It is therefore RECOMMENDED, that your Board adopt the attched resolution supporting AB 546.

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1 0035 County of Santa Cruz Fred Keeley Treasurer TREASURER 701 OCEAN STREET, ROOM 150 P.O. Box 1817Santa Cruz, California Treasurer: (831) Tax Collector: (831) Central Collections: (831) FAX: (831) April 17,2013 BOARD OF SUPERVISORS County of Santa Cru 701 Ocean Street Santa Cruz, Californa AGENDA: April 23, 2013 Dear Members of the Board: On April 16, your Board authorized the Treasurer-Tax Collector to convene meetings with the County Administrative Offce, the Offce of the Auditor-Controller, the Office of the Assessor- Recorder, the County Counsel, and the Board of Supervisors' representative to the Treasury Oversight Commission, for the purose of identifying the issues associated with a consolidation of the Office of the Treasurer-Tax Collector with the Offce of the Auditor-Controller. Your Board asked that I retu on April 23, with a correction resolution and a copy of Assembly Bil 546 for additional review in order to provide support for Assembly Member Mark Stone's legislation which would allow the County of Santa Cru to consolidate the Office of the Treasurer-Tax Collector with the Office of the Auditor-Controller. I will report back at budget hearngs regarding the progress on the possible consolidation. It is therefore RECOMMENDED, that your Board adopt the attched resolution supporting AB 546. Sincerely, -- ~Treasurer County of Santa Cru RECOMMENDED BY: CC: Assembly Member Mark Stone, Auditor-Controller, Assessor-Recorder, County Counsel Treasury Oversight Commission, County Administrative Office 14

2 BEFORE THE BOARD OF SUPERVISORS OF THE COUNTY OF SANTA CRUZ, STATE OF CALIFORNIA Resolution No. On the motion of Supervisor duly seconded by Supervisor the following resolution is adopted RESOLUTION OF THE BOARD OF SUPERVISORS OF THE COUNTY OF SANTA CRUZ SUPPORTING ASSEMBLY BILL 546 BY ASSEMBLY MEMBER STONE WHEREAS, the County of Santa Cruz currently divides fiscal checks and balances between the elected Treasurer-Tax Collector, elected Auditor-Controller, and elected Assessor- Recorder; and WHEREAS, such a system of checks and balances is critical to the open and responsible management of public funds and preparation and collection oftaxes, including the local property tax; and WHEREAS, it is allowable under law to consolidate one or more of such offices, while retaining critical check and balance responsibilities; and WHEREAS, when a county wishes to consider such consolidation, it is necessary that there be statutory authorization; and WHEREAS, the Santa Cruz County Board of Supervisors, together with the County Treasurer- Tax Collector and Auditor-Controller are beginning a process to consolidate their offices in January of2015; and WHEREAS, Assembly Member Stone, a former member of the Santa Cruz County Board of Supervisors, has introduced Assembly Bill 546, which would, if enacted, permit the County of Santa Cruz to consolidate the offces of Treasurer- Tax Collector and Auditor- Controller. NOW, THEREFORE, BE IT RESOLVED that the Santa Cruz County Board of Supervisors does hereby recommend enactment of Assembly Bil 546 (Stone). PASSED AND ADOPTED at a regular meeting of the Board of Supervisors of the County of Santa Cruz, State of California, this 23rd day of April 2013 by the following vote: 14 AYES: NOES: ABSENT: ATTEST: SUPERVISORS SUPERVISORS SUPERVISORS Clerk of said Board Chairperson of said Board

3 RESOLUTION OF THE BOARD OF SUPERVISORS OF THE COUNTY OF SANTA CRUZ SUPPORTING ASSEMBLY BILL 546 BY ASSEMBLY MEMBER STONE 0037 Page Two 1t

4 0038 AMENDED IN ASSEMBLY MARCH 19,2013 CALIFORNIA LEGISLATURE REGULAR SESSION ASSEMBLY BILL No. 546 Introduced by Assembly Member Stone February 20,2013 An act to amend Section i 0 i i o. i of the Insmanee Code, relating to insuranee of the Government Code, relating to local government. LEGISLATIVE COUNSEL'S DIGEST AB 546, as amended, Stone. Insuranee: life and disability insurance: insurable interest. Local government: consolidation of offces. Existing law authorizes the board of supervisors in Mendocino County, Sonoma County, Trinity County, and Tulare County to consolidate the duties of the offces of Auditor-Controller and Treasurer-Tax Collector into the elected offce of Auditor-Controller- Treasurer- Tax Collector. This bil would additionally authorize the board of supervisors in Santa Cruz County to consolidate the duties of the offces of Auditor-Controller and Treasurer-Tax Collector into the elected offce of Auditor-Controller- Treasurer- Tax Collector. Existing ht'n pmvides, among other things, that an insmable interest, with reference to life and disability insmanee, is an interest based upon a reasonable expeetation of pecuniar advantage thmugh the continued life, health, or bodily safety of another person and consequent loss by reason of that person's deat or disability or a substantial interest engendered by love and affection in the ease of individuals elosely related by bltjd or ltrw' :

