May 6, 1999
The Honorable Board of Supervisors
County of Los Angeles
383 Kenneth Hahn Hall of Administration
500 West Temple Street
Los Angeles, California 90012
Dear Supervisors:
Approve appropriation adjustment in the amount of $2,500,000 to resolve our estimated appropriation shortfall for 1998-99 to be funded with increased recording fee revenues resulting from the Countywide economic growth in the real estate market.
The Register-Recorder/County Clerk is requesting Board approval for an appropriation adjustment in the amount of $2,500,000 to resolve our estimated appropriation shortfall. This shortfall is a result of: 1) the surge in economic growth in the real estate market that resulted in utilization of additional overtime due to workload increases and critical staffing shortages in our Document Recording Division; and 2) unbudgeted service and supply requirements necessary for the Department to continue meeting operational responsibilities.
One of the critical responsibilities of the Department is the examination of documents submitted for recording to determine if they are acceptable, complete and in compliance with statutory recording laws, and the collection of appropriate fees. The document examining function is vital to the real estate, legal and banking community and general economy of the County. In the past, the volume of property documents submitted for recording averaged approximately 8,000 per day. However, as a result of the upturn in the real estate market the number of property document recordings has increased to an average of 10,000 per day and as many as 15,000 on peak days each month.
Board of Supervisors
May 6, 1999
Page 2
In addition to this over the counter workload, the volume of mail received daily has also increased. The time-consuming examination and recording process of thousands of letters and legal documents arriving each day, coupled with insufficient staff in this area, has resulted in an eight to twelve week backlog for documents received through the mail to be recorded and/or returned for recording deficiencies.
As a result of this workload increase and our staffing shortages, a substantial amount of unbudgeted overtime has been utilized in an attempt to keep up with the workload demands. This has caused the Department to overspend our Salaries and Employee Benefits budget by approximately $900,000. After many months of recruiting for qualified employees to hire as Property Conveyance Document Examiners, we lowered the entry-level requirements and hired seven new employees last month. These employees will require a minimum of three months training prior to assuming duties in complex document examination. The Department has also recently been granted immediate hiring authority by the Chief Administrative Officer (CAO) for ten additional Property Conveyance Document Examiners and we are working with the CAO to include additional permanent budgeted items in our 1999-2000 Adopted Budget.
The Department is also estimating an overexpenditure of $1,600,000 in Services and Supplies attributed to the following factors that were not budgeted in 1998-99: 1) increased utilization of Recorder forms, supplies and postage directly attributed to the surge in the real estate market; 2) various service requirements from the Internal Services Department related to information technology, network infrastructure and telephone utilities; 3) enhanced multilingual sample ballot requirements; 4) increased security needs due to the opening of additional branch offices; and 5) a new telephone system to increase phone services to the public during the elections.
The requested appropriation adjustment is necessary to increase Salaries and Employee Benefits by $900,000 to cover overtime expenditures and to increase Services and Supplies by $1,600,000 to ensure that the Department meets its current expenditure and contractual obligations.
Financing for the requested appropriation adjustment is provided by increased recording fee revenues resulting from the Countywide economic growth in the real estate market. This requested action will not increase net County cost.
Board of Supervisors
May 6, 1999
Page 3
The requested appropriation adjustment does not impact current services.
Respectfully submitted,
CONNY B. McCORMACK
Registrar-Recorder/County Clerk
Attachment
c: Chief Administrative Officer
Executive Officer, Board of Supervisors
Auditor-Controller
(C:\1998-99 EST-ACTUAL\BA LETTER)