April 10 th, Sonoma County Assessor s Office Benchmark and Cost-Benefit Analysis Project Report

Transcription

1 April 10 th, 2009 Sonoma County Assessor s Office Benchmark and Cost-Benefit Analysis Project Report

2 Contents Executive Summary 2 Summary of Findings 7 Overview of Project Approach 7 Summary of Benchmark Analysis and PTAP Findings 10 Summary of Process and Best Management Practice Evaluation 15 Summary of Recommendations 20 Summary of Cost-Benefit Analysis 25 Summary of Recommendations for Future Evaluation 32 Appendix 34 Additional Detail for Benchmark Analysis and Performance Evaluation 34 Additional Detail for Cost-Benefit Analysis 53 2

3 Executive Summary The objectives of the Assessor s Office Benchmark and Cost-Benefit Analysis Project were to: 1. Conduct a benchmark analysis to identify relative Office performance compared to the Assessor s offices of other counties 2. Review the appropriateness of continued back-fill of Property Tax Administration Program (PTAP) funding by the Sonoma County Board of Supervisors 3. Develop recommendations based on Best Management Practices to allow the Office to operate at more efficient staffing levels Key background and history impacting the Assessor s Office: The Property Tax Administration Program (PTAP) provided state funding to Assessor s Offices from 1995 through 2005; since then, Sonoma s Board of Supervisors has provided additional General Fund support to back-fill a portion of PTAP staff levels (up to $1.2 million annually) Due to recent county budget constraints, the office currently has 8.65 open positions that have not been filled due to hiring restrictions, although partially offset by extra help The declining real estate market has led to a significant increase in the number of Prop 8 requests, non-market transfers (e.g., foreclosures, short-sales), and appeals filed; overall, these changing conditions have resulted in an increase in the complexity of appraisal activities Findings and recommendations for each project objective are on the following pages 3

4 Executive Summary Project Objective: Conduct a benchmark analysis to identify relative Office performance compared to the Assessor s offices of other counties Key Findings*: 1. The benchmark analysis indicated that Sonoma s overall performance across eight measures of high performance ranked it in the top third of a comparable group of 27 counties; these high performance indicators measured performance across three broad categories: Budget Efficiency and Productivity Workload Completion Quality and Timeliness 2. Overall, Sonoma is funded and staffed at levels comparable to many other counties, and demonstrates an overall level of efficiency consistent with the average 3. Several counties demonstrated particularly high levels of efficiency, suggesting that there are opportunities for Sonoma to make changes to operate at a best practices level * Note: Benchmark analysis findings were based on the California Board of Equalization s budget year Budgets, Workloads, and Assessment Appeals Activities report, the most recent version of the report available at the time the project began 4

5 Executive Summary Project Objective: Review the appropriateness of continued back-fill of Property Tax Administration Program (PTAP) funding by the Sonoma County Board of Supervisors Key Findings*: 1. Upon PTAP expiration, all evaluated counties absorbed at least part of the PTAP related headcount through Overall, 63% of counties either maintained headcount at PTAP levels or increased beyond that through 06 07; however, all high performing counties in the state maintained or reduced headcount 3. Sonoma s reduction of 6% (4.6 FTEs) of its budgeted headcount since ranks as the 3 rd largest percentage reduction across the 22 counties, suggesting that Sonoma has received relatively less General Fund support to back-fill PTAP staffing levels than other counties 4. Sonoma s current operating headcount (accounting for open positions and offsetting extra help) is 87.2% of staffing levels, reflecting the impact of recent hiring restrictions** 5. In conjunction with the benchmark analysis results of overall performance and budget efficiency, these findings suggest that there are no staffing and budget improvement opportunities associated with the PTAP back-fill decision for Sonoma * Note: The analysis of staffing levels includes 22 counties that are comparable to Sonoma and no longer report state funding. The data is based on the California Board of Equalization s budget year Budgets, Workloads, and Assessment Appeals Activities report, the most recent version of the report available at the time the project began. Analysis uses adopted budget data from and for Sonoma s staffing levels. ** Operating headcount numbers were calculated at the time of project initiation 5

6 Executive Summary Project Objective: Develop recommendations based on Best Management Practices to allow the Office to operate at more efficient staffing levels Key Findings and Recommendations: 1. Nine major recommendations for improving overall efficiency were developed, based on the findings from internal interviews with 38 office staff, detailed process analysis, and interviews with three high performing counties 2. Recommendations are of three major types: Technology, Process, and Policy 3. Only one recommendation, Implementation of a Computer Aided Mass Appraisal System (CAMA), requires upfront investment by the county 4. Most recommendations can be pursued independent of one another, but the benefits are most significant when paired together with a CAMA system 5. Additional savings opportunities can be realized through elimination of open positions not currently back-filled through extra help 6. The total benefit from recommendations and the elimination of open positions, minus associated costs, is estimated at $1.1 million for the two budget years ending in 10 11, and an annual savings of $1 million in the years going forward 7. These benefits assume that the Assessor s Office eliminates 8 FTEs, but with an offsetting addition of 4.5 FTEs in different roles, for a net reduction of 3.5 FTEs from current operating headcount and a total headcount of 65.5 FTEs; some reductions may be off-set by funding for temporary back-fill and extra-help to mitigate transition risk 8. Achieving targeted savings assumes that the Assessor s Office will achieve the targeted staffing levels in the and budget years; the exact staffing strategy to achieve those staffing levels within the given timeframe is not in the scope of this document, and may 6 take longer than two years at the discretion of the County

