Grand Jury notes problems with elected officials

May 2, 2010

By KAREN VELIE

A San Luis Obispo County Grand Jury investigation has concluded that some elected city treasurers locally are unqualified to do their municipal jobs and are lax at performing them.

As a result, the grand jury is recommending that cities appoint – instead of elect — their treasurers.

Only three county cities, Arroyo Grande, Atascadero and Paso Robles, elect their treasurers. If elected, the treasurer must be a voter who resides in the city – but no other qualifications are required by law.

By law, city treasurers are empowered to manage investment portfolios, totaling into the millions of dollars, for their cities.

State law requires that appointed and elected treasurers take responsibility for critical investment decisions while providing reports to the public regarding the city’s financial welfare.

The grand jury found that the treasurers in Atascadero and Arroyo Grande had failed to perform their duties because they lacked the knowledge of the jobs’ requirements.

These treasurers manage combined investment portfolios totaling more than $120 million.

First elected in 2002, the Atascadero treasurer, Joseph Modico Jr., began having problems performing his duties in 2008 and 2009. According to the report, Modico overlooked the requirement that he provide regular reports on the city’s financial situation for almost 18 months.

“We determined that Atascadero has been lax in adhering to state government code requirements and that their elected treasurer shows little interest in the financial oversight responsibilities that are part of his job,” the grand jury said in its report.

“In Arroyo Grande, the treasurer has delegated her job without knowledge of its responsibilities.”

The report concluded that Janet Huwaldt, the Arroyo Grande treasurer, had performed none of the functions of the job because she was asked by city manager Steve Adams to seek election to the post although she was only a city clerk.

Angela Kraetsch, currently Arroyo Grande’s director of finance, actually does the job but she is ineligible to seek election to the post because she lives outside of the city, the report said.

Huwaldt, who agreed to run to be treasurer, is paid $5 per month to do that job.

“That employee ought to be given more than the ‘very minimal training’ she received,” the report said.

In contrast, the grand jury had high praise for Mike Compton, the Paso Robles treasurer, who was described in the report as qualified and attentive to the requirements of his office.

However, the report cautioned that he could be replaced by a treasurer candidate, “whose only qualification is that he or she lives in the city and votes.”

In the past, voters in the three cities have rejected measures to make treasurers appointed, presumably so that voters can have more say in local government.

“But ironically, when these folks are elected but concurrently serve as city employees, it could be difficult for them to function as independent public watchdogs,” the report said.