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Receive a presentation on options for the potential consolidation of the County’s financial management structure into an appointed Office of Director of Finance pursuant to Government Code section 26980 and provide policy direction on potential next steps
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Published Notice Required? Yes ___ No _X _
Public Hearing Required? Yes ___ No _X _
DEPARTMENTAL RECOMMENDATION:
It is recommended that the Board of Supervisors receive a presentation on options for the potential consolidation of the County’s financial management structure into an appointed Office of Director of Finance pursuant to Government Code section 26980 and provide policy direction on potential next steps.
SUMMARY:
On June 5, 2024, Solano County Auditor-Controller officially retired before the expiration of her current term which creates a possibly opportune time for the Board and the voters of the County to consider making structural changes to the financial management structure of the County. The Board is being asked to consider the possibility of consolidating the County’s financial management structure to provide greater accountability and efficiency by combining the departments of the Auditor-Controller and the Treasurer-Tax Collector-County Clerk into one department headed by an appointed Director of Finance subject to voter approval pursuant to Government Code section 26980. Alternatively, the Board may choose to consider maintaining separate departments and instead consider if one or both of the positions should be appointed or elected.
FINANCIAL IMPACT:
Although the specific position and organization structure of a combined Director of Finance will require further study and analysis, there is the potential for several opportunities for long-term savings should the voters approve the consolidation. The Cost of placing this on the November 5, 2024 ballot is estimated at $50,000. If the Board directs adding a ballot measure in November 2024, the associated cost is anticipated to be addressed as part of the FY2024/25 Midyear budget update.
DISCUSSION:
Currently, the County’s financial management is primarily provided by three departments: Auditor-Controller, Treasurer/Tax Collector/County Clerk, and County Administrator’s Office. Over the past several years, the County has taken steps to modernize its financial systems and processes, specifically, with the upgrade of the County Assessment and Taxation System (CATS), while the County’s organizational structure has not changed. With the recent retirement of Auditor-Controller with over two years left in her term, an opportunity has been presented to review the current structure and consider making potential changes. Cal. Government Code section 26980 provides, that with the approval of the voters, any county may establish the office of a Director of Finance. Such a director can be either elected or appointed by the Board of Supervisors based on the wording of the ballot measure. State law further provides that such director position would consolidate the offices of the Auditor, Controller, Tax Collector and Treasurer and County Clerk and that such consolidation would only become effective upon the expiration of the current term of office of the incumbent of the offices so consolidated.
A number of counties in California have reviewed and made changes to consolidate and modernize their financial management structure. These counties include Alpine, Glenn, Fresno, Kings, Marin, Mono, Sacramento, San Bernardino, San Luis Obispo, Santa Clara, Sonoma, and Yolo. Of these 12, four remain as elected though consolidated offices (Fresno, San Bernardino, San Luis Obispo, and Sonoma) while the Board appoints in the remaining eight counties.
Policy options for consideration by your Board:
• Option 1: Maintain the separately elected offices of the Auditor-Controller and the Treasurer/Tax Collector/County Clerk; or
• Option 2: Place a ballot measure on the November 2024 or subsequent election asking the voters to establish the Director of Finance position that consolidates the Offices Auditor-Controller and Treasurer/Tax Collector/County Clerk and consider whether that position should be appointed or elected.
• Option 3: Maintain separate offices of the Auditor-Controller and the Treasurer/Tax Collector/County Clerk, but place a ballot measure on the November 2024 or subsequent election asking the voters to consider whether the County Auditor-Controller and/or the Treasurer Tax Collector/County Clerk should be appointed or elected.
Based on the experience of other counties, staff believes that there are opportunities for greater effectiveness and efficiency by consolidating these offices. While consolidating yet remaining an elected office will achieve those efficiencies, switching the position to appointed would provide further improvements in accountability and the ability to draw from a greater recruitment pool. Such greater accountability could be accomplished by requiring that any appointed Director of Finance could only be removed by a public hearing and a 4/5th vote of the Board, rather than a simple majority, and an outside independent audit would be conducted annually to verify proper financial management of the new office.
To place a ballot measure establishing a Director of Finance position, the Board would need to direct staff to return with a resolution calling for an election prior to August 6, 2024, which is the last date that the matter can be placed on the November 5th ballot. Staff is recommending that the Board consider taking such action which, if the voters approve of the consolidation, the new position would be established at the expiration of the current terms of office which is December 31, 2026. Staff would return after the election with the next steps in establishing the position.
ALTERNATIVES:
The Board could take no action at this time; however, given that the offices cannot be consolidated during the term of an elected officeholder, if this is not placed on this November’s ballot, the next opportunity to consider and actually effectuate the consolidation could not occur until January 1, 2031, which would be the end of the next term of elected offices.
OTHER AGENCY INVOLVEMENT:
The Auditor-Controller, Treasurer/Tax Collector/County Clerk, County Administrator’s Office and County Counsel were consulted in the preparation of this report.
CAO RECOMMENDATION:
APPROVE DEPARTMENTAL RECOMMENDATION