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B. ALLOCATION OF RESOURCES <br />1. General Strategy <br />Property taxes in California have evolved into an extremely complex system that requires <br />experience and expertise to fully monitor. There are two broad categories of property (real <br />and personal); three tax rolls (secured, unsecured and state assessed), and numerous <br />peculiarities such as possessory interests, mines & mineral rights and the distribution of tax <br />revenue from private aircraft. The revenues generated by the property tax system need to <br />be distributed to a myriad of taxing entities including cities, counties, schools, special <br />districts and redevelopment agencies both directly and as pooled allocations. The subtleties <br />of the apportionment of revenues in Teeter or non -Teeter cities are often challenging and <br />confusing. The Company's property tax information systems allow us to provide information <br />and analysis from a city's property tax data set to city staff quickly and accurately. <br />The Company's historical data (22 years in Orange County) provide critical data for trending, <br />analysis and economic planning. We have developed reports that assist cities in better <br />understanding the significance of the Proposition 8 reductions over the past several years <br />and the overall impact of those declines and potential recovery patterns when the real <br />estate environment improves. Our revenue modeling for General Fund and Successor <br />Agencies give cities tools to better forecast revenue based on data collected from transfers <br />of ownership, successful appeals and Prop. 8 reductions and how those elements fit <br />together in the overall picture of revenue forecasting. <br />With the adoption of SB 1096 in 2004, revenues formerly identified as Vehicle License Fees <br />(VLF) is being paid through the County Educational Revenue Augmentation Fund (ERAF). <br />The year-to-year growth of ERAF in lieu of VLF is now tied to gross property value growth <br />between tax years. The monitoring of this revenue source for budget projections is now a <br />feature of our property tax services. <br />The City's role is to provide a map with street names delineating City/Successor Agency <br />boundaries for use in auditing the secured property database and to confirm that suggested <br />misallocations were within City/SA boundaries. In addition, any City annexations which have <br />been approved within the previous 2 fiscal years need to be reviewed to ensure that the <br />county has correctly coded the parcels with City tax rate areas. <br />Page 17 <br />25B-33 <br />