussion about forward looking issues/anticipated financial impacts. She further mentioned the members would like to see the detailed expenses and revenue associated by function. Ms. Valentine indicated that some of the details can be found in the budget summary; comparative data can be provided by the Tax Collector s office. Mr. Winterkamp stated that large expenses, such as EDP (electronic data processing), real estate, etc. should considered as key measures. 2. Current Tax Collector s Office HR list with Job Titles, number of staff by location, and total compensation ranges Sub-Committee Chair Lezcano indicated that the committee will not need the names. They will need the number of staff by title or pay grade. Ms. Valentine indicated this can be provided. 4

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