Hefty accusations levied against the County Commission
I will say at the outset of this that I think most individuals involved in this are not doing so out of maliciousness, but rather that past Treasurer’s have settled for deferring to county staff as “the experts” in their respective fields and/or have felt powerless to intervene. This is none-the-less a very real problem as it seems to be a common threat in local politics; elected officers tend to be more ministerial in practice even if not on paper. It’s easy to do this; well-intentioned (and even impassioned) people run for office seeking to make a difference. When they get elected, they are at the mercy of staff and prescribed “crash courses” in the inner workings of local government to tell them how they must operate.
Very few enter with the foreknowledge of their authority and power or even that elected offices stand in opposition by design, as part of a vast network of checks and balances used mitigate corruption. Still, even with the checks and balances in place, every person who works in government, whether elected or not, is subject to corruption regardless of intentions. The problems we face in government today are the result of a convoluted, tightly-wound mess of tangles that is not easily combed through. This mess, no doubt, is far more convoluted then I can even present here, but as snarls go, you have two choices – cut it out entirely, or start somewhere and begin combing through a section at a time.
The Sandoval County Commission may be undermining the County Treasurer
State Statutes Concerning Co. Treasurer's Duties
Who decides the role and duties of the county treasurer? The state; not the county. While there is an interesting discussion to be had about whether or not this is best way to delegate authority, at this moment, this is how the law is written. Those desiring to challenge this must present a case to change the law. While there is a general statute outlining the broad authority of the treasurer, the county treasurer has been inserted into other various areas of county government. As such, her duties and powers are scattered through the state code.
So let’s break some of this down:
6-10-8 County boards of finance.
6-10-10. Deposit and investment of funds.
That term “advice and consent” is important. Black’s Law Dictionary defines ‘advice’ (n) as a view or opinion; information. To advise means to give advice, but is not instruction, or even persuasion, but rather “imports that it is discretionary or optional with the person being addressed.” In other words, the advice given by the Board of Finance does not have to be taken by the Treasurer as instruction, direction, or persuasion. The consent part is simply that the board holds veto power (the yes or no vote) over the treasurer’s decisions that require such approval. This is important as you’ll see further down.
Previous Opinions from the Attorney General Concerning the Treasurer's Role
So let’s break it down:
- The AG has upheld that the commission does not hold supervisory authority over the treasurer, and only holds “advice and consent” authority.
2. The AG stated that “[The executive] does not have the authority to expand the power of the Board of Finance beyond that conferred by law. We can interpret the executive here to mean the county manager. So, in other words, the county manager cannot give power to the Board of Finance, that is not already spelling out by state statute, and neither can the board of finance itself.
Further clarifying the term “advice and consent,” the AG stated, “The relationship between the county treasurer and the county board of finance was undoubtedly intended to be the same as that between the President of the United States and the Senate when the President can only act with the advice and consent of the Senate … Thus, decisions … are in the first instance, a matter for the county treasurer; the board of finance has veto power … it does not have the power of choice itself.”
It goes on to add, “the power of veto, like all powers constitutionally conferred upon a government officer or agency, is not absolute and may not be exercised without any restraint or limitation whatsoever.”
Other AG opinions have upheld this as longstanding precedence, stating that ‘if the role of treasurer was merely ministerial what was the purpose of the legislation (passed in 1933) in giving powers to the county treasurer,(1) and that the treasurer and the board of finance do not have co-equal powers. If this was the case, it “could create an absurd situation.” (2) It further states that the county cannot employ and pay “a person to perform services which the law requires be performed by the county [treasurer].” (3) This last point is important, remember, with regard to the county’s delegation of powers and authority to their Financial Adviser (an unelected government contractor further explained below). The closing states the commission can neither “act in a manner amounting to supervisory control over [the county treasurer,” nor “usurp this authority by effectively controlling the tasks and responsibilities of elected officials’ employees.” (4)
- pg 6
- pg 7
- pg 9
- pg 10
So think about “advice and consent” this way. The President of the United States must get approval from the Senate for appointments and ratification of treaties. The President is allowed by the Constitution to do all the foot work, the interviews, the research, the negotiations, the internal policies, etc., related to choosing his appointment or working out treaties. The Senate can offer opinions and information to aid him in this process, but they cannot instruct him as to how or whom to choose, or what will be included in a treaty. Then, after the President has done all the work, he brings his appointment (or treaty) before the Senate and the Senate only has the power to vote to uphold the work the President has done, or vote it down, sending the President back to make adjustments, but once again, he does not have to take the input provided by the Senate. The AG has upheld that this relationship is the same relationship that the Treasurer has with the Board of Finance, where the treasurer is likened to the President and the BoF is likened to the Senate. Keep this in mind.
County Investment Policy and Proposed Changes
First, the county treasurer currently has employed a Portfolio Manager to assist the treasurer in her statutory duties of investment and up until the passage of this new policy, was under the jurisdiction and direction of the treasurer. However, two changes were made that are cause for concern:
Section S.e., which affirmed the treasurer’s jurisdiction and direction of the portfolio manager was deleted, and an addition to S.a was made stating that the portfolio manager’s contract established a fiduciary relationship between “the County (Sandoval County) and the Manager,” but “Treasurer” is specifically left out. As written it appears as though the Portfolio Manager has moved under the authority of the county Manager and outside the jurisdiction of the Treasurer.
