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B. ALLOCATION OF RESOURCES 1. General Strategy Property taxes in California have evolved into an extremely complex system that requires experience and expertise to fully monitor. There are two broad categories of property (real and personal); three tax rolls (secured, unsecured and state assessed), and numerous peculiarities such as possessory interests, mines & mineral rights and the distribution of tax revenue from private aircraft. The revenues generated by the property tax system need to be distributed to a myriad of taxing entities including cities, counties, schools, special districts and redevelopment agencies both directly and as pooled allocations. The subtleties of the apportionment of revenues in Teeter or non -Teeter cities are often challenging and confusing. The Company's property tax information systems allow us to provide information and analysis from a city's property tax data set to city staff quickly and accurately. The Company's historical data (22 years in Orange County) provide critical data for trending, analysis and economic planning. We have developed reports that assist cities in better understanding the significance of the Proposition 8 reductions over the past several years and the overall impact of those declines and potential recovery patterns when the real estate environment improves. Our revenue modeling for General Fund and Successor Agencies give cities tools to better forecast revenue based on data collected from transfers of ownership, successful appeals and Prop. 8 reductions and how those elements fit together in the overall picture of revenue forecasting. With the adoption of S8 1096 in 2004, revenues formerly identified as Vehicle License Fees (VLF) is being paid through the County Educational Revenue Augmentation Fund (ERAF). The year-to-year growth of ERAF in lieu of VLF is now tied to gross property value growth between tax years. The monitoring of this revenue source for budget projections is now a feature of our property tax services. The City's role is to provide a map with street names delineating City/Successor Agency boundaries for use in auditing the secured property database and to confirm that suggested misallocations were within 0ty/SA boundaries. In addition, any City annexations which have been approved within the previous 2 fiscal years need to be reviewed to ensure that the county has correctly coded the parcels with City tax rate areas. Page 17