Calling all residents. In a little over a year, the City Council is set to significantly degrade the opportunity for the residents to attract a top-quality treasurer to look out for their interests. Over the past year, the City Council has been working on a plan to downgrade the City’s Treasurer position. All without asking your opinion.
The elected treasurer ensures financial transparency and stewardship. Reducing this role weakens oversight and public trust. Instead, we should expand the treasurer’s responsibilities to strengthen oversight.
It started in early 2023 when the City Council reconstituted the Audit Committee to include both audit and investment responsibilities. It then proceeded to staff the committee entirely with members who had investment expertise. The committee did not include anyone with accounting or auditing expertise or experience.
Given their backgrounds, perhaps it should not be surprising that the committee prioritized investments. However, the facts tell a different story. From 2018 through today, the Finance Department has routinely been graded by its outside auditors as having a Significant Deficiency (like getting a D on your report card) and, more recently, a Material Weakness (think F) in its ability to produce financial statements that are free of material error. During that same time frame, the treasurer, who manages the city’s investment activities, received a clean bill of health from its annual audit. Nevertheless, the Committee started with investments.
In its debate, the committee focused on how outsourcing the investment portfolio could improve returns. The committee did not spend nearly as much time weighing the advantages and disadvantages of outsourcing and whether outsourcing made sense for the city. The committee then moved to select a partner. In reviewing bidders, the treasurer was excluded from the selection process.
Next up was preparing a transition plan. Again, the treasurer, who has the relevant experience and expertise, was excluded from the process. At this point, it should not surprise you that the treasurer will not be playing a major role in overseeing the outsourcing contract or its related performance. Now, the city is considering a recommendation to reduce the pay for the treasurer position because they have reduced the required hours.
Was this the plan all along? You get what you pay for. If you want to keep your elected treasurer position as is, contact City Council.
The City Council must respect the treasurer’s role to foster a healthy democracy.
Mike Marriner, Laguna Beach
Mike:
Have you been wondering, like I have, many others, why the Mayor has in essence “benched” the CT?
She’s an elected, why are several appointed staff personnel up there in their elevated aerie and she’s in the audience?
Why is she restricted to 3 minutes of fame at the podium?
I first noticed it after Kempf became Mayor, how else to explain it but as petty and vindictive, payback.
Roger I totally agree. The treatment that the City Treasurer has been subjected to is totally degrading to her elected position. We the residents elected her to be our Treasurer and act as a watchdog over our financial position. It seems to me that they are trying to take away her power to ensure that our money is safe and is being handled in a proper manner. With all the problems that have occurred year after year being highlighted by our audit firm (and who were just dismissed by CFO Curran who oversees this dept.) I smell a rat and a coverup. Our City Treasurer is the only backstop we have on the uncontrolled power to do mischief by our CFO and the finance department. Curious that the City Council majority thinks he is the hero and our treasurer is the enemy. I wonder why??????
Hi Roger,
Thank you for your comment and for bringing up these important concerns.
I, too, have been puzzled by the treatment of our elected City Treasurer. It’s troubling to see the Treasurer, who has been elected to serve and protect the financial interests of our community, being sidelined. The Treasurer’s expertise and input are invaluable, especially in matters involving the city’s finances and investments.
The decision to limit the Treasurer’s participation and reduce the role seems counterproductive, particularly when transparency and accountability should be our top priorities. It does raise questions about the motivations behind these actions and whether they are in the best interest of our community.
Additionally, the composition of the audit committee, which lacks members with accounting or auditing expertise, is deeply concerning. This lack of qualified oversight has contributed to the city’s ongoing financial issues, as highlighted by the consistent poor audit grades. Such actions not only compromise the financial integrity of our city but also reflect an authoritarian style of leadership. By appointing committee members based solely on investment expertise and excluding those with essential accounting skills, the City Council is undermining the checks and balances necessary for effective governance.
This situation raises broader concerns about why our City Council members might be operating on a slippery slope towards authoritarian practices. Is it due to impatience, feeling overwhelmed, or a desire for more control? Regardless of the reasons, this approach is detrimental to our community. Authoritarian leadership leads to a lack of transparency, reduced public trust, and a diminished capacity for addressing the community’s needs.
