HomeMy WebLinkAbout1990-07-10; City Council; 10709; City Treasurer & City Clerk PositionOF CARLSBAD — AGENf BILL
MTG. 7JIO/9Q
DEPT..
CITY TREASURER & CITY CLERK POSITIONS:
ELECTIVE VS. APPOINTIVE
o
oo
RECOMMENDED ACTION:
Discuss the pros and cons of the City Treasurer and City Clerk's positions being elective
versus appointive and decide if these questions should be placed on the November, 1990
ballot.
ITEM EXPLANATION:
On March 20,1990 the City Council discussed the advantages and disadvantages of making
the City Treasurer's position an appointive versus an elective position. This item was placed
on the March 20, 1990 agenda at the request of Girard W. Anear, 1728 Calavo Court in
Carlsbad. At that time, Council directed staff to return with additional information concerning
appointive versus elective positions of both the City Treasurer and City Clerk.
All cities in California have the option of directly electing or having their City Councils appoint
the City Treasurers and City Clerks. California Government Code § 36508 gives the City
Council the ability to ask the electorate whether certain elective officers (except
councilmembers) shall be appointed by the City Council.
If the City Council wishes to submit the questions of elective vs. appointive City Treasurer and
City Clerk positions for the November, 1990 ballot, both would appear at the same time as
the election of individuals to the positions, since the terms of both incumbents expire in
November. The City Treasurer has chosen not to run for re-election.
If these measures are placed on the November ballot along with each position, and the
electorate chooses to have the City Council appoint individuals to the positions, then the
results of the elections to the positions would automatically be voided. If the electorate
chooses to have the positions remain elective, and there were no candidates for the
positions, the Council could then either fill the vacancies by appointment or call a special
election to fill the vacancies (Government Code § 36512). The earliest date for the special
election after the November election would be March 5, 1991.
The deadline to submit measures for the November ballot to the County Registrar of Voters
is August 10. The candidate filing period for City Clerk is July 16 - August 10. The filing
period for City Treasurer is July 16 - August 15.
FISCAL IMPACT:
The cost of placing each question on the November ballot is approximately $2200 (a total of
$4,400 for both).
A special election on March 5, 1991 could cost the City up to $50,000.
EXHIBITS:
1. Memo to City Manager from Research Manager dated June 29, 1990.
2. Memo to City Manager from Girard W. Anear, dated March 9, 1990.
June 29, 1990
TO: CITY MANAGER
FROM: Research Manager
CITY TREASURER AND CITY CLERK REPORT
In response to the City Council's request for further information on the positions of City Treasurer
and City Clerk, I have prepared the following report.
I. ELECTIVE VS. APPOINTIVE
All cities in California have the option of directly electing or having the city council appoint their
City Treasurers and City Clerks. The authorizing legislation enabling general law cities to do
either can be found in Sections 36503 and 36508 of the California Government Code:
"Except as otherwise provided in this title, all elective city offices shall be filled by
the city electorate at a general municipal election. City officers holding office shall
hold office for their prescribed terms...until their successors are elected and
qualified."
"At any municipal election, or a special election held for that purpose, the city
council may submit to the electors the question whether the elective officers, or
any of them except councilmen, shall be appointed by the city council; provided,
however, that the city council shall not submit such question to the electors more
often than once in an 11 -month period."
Elective city officers are responsible to, and removable by, the voters of the city. They may lose
their office either by a failure to be re-elected or as the result of a recall initiated by petition of the
citizens during their term. The appointive officer, on the other hand, owes the responsibilities of
office directly to the appointing authority whether it be the City Council or the City Manager and
may be removed from office at any time, with or without cause. Both elective and appointive
officers lose their office upon the occurrence of one of the enumerated events causing vacancy
in office which are set forth in Government Code § 1770. Such events include resignation,
removal, failure to discharge the duties of office, or conviction of a felony. Government Code §
1770 is attached for reference.
II. CITY TREASURER
The duties of the City Treasurer in California's general law cities are contained in state statutes.
Sections 41001 through 41005 of the Government Code set forth the primary statutory duties of
general law City Treasurers. These duties are: to receive and safely keep all money coming into
the treasury (Government Code § 41001), to comply with all laws governing the depositing and
securing of public funds (Government Code § 41002), to pay money only on warrants signed by
legally designated persons (Government Code § 41003), and to submit a monthly written report
and accounting of receipts, disbursements, and fund balances to the City Clerk and the City
Council (Government Code § 41004). In addition, the City Treasurer is required to perform such
duties relating to the collection of city taxes and license fees as are prescribed by ordinance
(Government Code § 41005).
In the City of Carlsbad, the City Treasurer manages an $80 million portfolio based on security
(safety of the investment), liquidity (ability to get at it), and yield (return on the investment). The
Treasurer makes investment decisions for surplus cash and idle or inactive City funds, as set
forth in the City Investment Policy. This responsibility requires a certain degree of expertise and
understanding of market conditions, rates of pay, and discounts. It is important to note that the
money invested by the City Treasurer is inactive, and is generally not needed for the day-to-day
operation of the City. Therefore, the Treasurer has no budgetary responsibilities. However,
because investments can be long term or short term, the Treasurer requires a certain amount of
lead time to secure funds for unusually large and irregular expenses, so a consistent investment
program can be maintained. The Treasurer has a part-time Assistant who assists with the
investment portfolio and produces up-to-date investment reports and accurate files for records
of all investment transactions.