7 Contents Executive Summary 2 Summary of Findings 7 Overview of Project Approach 7 Summary of Benchmark Analysis and PTAP Findings 10 Summary of Process and Best Management Practice Evaluation 15 Summary of Recommendations 20 Summary of Cost-Benefit Analysis 25 Summary of Recommendations for Future Evaluation 32 Appendix 34 Additional Detail for Benchmark Analysis and Performance Evaluation 34 Additional Detail for Cost-Benefit Analysis 53 7

8 The project s objective was to review the Assessor s Office staffing levels, and identify opportunities to improve efficiency Project Objectives Conduct a benchmark analysis to identify relative Office performance compared to the Assessor s offices of other counties Review the appropriateness of continued back-fill of Property Tax Administration Program (PTAP) funding by the Sonoma County Board of Supervisors Develop recommendations based on Best Management Practices to allow the Office to operate at more efficient staffing levels Project Considerations Given the organization s need to accommodate growing budget pressure, recommendations focus on efficient ways to achieve savings Efficiency improvements were identified based on a baseline of operating headcount and employed practices at the time of analysis The evaluation assumes that current workload levels and workload mix stay relatively constant in the short-term, and recommendations assume that staffing levels can be scaled appropriately as workload changes Some efficiency improvements have potential implications related to levels of service provided; these potential tradeoffs must be evaluated by the county based on its current priorities Impacts to staffing levels assume that the Assessor s Office has the ability to freely adjust headcount within this timeline 8

9 The project approach included six key steps in which Office Managers and Supervisors played a critical role in each Evaluate Productivity and Efficiency Against Benchmarks Map Organization and Processes Identify Process Gaps and Evaluate Best Management Practices Identify Operational and Organizational Improvements Develop a Cost-Benefit Model Demonstrating the Value of Investment Develop a Transition Plan for Improvements Conducted a benchmark analysis and compared budget and staffing levels to other counties Interviewed 38 Office staff to understand the organization s current state Identified best management practices through interviews with three high performing counties Identified potential policy, process, and technology changes to drive efficiency gains Analyzed the potential costs and efficiency benefits associated with each recommendation Identified the time-period over which benefits could be realized Identified high performing counties for interview Selected eight high opportunity Office workflows and capabilities for detailed review and analysis Conducted a detailed review of high opportunity workflows and capabilities through interviews Developed specific recommendations for improving overall efficiency Developed a model for evaluating the overall impact on staffing levels due to recommendations Identified key requirements, resources, and activities for implementing changes In total 35 interviews were completed with 38 of the Assessor s Office staff 9

10 Contents Executive Summary 2 Summary of Findings 7 Overview of Project Approach 7 Summary of Benchmark Analysis and PTAP Findings 10 Summary of Process and Best Management Practice Evaluation 15 Summary of Recommendations 20 Summary of Cost-Benefit Analysis 25 Summary of Recommendations for Future Evaluation 32 Appendix 34 Additional Detail for Benchmark Analysis and Performance Evaluation 34 Additional Detail for Cost-Benefit Analysis 53 10

11 Benchmark Analysis Approach 1 2 Calculate County Assessor Benchmarks Identify Comparison Groups Calculated 125+ metrics for all California counties based on the BOE s Budgets, Workloads, and Assessment Appeals Activities report data for the roll year 3 4 Identify High Performing Counties Identified a Benchmark Evaluation Group of 27 counties, and a Peer Group of 6 based on relative property roll size as compared to Sonoma Evaluate Sonoma s Performance Against Benchmarks Counties Identified 8 metrics as contributing indicators of high performance, and used Archstone s Benchmark Analysis Tool to rank county performance 11 Compared Sonoma s performance against 50+ key benchmarks, and identified 28 metrics for detailed analysis and comparison

12 The benchmark analysis revealed that Sonoma s overall performance ranked in the top third of all counties Overall county performance was evaluated using 8 benchmark metrics identified as indicators of high performance: Category Budget and Productivity Workload Completion High Performance Indicator Gross Budget / Total Property Roll (#) Property Roll (#) / Total Staff Weighted Real Property Assessment Workload / Real Property Appraisers Weighted Business Property Assessment Workload / Business Property Auditor-Appraisers Mandatory Audits Completed and Waived / Mandatory Audit Workload The benchmark analysis indicated that Sonoma s overall performance across the 8 high performance indicators ranked in the top third of all counties*: Better Score Overall County Rank Fresno San Mateo Kern Monterey Sonoma Fresno Kern Santa Clara Riverside Riverside 8,489 7,328 7,120 Quality and Timeliness Total # of Appeals Resolved / Total # of Appeals No. of Changed Assessments due to Appeal / Total Property Roll (#) , , , ,000 1,000,000 1,200,000 1,400,000 Property Roll (#) No. of Real Property Roll Corrections / No. of Real Property Appraisals Sonoma High Performing Counties Peer Counties Other Counties * Overall county performance was ranked based on the cumulative total of each county s percentile in each of the eight high performance indicators 12

