LAKEPORT, Calif. – The Board of Supervisors has given the go-ahead to exploring the possibility of transferring authority for overseeing the county’s investments from the Treasurer-Tax Collector’s Office to either administrative staff or an outside consultant.
At its meeting last week, the board voted unanimously to have an ad hoc committee and staff return with some options for how that transition might take place.
Supervisors Bruno Sabatier and Moke Simon brought the matter to the board.
The two are serving on an ad hoc committee formed by Board Chair Tina Scott to work with the elected Treasurer-Tax Collector Barbara Ringen to see how they can help her department and accomplish a number of goals, including a focus on revenue generation.
Also on the ad hoc committee is County Administrative Officer Carol Huchingson and some of her staff, including Patrick Sullivan, the county’s tax administrator.
Publicly, Ringen, who was reelected after running unopposed last year, has been under the scrutiny of the board and Huchingson
since last year. In the spring the ad hoc committee – in particular, Sabatier and Simon – asked her to resign well ahead of the end of her term, which is Jan. 1, 2023.
At the board’s request, Assemblywoman Cecilia Aguiar-Curry authored
AB 632, which the governor signed in July, which would allow Lake County to consolidate its auditor-controller and treasurer tax-collector’s offices.
For Sabatier, one of the key issues he’s had with Ringen’s performance has had to do with a dearth of sales of tax defaulted properties, a matter which has had a large impact on his district, especially the
city of Clearlake.
Initially, Ringen had indicated she would resign in a June 14 email. However, at a meeting in August, she refused to give a firm date for when she might step down,
as Lake County News has reported.
Ringen was not present for the Oct. 8 discussion, during which Sabatier explained that at a previous ad hoc committee meeting, they discussed with Ringen the investment authority matter.
State Government Code makes the Board of Supervisors “the agent of the county who serves as a fiduciary and is subject to the prudent investor standard,” unless, that responsibility is delegated to the county treasurer, according to a memo to the board from Sabatier and Simon.
Sabatier said the board is supposed to get an annual report on the county’s investments, but that hasn’t happened for at least a couple of years or possibly longer.
He said he wanted to have a discussion about relieving Ringen of that responsibility and moving it to the County Administrative Office. “It should be an interim move and not a permanent move,” he said, adding he wants to have Ringen focus on revenue generating work.
Simon added that the county could find licensed investment firms that could help take the responsibility off of Ringen’s office.
Sabatier said the proposal was not meant to be a slap on the hand for Ringen but a way of helping her with other goals.
Supervisor Rob Brown asked about the membership of the ad hoc committee, and whether it included Cathy Saderlund, the auditor-controller-county clerk. He said he was curious about Saderlund’s take on the matter, considering her longterm involvement with county investments and outcomes. Sabatier said that, so far, Saderlund hasn’t been involved.
Huchingson said that it is within the board’s authority to move investment authority wherever it chooses, and Sabatier noted that rules and regulations don’t specify that it must be with the Treasurer-Tax Collector’s Office.
Huchingson asked Sullivan if he could speak to how it’s done in other counties. He said that, in his experience, smaller counties tend to use an outside consultant as they don’t have investment staff in house like larger counties do. Those contracted firms are then able to help with asset allocation, strategy and reporting. He added that sometimes an outside contractor can provide an advantage.
County Counsel Anita Grant said she hadn’t looked closely at the regulations, but she said she noticed that state code allows for the investment responsibility to be delegated by an investment body to the treasurer of a local agency for a period of one year.
“That’s not to say that your board can’t contract with whomever you want to provide advice and to handle various aspects of this,” she said.
Sullivan said that, no matter what model is chosen, the Treasurer-Tax Collector’s Office still retains a major role. “They’re still handling wire transfers and the distribution of funds.”
Grant said that doesn’t alter or affect the board’s ability to contract with consultants.
An ‘exploratory’ discussionHuchingson said the discussion’s purpose was exploratory in nature, to find out if there’s interest from a majority of the board to come back with a plan. She said Ringen would need to be involved, and Saderlund would be invited.
Huchingson added that she was surprised that Ringen, who was invited to the discussion, wasn’t in attendance.
Brown said it was a good initial discussion, but he wasn’t ready to make a decision and there wasn’t a recommendation about what action to take. He said the matter needs to be explored further, and he wanted Saderlund involved, along with someone from the private sector with experience in investments.
Brown said he also wanted to see information about the county’s investments over the past 15 years so he could gauge how the county has done.
“I think therein lies the problem,” said Huchingson, who explained that they had hadn’t gotten the annual history so she didn’t think it will be possible to provide Brown with that information.
“You’re not sure we can do it. Are you saying we can't do it in a nice way?” Brown asked.
Huchingson said they haven’t been able to obtain that information on a year-to-year basis so she thinks it’s doubtful she can get it.
Brown said it wanted to get to the bottom line. Grant responded, “You’re supposed to get an annual report of investments. You haven’t been getting one.”
Brown pressed, asking if that was because they hadn’t asked for it or if it wasn’t available. Grant said it’s supposed to be prepared by the Treasurer-Tax Collector’s Office and she had no idea if it was available.
Sabatier said the ad hoc committee had been requesting the report from Ringen’s office and have not received it. He said he wanted to come back to the board to see what it would look like to move the investment authority from Ringen’s office.
He said an investment committee must be formed to ensure that there is oversight and that it’s not being held in a single person’s hands, “which leaves us in the situation where we don’t know any of the information of what’s happening,” Sabatier said.
Sabatier added that he thinks it’s important since it’s public money that the board knows exactly what is happening with the funds and how the county is choosing to invest it. “Right now, that is not the case.”
Simon agreed, noting in his three years on the board he’s seen no investment reports from the Treasurer-Tax Collector’s Office.
Brown said the last report he could recall was when the county changed banks under Ringen’s predecessor, Sandy Kacharos. “But that’s been awhile.”
Huchingson said she believes the county’s investment policy also hasn’t been updated since 2013.
Sabatier said an investor the county had contracted with to manage investments had been dropped by many counties and is not really an active investor. “We want to go with somebody that we’re going to be able to have a future with and relationship with, and make sure we can ask for and receive any reporting that we should be receiving.”
Scott said the board has been putting a lot of work on the County Administrative Office. She asked if they had the capability of taking it on, and who in the office would do it.
Huchingson said that if they brought on consultants, they would have a staffer anchor that relationship, and the consultant would submit reports. If it was structured that way, she said they could do it and on the staff side it would likely be a role filled by Sullivan.
Sabatier said he believed that, in the beginning of such a transition, there might be more work for staff and that it should smooth out down the road.
There was no public comment, and Huchingson asked the board for consensus to have the ad hoc committee, staff and others get back to the table and return with a formal recommendation.
Sabatier moved to have that done, including the creation of an investment committee, which the board approved 5-0.
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