AGENDA STAFF REPORT

Agenda Item AGENDA STAFF REPORT ASR Control 19-000222
MEETING DATE:	12/08/20
legal entity taking action:	Board of Supervisors
board of supervisors district(s):	All Districts
SUBMITTING Agency/Department:	District Attorney (Approved)
Department contact person(s):	Shawn Nelson (714) 347-8402
	Glenn Robison (714) 347-8778

Subject: Approval of OC Auto Theft Task Force Vehicle Registration Fee Increase

ceo CONCUR

County Counsel Review

Clerk of the Board

Concur

Approved Resolution to Form

Public Hearing

3 Votes Board Majority

Budgeted: No

Current Year Cost: No

Annual Cost: See Financial Impact Section

Staffing Impact:

# of Positions:

Sole Source: N/A

Current Fiscal Year Revenue: See Financial Impact Section

Funding Source: Vehicle Registration Fees (VC 9250.14):100%	County Audit in last 3 years: No

Prior Board Action: 5/25/2010 #58, 4/6/1993 #43

RECOMMENDED ACTION(S):

1.	Find that the proposed fee is Statutorily Exempt from the provisions of the California Environmental Quality Act (CEQA) pursuant to Section 21080(b)(8) of the Public Resources Code and Section 157273 of the CEQA Guidelines as the establishment of modification of rates, fees and charges, which are for the purpose of meeting operating expenses, including employee wage rates and fringe benefits, purchasing or leasing supplies, equipment or materials as set forth herein.
2.	Conduct a Public Hearing.
3.	Adopt a Resolution that:
	a.	Approves an increase in the vehicle registration fees collected by the California Department of Motor Vehicles from $1 to $2 for the base registration fee, and from $3 to $4 for commercial vehicle registration in order to enhance funding for the Orange County Auto Theft Task Force pursuant to California Vehicle Code Section(§) 9250.14.
	b.	Finds that the proposed fee meets the requirement set forth in subdivisions (e)(2) and (e)(3) of Section 1 of Article XIII C of the California Constitution, and is therefore exempt from the definition of a tax as used therein.
	c.	Finds that the fee bears a fair or reasonable relationship to the payor’s burdens on, or benefits received from, the applicable governmental services and the revenue resulting from the fee established under the resolution will not exceed the estimated reasonable cost to provide these services.
	d.	Authorizes the District Attorney to submit the approved resolution to the California Department of Motor Vehicle to collect the additional fees on behalf of Orange County.

SUMMARY:

Approval of the revised fee will allow the District Attorney to increase the vehicle registration fee for base registration and commercial vehicles to adequately fund the Orange County Auto Theft Task Force to investigate, arrest and prosecute criminals responsible for auto thefts in Orange County.

BACKGROUND INFORMATION:

The Orange County Auto Theft Task Force (OCATT) is a functioning multi-jurisdictional law enforcement program funded by vehicle license registration fees that have not been increased for 27 years. In the last five years, OCATT has been directly responsible for 397 arrests and the recovery of 1,248 vehicles valued at $20,168,961.85. In addition, OCATT assisted allied agencies in making 257 more arrests and recovered 241 more vehicles valued at $4,252,894.08. As auto theft continues to be a major issue in Orange County, OCATT is in jeopardy of ceasing operations due to lack of funding.

The proposed vehicle license fee increase will align Orange County with the fees currently charged by Los Angeles, Riverside and San Bernardino Counties. Several local agencies have indicated a renewed interest in participating in OCATT pursuant to appropriate reimbursement. If approved, OCATT proposes to actively recruit personnel from currently non-participating agencies to increase OCATT’s full-time detectives/investigators from nine to 16. As recruitment efforts for additional detectives/investigators progress, additional office space will be needed at OCATT’s current facility. OCATT will also purchase equipment necessary to effectively identify professional auto thieves. An adequately funded County auto theft task force requires the necessary equipment and resources for both internal operations, as well as the ability to assist and supplement the efforts of Countywide allied agencies with local auto theft operations. Necessary equipment includes: license plate reader (LPR) trailers and LPR vehicles, surveillance vehicles, undercover communication equipment, handheld radios capable of interoperability throughout Southern California and the advanced computer technology to keep pace with the current trend of identity theft and fraudulent vehicle purchases. Thus far in 2020, 64 percent of the OCATT criminal filings involved fraud related criminal activity associated with auto theft. OCATT currently borrows outdated LPR equipment and computer resources from the Anaheim Police Department (APD). APD is the only law enforcement agency for all of Orange County that owns LPR trailers and equipment critical for proactive auto theft operations. OCATT should be the primary source of equipment and resource availability to the County law enforcement agencies who strive to combat and deter auto theft in Orange County. With the additional funding, OCATT would have the financial ability to procure the necessary equipment and provide resources to supplement County law enforcement agencies who lack the necessary funding.