The role of the county’s Financial Adviser (FA) is a curious one too. I’ll get into more in the box below, but suffice it say, the new policy inserts the Adviser in areas related to investment that are squarely under the Treasurer’s jurisdiction (thanks to implied relationship under the advice and consent rule), while taking the Treasurer out of the picture. Section T.i stipulates the the FA will agree to meet personally with the Board of Finance – striking out Treasurer. It also stipulates that the FA will be the one to present to the board of finance all things investment related, and strikes out the Treasurer’s (acting as the Investment Officer) right to request monthly meetings.
It establishes a new Investment Committee that will supplant the Treasurer’s Investment Committee, and it’s made up almost entirely by Board of Finance members. So to be clear … The Board of Finance is one and the same as the County Commission – identical. And now the Investment Committee (which is taking the place of the Treasurer’s committee) is made Commissioners and county staff. So this new policy allows Commissioners (acting as committee members) to advise themselves (acting as Board of Finance members) on matters delegated to the treasurer by the state.
Who is this Unelected Government Contractor?
Burpo was hired in June 2014 and it was he that presented the new Investment Policy to the the Board of Finance on Sep 17th. But in addition to curiosities mentioned above, is Burpo’s contract. Under the Scope of Services, Burpo was given a series of duties concerning investments and deposits. See below:
All of the items under Investments and Deposits are duties normally entailed in the treasurer’s duties and what’s more is there are even some duties that appear to be delegations of the “advice” part of the Board’s duties. (I’ll pull this altogether below). But this contract, coupled with the new investment policy, and the fact that Burpo was at one time in a position under the Treasurer where he had the power to invest (and was subsequently removed to comply with federal law), gives one reason to pause.
Don’t forget to also look at the compensation page. Burpo has been tasked with a portion of the work load that would be entailed in the Treasurer’s job concerning investments, and yet, he’s being compensated $9200 a month (plus fees) to do the same thing the Treasurer gets paid roughly half to do (without fees). It was mentioned at a recent meeting on Sep 29th, by Burpo himself, that he was responsible for making changes to the new investment policy, “all the red and blue sections” (see the link in the box above), while the portion written by the legal department, was the old policy. So to be clear … the guy that used to work on investments under the old Treasurer, forced to leave under the new treasurer, was hired on again by the Commission, and wrote new policy that broadened his role as Financial Adviser, after being contracted to do a job that the state has delegated to the treasurer, getting paid twice as much as the Treasurer. Can you say conflict of interest?
Okay, let’s pull this all together:
The longstanding definition of the term “advice and consent” dictates the relationship between the county treasurer and the county board of finance, and it is vastly clear that the state-designated role of the Treasurer is to work out everything entailed in investing legally available monies in legally available avenues, and that the board of finance can offer their opinions and advice, but that the Treasurer can take it or leave it. Ultimately, and the county manager and attorney know and understand that the board of finance can only approve or deny the Treasurer’s proposals; they cannot interject themselves into her role.
But there’s more. The longstanding opinion from the AG is that the commission neither has the authority to usurp the Treasurer’s authority, nor do they have the power to delegate their own authority to someone else. In this case, the Commission’s Financial Advisor arguably does both – usurp’s the treasurer’s authority and assumes delegated power from the board of finance. Think about this: if a future treasurer was elected, and that person was a bit naive about his or her power, and was told by county staff that she didn’t need to worry about the work entailed in investing because the commission has a guy who does it, and oh! there’s this investment policy that makes it set in stone! Can you imagine this naive treasurer shrugging his and her shoulders and just going with what they’re told? I can.
The AG also said that the county treasurer is not a mere ministerial role but rather a governing authority in her own right. If this future treasurer left the duties outlined in Burpo’s contract, to Burpo, then, aside from collecting taxes and signing checks, what governing authority does she have? None. In effect, she becomes ministerial, and that’s a violation of state law.
In fact, because it is the responsibility of the Treasurer to work out the details of investing practices before presenting to the Board of Finance for final approval, it’s actually the treasurer’s responsibility to write the Investment policy, and in 2009, that’s the office who had presented it, with the adviser Robert Burpo. In other words, neither the Commission nor the their contractor has any business drafting an investment policy in the first place.
The county manager and attorney were almost patronizing at the Sep 17th meeting with how they treated Montoya’s concerns regarding this apparent usurpation of her authority. And yet, they offered no real substantial defense. It was, “this is much ado about nothing,” or “let’s agree to disagree,” or “you’re confused; you must be confused.” And why aren’t the commissioners asking these questions? Do they just take what the manager and attorney say at face value? What’s the point of having a commission if they’re going to just defer to the manager and attorney. Maybe the real reason why they don’t see this as reducing the treasurer to a mere figurehead, is because they have reduced themselves to mere figureheads.
There’s still time before this Investment Policy gets final approval by the County Commission, so if this is as disconcerting to you as it has been to me, contact your county commissioner, and tell them it’s time to start paying attention and stop micromanaging the treasurer.