We need to elect City Council members who will nurture a healthy democracy, valuing inclusive and collaborative decision-making processes. Our leaders should prioritize the diverse voices of our community and ensure that all elected officials can contribute their expertise effectively.
I believe it’s crucial for residents to voice their concerns and ensure that our elected officials can fulfill their roles effectively. Limiting the Treasurer’s involvement and stacking committees with unqualified members undermines the democratic process and the trust we place in our elected representatives.
Thanks again for your insight, and I encourage everyone to speak up and support maintaining the integrity and independence of our City Treasurer’s position.
Best regards,
Mike Marriner
Roger,
Furthermore, unchecked authoritarian leadership styles in governance can lead to several escalating problems that, over time, may become deeply ingrained and difficult to reverse. Initially, such leadership might promise efficiency and decisiveness, but as power becomes increasingly centralized, checks and balances often erode, leading to a lack of accountability. This centralization can suppress dissent and limit the diversity of ideas, resulting in policies that may not reflect the broader public interest. Furthermore, the concentration of power can lead to corruption, as leaders and their close associates might exploit their positions for personal gain without fear of consequences. Over time, the public’s trust in government can severely diminish, as citizens feel their voices are ignored or suppressed.
As these issues compound, the damage to the institutional framework of governance can become extensive, making recovery challenging if the leadership isn’t replaced or reformed. Institutions weakened by authoritarian practices may struggle to perform their roles effectively, whether in enforcing laws, upholding rights, or delivering public services. The longer such leadership persists, the more entrenched these problems can become, creating a self-reinforcing cycle where institutional weakness justifies further authoritarian measures. Restoring democratic norms in such contexts requires not only a change in leadership but also comprehensive reforms to rebuild institutions and heal public trust. This process is often slow and fraught with challenges, as the dismantling of entrenched systems and networks of power can face significant resistance from those who benefit from the status quo.
In a glaring attempt to remain in control of Laguna Beaches direction our CC “Majority” has for years placed a stranglehold on the “mayoral position”. Passing the position of “Mayor” back and forth between CC Member/Mayor Sue Kempf and CC Member/Mayor Bob Whalen. This gavel toss has effectively eliminated the possibility of installing qualified Mayoral candidates beyond these two CC Members and/or their acolytes.
NOTE: CC Member Whalen was elected to the CC in 2012, Whalen served as Mayor for the first time in 2015 and again concurrently in 2019, 2020, and 2021. Sue Kempf served as Mayor in 2022, handing the Mayoral reins back to Whalen in 2023. Then in 2024 the Mayoral position was handed back to Sue Kempf.
Sue Kempf and Bob Whalen then orchestrated the appointment of a 1ST term CC Councilmember, Alex Rounaghi, a 24 year old with no prior Council experience to serve as Mayor Pro-Tem. Note: A. Rounaghi was endorsed by Sue Kempf and Bob Whalen in the 2022 election. Rounaghi is now slated to serve as Laguna Beach Mayor in 2025. This triumvirate now replaces the Whalen, Kempf, Blake threesome of the prior Council Majority. We had, and have a more qualified successor for the position of Mayor in George Weiss, but, in the CC Majorities endeavor to maintain domination/control the more qualified CC Member was passed over in favor the CC Member with the least experience.
Now, with the “New Majority” firmly in place with the election of Rounaghi, on the heals of a the 2022 defeat of CC Member Peter Blake… No need to rehash CC Member Blake, or his caustic tenure on the CC. The “New Majority” has continued to make decisions that DO NOT REFLECT the wishes of many of Us the Residents of Laguna Beach.
Our current CC “Majority” continues to exercise their Pro-Development, Pro-Parking Structure, Pro-Tourism agenda at the expense of Us the Residents. As our CC continues this abuse of power authorizing study after study, spending thousand upon thousands of our dollars to research agendas that many of their constituents simply DO NOT WANT. (Think, Purchase of Laguna Canyon Road, 3RD Street Parking Structure, Replacing our Library with a Parking Structure, Etc., Etc.) This must stop with in the next election cycle.
Furthermore, now our CC “Majority” wants muzzle access to CC Meetings and has accomplished this by banning ZOOM CALLS. In doing so Laguna Beach Residents not able to attend CC Meetings in person are now unable to to voice opinions and concerns that are significant and important to Us the Residents of Laguna Beach.