13 28 budget, staffing, and productivity related benchmarks were used to compare overall efficiency across counties The benchmark analysis revealed that staffing levels were consistent with the mean staffing levels for the 27 comparable and 6 peer counties Selected Budget and Staffing Benchmarks Metric Budget / Property Roll (#) Tax Base Value / Budget Dollar Cost Per Employee Property Roll (#) / Staff % Assessors and Managers Secured Roll / Real Prop. Appraisers Unsecured Roll / Business Prop. Appraisers Real Prop. Productivity Indicator Business Prop. Productivity Indicator Sonoma Value Peer Mean* Comparable Mean* High Performing Mean* $38.09 $39.80 $36.12 $28.34 $7,783 $7,120 $7,328 $8,489 $92,296 $74,944 $75,578 $69,702 2,878 2,153 2,619 3, % 7.8% 6.3% 5.0% 7,502 5,645 6,766 8,181 4,111 3,786 3,166 3, ,260 1,563 1,978 1,653 1,756 * The peer mean is the average across the six counties identified as closely resembling Sonoma in terms of size and property roll composition. The comparable mean is the average across the entire benchmark evaluation group of 27 counties. The high performing mean is the average across the seven counties with the highest overall scores in the eight high performance indicators. 13 Key Findings For the budget and roll year: Sonoma s general efficiency with its budget dollars, and the return on those budget dollars, was in-line with other counties Overall, Sonoma appeared to be staffed comparably to most other counties Metrics related to relative staffing levels suggested Sonoma might be relatively heavily staffed in some sections, and relatively lightly staffed in other sections Several counties demonstrated particularly high levels of efficiency, suggesting that there are opportunities for Sonoma to make changes to operate at a best practices level Sonoma s percentage of management staff was relatively low compared to other counties Of all evaluated counties, Sonoma has the third highest cost per employee. Preliminary investigation suggests that cost of living and staff mix may not entirely explain the relatively high cost; additional analysis would be required to draw conclusions on the appropriateness of employee compensation.

14 Analysis indicates that Sonoma s back-fill of PTAP funding levels through the year was consistent with other counties % C h an g e in H ead count from '04-'05 to '06-'07 25% 20% 15% 10% 5% 0% 0% 5% 10% 15% 20% 25% -5% -10% -15% Sonoma % of Employee Costs Funded by PTAP in '04 - ' 05 Key Findings* In 04 05, PTAP funded 16% of Sonoma s total employee costs Upon PTAP expiration, all evaluated counties absorbed at least part of the PTAP related headcount through Overall, 63% of counties either maintained headcount at PTAP levels or increased beyond that through 06 07; however, all high performing counties in the state maintained or reduced headcount Sonoma s reduction of 6% (4.6 FTEs) of its budgeted headcount since ranks as the 3 rd largest percentage reduction across the 22 counties, suggesting that Sonoma has received relatively less General Fund support to back-fill PTAP staffing levels than other counties Sonoma High Performing Counties Peer Counties Other Counties * Note: The analysis of staffing levels includes 22 counties that are comparable to Sonoma and no longer report state funding. The data is based on the California Board of Equalization s budget year Budgets, Workloads, and Assessment Appeals Activities report, and includes budgeted permanent and temporary positions Benchmark findings and an analysis of PTAP back-fill suggest that Sonoma s staffing levels through were consistent with other counties and the workload at the time 14

15 Contents Executive Summary 2 Summary of Findings 7 Overview of Project Approach 7 Summary of Benchmark Analysis and PTAP Findings 10 Summary of Process and Best Management Practice Evaluation 15 Summary of Recommendations 20 Summary of Cost-Benefit Analysis 25 Summary of Recommendations for Future Evaluation 32 Appendix 34 Additional Detail for Benchmark Analysis and Performance Evaluation 34 Additional Detail for Cost-Benefit Analysis 53 15

16 In addition to the elimination of PTAP funding, changing market conditions and declining budgets have introduced a set of new challenges for all counties New Challenges Declining Market Values and Growth in Prop 8 Requests Increasing Appeals and Tax Payer Demands Increasing Foreclosures and More Complex Workload Increasing Budget Pressure and Hiring Restrictions Impacts Workload Prop 8 requests for temporary reductions in value have increased from 270 in to 20,000 in The number of appeals filed has almost tripled since 06-07; appraisers spend an increasing amount of time resolving and preparing for appeals Work Complexity Foreclosures now account for over 50% of total sales, making it more difficult to find comparable sales Overall, the rise in nonmarket transfers has increased the complexity of appraisal activities Staffing Levels Due to recent county budget constraints, the office currently has 8.65 open positions that have not been filled due to hiring restrictions, although partially offset by extra help 16

17 To find ways of managing these new challenges, Archstone performed an analysis of Sonoma s current processes, and conducted interviews with high performing counties to identify leading practices 1 High opportunity workflows / processes were analyzed to identify potential efficiency improvements 2 Interviews with three high performing counties were conducted to identify Best Management Practices for the Assessor s Office 17

18 Through working sessions with office staff, eight high opportunity processes were analyzed for potential efficiency gains High opportunity processes were selected based on a number of criteria: high number of hand-offs; high impact on the organization; limited use of technology; and limited number of complex exception conditions High Opportunity Processes Audits Workload Management Real Property Value Entry Property Characteristics Entry Change in Ownership Appraisals (Sales Comp Process & Automated Appraisal) Prop 8 Workload Management IT Project Prioritization and Issue Escalation Workload Management Customer Service Standards Process Analysis Approach High opportunity workflows were evaluated in greater detail, and key process elements documented for each: Process description Key inputs / outputs Key policy points / issues Analysis focused on common causes of process inefficiency, including: Process and data entry inconsistency Duplication of effort in documentation and data entry Limited use of information technology tools and process automation Lack of formal guidelines / standards for key activities Lack of performance metrics Integrity of process documentation 18