Basic Differences Between Elective and Appointive City Treasurer*
According to the California Municipal Treasurer's Association, there are several fundamental legal
differences between the office of appointive City Treasurer and that of elective City Treasurer.
Elective officers are selected every four years at which time they must again be approved by the
voters of the community. The appointive officer, on the other hand, is appointed either by the
City Council or by the City Manager and holds office at the pleasure of the appointing authority
unless the position is made a part of a classified service under a merit or a civil service system.
Appointive City Treasurers, like other appointive officers, are not required to be residents or
electors of the city (Government Code § 36510) nor may a city, by ordinance, require residency
(Calif. Const., Article XI, § 10).
If an elective treasurer performs the statutory duties set forth in the Government Code, the officer
need not perform any duties required by ordinance of the City Council unless such ordinance-
imposed duties relate to the "collection of city taxes and license fees" (Government Code §
41005). Appointive officers, on the other hand, are subject to the legally expressed wishes of the
appointing authority. Elective status, therefore, confers on the elected City Treasurer the
possibility of a much greater degree of independence from the City Council and the City
Manager. So long as the elective officer performs the statutory duties and the few duties which
the council can by ordinance require the Treasurer to perform, there is no basis upon which this
official may be removed from public office other than recall or the occurrence of one of the
events set forth in Government Code § 1770.
* Source: City Treasurer's Handbook, California Municipal Treasurer's Association, prepared
by Ralph Anderson & Associates, August, 1984; revised and updated by McDonough, Holland
& Allen, March, 1989.
In San Diego County, 13 of 18 City Treasurers are appointed, while 5 are elected. In the City of
Escondido, the City Treasurer is responsible for investments and accounting for bonds. The City
Treasurer in La Mesa is responsible for investing idle or surplus funds. In National City, the City
Treasurer approves bond payoffs, supervises and directs bond foreclosure proceedings, reviews
and verifies the availability of funds for departmental requests and approves the city investment
policy. In Oceanside, the City Treasurer acts as signatory on parcel maps and accounts,
chooses banking facilities and reviews investment reports. All investments in the City of
Oceanside are administered by an Investment Officer.
City
Carlsbad
Chula Vista
Coronado
Del Mar
El Cajon
Encinitas
Escondido
Imperial Beach
La Mesa
Lemon Grove
National City
Oceanside
Poway
San Diego
San Marcos
Santee
Solana Beach
Vista
Appointed
X
X
X
X
X
X
X
X
X
X
X
X
X
Serving as
Director of Finance
Dir. of Admin. Svcs.
Finance Director
Finance Director
Dir. of Admin. Svcs.
Finance Director
Finance Dir./City Clerk
City Clerk
No other position
City Manager
Finance Director
Dir. of Admin. Svcs
Finance Director
Elected
X
X
X
X
X
City of Carlsbad Investment Policy
Section 53646(a) of the California Government Code requires the Treasurer or Chief Fiscal Officer
of a city to render annually to the legislative body of the local agency a statement of investment
policy. The City of Carlsbad Investment Policy provides policy guidance for the investment of
all City funds not required for the immediate day-to-day operation of the City, and gives these
responsibilities, as directed by the City Council, to the City Treasurer. The City of Carlsbad
Statement of Investment Policy, revised November 7, 1989, is attached for information.
Previous Carlsbad Elections
The question of whether the City Treasurer position should be appointive has been placed before
the Carlsbad electorate three times: 1956,1964 and 1980. In each election, the voters rejected
the measure. In 1964 (when the question was combined with the City Clerk's position), the
measure was defeated by a vote of 58% to 42%. In 1980, the measure was defeated by a margin
of 62% to 38%. Data is not available for the 1956 election.
III. CITY CLERK*
In California, there are two ways to become a City Clerk. One is to be elected by the voters of
the community. The other is to be appointed by either the City Council or City Manager. The
elected City Clerk is responsible to the voters directly. The appointed City Clerk, on the other
hand, is responsible to their appointing authority. Whether elected or appointed, the City Clerk
is required to accomplish certain duties. These duties are set forth in California Government
Code Sections 40800 et. seq. They include: keep an accurate record of proceedings of the
legislative body, keep a certified record of ordinances, be the custodian of the city seal, and
perform such additional duties as prescribed by ordinance. Additionally, the statutes of the State
of California prescribe the basic functions and duties of City Clerks. A list of the duties which
are customarily performed by the City Clerk include:
• maintain custody of records;
• serves as clerk of the Council and secretary of the Redevelopment Agency;
• record and maintain proceedings of Council meetings;
• attest, publish, index, and file ordinances and resolutions;
• administer and file oaths of office, affirmations and acknowledgments;
• conduct elections;
• receive petitions relating to initiative, referendum or recall;
» conduct annexation proceedings;
• countersign annexation bonds;
• attest to subpoenas;
• file affidavits of completion;
• file name change instruments for various purposes;
• duties concerning improvement district proceedings, street vacations, and filing
of claims;
• give notice of public hearings;
• file official bonds;
• serve as filing officer for the Fair Political Practices Commission regulations;
• financial disclosure officer; and
« maintain appointive list.