According to the California Highway Patrol, the statewide vehicle theft coordinator, 7,289 vehicle thefts occurred in Orange County in 2019

Orange County

Vehicle Thefts

2015

2016

2017

2018

2019

2020

(Jan – Oct)

Stolen Vehicles

9,156

8,767

9,068

7,983

7,289

7,832

Stolen Daily

Vehicle thefts in Orange County during 2020 have increased by 29 percent when compared to the same period from January – October in 2019. The District Attorney has seen an increase of 30 percent in vehicle theft filings during the same time period. The new theft rate is 26 thefts per day, virtually 1 per hour. The increase of auto theft is directly affected by programs such as AB109, Early Release, Zero Dollar Bail and issues related to the COVID-19 pandemic.

Vehicle Theft Trends

As methods of investigation, detection and enforcement improve, so do the methods by which the professional auto thieves operate. The latest uptrend in auto theft is fraudulent vehicle purchases through identity theft. Recent studies indicate approximately 70 percent of all vehicle loans not paid may be due to fraud, which will impact auto lenders losing approximately $6 billion dollars in revenue. Professional auto thieves evolve their modus operandi to remain effective and efficient. Quite simply, auto fraud purchases are easier to complete, auto fraud suspects are less likely to get caught, difficult to detect and affords suspects more time to fraudulently sell the vehicle to unsuspecting purchasers or ship it overseas for sale.

The tedious and difficult task to detect auto theft by fraud, and rental car fraud, is a major concern for the OCATT, allied agencies and its stakeholders. The Orange County Auto Dealers Association, Automobile Club of Southern California and Orange County Business Council are cognizant of the financial impact these crimes can inflict on their memberships. In addition to the legal vehicle owners and insurance industry suffering major losses, the fraudulently obtained vehicles are also being used to facilitate other serious crimes and fund other major criminal activity.

Evidence to support the evolving uptrend of identity theft and fraudulent vehicle purchases in Orange County is apparent in the percentage of criminal cases filed by the District Attorney. In 2017, 42 percent of the cases filed by the District Attorney assigned to OCATT involved identity theft/fraudulent purchases. In 2018, 71 percent of those cases filed involved identity theft/fraudulent purchases and, in 2019, 65 percent of the cases filed involved identity theft/fraudulent purchases.

Other trends in auto theft are becoming more high-tech as electronic fobs replace physical keys and vehicle tracking systems become more prevalent. Grand theft auto is not just a solo activity; OCATT has uncovered more and more organized gangs of car thieves in recent years hitting dealerships around Southern California. Car cloning is one of the newest frauds where multiple cars of the same model are stolen and registered with a VIN number copied from a legitimate vehicle on a showroom floor. The stolen VIN number is then attached to the stolen vehicles and shipped to several other states. The FBI has indicated that car-cloning rings are operating in most major cities nationwide.

Vehicle Registration Fee Update

On January 12, 1993, the Board of Supervisors (Board) adopted Resolution 93-54, pursuant to California Vehicle Code (CVC) Section 9250.14, establishing a $1 fee to be charged on base vehicle registrations and an additional $2 fee for commercial vehicle registrations (for a total of $3) with Orange County addresses to fund the multi-jurisdictional vehicle theft task force. This revenue was directed toward the development, support and operation of the task force to deter, investigate and prosecute vehicle theft crimes. Furthermore, the Board authorized the District Attorney to work with county, cities, state and other participating agencies to develop an operational protocol.

On April 6, 1993, the Board authorized the County's participation in OCATT. The Board further authorized the District Attorney to approve and the Auditor-Controller to pay necessary and reasonable expenses for OCATT participants from county, cities, state and other agencies.

On May 25, 2010, the Board approved the Memorandum of Agreement (MOA) for OCATT for the period ending January 1, 2018, and authorized the District Attorney and the Sheriff to execute legally permissible amendments to the OCATT MOA, as long as such amendments did not materially alter or extend the obligations of both parties.

In 2013, AB 767 amended Section 9250.14 of the CVC and authorizes every county to increase the base vehicle fee from $1 to $2, and provides that the service fee on commercial motor vehicles shall increase from $3 to $4, upon adoption of a resolution by its board of supervisors, and requires the resolution to be submitted to the California Department of Motor Vehicles (DMV) at least six months prior to the operative date of the fee increase.

The vehicle registration fee to fund OCATT has not been increased in the 27-year history of the task force, despite substantial increases in salaries, benefits, facility leasing, vehicle rentals, equipment and other associated task force costs. With current staffing of nine detectives/investigators, one Deputy District Attorney, one Attorney Clerk, one Crime Analyst and one Accountant/Auditor, for FY 2019-20, approximately 85 percent of the OCATT budget is dedicated to salaries and benefits for assigned personnel.