19 Interviews revealed that high performing counties have taken steps to improve overall efficiency by standardizing processes and defining time guidelines for key activities In the past, Sonoma has taken a highly individualized approach to taxpayer service and valuation activities; some efficiency improvements would shift Sonoma s position, and may have implications to levels of service provided Highly Individualized Degree of Standardization Across Appraisal and Customer Service Activities Highly Standardized Sonoma s Traditional Position Representative of Interviewed County s Position Taxpayer Service Most taxpayer inquiries are handled in person or over the phone The amount of time spent resolving an inquiry is determined on a case-by-case basis, and at the discretion of the staff member involved Most taxpayer inquiries are handled through and automated call distributors Established time guidelines limit the amount of time staff members spend resolving taxpayer inquiries Valuation Activities 19 Limited use of automated Mass Appraisal systems Lower ratio of support staff to appraisers Appraisers determine how much time to spend valuing a property on a case-by-case basis Emphasis on getting it right the first time, and minimizing work on the backend through appeals Use of automated Mass Appraisal systems for routine valuations Higher ratio of support staff to appraisers Established time guidelines limit the amount of time spent on more simple appraisals Willingness to accept a higher number of errors to be resolved through appeal

20 Contents Executive Summary 2 Summary of Findings 7 Overview of Project Approach 7 Summary of Benchmark Analysis and PTAP Findings 10 Summary of Process and Best Management Practice Evaluation 15 Summary of Recommendations 20 Summary of Cost-Benefit Analysis 25 Summary of Recommendations for Future Evaluation 32 Appendix 34 Additional Detail for Benchmark Analysis and Performance Evaluation 34 Additional Detail for Cost-Benefit Analysis 53 20

21 A number of recommendations to improve overall efficiency were developed based on findings from the analysis of high opportunity processes and high performing county interviews Recommendations fall into three broad categories; only the two technology recommendations are mutually exclusive options Technology Process and Organization Recommendation Implement a 3rd Party Computer Aided Mass-Appraisal (CAMA) System; or: Optimize Existing Valuation and Sales Comps Tools Implement Tactical Operational Improvements Across All Sections Improve IT Support and Management Capabilities Transfer Appraisal Support Tasks to Appraiser Aides Re-Implement Direct Enrollment Program Streamline Business Audits Processes Implement Detailed Production Tracking Policy Streamline Appeals Process and Pre-Schedule Hearings A summary of each recommendation is found on the following pages 21

22 Summary of Recommendations: Technology Recommendation Implement a 3 rd Party Computer Mass-Appraisal (CAMA) System Implement a computer assisted mass-appraisal system that: Increases the number of appraisals that can be automatically uploaded into the system with little or no manual review, while providing sufficient evidence to support valuation in case of appeal Improves the efficiency of transactions that require manual appraisal review by improving access to potential comparable sales Improves access to, and quality of, data on property characteristics and sales adjustment factors Improves visibility into property roll composition and market trends Optimize Existing Valuation and Sales Comp Tools Revise existing IT tools to automate routine activities involved in the appraisal process, including: Selection of comparable sales Calculation of differences between subject property and comparable property characteristics (e.g., square footage) Application of adjustment factors to differences in property characteristics (e.g., $120 / sq. ft.) Entry of values and property characteristics to the primary system of record Impacts: Reduced time spent on documentation and data entry for routine transactions Improved consistency in selecting comparable sales Reduced reliance on internally developed IT tools and databases Reduced time spent on documentation and data entry Reduced appraiser time spent on routine transactions Improved consistency in selecting comparable sales Improved ability to efficiently and accurately update property characteristic information during routine appraisal processes 22

23 Summary of Recommendations: Process and Organization Recommendation Implement Tactical Operational Improvements Across All Sections Implement specific changes to a number of reviewed processes to Improve overall workflow, including: Elimination of redundant activities Reduction in number of hand-offs Centralization of critical data entry activities Improving process documentation Improve IT Support and Management Capabilities Retain additional FTE to provide support in maintaining IT tools and managing IT processes Develop IT lifecycle processes for managing IT projects Transfer Real Property Appraisal Support Tasks to Appraiser Aides Transfer non-valuation activities to support staff (e.g., drawing, field visits, photo maintenance, file preparation) Re-Implement Direct Enrollment Program Re-implement program that automatically enrolls the sales price of a property according to a defined set of criteria Streamline Audits Process Use audit sampling / testing methodology, and establish hourly targets for audit completion based on complexity Implement Detailed Production Tracking Establish production and time guidelines for key activities within each section Use production reports to manage changes in individual and section output and run-rates Impacts: Standardization of key documentation and system data entry activities Centralization and standardization of information required for customer service in one system of record Increased ability to monitor compliance with key processes Increased resource time spent on core activities Reduced reliance on a single resource for internal IT tools Improved resolution of user issues Improved identification of IT opportunities Increased speed in delivering critical IT projects Reduced time spent by expensive resources on routine transactions Increased focus of appraisers on exception transactions and challenging valuations Reduced auditor time spent per audit Improved ability to complete mandatory workload Improved visibility into individual and section performance Improved visibility into impacts of changing external conditions, and process, technology, and policy changes Improved ability to identify root causes of inefficiencies 23