In addition to the duties listed above, in the City of Carlsbad, the City Clerk also acts as signatory
on subdivision maps and attests to most city agreements, contract bonds, and subdivision
bonds; performs noticing requirements for Council compliance with the Brown Act; prepares
Council agendas; assembles Council packets; maintains the Municipal Code; transmits all
documents requiring recordation; plus many other ministerial duties as assigned by Ordinance.
The City Clerk has also been designated as the Auditor of the Building Authority, the Clerk of the
Parking Authority, and the Secretary of the Board of Directors of the Carlsbad Municipal Water
District.
* Source: City Clerk's Handbook, City Clerks Association of California, prepared by Stately
Associates, August, 1986.
In San Diego County, 12 of 18 City Clerks are appointed. Most of these positions are full-time
and serve solely as City Clerks. In Lemon Grove, the City Clerk also serves as the Finance
Director and the City Treasurer.
City Appointed Elected
Carlsbad X
Chula Vista X
Coronado X
Del Mar X
El Cajon X
Encinitas X
Escondido X
Imperial Beach X
La Mesa X
Lemon Grove X
National City X
Oceanside X
Poway X
San Diego X
San Marcos X
Santee X
Solana Beach X
Vista X
Previous Elections
The question of whether the City Clerk's position should be appointive has been placed before
the Carlsbad electorate four times (in 1954,1956, 1964 and 1980) and was defeated each time.
In 1954, the measure was defeated by a vote of 64% to 36%. In 1964 (when the question was
combined with the City Treasurer), the vote was 58% to 42%. In 1980, the vote was 59% to 41 %.
Data is not available for the 1956 election.
IV. SUMMARY
The City Treasurer and City Clerk in Carlsbad are elected every four years. The duties of these
positions are set by State statute. If the positions becomes appointive, they are subject to the
legally expressed wishes of the appointing authority (e.g. the City Council or City Manager).
The Council can choose to either (a) have the positions of City Treasurer and/or City Clerk
remain elective or (b) place questions on the November ballot which ask the voters if the
positions of City Treasurer and City Clerk should be appointive.
The terms of the current City Treasurer and City Clerk expire in November, 1990. The incumbent
City Treasurer will not seek re-election. If the Council wishes to put the elective/appointive City
Treasurer and/or City Clerk questions before the voters in November, both the question of
elective/appointive and the position would appear on the ballot as separate items. If the voters
choose to make the City Treasurer and/or City Clerk positions appointive, the results of the
voting on candidates to fill the position(s) are automatically voided.
If the voters choose to leave the position(s) elective, and no one runs for the position(s), the
Council could then either fill the vacancies by appointment, or call a special election to fill the
vacancies (Government Code § 36512). The earliest date for the special election after November,
1990 would be March 5, 1991. This election would be run by the City and could cost up to
$50,000.
V. FISCAL IMPACT
The cost of placing these questions on the November ballot is approximately $2200 for each
measure ($4400 for both). The deadline to submit measures for the November ballot to the
County Registrar of Voters is August 10. The candidate filing period for City Clerk is July 16-
August 10. The candidate filing period for City Treasurer is July 16 - August 15.
Attachment: California Government Code § 1770
City of Carlsbad Statement of Investment Policy
California Government Code § 36512
6
GOVERNMENT CODE
Suits Thereon) was repealed
x.
§244.]
i in Code of Civil Procedure Section
of Civil Procedure Section 996.020
of Civil Procedure Section 996.020
iil Procedure Sections 996.210-996.230
il Procedure Section 996.250 (effect of
il Procedure Section 996.250 (effect of
il Procedure Section 996.250 (effect of
and repealed by Stats 1983
commencing with Section 680.010) of
Law) and to make technical revisions.
il Procedure Section 996.250 (effect of
i Supplemental Bonds) was
>245.]
led by Section 996.350 (new bond or
ivil Procedure Section 996.210 (when
1 Procedure Section 996.240 (effect of
of Civil Procedure Section 996.310
Procedure Section 996.320 (notice of
Civil Procedure 996.320 (notice of
[ZGovCode]
GOVERNMENT CODE §1770
The substance of former Section 1606 is continued in Code of Civil Procedure Sections 996.320 (notice of
withdrawal) and 995.030 (manner of service).
Former Section 1607 is superseded by Sections 996.330 (effective date of withdrawal) and 996.340 (effect
of withdrawal).
The substance of the first sentence of former Section 1608 is continued in Code of Civil Procedure
Section 996.340 (effect of withdrawal). The substance of the second sentence is continued in Code of
Civil Procedure Section 996.220 (contents of supplemental bond).
