Ken Palmer for Brea City Treasurer
[v] Vote Yes to Government Accountability
[v] Vote No to Higher Taxes
Ken’s Pledge:
I promise to be of service to the people of Brea. I will help the City Council to be wise stewards of our funds, by seeking to “tighten our belts” and balance the budget.
Ken’s experience in Corporate America and CPA / MBA education help him to understand more options available to increase City efficiency and productivity without raising taxes.
Non-deductible contributions to defray campaign costs are greatly appreciated.
Make checks payable to Ken Palmer for Treasurer to 275 Morning Glory St.
Organizations Served: City of Placentia Financial Oversight Committee, North Orange County Leadership Institute, Brea Chamber of Commerce, Park Paseo HOA, Brea Foundation, Knights of Columbus, Brea Soccer Association, St Angela Merici.
October 21, 2008
Honorable Mayor, Distinguished Council Members, Ladies & Gentlemen:
My name is Ken Palmer and I live with my family at 275 Morning Glory. I’m a self employed CPA and I’m also working to be your City Treasurer.
Years ago the City meant very well in the formation of the Investment Committee and separately the Finance Committee; and they do function for the betterment of our community. However, in these difficult times a higher level of fiduciary responsibility (the wise use of our money) is needed and expected. I have a couple of examples I would like to share.
I recently reviewed the Comprehensive Annual Financial Report or CAFR, as it is known. I was surprised to note that it was signed by the same Independent Auditor that had signed Audit Reports 10 years ago! 10 years! This is outrageous! The audit contract for the City of Brea is extremely complex and lucrative. With such a cozy arrangement, the City has provided outside auditors an occasion to avoid the uncomfortable job of communicating internal control weaknesses and the recommendations needed to correct them (like - don’t bite the hand that feeds you). Since there are many qualified auditors in the area, I am wondering why the Finance Committee allowed this to happen.
I also had the opportunity to review the August 2008 Treasurer’s Report. It was largely prepared by our Investment Counselor who has been preparing the same stale and regurgitated reports for at least eight years. 8 years! The report, submitted to the Council by the City Manager, indicated that even during the current troubling bailout of Fannie Mae and Freddie Mac, the City and the Redevelopment Agency still owned over $26 million of their securities. This report also indicated that the amount invested in these types of securities did exceed the limit developed by our very own Investment Committee. Naturally, I was shocked to read that even though the report contained this violation of policy, the recommendation to the Council was simply “receive and file.” (like – a rubber stamp)
I believe the following actions are needed to strengthen the City of Brea’s financial controls:
1. Implementation of a formal and independent Audit Committee that will choose and evaluate the outside auditors and to whom the auditors will directly report. Of course, language developed by our fine City Attorney will address Brown Act concerns so that confidentiality can be maintained.
2. Require mandatory outside auditor rotation, at least every five years. Because the City, as a municipality, is exempt from the provisions of the Sarbannes-Oxley Act this provision needs to be clearly stipulated.
3. Conduct a thorough review of Investment Strategy and Policies; including a formal performance appraisal of our Investment Counselor.
My summary and conclusion requires “connecting the dots”. I have addressed this Council during previous Matters from the Audience sessions about cost saving measures at the Brea Sports Park. I also previously addressed the Council about implementing transparency through “read-only” access to the city’s financial database. Today my concerns about improvement in Fiduciary Responsibility, does connect the dots. What has now become apparent is that Brea needs a treasurer with a solid financial background.
Ladies and gentlemen, let’s not let Good Old Brea turn into “Good Ole Boys” Brea.
It’s time for a change! Thank You!