24 Summary of Recommendations: Policy Recommendation Streamline Appeals Process and Pre-Schedule Hearings Establish clear standards and time guidelines for appeals preparation Schedule appeal hearings for real property and business property prior to taxpayer contact, and only review appeals that are confirmed by the taxpayer (likely requires a new, or amended local Board rule) Impacts: Reduced overall time spent on appeals preparation Reduced time spent preparing for appeals from taxpayers that are not likely to complete the appeals process Potentially lengthy process to establish new local board rule Recommendations require a countywide evaluation of key policy changes and tradeoffs 24

25 Contents Executive Summary 2 Summary of Findings 7 Overview of Project Approach 7 Summary of Benchmark Analysis and PTAP Findings 10 Summary of Process and Best Management Practice Evaluation 15 Summary of Recommendations 20 Summary of Cost-Benefit Analysis 25 Summary of Recommendations for Future Evaluation 18 Appendix 30 Additional Detail for Benchmark Analysis and Performance Evaluation 30 Additional Detail for Cost-Benefit Analysis 53 25

26 Recommendations were developed on a baseline of operating headcount, and existing work structure and processes at the time of analysis Role Budgeted Positions* Unfilled Positions as of 12/1/08 Extra Help as of 12/1/08** Baseline Operating Headcount as of 12/1/08 Assessor / Other Managers Real Property Appraisers Appraisal Aides Business Property Auditor-Appraisers Mapping Support Supervisors Assessment Process Specialists Assessment Clerks IT Total of All Roles * Does not include budgeted overtime ** Extra help numbers are approximate based on the typical number of hours worked per week 26

27 Implementing the identified recommendations provide opportunities to operate with fewer resources; benefits are most significant when paired with a CAMA system Role Assessor / Other Managers Real Property Appraisers Baseline Operating Headcount Impact of Efficiency Improvements with CAMA 1 Incremental Impact Incremental Impact Total Impact in Appraisal Aides Business Property Auditor-Appraisers Mapping Support Supervisors Assessment Process Specialists Assessment Clerks IT Total of All Roles Total Dollar Savings 4,5 $392,692 $517,637 $910, Efficiency improvements without CAMA equal FTEs ($613,434); see appendix for a complete breakdown 2. Without instituting the appeals scheduling recommendation, the potential reduction in real property appraisers reduces by 0.5 FTE 3. Headcount reflects the time allocation of FTEs, as opposed to their budget allocation across divisions (e.g., Clerk, Recorder, Assessor offices) 4. Dollar savings is based on salary and benefits costs by role from the budget year 5. Values reflect total savings for the and budget years, and the cumulative savings in Key Observations Impacts to staffing levels assume that the Assessor s Office has the ability to freely adjust headcount within this timeline; it may be preferable for the county to achieve targeted reductions over time The reduction in real property appraisers is primarily driven by four major recommendations: Re-implement direct enrollment (-1) Transfer real property appraisal support tasks to appraisal aides (-4) Implement 3rd party CAMA system (-1) Streamline appeals (-.75) Implementing a CAMA system maximizes the number of nonvaluation activities transferred to appraisal aides Reductions in other roles are realized through implementation of various other recommendations Without CAMA, headcount could be reduced by a total of 2.75 FTEs by the 10 11, for a total two year savings of $613,434; see Appendix for additional detail

28 The CAMA system is the only recommendation that includes an upfront cost to the county, but would likely result in significant cost-savings over time A directional Cost-Benefit analysis was developed to demonstrate the value of the CAMA system; estimates suggest that even in a high-cost scenario, breakeven would occur in the second year One-Time Costs 1 Estimate Range: CAMA Software Purchase $150,000 $350,000 CAMA Implementation Services $50,000 Infrastructure Purchase $10,000 '09-'10 '10-'11 '11-'12 Low High Low High Low High Recurring Costs Software Maintenance Fee $15,000 $90,000 $15,000 $90,000 Infrastructure Maintenance $1,000 $1,000 Resource Savings Resource Cost Savings 2 $224,100 $224,100 $297,899 $297,899 $309,815 $309,815 Total Cost $150,000 $410,000 $15,000 $91,000 $15,000 $91,000 Total Savings $224,100 $224,100 $297,899 $297,899 $309,815 $309,815 Net Savings (Savings - Cost) $133,713 -$185,900 $282,899 $206,899 $294,815 $218,815 Cumulative Net Savings $74,100 -$185,900 $356,999 $20,999 $651,813 $239, Note: The costs and benefits are estimates based on an initial review of two potential CAMA packages. All costs and benefits will have to be evaluated as part of an RFP and software selection process. 2. Resource Cost Savings is based on an estimated wage savings of 1 Appraiser FTE,.5 Process Specialist FTE, and.5 IT Support FTE directly attributed to efficiency gains for CAMA, and the additional savings associated with transferring an additional 2 (in addition to the two defined in the non-cama scenario) Appraiser FTEs to 2 Appraiser Aide FTEs beginning in the second year 28

