During a City Council session Feb. 16, the question whether the city should ask voters to approve changing from an elected to an appointed City Treasurer was discussed and deferred pending more research by the city attorney and staff.
It came up at the behest of First District Council Member Evelyn Zneimer, who ran for Council after voters agreed in 2019 to eliminate her former position as the elected City Clerk.
The Treasurer “maintains an autonomous role for oversight and decisions relating to investment and safekeeping of city funds” and is “independent of city council,” according to a staff report prepared by Interim Finance Director Kenneth Louie. The Treasurer works with Finance Department staff to provide reports to the City Council and meets monthly with the city’s volunteer Finance Commission.
Louie said the pros of keeping the position elected are public accountability, “checks and balances” and third-party oversight, while the con is there is no age or background requirement. Pros of an appointed position are the greater likelihood of having a skilled investment and finance professional whose work can be more seamlessly supplemented by the resources and expertise of the Finance Department, while the cons are less independent decision-making and third-party oversight.
Because of the technical training required and the need for qualified applicants, over two-thirds of California cities now have appointed treasurers. But there is no standard practice among regional cities. Staff surveyed 11 mostly San Gabriel area cities. Seven had elected treasurers, two where the treasurer is appointed by the City Council, and two where the City Manager apparently hire them. Staff also indicated South Pasadena is relatively unique in having a separate Finance Commission.
The report did not address the city’s difficulty in locating a qualified Finance Department director. Since the departure of the last finance director in August 2020, the city has had two interim directors, but has yet to successfully recruit a permanent one.
Meantime the Finance Commission hasn’t produced minutes of any of its meetings since last July, and the Ad Hoc Finance Committee–charged last year to serve as a “short term” body in the fallout from the city’s summer 2020 financial debacle–has been bickering over the release of a final report and is slated for abolishment under a recent City Manager proposal.
As for the status of the Treasurer, the staff report offered three options: do nothing; direct drafting of a resolution calling for the question to be placed on the Nov. 8 ballot; or place such a measure on a later ballot.
Gary Pia, who’s been City Treasurer since 2011 and who along with the Finance Commission was not consulted on the question, called in to offer some background. He’s glad Council is discussing the matter–not only because the staff report mistakenly stated the next Treasurer election is set for 2024, when it is actually set for this year’s Nov. 8 ballot—but also to disclose he has decided not to seek a third, four-year term. It could create confusion, he pointed out, if on the same ballot voters are asked both who should be Treasurer and whether the Treasurer should be appointed instead of elected.
Pia did not take a position but said regardless, it is critical to have a Treasurer who understands institutional investing, stewardship and oversight. He reported the city’s bond portfolio has done well under him, with interest revenue set to double to a half million dollars annually.
Council Members raised questions about the history of the position and legal consequences of various election timing and outcome scenarios–including if and when there should be a special election. District 3 Council Member Jon Primuth said a special election would not be worth the cost.
There were also questions about the Treasurer’s annual salary. The staff report said of the eleven cities it surveyed, two “staff” Treasurers earn civil service wages while the appointed and elected ones earn between zero at $14,400–except in Torrance where the elected Treasurer gets $137,610. District 5 Council Member and Mayor Michael Cacciotti said it was wrong that South Pasadena Council members, who put in up to 100 hours a month and under state law get $300 per month, should get only half the pay of the Treasurer, who presumably puts in considerably less time.
Pia‘s annual salary, set under Article II of a bizarre 1983 municipal code formula that two council members called at best “ambiguous,” has ranged from $7,766 to $9,178, according to Transparent California.
City Attorney Andrew Jared compiled such a long list of unanswered questions during the meeting that District 5 Council Member Diana Mahmud moved to table the matter until Jared and staff can return with more information.
Meantime both Cacciotti and Mahmud indicated a preference for retaining the elected Treasurer.