The substance of former Section 1609 is continued in Code of Civil Procedure Section 996.220 (contents
of supplemental bond).
Former Section 1610 is not continued.
The substance of former Section 1611 is continued in Code of Civil Procedure Section 996.250 (effect of
supplemental bond).
The substance of former Section 1612 is continued in Code of Civil Procedure Section 996.360 (liability
of surety).
The substance of former Section 1613 is continued in Code of Civil Procedure Section 996.360 (liability
of surety).
Review of 1982 Legislation. 14 Pac LJ 468.
§ 1750. Manner of making
Cal Jur 3d (Rev) District and Municipal Attorneys § 17.
§ 1752. Eligibility for appointment to vacancy
(a) Except as provided in subdivision (b), no person elected or appointed to
the governing body of any city, county, or district having an elected
governing body, shall be appointed to fill any vacancy on such governing
body during the term for which he or she was elected or appointed.
(b) With respect to a general law city, if a vacancy in the elected office of
mayor occurs, the council may fill that vacancy by appointing a member of
the council to the office of mayor. Any person appointed to fill the vacancy
shall hold the office of mayor for the unexpired term of the former mayor.
Any vacancy created in the membership of a city council as the result of an
appointment of a member to the office of mayor shall be filled in accordance
with Section 36512, 36512.1, or 36512.2.
Amended Stats 1984 ch 1343 § 3, effective September 26, 1984.
Amendments:
1984 Amendment: (1) Added subdivision designation (a); (2) amended subd (a) by adding (a) "Except as
provided in subdivision (b),"; and (b) "or she" after "which he"; and (3) added subd (b).
§ 1770. Events causing vacancy in office
An office becomes vacant on the happening of any of the following events
before the expiration of the term:
(a) The death of the incumbent.
(b) An adjudication pursuant to a quo warranto proceeding declaring that
the incumbent is physically or mentally incapacitated due to disease, illness,
or accident and that there is reasonable cause to believe that the incumbent
will not be able to perform the duties of his or her office for the remainder
of his or her term. This subdivision shall not apply to offices created by the
California Constitution nor to federal or state legislators.
(c) His or her resignation.
(d) His or her removal from office.
(e) His or her ceasing to be an inhabitant of the state, or if the office be
local and one for which local residence is required by law, of the district,
[2 Gov Code] 31
§1770 GOVERNMENT CODE GOVERNMENT CODE
county, or city for which the officer was chosen or appointed, or within
which the duties of his or her office are required to be discharged. However,
the office of judge of a municipal or justice court shall not become vacant
when, as a result of a change in the boundaries of a judicial district during
an incumbent's term, the incumbent ceases to be an inhabitant of the district
for which he or she was elected or appointed to serve.
(f) His or her absence from the state without the permission required by law
beyond the period allowed by law.
(g) His or her ceasing to discharge the duties of his or her office for the
period of three consecutive months, except when prevented by sickness, or
when absent from the state with the permission required by law.
(h) His or her conviction of a felony or of any offense involving a violation
of his or her official duties. An officer shall be deemed to have been
convicted under this subdivision when trial court judgment is entered. For
the purposes of this subdivision, "trial court judgment" means a judgment
by the trial court either sentencing the officer or otherwise upholding and
implementing the plea, verdict, or finding.
(i) His or her refusal or neglect to file his or her required oath or bond
within the time prescribed.
(j) The decision of a competent tribunal declaring void bis or her election or
appointment.
(k) The making of an order vacating his or her office or declaring the office
vacant when the officer fails to furnish an additional or supplemental bond.
(/) His or her commitment to a hospital or sanitarium by a court of
competent jurisdiction as a drug addict, dipsomaniac, inebriate, or stimulant
addict; but in that event the office shall not be deemed vacant until the
order of commitment has become final.
Amended Stats 1988 ch 283 sec 1.
Amendments:
1988 Amendment: In addition to making technical changes, (1) amended subd (b) by (a) substituting "the
incumbent" for "he" after "to believe that" in the first sentence; and (b) added "California" in the
second sentence; (2) amended subd (e) by substituting (a) "the officer" for "he" after "city for which" in
the first sentence; and (b) ". However," for "; provided, however,"; (3) added the third sentence of subd
(h); and (4) substituted "the office vacant when the officer" for "his office vacant when he" in subd (k).
Note—Stats 1988 ch 283 sec 4 provides:
SEC. 4. Sections 1 and 2 of this act do not constitute changes in, but are declaratory of, the existing
law.
Witkin Procedure (3d) Courts § 21.
Cal Jur 3d (Rev) Elections § 255.
Review of Selected 1988 Legislation. 20 Pacific LJ 717.
A proposed consolidated legal capacity standard for California. (1987) 27 Santa Clara LR 787.
Where city council has designated itself the community redevelopment agency, city councilman does not
vacate his office as member of that agency for three consecutive months. (1984) 67 Ops Atty Gen 459.
