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Electronic Real Estate Recording Task ForceMEETING MINUTES Minutes: 10 January 2002 As recorded by Beth McInerny Present: (Members) John Jones and Steve Rohlik (via conference call), David Arbeit, Angela Burrs, Jeff Carlson, Michael Cunniff, Paul Kiltinen, Leonard Peterson, Paul McGinley, David Claypool, Chuck Parsons, Larry Dalien, Don Goedken, Jeanine Barker, Dennis Unger, Marc Dierson, Chuck Hoyum, Secretary of State Mary Kiffmeyer, Cindy Koosman, Denny Kron, Gail Miller, Bill Mori, Mark Monacelli, (Guests) Bert Black, Luci Botzek, Greg Hubinger, Beth McInerny 1. Call to order Secretary of State Mary Kiffmeyer called the meeting to order at 9.40 A.M. 2. Approval of 13 December 2001 minutes The minutes for the 13 December meeting were approved as distributed. 3. Report on Legal Subcommittee Findings Chuck Parsons reported. Members of the Legal Subcommittee commented on the statutes they were assigned to review for issues concerning e-recording in MN. The subcommittee has reviewed 75% of the statutes. At the next meeting they will review remaining sections and sections needing additional review. They are considerating amending 507.24, defining what is a recordable document and requiring original signatures. They will add a subdivision to permit e-recording in the designated pilot counties. They will cross-reference the MN UETA provisions for the exemption of real estate documents. They will complete the review of statutes by the end of their next meeting and will propose changes for legislation to be passed this year. The subcommittee is also involved in creating a draft asking for an Attorney General’s opinion. Eileen Roberts crafted the first draft and John Richards provided revisions. This has been disseminated to the Task Force for their review. The letter frames the question for the E-sign and UETA sections that need addressing. The draft also needs a reference to Task Force and to the legislation that created the Task Force. John Richards feels strongly that the answers will be that the current statute is OK but each agency will need to decide if they will accept electronically transmitted documents. Counties are specifically mentioned as being able to decide not to accept documents under E-sign. He also tells us that each agency is allowed to establish their own standards for accepting electronic documents. The Task Force wants uniform standards. We will need to address that when standards are created. Chuck asked if the Task Force would authorize the Legal subcommittee to create this request for the Attorney General and work with a county to submit to the Attorney General’s office? Secretary Kiffmeyer asked for the opinion of the Task Force of giving this authority. Gail Miller stated that we need to keep this work moving and that this is a short legislative session coming up. Secretary Kiffmeyer commented that the Task Force has talked about this need and asked if authority could be released to the subcommittee or work on this at an additional meeting of the Task Force? Bill Mori moved and Leonard Peterson seconded that the legal subcommittee have the authority to complete the document and work with a county to send to the Attorney General. The motion was unanimously adopted. Chuck Parsons next issue was the discussion of race-notice issues. In e-filing, how should a statute work in dealing with the order that documents arrive at an office throughout day? Some people come to the Recorder’s window and have documents recorded that day, others are delivered in batch drop off, a third option is submission via US mail or private courier delivery and (soon) a fourth option will be electronic transmission. We must discuss how these documents arrive and whether counties have authority to prioritize how these get recorded. Another issue was tract index: The legal subcommittee was of the unanimous opinion that we should look at requiring a tract index and that county recorders should comment on whether the tract index should be the official index going forward, instead of the grantor/grantee index. He would like counties to discuss it as a group and Chuck would bring it to the Legal Issues Committee meeting. Bert commented that with race-notice document submissions, there are similarities to the uniform commercial code rules and that the same four means are used to submit documents. There were great pains in that area taken to indicate what the priorities are for that. Bert wondered if UCC had come up as a model and suggested the legal subcommittee consider it. Chuck indicated that it had not and Bert said he would forward the provisions on to Chuck electronically. Secretary Kiffmeyer added that this issue of submission and acceptance is going to come back again in other subject matter areas but whatever we do here will set a precedent and affect other areas. Chuck added that the legal subcommittee was not going to change the race notice statute but if there was authority to deal with delivery