OCATT pays 100 percent of salaries and benefits of participating agency personnel assigned to the task force with the exception of the California Highway Patrol (CHP) Lieutenant, two CHP investigators, a DMV investigator and a National Insurance Crime Bureau investigator. Only overtime for the aforementioned personnel is paid for by the OCATT with the exception of the CHP lieutenant, who does not earn overtime. Other participating agencies include police departments from Brea, Buena Park, Fullerton and La Habra, as well as the Orange County Sheriff’s Department.

Current financial projections indicate the depletion of OCATT reserve funds by the end of FY 2021-22. The requested fee will not only address short term funding concerns, but will provide sufficient funding to adequately staff the task force to meet current operational needs to remain effective in combating and deterring auto theft. The attached five-year projection (Attachment A) includes a table showing the revenue shortfall at the current level fee, and a table which assumes receipt of the increased funding and the addition of six to seven detectives/investigators from local agencies commencing in January 2022; one-time procurement of additional necessary equipment currently borrowed from a local agency; buildout of additional office space; additional rental vehicles; and the provision of an estimated 3 percent annual cost of living adjustment. A list of necessary equipment is provided in Attachment B.

The DMV imposes an administrative programming fee of approximately $30,000 for implementation of the additional CVC §9250.14 fee. The cost of the fee is incurred by OCATT when it is deducted from the first quarterly installment of funds issued by the DMV.

Upon approval from the Board for the registration fee increase and the six month notification requirement set by the DMV for administrative procedures and programming, the OCATT would begin to receive revenue from the additional funding in approximately six to eight months. With the additional funding authorized by CVC §9250.14, the OCATT budget would increase from approximately $3 million for FY 2020-21 to approximately $5.9 million.

Compliance with Proposition 26

The proposed fee does not fall within the definition of a tax under Proposition 26 because it is excepted by California Constitution Article XIII C, Section 1, Subdivision (e)(2) and (e)(3). Subdivision (e)(2) excepts from the definition of tax, “a charge imposed for a specific government service or product provided directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to the local government of providing the service or product.” Subdivision (e)(3) excepts from the definition of tax, “a charge imposed for the reasonable regulatory costs to a local government for issuing licenses and permits, performing investigations, inspections, and audits, enforcing agricultural marketing orders, and the administrative enforcement and adjudication thereof.” This exception applies because the vehicle registration fees allocated to the OCATT program qualifies as a regulatory fee for the deterrence, investigation and prosecution of vehicle theft crimes. The increased fees do not exceed the reasonable costs to the County for OCATT.

Counties with CVC Section 9250.14 Funding

Each of the major Southern California counties have instituted a task force dedicated to combating auto theft related crimes in their respective jurisdictions: Los Angeles, San Bernardino, Riverside, Orange and San Diego. As of December 1, 2020, the Los Angeles County Taskforce for Regional Autotheft Protection, San Bernardino County Auto Theft Task Force and the Riverside Autotheft Interdiction Detail of Riverside County have all been successful in obtaining approval for additional AB 767 funding. This has allowed the aforementioned task forces to increase personnel, deploy auto theft teams to cover all portions of their respective counties, procure necessary equipment and task force vehicles, as well as provide current auto theft related training for both task force personnel, local law enforcement agencies, as well as industry stakeholders.

Current Fees Charged by Southern California Counties:

County	Base Registration Fee	Commercial Registration Fee	Last Updated
Los Angeles	$2	$4	2016
Riverside	$2	$4	2018
San Bernardino	$2	$6	2016
Orange	$1	$3	1993
San Diego	$1	$3	1992
Proposed Orange County Fee	$2	$4

The San Diego County Regional Auto Theft Taskforce and OCATT are the only major Auto Theft Task Forces in Southern California who have not requested additional AB 767 funding. Behind Los Angeles County, San Diego County is second and Orange County is third in terms of most registered vehicles by county in the state.

FINANCIAL IMPACT:

The proposed fee increase will result in full cost recovery of the cost of OCATT. This revenue will be included in the District Attorney's FY 2021-22 Budget for Fund 122, Motor Vehicle Task Force and will be included in the budgeting process for future fiscal years.

STAFFING IMPACT:

N/A

ATTACHMENT(S):

Attachment A - Orange County Auto Theft Task Force 5 Year Revenue/Expense Projection
Attachment B - Orange County Auto Theft Task Force Equipment List
Attachment C - Vehicle Code Section 9250.14
Attachment D - Resolution 93-54
Attachment E - Proposed Resolution
Attachment F - Fee Checklist
Attachment G - Notice of Public Hearing
Attachment H - Public Resource Code 21080(b)(8)