§ 1770.1. Conviction; effect of appeal on disqualification
The disqualification from holding office upon conviction, as provided in
Section 1021, or the forfeiture of office upon conviction, as provided in
subdivision (h) of Section 1770 and Section 3000, is neither stayed by the
initiation of an appeal from the conviction, nor set aside by the successful
prosecuting of an appeal from the conviction by the person suffering the
conviction.
Added Stats 1988 ch 283 sec 2.
32 |2 Gov Code]
fjote—For legislative intent, see 198
Review of Selected 1988 Legislation.
§ 17702. When disqualific
Upon the entry of a plea (
the rendering of a verdict
without a jury of a public
provisions of Section 1021
the person found guilty s
otherwise qualified or sh
person then holds. Durir
suspension from office,
emoluments of the office,
powers of the office, the 1
tion, including benefits, p:
In the event the trial c
verdict before the trial <;
office or the suspension
suspended from office \
including those that woi
excluding, however, inter
Added Stats 1988 ch 283 sec 3.
Review of Selected 1988 Legislatic
§ 1773. Issuance of writ
Cal Jur 3d (Rev) Elections § 118.
§ 1774. Filling vacancies
(a) When an office, the
Senate, either becomes i
the Governor may appo
after the expiration of
appointed or reappointe
nor. If the term of offio
Governor shall have 6
incumbent. If the incui
the office shall be deem
of the 60-day period.
(b) With respect to the
person to an office subji
submit the name of ti
reappointed, and the el
the Senate or, if the Se
the Senate, within 60 d
of the office, or, as to
after the expiration da
required notification w
the duties of the office
office after the expir;
expiration of the term,
day immediately follov
(2 Gov Code]
Revised November 7, 1989
CITY OF CARLSBAD
STATEMENT OF INVESTMENT POLICY
I. INTRODUCTION
Section 53646(a) of the California Government Code requires the
Treasurer or Chief Fiscal Officer to render annually to the legislative
body of the local agency a statement of investment policy. The
statement of investment policy set forth herein is a revision of the
City of Carlsbad's Investment Policy as approved by the Carlsbad City
Council on January 2, 1985, and as revised on March 28, 1989. It
provides policy guidance for the investment of all City funds not
required for the immediate day-to-day operation of the City.
II. BACKGROUND
A. OBJECTIVE - The primary investment objective is the prudent
utilization of surplus cash and idle or inactive City funds to
generate a reasonable rate of return with an understanding and
recognition of the associated risks involved. The City shall
strive to maintain the level of investment of all idle funds as
close to one hundred percent as possible through daily and
projected cash flow determinations and forecasts as made available
by the City's Director of Finance.
B. RESPONSIBILITY - The management of idle cash and the investment
of City funds are the responsibility of the City Treasurer as
directed by the City Council. The Treasurer will also be guided
in this responsibility by the Government Code of the State of
California specifying legal investments, by the prudent man rule
and by the provisions of this policy.
C. DELEGATION OF RESPONSIBILITY - In the absence of the City
Treasurer, the Deputy City Treasurer will assume the Treasurer's
duties and responsibilities.
D. LEGAL INVESTMENTS PERMITTED UNDER STATE LAW - The City Treasurer
may invest City funds in the following instruments as specified
in the Government Code, Section 53601 and as further limited in
this policy.
Obligations of the U.S. Government, its agencies and
instrumentalities.
Registered state warrants or treasury notes or bonds of the
State of California.
Bonds, notes or warrants of any local agency within the State
of California.
Time Certificates of Deposit and Negotiable Certificates of
Deposit offered by commercial banks, savings and loan
institutions and state and federal credit unions. Negotiable
Certificates of Deposit are limited to 30% of the portfolio.
Prime bankers acceptances with the following limitations:
a. Must be eligible for purchase by the Federal Reserve
System.
b. May not exceed 270 days maturity or 25% of the City's
portfolio.
c. No more than 10% of the City's portfolio may be invested
in the bankers acceptances of any one commercial bank.
Prime Commercial Paper of the highest numerical rating of
Moody's Investment Services, Inc., or Standard & Poors
Corporation. Commercial paper may not exceed 30% of the
total portfolio or 180 days maturity.
Repurchase Agreements.
Reverse Repurchase Agreements.
Money market funds whose portfolio consists of one or more
of the foregoing legal investments.
Mortgage Securities purchased under Repurchase Agreements.
May not exceed 95% of fair market value and 25% of eligible
funds.
Medium-Term Corporate Notes of U.S. companies with a maximum
maturity of five years and rated in the top three rating
categories by two of the three largest rating services.
Purchases limited to 15% of eligible funds.
No Load Mutual Funds investing in the securities and
obligations of the foregoing legal investments. Purchases
limited to 15% of the eligible funds.
The City may also invest idle funds in the State of California
Local Agency Investment Fund in accordance with the laws and
regulations governing such investments.
Revised November 7, 1989
III. INVESTMENT PHILOSOPHY
A. BASIC PREMISE - The basic premise underlying the City's investment
philosophy is to insure that sufficient funds are available to
meet the obligations of the City when needed. The investment
policy of the City is one that seeks aggressive management of
inactive cash balances, yet emphasizes the safety, liquidity and
security of the investment instruments.
