RES-2015-280RESOLUTION NO. 2015- 280
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
ANAHEIM DELEGATING POWER TO APPOINT AND
REMOVE THE CITY TREASURER TO THE CITY
MANAGER; COMBINING THE POWERS AND DUTIES OF
THE OFFICES OF CITY TREASURER AND FINANCE
DIRECTOR IN ONE PERSON, SUBJECT TO LIMITATIONS
PROVIDED HEREIN, TO ALLOW CONSOLIDATION OF
FISCAL ADMINISTRATION POSITIONS AND
RESPONSIBILITIES; AND MAKING FINDINGS WITH
RESPECT THERETO.
WHEREAS, the Anaheim City Council at the February 18, 2014 City Council meeting
approved the submission of a ballot measure, consisting of proposed Charter amendments, for
voter consideration in the June 3, 2014 Special Municipal Election. The Charter amendments
included, among other items and as reflected in the ballot question, a proposed Charter
amendment to "allow combining offices of Treasurer and Finance Director;" and
WHEREAS, consistent with the ballot question presented to the voters, the above -
referenced ballot measure included a proposed amendment to Section 702 of the City Charter to
delete the prohibition of combining the duties of the offices of Finance Director and City
Treasurer in one person, provided the offices are not incompatible; and
WHEREAS, said measure also included a Charter amendment providing that the City
Council could by ordinance or resolution delegate to the City Manager its vested power to
appoint and remove the City Treasurer, which amendment was proposed to Section 701 of the
City Charter; and
WHEREAS, the ballot measure, including the provisions described above in Sections 701
and 702 of the Charter, was approved by Anaheim voters and became effective in the manner
provided by law; and
WHEREAS, as amended, Section 701 of the City Charter reads, in part, "the City
Council may by ordinance or resolution delegate to the City Manager its vested power to appoint
and remove the City Treasurer;" and Section 702 of the City Charter reads, in part, "When the
positions are not incompatible, the City Council may combine in one person the powers and
duties of two or more officers;" and
WHEREAS, these amendments provide flexibility to combine the powers and duties of
the offices of Finance Director and City Treasurer to a single individual where the positions are
not incompatible; and
WHEREAS, pursuant to Charter Section 604(h), the City Manager has vested power to
exercise control of all administrative offices and departments of the City, including the offices of
Director of Finance and (as granted by this Resolution) the City Treasurer, and may prescribe
general rules and regulations as he or she may deem proper and necessary for conduct of the
administrative offices and departments under his or her jurisdiction. Such vested power to
develop rules and regulations includes power to design rules, policies, procedures and
regulations to ensure that the operation of financial departments of the City have oversight and
controls on said City resources; and
WHEREAS, pursuant to Charter Section 1219, the City Council must retain an
independent certified public accountant, procure an annual final audit report from said
independent auditor to evaluate the City's financial practices and processes for handling and
disbursing public funds and make such annual audits available for public review. The retention
of an independent outside auditor has been recognized in legal opinions as a sufficient "check
and balance" to "safeguard the finances" in cases where combining offices of a public agency
treasurer and finance director occur; and
WHEREAS, the City Treasurer's Office currently has two primary functions: central
cashiering and cash and investment management; and
WHEREAS, combining the duties and powers of the Finance Director and City Treasurer
in one person will not eliminate the segregation of duties of each office and, as directed in this
Resolution, the City Manager, in consultation with the City's outside auditor will take any
necessary and proper action to promulgate rules, regulations, policies and practices (as
authorized by the City Charter) to ensure the same person does not make an investment and then
record and reconcile such investment in the City's financial records; and
WHEREAS, comparable cities such as Los Angeles, San Jose, Fresno, Santa Ana,
Fullerton, , and Newport Beach all assigned the duties of City Treasurer to the City's top finance
official and, in each instance, systems of control have been initiated to ensure sound fiscal
management and transparency; and
WHEREAS, the City's external auditors will be directed by the City Manager to assist
with best practice procedures during the consolidation process and, pursuant to Charter
Section 1219, monitor activities and performance of the new practices. Further, once the
controls are in place, the external auditors will evaluate key controls implemented by city staff to
ensure the controls are designed and operating properly and allow for proper segregation of
duties; and
WHEREAS, the offices of Finance Director and City Treasurer are found to be
compatible for combination of powers and duties in one person, and such combination in a single
responsible party allows the City to streamline the duties and reporting requirements vested in
each office; further, the combination does not diminish any internal controls in place or increase
the City's risk for the following reasons:
First, pursuant to applicable law and direction given in this Resolution, including
without limitation Charter Sections 705 and 706, neither offices have auditory, appointive,
removal or supervisory powers over the other office.