methods in different ways, there would be a reasonable business practice the counties could follow. Paul Kiltinen suggested that Dodge county could help in looking into this also. He is the Dodge County Attorney. Secretary Kiffmeyer added how the Task Force appreciated the amount of time and work going into this. 4. Report on Pilot Framework / Scope Subcommittee Gail Miller detailed how the Pilot subcommittee was trying to work on pilot framework issues and picking counties to participate in the 21 county surveys. The committee looked at some material that gave insight on counties. Volume of filings, geographical location, backoffice software, population, etc. as parameters that were considered. They tried to get a good mix when looking at counties. They identified 25 counties that they felt would work with consultants to participate in an in-depth survey to create standards. Counties willing to be part of this survey would need to provide access to their auditor, treasure, a lot of participants, they may also need their County commissioner to authorize their participation. Private sector users and state agencies also need to be involved. The committee looked at these variables and census information to help divide them. The State Demographer’s web site segmented counties by population and these standards were used when looking at populations. Committee members looked at small, medium and large populations and used what they know about fellow county offices. A questionnaire was prepared by Beth to be used when discussion this option with a county. But after looking at a map of the chosen counties there were a lot of counties in the south; the sample was weak in northern Minnesota and so they looked at adding another northern county. We also have some private folks on subcommittee. We want one bank, one realtor, two title companies (one that does broad based title business and one that does secondary mortgages) a law firm and the Dept of Revenue. We also talked about the Department of Health which uses the recorder’s office to gather Well Certificates. We have had great success in recruiting but we initially identified more than 21 because we thought not everyone would say yes. Beth added that we also added one more private sector company to the contractor’s commitment for interviewees so we have a bit more wiggle room. We tried to disperse this but we have all metro and all ring counties. What does everyone think about this? Jeff Carlson asked if this was going to be addressed at MACO? What will there reaction be if they see all metro counties mentioned? He mentioned that the counties may know better but what would MACO think? Jeanine Barker stated that one of her concerns, one thing the Task Force was directed to do was make sure all counties were equipped to receive e-recording. We know that the metro can afford to grow into this. Some of the other counties that are not as big in revenue would have a harder time. It may be nice to see where all these other counties are. David Arbeit added that population change might be an indicator also. Mike Cunniff mentioned that the Pilot subcommittee did take a look at that information, Percentage change in population appears to be the key, and metro ring counties have also been growing. Dakota grew almost as much in raw numbers as Hennepin, and far more, proportionately. One thing considered for selecting the metro counties, is that 2/3 of all recording takes place in 8 high volume counties. It was important to consider this in the evaluation. That was one of the factors. Jeannine Barker asked what percentage of filing will be electronic for these counties? Secretary Kiffmeyer suggested that high volume is important but the needs of medium size counties are also important. The ability to get this technology going in some counties could be an issue. Could we look at Itasca, with their unique structure? Wabasha and Fillmore, do we need both counties in the sample? Could one be deleted and another county included? John Jones stated that he would like to throw out a preview of PRITF group with respect to who will use e-recording; the early adopters will be those people in larger communities and those that adopt technology quicker. Even in small counties where there is a metropolitan market have a positive correlation in using e-recording. For geographic locations in outlying areas, if a title company does business in these counties, it would make sense if that whole market could adopt e-recording, there would be more synergy. An outlying county where there is not a lot of activity may not have a payoff for e-recording. Mark Monacelli noted that there are 27 dots and we need to go down to 21 counties. There needs to be a more balanced map. This is a snapshot of time for a survey, the pilots won’t all be here. But a con is that the cost of using the outlying counties, the travel cost is greater. He agrees that all metro counties should be in this. Secretary Kiffmeyer suggested an exercise. What would be the 21 