B. ACCEPTABLE RISK - Acceptable risk, as it relates to this
investment policy, is defined as that risk which a person is
permitted to take in the investment of the City's funds under the
terms and intent of the Prudent Man Rule which states, in essence,
that "in investing ... property for the benefit of another, a
trustee shall exercise the judgement and care under the
circumstances then prevailing, which men of prudence, discretion
and intelligence, exercise in the management of their own
affairs."
C. PREFERENCES - When two or more investment opportunities offer
essentially the same maturity, yield, quality and liquidity,
priority will be given first to the financial institutions based
in the City of Carlsbad, and second to other financial
institutions in the State of California.
D. ETHICS - All participants in the City's investment process shall
seek to act responsibly as custodians of the public trust. The
City Treasurer shall avoid any transaction that might impair
public confidence in the City's ability to govern effectively.
IV. POLICY STATEMENT
A. INVESTMENT LIMITS - To insure that invested funds are always
available when needed, the City Treasurer will maintain the
following policy on investment maturities.
1. At least 67% of the portfolio will be invested in instruments
with maturities of less than one year from the current date.
2. No more than 33% of the portfolio may be invested in
instruments maturing one year or more from the current date,
with no more than 10% of the portfolio invested in maturities
beyond ten years from the current date.
3. The City Treasurer shall maintain an average portfolio
investment maturity of 3 years or less. If the average
maturity exceeds 3 years at any time, the Treasurer shall
take steps to reduce the average maturity to three years
within 90 days from such time.
Revised November 7, 1989
Investments will be made only in readily marketable
securities, actively traded in the secondary market. No
more than 10% of the investment portfolio will be placed
with any one financial institution. If a decline in the
portfolio results in more than 10% of the total being
invested with one institution, the funds necessary to reduce
the investment to 10% will be removed upon maturity or when
no loss would occur.
4. Any investment in securities with maturities greater than
five years will require that:
a) The City Treasurer first consult with and receive the
approval of the Finance Director for such investment.
b) The City Treasurer and Finance Director review the City's
long term cash flow needs prior to making such
investments.
B. INVESTMENT CRITERIA - The criteria for selecting investments, by
order of priority, shall be:
1. Safety. It is the Treasurer's primary duty and
responsibility to protect, preserve and maintain intact cash
and investments placed in trust with the Treasurer on behalf
of the citizens of the community.
2. Liquidity. An adequate percentage of the portfolio should
be maintained in liquid short-term securities which can be
converted to cash if necessary to meet disbursement
requirements.
3. Yield. Yield becomes a consideration only after the basic
requirements of safety and liquidity have been met. The
City shall attempt to obtain the highest available yielding
investment provided that the criteria for safety and
liquidity are first met.
Section 53637 of the Government Code requires money to be
deposited in any depository selected from those banks and savings
and loan associations agreeing to pay the highest rate of
interest.
The City seeks to attain market rates of return on its investments
consistent with constraints imposed by safety, cash flow
considerations, and state laws that restrict the placement of
public funds.
U.S. Government and Agency obligations are the highest quality
investments available to the City in terms of investment safety
and liquidity.
Revised November 1, 1989
C. INSURED INVESTMENTS - Investments in commercial bank and savings
and loan institution time certificates of deposit shall be fully
insured up to $100,000 by the Federal Deposit Insurance
Corporation and the Federal Savings & Loan Insurance Corporation
respectively.
D. COLLATERALIZATION - Investments in certificates of deposit in
excess of $100,000 shall be properly collateralized. Government
Code Section 53649 specifies that the City Treasurer is
responsible for entering into deposit contracts with each
depository. Section 53652 of the Government Code requires that
the depository pledge securities with a market value of at least
10% in excess of the City's deposit as collateral in government
securities and fifty percent in excess of the deposit as
collateral in mortgage pools.
E. ACTIVE AND PASSIVE TRADING - Active and passive trading of
securities is authorized. Active trading is the buying and
selling of securities in the market in an effort to take advantage
of short term profits and advantageous arbitrage situations.
Passive trading is the purchase of securities and their retention
until they mature. Active trading can result in occasional loss
of principal and should be engaged in only when there appears to
be a clear advantage at the outset.
F. SELECTION OF FINANCIAL INSTITUTIONS - Investments shall be
purchased only through well established, financially sound
institutions. The City shall maintain a list of financial
institutions approved for investment. Commercial banks and
savings and loan associations must be State or Federally chartered
and must maintain a minimum net worth to asset ratio of three
percent. Total regulatory net worth divided by total assets
equals the net worth to asset ratio. They must also have a
positive net earnings for the last reporting period. Commercial
banks must have on file in the Treasurer's Office a current FDIC
call report and savings and loans must have on file in the
Treasurer's Office the latest monthly FHLBB report. Brokerage
firms must be members in good standing of a national securities
exchange.