Second, as reflected in opinions of the California Attorney General and state law,
the powers and jurisdiction of the offices do not lead to the possibility of a significant clash of
duties or loyalties between the offices of City Treasurer and Finance Director in that there is an
absence of statutes suggesting a contrary result; thus, there is no statutory prohibition to
combining the duties of City Treasurer and Finance Director. Further, the Attorney General has
opined that the offices of clerk (which includes financial and accounting duties delegable by
statutes to a director of finance) and treasurer are not incompatible and this, as noted by the
Attorney General, is "positive grounds for holding the offices compatible." Indeed, in the similar
case of county functions, statute expressly authorizes the combining of the treasurer and finance
director offices in one person. Additionally, as recognized by the Attorney General, the
maintaining of an independent external audit, as is required by City Charter Section 1219,
provides additional "safeguard" to City finances if such offices are combined. Finally, by
delegation contained in this Resolution, the City Charter authorizes and directs the City Manager
to promulgate rules and regulations as directed by this Resolution to ensure that practices and
procedures are utilized to promote fiscal segregation of duties.
Third, policy considerations make it proper for one person to hold both offices in
that the ballot measure, which was overwhelmingly approved by Anaheim voters, specifically
included in the ballot question presented to the voters in the ballot pamphlet the recitation that
the intention of the measure was, among other things, to "allow combining offices of Treasurer
and Finance Director." As a result, taking action to combine said offices would be consistent
with the voters' intent in approving the Charter amendments. Further, combination of the duties
and offices in one person is consistent with other cities identified in this Resolution above, which
have combined the duties and powers of these offices in one person; and
WHEREAS, consistent with Charter Section 701, the City Council desires to delegate its
vested power to appoint and remove the City Treasurer to the City Manager; and
WHEREAS, consistent with Charter Section 702, the City Council desires to combine in
one person the powers and duties of the offices of Treasurer and Finance Director subject to the
limitations provided herein.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
ANAHEIM AS FOLLOWS:
1. The City Council finds and determines that all of the foregoing Recitals are true and
correct, and the City Council expressly incorporates all of said Recitals into its approvals.
2. The City Council hereby delegates to the City Manager its vested power to appoint and
remove the City Treasurer. This delegation does not abrogate the obligation of the City
Manager to conform his or her conduct in such appointment or removal to the
requirements of Charter Section 604(a).
3. The City Council hereby combines in one person the powers and duties of the offices of
City Treasurer and Finance Director.
4. The City Manager is authorized and directed in recognition of the City Manager's
independent authority under Charter Section 604 to promptly, in consultation with the
City's outside independent auditor, take any necessary and proper action to create rules,
regulations, policies and practices to ensure proper internal controls are in place and
thereafter monitor activities and performance of said practices.
5. This Resolution shall be effective immediately upon its adoption but Resolution action
Number 3 shall become operative on the date that the current incumbent City Treasurer
retires from his office.
THE FOREGOING RESOLUTION is approved and adopted by the City Council of the
City of Anaheim this Sth day of December, 2015, by the following roll call vote:
AYES: Mayor Pro Tem Kring and Council Members Murray, Brandman,
and Vanderbilt
NOES: Mayor Tait
ABSENT: None
ABSTAIN: None
CITY OF ANAHEIM
By:
(X-
MAY'OR OF THE CITY OF ANAHEIM
ATTEST:
"n��,ao
CITY CLERK OF THE CITY OFA AHEIM
CAO -1132030