5 AB This bill would make technical, nonsubstani-e changes to those pmvisltns. Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no. The people of the State of California do enact asfollows: 1 SECTION 1. Section of the Government Code is 2 amended to read: Notwithstanding Section 24300, in Mendocino 4 County, Santa Cruz County, Sonoma County, Trinity County, and 5 Tulare County, the board of supervisors, by ordinance, may 6 consolidate the duties of the offces of Auditor-Controller and 7 Treasurer- Tax Collector into the elected office of 8 Auditor-Controller- Treasurer- Tax Collector. 9 SECTION 1. Section of the Insmanee Code is 10 amended to read: O. 1. (a) An ins tlrable interest, 'vvith reference to life and 12 disability insurance, is an interest based upon a reasonable 13 expeetation of pecuniary advantage thltugh the continued life, 14 health, or bodily safety' of another person and consequent loss of 15 that person by reason of death or disability or a substantial interest 16 engendered by love and affection in the ease of indi'viduals elosely 17 related by blood tj la'vv. 18 (b) An individual has an unlimited insurable interest in his tj 19 her o..vn life, health, and bodily safety and may lavifully take out 20 a poliey of insurance on his tj her mvn life, health, or bodily safety 21 and have the policy made payable to vthomsoever he or she pleases, 22 regardless of whether the beneficiary designated has an insurable 23 interest. 24 (e) Except as pmvided in Section , an employer has an 25 insurable interest, as referred to in subdivision (a), in the life or 26 physical or mental ability of an of its directors, offcers, or 27 employees or the directors, offcers, or employees of any of its 28 subsidiaries or any other person..vhose death or physical or mental 29 disability might cause financial loss to the employer; or, pursuant 30 to a contractual arangement vtith a shareholder etjeeming the 31 reacquisition of shares OV'fled by the shareholder at the time of his 32 or her death or disability., on the life or ph)'sieal tj mental ability 33 of that shareholder fur the purpose of ear'ing out the Ctntraetual 98 14

6 -3- AB arrangement; or, pursuant to a eontraet obligating the employer as 2 I'ar of eomi'ensation arrangements tj pursuant to a contract 3 obligating the employer as guarantor or surety, on the life of the 4 I'rineipal obligor. The trustee of an emi'loyer or trstee of a 5 I'ension, vtelfare benefit I'lan, or trust established by an employer 6 I'm-tiding life, health, disability, retirement, or similar benefits to 7 employees and retired employees of the emi'loyer or its affliates 8 and acting in a fiduciary capacity with resi'eet to those employees, 9 retired emi'loyees, or their dei'endents or beneficiaries has an 10 insurable interest in the lives of employees and retired employees 11 for vv'hom those benefits are to be I'ltvided. The emi'loyer shall 12 obtain the written consent of the individual being insured. 13 (d) Trusts and si'eeial I'urpose entities that are used to apply for 14 and initiate the issuanee of policies of insuranee for investors, 15 where one or more beneficiaries of those trsts or special purpose 16 entities do not ha'v'e an insurable interest in the life of the insured, 17 violate the insurable interest laws and the prehibition against 18 'vvagering on life. 19 (c) A deviee, seheme, or artifiee designed to give the appeai anee 20 of an insurable interest where there is no legitimate insurable 21 interest v iolates the insurable interest laiiv s. 22 (1) An insurable interest shall be required to exist at the time 23 the contract of life or disability insurance becomes effective, but 24 need not exist at the time the loss occurs. 25 (g) A. eontraet oflife or disability insurance plteured or eaused 26 to be pm cured upon another indi'v'idual is void unless the person 27 applying for the insurance has an insurable interest in the indi'v'idual 28 insured at the time of the application. 29 (h) NOI'V'ithstanding subdivisions (a), (1), and (g), a charitable 30 organization that meets the requirements of Section 2 14 or d 31 ofthe Revenue and Taxation Code may effectuate life or disability 32 insurance on an insmed who consents to the issuance of that 33 lfsuranee. 34 (i) This section shall not be interpreted to define all instances 35 in which an insurable interest exists. o 98 It

7 Alicia Murilo From: Sent: To: Subject: Monday, April 22, :07 AM CBO BOSMAIL Agenda Comments Meeting Date: 4/23/2013 Item Number: 14 Name: Bruce Holloway Address: 891 Elsie Mae Dr. Boulder Creek, CA Phone: Comments: The offce of Director of Finance, who would need the qualifications of either Auditor-Controller or Treasurer- Tax Collector, may be established according to Government Code section 26980, but that would require an election. Section already provides for consolidating the offces of Auditor-Controller, Treasurer-Tax Collector, and Director of Finance. The proposed Board resolution, by requesting an amendment to section , will avoid an election but will create an office such that a person needs the qualifications for both of the existing offces. An Auditor needs to be a professional accountant, and someone with that credential would also qualify as Treasurer. But as I understand it, the incumbent Treasurer is not an accountant, would not qualify as Auditor, and even though thoroughly qualified as a senior finance manager, would not qualify for the new office as presently conceived. Fred said he won't run for any office in 2014, so that's not the issue. The Secretary ofthe U. S. Treasury and the state Treasurer are lawyers, not accountants, and would not qualify for county Auditor- Controller- Treasurer-Tax Collector. As the Treasurer-Tax Collector described the new offce, it wil exercise authority through a Chief Deputy Auditor-Controller and a Chief Deputy Treasurer-Tax Collector who separately have the qualifications for the tw 0 existing offices. So it wil not be necessary for the top manager to possess all of the skils for both offces. Those skils are rather different: a Treasurer surveys the forest and surrounding landscape, while an Auditor focuses on the health of each tree. Please consider carefully before creating an office for which highly-capable public servants like Jack Lew, Bil Lockyer, and Fred Keeley would not be eligible. A single sentence in an appropriate place in the Governent Code could allow the County of Santa Cruz to create an elected office of Director of Finance without holding an election, if the cost of such an election is an issue. Sincerely yours, Bruce Holloway 1 If