G. SHORT-TERM BORROWING - The City is permitted by law to borrow
money to meet current short-term cash flow needs during periods
when projected cash disbursements exceed projected cash receipts
through the use of tax exempt instruments such as revenue
anticipation notes and tax anticipation notes. The amount which
can be borrowed equals the total of the cash deficit plus
projected cash disbursements for one month. These funds may be
borrowed at the beginning of the fiscal year and repaid at the end
of the year.
Revised November 7, 1989
H. LINE OF CREDIT - The effort to maintain idle funds 100% invested
at all times can result in the City's cash accounts being
temporarily overdrawn from time to time. To guard against this,
the City is authorized to maintain a line of credit with the
City's bank in a sufficient amount to cover sums temporarily
overdrawn.
V. REPORTING AND REVIEW
A. REPORTS - The Treasurer shall annually review the Statement of
Investment Policy and report to the City Council. The Treasurer
shall also submit to the City Council a monthly report showing
type of investment, institution, maturity date, amount of deposit,
current market value of all securities with a maturity of more
than twelve months, and rate of interest. This report will show
its relationship to the statement of investment policy.
B. REVIEW - This policy and the strategy for and conduct of the
investment of City funds will be reviewed by an investment review
committee as set forth below and by the City's auditors in the
conduct of their annual audit of the City.
C. INVESTMENT REVIEW COMMITTEE - An Investment Review Committee is
hereby established to conduct periodic reviews of the City's
investment portfolio, the strategy being utilized for the
investment of City funds, and the City's investment policy. This
Committee will be composed of the City Treasurer, the Deputy City
Treasurer and the City Finance Director as voting members.
Additionally, an outside financial advisor may be included as an
advisor without a vote. The Committee will be convened
periodically as necessary or desirable but not less often than
quarterly.
Revised November 7, 1989
GOVERNMENT CODE
fc Cities of 10,000 or less in
0 or less and situated in a
jction 28071, may enact an
tion to be held on the same
pply at the second ensuing
t of the ordinance,
liately following the adoption
Tuesday in April in the next
option of the ordinance. At
to be included in the sample
ige in the election date. Such
result in the change in the
1 office will be extended.
vision (a), the second ensuing
; ordinance and each munici-
; date specified in subdivision
•ealed by the legislative body.
rney may lawfully contract with county
xl indigent provided that attorney does
sxpressly relieves attorney of prosecuto-
e, accused waives any potential conflict,
gaging in such representation. (1987) 70
and employees: Tenure of
§§ 225, 243, 276, Public Officers and
i suffered injury or death while assisting
iepartment, and where the city had not
0 any service contract with the dece-
iltimate power to hire and compensate
or independent contractors is a discre-
iction of government, vested in the
wdy of the city by Gov. Code, § 36506,
eged promise was made without autho-
pproval or ratification by that body,
atebello (1980) 112 CA3d 658, 169 Cal
ition or Ordinance; Initiative
he clear language of Gov. Code,
quiring compensation of all appointive
1 employees to be fixed by the city
a general law city by ordinance or
a general law city had no power to
ig of compensation by administrative
[10 Gov Coda]
GOVERNMENT CODE
order or by arbitrator's award. Accordingly, the
city properly refused to place on the ballot an
initiative measure which would have provided that
unresolved disputes between the city and the fire-
men's employee organization should be submitted
to arbitration, and his award should be final and
binding; since the city possessed no power under
state law to provide for arbitration of wage rates,
such power could not be created by local initiative.
Bagley v Manhattan Beach (1976) 18 C3d 22, 132
Cal Rptr 668, 553 P2d 1140.
5. Tenure, and Removal of, Particular Officers
and Employees
The language and legislative history of those
provisions of the Municipal Libraries Act (Ed.
Code, § 18900 et seq.) specifying that public librar-
§ 36512.1
ies established under it are to be managed by a
board of trustees fulfilling designated composition
and term requirements (Ed. Code, §§ 18910,
18911, 18960) indicate that they are to be given
mandatory construction, and that they thus con-
trol over the more general provisions of Gov.
Code, § 36506 (appointive officers and employees
hold office at city council's pleasure). Accordingly,
a city council had no authority under Gov. Code,
§ 36506, to discharge its board of library trustees
by ordinance without cause or hearing, and to
abolish altogether the offices of trustees and there-
after provide for operation and management of the
municipal library by the city council with the aid
of an advisory commission. Friends of the Library
of Monterey Park v City of Monterey Park (1989,
2nd Dist) 211 Cal App 3d 358, 259 Cal Rptr 358.
§ 36508. Submission to electors of question of appointment of elective
officers
At any municipal election, or a special election held for that purpose, the
city council may submit to the electors the question whether the elective
officers, or any of them except councilman, shall be appointed by the city
council; provided, however, that the city council shall not submit such
question to the electors more often than once in an 11-month period.
Amended Stats 1977 ch 609 § 2.
1977 Amendment: Added the proviso.
Cal Jur 3d Municipalities §§ 175, 224.
§ 36510. Appointment of elective officers after favoring note
Cal Jur 3d Municipalities §§ 222, 224.
§ 36511. Appointment of elective officers under provision in incorporation
petition
Cal Jur 3d Municipalities § 224.
