HomeMy WebLinkAbout09 APPOINTMENT OF THE CITY TREASURERAgenda Item
AGENDA REPORT Reviewed:
a�s�t
MEETING DATE: OCTOBER 1, 2013
TO: HONORABLE MAYOR AND MEMBERS OF CITY COUNCIL
FROM: JEFFREY C. PARKER, CITY MANAGER
G
SUBJECT: RECOMMENDATION OF THE FINANCE DIRECTOR'S APPOINTMENT
AS THE CITY TREASURER
SUMMARY:
City Council is asked to consider the recommendation to appoint the Finance Director
as the City Treasurer.
RECOMMENDATION:
It is recommended that the City Council adopt one of the following three alternatives:
1. Accept the City Manager's recommendation to appoint the Finance Director as
the City Treasurer, who shall be responsible for investing City funds in
accordance with the City's Investment Policy that is adopted by the City Council
annually, and increase the Finance Director's annual salary by 5% from
$165,651 to $173,933.
2. Recruit for an appointed City Treasurer at no cost or at a cost to be determined.
3. Retain the services of an outside investment firm to invest the City's cash.
FISCAL IMPACT:
Appointing the Finance Director as the City Treasurer would yield a net savings in
expenditures to both the General Fund and Water Enterprise Fund of $19,858. The
costs associated with alternatives two (2) and three (3) are not known as this time.
CORRELATION TO THE STRATEGIC PLAN:
The recommendation correlates to the City's strategic plan for fiscal stewardship for
practicing sound stewardship of the public's assets, Goal C.
BACKGROUND:
Currently the Finance Director is serving as the Interim City Treasurer. As the Interim
City Treasurer the Finance Director invests the City's cash according to the City's
annually adopted Investment Policy. The Investment Policy is based on State law and
RECOMMENDATION OF THE FINANCE DIRECTOR'S APPOINTMENT AS THE CITY TREASURER
OCTOBER 1, 2013 PAGE 2
expanded to accommodate the City's investment needs. The Finance Director is
investing funds based on a conservative approach that the former City Treasurer,
George Jeffries followed. Mr. Jeffries made all the investments for the City based on his
knowledge, research, and expertise. His annual compensation was $48,000. At no
time did he make investments because he was directed to by the Finance Director or
Audit Commission. He would communicate with the Finance Director on a regular basis
in regards to the cash flow needs of the City and consulted with the Finance Director on
many occasions regarding the investments he made or was thinking of making. Mr.
Jeffries also communicated to the Audit Commission on the investments he intended to
acquire and the status of interest rates.
The City Manager recommends the Finance Director serve as the City Treasurer and be
responsible for investing the City's cash according to the City's Investment Policy. To
provide a third parry review of the City's investments the Finance Director /City
Treasurer will present to the Audit Commission (Commission) the current investment
portfolio and his /her strategy for investing City cash at their bi- monthly meetings. The
Commission is only an advisory board; the Chair was comfortable with providing
comments and recommendations regarding the investment activity but did not think it
was appropriate for the Commission to provide a signature on the quarterly investment
reports. The Finance Director /City Treasurer will communicate on the quarterly
investment reports to the City Council the comments and recommendations the
Commission may have had on the investment portfolio and investment strategy. The
recommended compensation increase for the Finance Director /City Treasurer position
to accommodate the additional duties as the City Treasurer is 5 %. The annual
compensation would increase from $165,651 to $173,933 which is comparable to cities
where the Finance Director also serves as the City Treasurer.
Two alternatives to the recommendation are: ( #2) the City Council appoints a City
Treasurer at no cost or at a cost to be determined, or ( #3) the City Council would retain
the services of an outside investment firm to invest the City's cash at an annual cost
that may range from $50,000 to $150,000. To ensure the City's best interests, it will be
important to select a firm that would only benefit financially from the fee it is paid from
the City and not from investment selections.
Should the City Council accept the City Manager's recommendation the resolution
authorizing the Finance Director /City Treasurer's salary increase and the approval of
the Finance Director /City Treasurer position will be presented to the City Council at the
October 15, 2013 council meeting.
If the City Council decides to pursue one of the alternatives presented, staff will provide
requ s d in format t the City Council's direction.
�i
J ff . Parker
it pager