M 12-22-86TOWN OF LOS GATOS CALIFORNIA
TOWN COUNCIL/PARKING AUTHORITY AGENDA
DECEMBER 22, 1986
TOWN COUNCIL
The Town Council/Parking Authority met in a joint meeting in the Council
Chambers at 7:35 p.m., in a special called meeting.
ROLL CALL
PRESENT:Joanne Benjamin,Eric d. Carlson, Thomas J.Ferrito, Robert
L. Hamilton and Mayor Brent n. Ventura.
ABSENT:None.
REVOCATION OF TREASURER'S RESPONSIBILITY AND AUTHORITY FOR
INVESTMENTS IN BELL SAVINGS
Town Manager, Deborah Swartfager, referred to her report on delegation of
authority for investments, explaining the reason for the necessity to delegate the
authority for investments and requested that Council go on record approving the
recommendation so the Town will not be in violation of the Government Code.
Discussion was held regarding withdrawal of Town funds without penalty. It was
noted that according to contract with Bell Savings, as furnished by Town
Treasurer, there would be no penalty for withdrawal. Town Manager answered
questions of Council and stated the only issue being dealt with is the investment
of monies in institution whereby they would be in compliance with the
Government Code which states that the Town's maximum deposit in a savings
and loan shall not exceed the total net worth of any savings and loan. In the
case of Bell Savings, as of July 1986, the Town had on deposit 3 million dollars
when Bell Savings' net worth reflected a negative 145 million dollars. The Town
attorney answered questions of Council regarding Treasurer's Investment Policy,
stating this policy was not adopted by Council. The original investment authority
is with the Town Council. It was delegated to Town Treasurer many years ago
and the Council is now aware of the Code violation, and has asked the Treasurer
to correct it. The Treasurer has not done this, therefore the duty lies with the
Council to remedy the situation to bring the Town Funds into compliance with the
Government Code. After further discussion Mr. Ferrito moved for adoption of
Resolution No. 1986-185 entitled, A RESOLUTION REVOKING THE TOWN
TREASURER'S RESPONSIBILITY AND AUTHORITY FOR INVESTMENTS
(DEPOSITS) IN BELL SAVINGS AND LOAN ASSOCIATION; and recommends
that the Treasurer from this date forward make no investments (deposits) in any
financial institution in excess of the institution's net worth or in violation of state
law or regulations. Mr. Carlson seconded making findings (for the record) that in
fact 1.5 million was deposited in error by Government Code and by contract with
Bell Savings and Loan. As Treasurer has not acted to remedy the error, Council
has no other alternative but to revoke Treasurer's authority for investment in said
Association. Motion carried by vote of four ayes. Mr. Hamilton voting no, stating
until such time Council can discuss the entire Main-Hurdman letter and have a
reasonable working session with the Town Treasurer to provide him with the
necessary tools to do his job. Mayor Ventura supported the motion because the
investment was made in violation of the State statute that prohibits public
agencies to invest funds in bankrupt institutions or institutions that do not have
enough assets to provide adequate security for the investments and it is the
responsibility of the elected official to protect the public funds. Mr. Ferrito moved
that Council authorize the Town Manager and the Town Attorney to be the
contact with Bell Savings and Loan for the purposes of the Resolutions that were
passed this evening and on December 15, 1986. In addition, should the
Manager or Attorney penalty that they report back to council, at the January 5,
1987 Council meeting, with a recommendation on the next action to be taken.
Mr. Carlson seconded. Carried by a vote of four ayes. Mr. Hamilton voted no.
The Town Manager and Town Attorney to keep the Town Treasurer informed.
Discussion was held with regard to holding a study session with Town Treasurer.
This will be schedule in the near future.
ADJOURNMENT
Mayor Brent N. Ventura declared the meeting adjourned at 8:15 p.m., Monday,
December 22, 1986.
ATTEST:
Rose E. Aldag
Town Clerk