§ 36512. Filling vacancies: Tenure of office
The city council shall take the action specified by this section to fill any
vacancy occurring in the offices provided for in this chapter. If the vacancy
is in an appointive office, the council shall fill the vacancy by appointment.
If the vacancy is in an elective office, the council shall, within 30 days from
the commencement of the vacancy, either fill the vacancy by appointment or
call a special election to fill the vacancy. Such a special election shall be
held on the next regularly established election date not less than 90 days
from the call of the special election. A person appointed or elected to fill a
vacancy holds office for the unexpired term of the former incumbent.
Amended Stats 1975 ch 283 § 1; Stats 1977 ch 1205 § 89.
Amendments: ;
1975 Amendment: Amended the section to read as at present, except for the 1977 amendment
1977 Amendment: Substituted "90" for "74" in the fourth sentence.
Uncontested special election: Elec C § 22844.
Cal Jur 3d Law Enforcement Officers §§ 15, 19, Municipalities § 228.
§ 36512.1. Special election to fill council vacancy
Notwithstanding the provisions of Sections 34902 and 36512, a city may
enact an ordinance requiring that a special election be called immediately to
110 Gov Code] 29
Mar 9"' ", 1990
To: City Manager Ray Patchett
Prom: Girard W. Anear - 1728 Calavo Ct., Carlsbad 729-4183
Subject: Council Agenda Item, Re: City Treasurer's Position
I request the city treasurer's position be placed on the council
agenda to discuss the pros and cons of making the position an ap-
pointive one rather than an elective one.
AGENDA ITEM:
I recommend this November the following proposition be .placed
placed on the ballot:
Shall the position of City Treasurer remain an elective posit*
ion, or shall the appropriate legal records be changed to make the
position appointive. The City Treasurer shall be appointed by the
City Manager and be considered a staff member.
ADVANTAGES of having the city treasurer elected:
1. Directly responsible to the people.
2. Prevents nepotism or political patronage.
DIS-ADVANTAGES: Other than being a registered voter of the city,
cannot establish any other requirements or qualifications for
the position, i.e.:
1. Responsible only to the people. If performance is un-
satisfactory can only remove candidate from office by a
re-call election, or wait until the next election and vote
for another candidate.
2. Elected person can set their own hours and come and go as
as they please regardless of the needs of other city agen-
cies.
3. No incentative to become a "team player".
4. May not have the necessary health, education, motivation,
etc., to do the job.
5. May not be people orientated, and difficult to work with.
6. Field of applicants very limited by resident requirement
and very few people interested in spending the amount of
time and money to get elected for a position that only
pays $500 per month.
ADVANTAGES of having the city treasurer appointed by the city manager:
1. Responsible to the city manager who in turn is responsible
to the city council.
2. If performance is unsatisfactory can be terminated.
G. W. Anear -2- Mar 9th 1990
City Treasurer
3. List of necessary and/or desireable qualifications can
be established:
Education
Experience
Good health
Ability to work well with people (team player)
Must be willing to submit to thorough back ground check.
4. Establish working hours for the convenience of the city and
the public.
5. Wider field to draw from with no resident requirements.
6. Chances of getting good candidates are improved when you
recruit them.
DISADVANTAGES of appointed treasurer.
1. Not directly responsible to the people.
2. Indirectly, city council could put political pressure
on treasurer through the city manager.
As of now anyone who is a registered voter living in the city
can run for the treasurer's position. All they need is to fill
out an application, with a nominating petition or in-lieu fee.
Half of the city treasurers in North County are elected. In
the other half, two are filled by the finance directors, and one
by the city manager. Even where the city treasurer is elected
the bulk of the work is done by an assistant, who is appointed and
also has other city duties.
With an investment potfolio of approximately $70 million
the city must have the best person available for this position.
An election is neither the most efficient or safest way to accom-
plish this.
Sincerely
J£-~y
.S" ^^J^^^s^ £ &1**
•^ Girard W. Anear
;n CITY MANAGER :
CITY OFCARLSBAD
PROJECT FUTURE
P. O. Box 4650
Carlsbad, CA 92008
July 10, 1990
Dear Mayor Lewis and Councilmembers:
RE: AB 10679 - City Treasurer & City Clerk
Positions; Elective vs. Appointive
PROJECT FUTURE urges the council to publicly
support continuation of the present system of electing
Carlsbad's City Treasurer and City Clerk.
We ask the council to file Girard Anear's sugges-
tion that the elective vs. appointive issue be put on
the ballot for the fourth time in the city's history.
Carlsbad voters have consistently rejected all such
moves to make these offices appointive, and FUTURE
respects their judgement.
One of FUTURE'S goals is to increase the public's
active participation and input in local government. A
ballot measure that could remove these positions from
the electoral control of and responsibility to the
public is not consistent with that goal.
We therefore ask the council to advise those
wishing to put such a measure on the ballot of their
option to circulate an initiative petition to that effect,
Very truly yours,
PROJECT FUTURE
Anne Mauch, Secretary
of
TO