29 Because a baseline of 69 was used to identify new efficiencies, the 5 vacancies not back-filled by extra help could be eliminated from the budget with limited impact to the organization Role Budgeted Headcount 1 Baseline Operating Headcount Assessor / Other Managers Real Property Appraisers Impact of Eliminating Open Positions Not Currently Back-filled by Extra Help 2 Incremental Incremental Impact Impact Total Impact in Appraisal Aides Business Property Auditor-Appraisers Mapping Support Supervisors Assessment Process Specialists Assessment Clerks IT Total of All Roles Total Dollar Savings 4,5 $495,297 $520,061 $1,015, Budgeted headcount does not include budgeted overtime 2. Impacts are based on estimated wage rates in and Note: Based on the recommendations, 0.5 of an IT resource is added that offsets part of the shown above for a total net change of FTEs from currently budgeted IT resources 4. Dollar savings is based on salary and benefits costs by role from the budget year 5. Values reflect total savings for the and budget years, and the cumulative savings in

30 Summary of Savings Opportunities (with CAMA) Savings Year 3+ 1 Net Savings Related to Elimination of Open Positions not Currently Back-Filled by Extra Help Net Savings Related to Recommendations Resource Savings Related to Recommendations Costs Related to CAMA 2 Costs Related to Temporary Back-Fill and Extra Help to Reduce Transition Risk $495,297 $520,061 $540,864 $112,692 $392,692 -$280,000 3 $464,637 $517,637 -$53,000 $485,343 -$266,397 -$207,540 $0 $538,343 -$53,000 Total Savings $341,592 $777,158 $1,026,207 Cumulative Net Savings $341,592 $1,118,750 $2,144,957+ Considerations for Total Savings Opportunity Implementing rapid changes to resource levels and adopting new technology often result in changes to process, culture, and organization These changes may present a transition risk, and could impact the Office s ability to effectively manage its current workload To mitigate these transition risks, it is recommended that the budget include some offset to savings in the form of funding for temporary back-fill or extra help This funding for temporary back-fill or extra help could be used to provide additional support during peak work-periods, or to accommodate some unanticipated shifts in workload The recommendation for this temporary funding is that it be set at 30% of the estimated resource savings in Year 1, 20% of the estimated resource savings in Year 2, and expiring by Year 3 1. Annual numbers going forward are based on estimated wage rates 2. Costs are an average of the high and low scenarios estimated in the initial review of potential CAMA packages. All costs and benefits will have to be evaluated as part of an RFP and software selection process. 3. Includes the total one-time costs associated with software purchase and installation 30

31 Successfully implementing the identified recommendations, and fully realizing the potential efficiencies, will require increased process structure and careful workload management Key Considerations for Potential Efficiency Gains The evaluation assumes that current workload levels and workload mix will not change significantly, nor will the processes used to transact that workload The efficiency benefits and costs of implementing a CAMA system are directional estimates; assumptions need to be reevaluated after an RFP and selection of a specific software solution Efficiency gains do not include a number of potential soft savings associated with better visibility into individual and section performance, but that could be significant Impacts to staffing levels assume that the Assessor s Office has the ability to freely adjust headcount within this timeline Key Implementation and Management Considerations Establishing, and managing to, specific target dates for key implementation activities will help ensure benefits are realized in a reasonable timeframe Ensuring adoption of new processes, guidelines, and technology by staff is critical, and will require careful oversight of process compliance by Supervisors Detailed workload tracking and reporting will help the Office monitor its efficiency gains, and make adjustments where required Maintaining some level of potential extra-help funding for each eliminated budgeted position will help minimize risk 31

32 Contents Executive Summary 2 Summary of Findings 7 Overview of Project Approach 7 Summary of Benchmark Analysis and PTAP Findings 10 Summary of Process and Best Management Practice Evaluation 15 Summary of Recommendations 20 Summary of Cost-Benefit Analysis 25 Summary of Recommendations for Future Evaluation 32 Appendix 34 Additional Detail for Benchmark Analysis and Performance Evaluation 34 Additional Detail for Cost-Benefit Analysis 53 32

33 In the long-term, as the market recovers and budgets grow, a number of additional opportunities to improve overall Office efficiency and capabilities should be evaluated Technology Recommendation To support office-wide goal of becoming a paperless environment, implement an integrated document management and workflow system, based on a detailed office-wide requirements definition process Integrate mapping technology and processes with GIS; maintain maps in a single location Implement additional CAMA capabilities, including new construction appraisal and commercial valuation in order to realize additional efficiencies in real property appraisal Process and Organization Add an additional manager to provide additional oversight of Standards and Appeals Add additional clerical support for discovery activities to capture additional value to the unsecured property roll Increase resources contributing to map digitization in order to speed completion As property values begin to increase and previous Prop 8 adjustments are corrected upward, re-evaluate real property staffing levels to ensure timely and accurate capture of these increasing values to the roll 33

34 Contents Executive Summary 2 Summary of Findings 7 Overview of Project Approach 7 Summary of Benchmark Analysis and PTAP Findings 10 Summary of Process and Best Management Practice Evaluation 15 Summary of Recommendations 20 Summary of Cost-Benefit Analysis 25 Summary of Recommendations for Future Evaluation 32 Appendix 34 Additional Detail for Benchmark Analysis and Performance Evaluation 34 Additional Detail for Cost-Benefit Analysis 53 34

