I have reviewed Treasury functions as an external and internal auditor, and as an internal controls consultant. I also had a Treasury function report to me when I worked for an international organization. I’m concerned that recent Council decisions likely will result in reducing the Treasurer position pay to an amount that will attract someone with fewer skills.
This position is not trivial. Currently it is involved with approval and opening of bank accounts and wire transfers, managing bond funds and reporting to the SEC. It’s perplexing as to why the compensation for a position this important is being discussed in terms of hours. This is a professional job and compensation for professional positions is generally salaried, with the expectation that the position occupant will work whenever and for however long it takes to get the job done.
The real discussion should be what is required of a Treasury function; the skills, responsibilities, the number of staff needed to ensure appropriate segregation of duties, and the related market compensation(s). Currently, the Treasurer makes $125,000 and has an unpaid Deputy. As a result of outsourcing investment responsibilities, which were previously performed by the Treasurer, Treasurer pay is recommended to be reduced to $80,000, a saving of $45,000.
But what about additional costs? The City Manager will have responsibility for overseeing the outsourcing contract. But no one expects him to do the necessary tasks himself. He will assign them to one of his staff. And unless there is someone with investment expertise currently on staff that has enough slack in his schedule to add these new duties, the City will need to hire new staff. The current pay of the lowest-paid staff in the Finance Department is more than $80,000.
We are about to transfer oversight of a new outsourcing contract to unnamed staff with unknown skills from someone who has been doing the job for the past twenty years, so knows it inside and out. And the result may be that the City spends more money and reduces overall skills.
To their credit, council has authorized an audit of the new Treasury process. This is an opportune time to review how various Treasury functions are performed and by whom. Let’s not lose focus on the position and its importance to the protection of city (and resident) resources.
Mary Locatelli, Laguna Beach