dots be for this? What would the grouping of 21 look like, that will be surveyed in-depth? She asked Beth to explain how the other counties not included in the in-depth survey will be interviewed? Beth detailed how interns would be used and that counties would be contacted in either face-to-face or phone interview. Bill Mori stated that we need to define the scope of the pilot. It should not be to prove computer technology. His concern is about processes and procedures and legal issues adequately represent the diversity of the counties. His recommendation would be that as counties are selected, that the scope of pilot is considered; what counties will give us the best, fullest answers. Bert noted that the pilot that will come in the summer and fall is intended to validate the standards. What should the process be in the future? It is possible to be a pilot county without being a black dot. These interviews are important to set the standards, along with MISMO, Property Records Task Force information. We need all this information to validate this with the pilots. Secretary Kiffmeyer said that in light of all of this and that most pilot subcommittee members are here, did they want to break out and reshuffle the dots. Paul McGinley mentioned that back office procedures of counties are important. Do we have that information already now? Several members indicated that was one of the goals of the survey. Mike Cunniff stated that one of the considerations was what vendors the counties use for taxes and other backoffice activities and thought they had counties that cover all of the known major different methods, for tax and record keeping, and that they had looked at small, medium and large counties and other distributions. Secretary Kiffmeyer asked if we could take a look at a map and try to step back and focus on all the counties. Gail Miller mentioned that Wright, Scott and Carver were all growing areas. That is why they were recommended. Secretary Kiffmeyer asked if interviewing just one of them in depth gets us what we need instead of all three. Bill Mori noted that they all use same system. He added that Carver has a very active IT department that would be cooperative and anxious to help. Secretary Kiffmeyer emphasized that the big thing is to get the knowledge needed to get standards. She suggested putting names on the list and that Bert would manage the list. Cindy Koosman asked if there was any way to do a written survey for other counties to do a study and incorporate their information. Secretary Kiffmeyer mentioned that while Cindy was out Beth described that all counties will be interviewed in one fashion or another. But 21 will have an in-depth study from which standards would be based. No county will be left out, but we won’t hold up the standards to wait for all surveys to come in. There were 8 metro area counties and 13 remaining to be suggested by the Task Force and Carver, Pipestone had already been mentioned. David Arbeit suggested keeping Wright County in the mix. He noted that there is a lot of development there that will come into play in the next years. Chuck Hoyum asked about selecting Sherburne, also a ‘hot’ area. Larry Dalien asked if growth meant anything. Mark Monacelli moved to take this to the subcommittee. This was seconded. Chuck Parsons stated his belief that the small counties will have the greatest challenge. One way that could be surmounted is if two or more counties shared the technology costs and effort. That needs to be thought through. That would make it more financially feasible, having two counties work together. Mark Monacelli mentioned that we have talked about how consortiums of counties could work together. How will this be funded also, this needs to be discussed and as Chuck mentioned this needs to be considered. Secretary Kiffmeyer suggested that maybe one of those pilots needs to be a consortium. Secretary Kiffmeyer moved and it was seconded to have the Pilot subcommittee report to the executive subcommittee on its new findings. Bert noted that the consultants need this information for the week of 21st, when they hope to start interviews. Secretary Kiffmeyer extended thanks to Planning for having this map available. A good example of a Web resource that can be shared and used for other purposes! 