35 Benchmark Analysis Approach 1 2 Calculate County Assessor Benchmarks Identify Comparison Groups Calculated 125+ metrics for all California counties based on the BOE s Budgets, Workloads, and Assessment Appeals Activities report data for the roll year 3 4 Identify High Performing Counties Identified a Benchmark Evaluation Group of 27 counties, and a Peer Group of 6 based on relative property roll size as compared to Sonoma Evaluate Sonoma s Performance Against Benchmarks Counties Identified 8 metrics as contributing indicators of high performance, and used Archstone s Benchmark Analysis Tool to rank county performance 35 Compared Sonoma s performance against 50+ key benchmarks, and identified 28 metrics for detailed analysis and comparison

36 Benchmark Analysis Approach Step 1- Calculate County Assessor Benchmarks Benchmarks were calculated for all 58 California Counties based on the California Board of Equalization s Budgets, Workloads, and Assessment Appeals Activities report Budgets, Workloads, and Assessment Appeals Reports from the Board of Equalization 125+ metrics for every county Data for the benchmark analysis was compiled from the three most recent available years (FY 04-05, FY 05-06, FY 06-07) of the California Board of Equalization s Budgets, Workloads, and Assessment Appeals Activities report More than 125 metrics were calculated to permit comparisons across counties Most benchmarks and comparative analysis are based on FY data due to the significant differences in overall funding levels due to PTAP before that time 36

37 Benchmark Analysis Approach Step 2- Identify Comparison Groups A Benchmark Evaluation Group of 27 counties was identified based on roll characteristics; two sub-groups provide additional means of comparison Benchmark Evaluation Group Peer Group High Performing Group Description Counties of a relevant size and Counties from the Benchmark The highest performing counties property roll composition that Evaluation Group of a particularly from the Benchmark Evaluation allow for meaningful comparisons close size and property roll Group identified through the high of key benchmarks composition to Sonoma performing county analysis Criteria Property roll > 100,000 units Property roll: 110, ,000 Highest overall score in 8 high Sonoma Property Roll = Sonoma = 212,948 performance indicators across 212,948 % Unsecured Roll: 10% - 20% three categories: Sonoma = 15% Budget efficiency % Ag / Rural Property: 2% - 10% Sonoma = 5% Workload completion Timeliness and accuracy Number of Counties Statistics Population 27 (including Sonoma) ,000 3,150, , , ,000 3,150,000 Property Roll (#) 107,000 1,182, , , ,000 1,200,000 Property Roll ($) $14 billion $382 billion $23.8 billion - $124 billion $25 billion - $382 billion Total Staff Total Gross Budget $3.2 million - $32.5 million $5.2 million - $10.5 million $4 million - $32.5 million 37

38 Benchmark Analysis Approach Step 2- Identify Comparison Groups Benchmark Evaluation Group and Peer Group counties: County Population Property Roll (#) Property Roll ($M) Total Staff Total Gross Budget Alameda 1,543, ,048 $181, $18,977,131 Butte 220, ,247 $16, $3,831,086 Contra Costa 1,051, ,337 $146, $16,164,868 El Dorado 179, ,628 $25, $4,152,164 Fresno 931, ,531 $55, $11,701,623 Kern 817, ,180 $71, $9,303,518 Marin 257, ,525 $49, $6,828,542 Monterey 428, ,854 $47, $4,163,045 Orange 3,121,251 1,077, , $32,557,011 Placer 333, ,441 $53, $7,434,935 Riverside 2,088, ,214 $205, $20,485,687 Sacramento 1,424, ,269 $123, $18,041,770 San Bernardino 2,055, ,401 $154, $20,006,661 San Diego 3,146,274 1,181, , $29,505,758 San Francisco 824, ,576 $120, $10,536,191 County Population Property Roll (#) Property Roll ($M) Total Staff Total Gross Budget San Joaquin 685, ,365 $59, $9,006,321 San Luis Obispo 269, ,472 $37, $7,623,464 San Mateo 739, ,677 $124, $9,263,782 Santa Barbara 428, ,259 $54, $7,222,537 Santa Clara 1,837, ,579 $265, $24,100,104 Santa Cruz 266, ,761 $31, $3,152,977 Shasta 182, ,465 $14, $3,520,812 Solano 426, ,903 $42, $5,167,988 Sonoma 484, ,948 $63, $8,111,231 Stanislaus 525, ,478 $39, $5,540,587 Tulare 435, ,122 $23, $5,194,496 Ventura 831, ,283 $97, $13,154,594 Indicates Peer Group county 38

39 Benchmark Analysis Approach Step 3- Identify High Performing Counties Eight benchmark metrics in three categories were selected as indicators of high performance amongst Assessors Offices: Category High Performance Indicator Rationale Budget and Productivity Workload Completion Quality and Timeliness Gross Budget / Total Property Roll (#) Property Roll (#) / Total Staff Weighted Real Property Assessment Workload / Real Property Appraisers Weighted Business Property Assessment Workload / Business Property Auditor-Appraisers Mandatory Audits Completed and Waived / Mandatory Audit Workload Total # of Appeals Resolved / Total # of Appeals No. of Changed Assessments due to Appeal / Total Property Roll (#) No. of Real Property Roll Corrections / No. of Real Property Appraisals Measures the cost of services per county property that has to be absorbed by County and / or State funding Measures the office s overall efficiency of staffing levels Measures average productivity of real property appraisal staff Measures average productivity of business property appraisal staff Measures the office s ability to meet state obligations for audit workload and avoid a backlog Measures the office s success in responding to its public obligations in a timely manner and avoid a backlog Measures the number of assessments changed due to appeals Measures the frequency of corrections to the roll in real property assessment activities 39