This CC “Majority” and its predecessor Council have made so many disturbing decisions, from the purchase of Ti Amo for a Fire station that simply did not fit, to the hiring of an unqualified City Manager, to the unwarranted “Pay Off” to the unqualified City Manager, to the stripping of authority of the City Treasurer. The abuses, too numerous to list, go on and on. This misuse of power will continue unless We the Residents put an end to it at the ballot box in November.
Please vote to restore a Residents First Council in the upcoming election.
Mike M.,
Thank you for respectfully addressing the governing issues and concerns facing our City. They are real and increasing as discoveries like this occur.
In general, LB resident stakeholders must become more aware and better informed about our City Council leadership, city management, business operations and investments.
“The City of Laguna Beach” is US and our investment is at risk if we do not pay attention to all financial and policy decisions being made internally and without public acknowledgment/input and hold the folks we put in office and lead employee positions accountable.
This was a 5-0 vote, folks.
Roger, Michele and Claude…thank you for stating what so many of us are wondering and thinking. Haven’t residents and our honest and committed city employees suffered enough under these self-serving/controlling members?
Laguna Beach has been in a state of community unrest and government mistrust for the last decade. The fact that the Mayor’s (Whalen/Kempf) and MPT’s (Whalen/Kempf and Rounaghi) outright rejected numerous citizen public requests for fairly alternating the two council lead positions and to adopt CC term limits speaks volumes about their self-serving agenda’s and who they are serving. It’s not the residents of Laguna Beach folks!
Vote to change this stifling and undemocratic governing leadership style in November. And reject any candidates the Mayor. MPT and Council majority promotes to join them or we will be accepting their lack of transparency best practices and sealing our own future fate.
Correction to Mr. Quilter’s 5-0 report. There were two parts to Agenda Item #15 from the 7/9/24 Council Meeting. The Council DID vote 5-0 in favor of the first part of the transition plan for outsourcing management of City investments with the following modifications: Meeder Investments, the outsourced investment company, will provide monthly reports to both the CFO (Mr. Curran) and the City Treasurer (Ms. Parisi), and the City Manager (Mr. Kiff) will provide investment oversight. On the second part of Agenda Item #15, the Council voted 3-2 with Mayor Kempf and Mayor Pro Tem Rounaghi dissenting, to increase the City Treasurer’s pay by 5% and retain her current hours and duties as the voters elected her to in 2020. The Council did plan to revisit the City treasurer’s responsibilities–which include payroll for a staff that has increased to 337 members in 2024 from 260 earlier (that sounded like more hours and complexity for the Treasurer to this attendee at the 7/9 CC meeting)–prior to November’s election and description of the Treasurer’s responsibilities in the voting guide. It was interesting to hear the man who saved OC County from bankruptcy, John Moorlach, praise the City Treasurer’s skills who he had worked with for 25 years. He warned that chasing after returns on investments is what led Orange County into bankruptcy. A theme echoed by some of the auditors who testified on Agenda Item #15.
Editor’s Note: Deborah Laughton is the Publisher of Methodology and Statistics and spouse of Councilmember George Weiss
Why isn’t the department that is responsible for the safe keeping of the city’s finances, that has had high turn over of personnel, produces financial statements that the outside auditors have found deficiencies with, has been written up for not having closing procedures, has produced financial statements that have required significant adjustments by the outside auditors, has terminated the outside auditors’ contract without first discussing the matter with the audit committee or council, has completely controlled the RFP for new auditors, hasn’t produced timely financial statements in the last 7 years, and has yet to present the June 30, 2023 audited financial statements and the auditors’ letters been held accountable? I can’t answer that question though I’ve asked city council.
Meanwhile, the elected treasury position that has had no reported audit deficiencies and produces timely reportings seems to be under attack. The position has been significantly downgraded, the hours reduced and a compensation reduction is under discussion. All this without a thorough, unbiased analysis of the position’s duties and responsibilities.
Really, I’m baffled.
There’s gotta be a way to program software so that every voter can vote on every expense day-by-day online, to determine what should get paid. Why not?
Such a software tool would confine the city’s agenda, they would no follow it’s guidelines nor honor the intent much less pay to develop such a tool.