5. Report from Executive Committee and Coordinator on Award of Contract Mark Monacelli reported that the Task Force did receive seven responses. After a discussion of the Executive Committee’s review of these proposals it was narrowed to four. Based on written proposals these four were in the ball park (BenNevis (BN), SRM, LBL and Advanced Strategies(AS)). They were asked back for a panel interview and each was given standard and specific questions ahead of time to respond to at the interview. All were asked to lower their costs and were notified this was an expectation. All the interviews went well. If you look at the pricing, AS, BN and LBL reduced their price but SRM didn’t drop. They had come in low initially and felt the price was appropriate. However, the panel determined that SRM was relying more on Task Force members and interns to do work. We calculated the cost of this work and this evened them out to about the same range as the others. BN was the one that came in and spoke the language best. They had an impressive team approach, XML, cost / benefit analysis and use case experience, and they were strong in web development and business rules modeling and legal background. While others came in and knew counties, that wasn’t exactly what we were looking for. We were comfortable that BN could fit that well. Secretary Kiffmeyer added, just for clarification, what was asked for was a price reduction with no reduction in services. What was desired was just a cheaper offer. Chuck Hoyum asked if they were going to use Javelin and the law firm to work on the project and Mark confirmed that yes they were. Jeff Carlson added that BN has also done agricultural XML standards and that they were impressive in their technical skills. Bert noted that drafts were going back and forth on contracts. At the end of last week BN got the contract, there were some changes, BN has signed, the Secretary has signed and we are waiting for LCC to sign and they will start next week. Secretary Kiffmeyer added that there were many really good choices and we were very fortunate. If was felt that we could have lived with either BN or LBL, and that it was nice to be in a place where we had choices. And the consultants are ready to go to work. 6. Review letter to Senator Kelley and Representative Juhnke. Beth addressed the letter regarding HR 2753. She reviewed the content and the process for the letter. She will make an initial contact with an association and ask them to craft a letter. She will email them contents for the letter. A Task Force member will need to follow up and prompt them to complete this. There is a list of associations with contact information. This will be disseminated to members for additional association and contact information. Members will also be asked to select an association they can work with to urge them to draft the letter. Letters can be sent directly to the Senators and Representatives but a copy should go to Beth who will keep a tally of what has been sent. Responses need to be back to Beth or in to the Senators and Representatives by 2-1-02. 7. Review of ERERTF Budget To-Date (Beth McInerny) Beth spoke about the budget to date. Approximately $1,300 is remaining in the budget. Merrill King will be working to look at county payments for the year to date and give us updated numbers. A copy of this will be e-mailed to members. 8. Presentation of Change Control Form and Escalation Procedures for Consultant Work Beth spoke of the Change Request form that will be used for the consulting team in order control scope and budget. A copy was presented to the members and will be posted on the Web. Paul McGinley asked how BenNevis was able to reduce their costs and not change scope. Jeff Carlson commented on how they had re-evaluated what they were doing and believed they had read more into their responsibilities than what would be needed. They also cut back on people needed for every sight visit from 4 to 2 people. Secretary Kiffmeyer also mentioned that they realized they were providing duplicate project management duties to what we were already providing and the Legal Subcommittee was doing work they thought they were responsible for. Another factor is that their company wanted to break into this sector, and wanted the business, and so they offered a deep discount. 9. Report on Next Steps for Business Analysis Phase Beth spoke on the next steps for the project. 1) Subcommittees were meeting and were getting ready to state their needs for the consultant teams. The Chair of each subcommittee will educate the consultants on the issues concerning their group and they will be the point person to direct the consultants to the right member of their subcommittee team. 2) BenNevis contract would be complete today. They will begin on Monday 1-14-02. Work will begin to outline their approach. 3) Interns posting are going to the following institutions: Mankato State, St. Cloud State, UMN, U of M - Minneapolis, St. Thomas and St. Catherines. Beth met with or spoke on the phone with different departments at all of these institutions and got a committment to post for interns. There was a concern expressed at the different colleges that an un-paid internship would not attract any students. Secretary Kiffmeyer asked how much it would cost for paid interns. Bill Mori and Paul McGinley both thought that the cost would be manageable and had suggestions for students at Macalester and Metro State. Luci Botzek also had a contact at Hamline. They will be contacted next week. Gail Miller announced that there would be a Pilot subcommittee meeting after adjournment. The meeting was then adjourned. Respectfully submitted, Beth McInerny
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