40 Benchmark Analysis Approach Step 3- Identify High Performing Counties Each county was ranked based on the High Performance Indicators in order to identify high performing counties A percentile rank was calculated for each High Performance Indicator for each county in the Benchmark Assessment Group An average High Performance score was calculated for each county Counties were ranked based on their High Performance Score, and the top-25% identified as High Performers Counties Counties Counties Illustrative Data Illustrative Data Illustrative Data 40

41 Benchmark Analysis Approach Step 4- Evaluate Sonoma s Performance Against Benchmarks 28 metrics across four categories were selected for detailed analysis and for comparison across counties Budget and Cost Resources and Staffing Workload and Efficiency Quality and Timeliness Budget / Property Roll (#) Tax Base / Budget Dollars Net Budget / Gross Budget Cost Per Employee Cost of Base Salaries and Wages Per Employee Cost of Benefits Per Employee Property & Supplemental Tax Administration Fees / Property Roll (#) Map Sales, Property Characteristics Fees, Copies, & Info / Property Roll (#) Property Roll (#) / Staff Secured Roll / Real Property Appraisers Unsecured Roll / Business Property Appraisers % Assessors and Other Managers % Real Property Appraisers % Business Property Auditor-Appraisers % Mapping / Drafting % Computer Analysts and Other Tech % Clerical % Temporary Staff % Support Staff % Assessors, Managers, Mapping, and Appraisers Efficiency metrics of interest selected for inclusion in final report % Appeals Resolved % Audits Completed Mapping Workload / Mapping Staff Real Property Productivity Indicator Business Property Productivity Indicator Changed Assessments due to Appeal Changed Assessments due to Appeal (including stipulations) Occurrence of Real Property Roll Corrections 41

42 Benchmark Analysis Approach Step 4- Evaluate Sonoma s Performance Against Benchmarks Sonoma s performance for each of 28 benchmarks was analyzed in detail, and compared to the Evaluation, the Peer, and the High Performance groups Graph plots Sonoma s metric value, and the value for each of the other Evaluation Group counties Each benchmark metric is defined, and the calculation described Metric performance is plotted against property roll size to illustrate potential relationships to county size Sonoma s metric value and percentile rank is calculated The mean for the Evaluation, Peer, and High Performance groups are plotted for comparison Key observations are made regarding Sonoma s performance relative to other counties 42

43 Benchmark Analysis Considerations and Observations The BOE Budgets, Workloads, and Assessment Appeals Activities source data may contain some variations in reporting standards that will affect a specific metric for a specific county; analysis has identified and corrected significant discrepancies There are a number of reasons why a county may perform well or poorly in a given metric; performance depends on a county s organization, processes, technology, and overall property roll structure Significant weight should not be given to any one metric; the benchmark analysis is meant to identify overall patterns in productivity, efficiency, and resource levels No one county performs uniformly well across all metrics, with most counties demonstrating areas of relative strength and weakness The largest counties appear to benefit from some economies of scale, and tend to demonstrate higher scores on some productivity indicators There are small and medium sized counties that also score highly in overall productivity There is a wide distribution among Sonoma s peer group counties 43

44 Budget and Cost: Budget / Property Roll (#) Sonoma s budget per property is higher than the overall mean, but lower than the peer mean. Sonoma s spending is not out of line, but there may be opportunity for improvement Better Score Budget / Property Roll $65 $60 $55 $50 $45 $40 $35 $30 $25 $20 Sonoma 0 200, , , ,000 1,000,000 1,200,000 1,400,000 Property Roll (#) $39.80 $36.12 $28.34 Sonoma igh Performing Counties Peer Counties Other Counties High Performing Mean Peer Mean tal Group Mean H To * No te: Findings were based on the California Board of Equalization s data from the budget year 44 Calculation Total Budget / Property Roll (#) Definition Measures the average cost of services per parcel / unit Sonoma Value: $38.09 Percentile: 42% Observations Sonoma s cost of services per parcel / unit is more expensive than the mean Sonoma ranks in the middle of its peer group The largest counties tend to rank higher than smaller ones The mid-sized counties tend to rank the lowest

45 Budget and Cost: Tax Base Per Budget Dollar The value of Sonoma s tax base per budget dollar is slightly higher than the mean and better than most of its peers, suggesting the overall return to the county is competitive Better Score Total Property Roll ($) / Total Budget 45 $15,000 $14,000 $13,000 $12,000 $11,000 $10,000 $9,000 $8,000 $7,000 $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 Sonoma $ , , , ,000 1,000,000 1,200,000 1,400,000 Property Roll (#) 8,489 7,328 7,120 Sonoma igh Performing Counties Peer Counties Other Counties High Performing Mean Peer Mean tal Group Mean H To ranks strong * No te: Findings were based on the California Board of Equalization s data from the budget year Calculation Total Property Roll ($) / Total Budget Definition Measures the number of tax base dollars from every invested budget dollar Sonoma Value: 7,783 Percentile: 58% Observations This metric measures the potential return on budget dollars from property taxes Counties with higher property values have an advantage in this metric, potentially off-setting some productivity inefficiencies Sonoma is in line with the high performing mean, and generally