The Hermosa Beach City Council voted unanimously Tuesday night to enact additional safeguards that will further protect the city's finances.
The new guidelines, which add additional checks and balances to the City Treasurer position, came after a request from Mayor Pro Tem Kit Bobko for city staff to look into the security of the city's funds following an alleged extortion attempt against City Treasurer David Cohn and a related sexual assault investigation.
In a report to the council, City Manager Tom Bakaly laid out the already existing measures that safeguard the city's finances but also outlined six additional suggestions that would further enhance those measures.
Among the new changes, all investment transactions and brokerage arrangements must first be approved by the City Council and the City Manager, respectively. Should the city treasurer become incapacitated, the functions of the job will be performed by the city's finance director under the supervision of the city manager.
"Adequate safeguards are currently in place to protect against the misappropriation or misdirection of city funds," Bakaly said in the report. "Nonetheless, additional safeguards may be instituted consistent with the respective roles and responsibilities of the City Council and City Treasurer."
The new staff recommendations were fully supported by both the council and Cohn himself.
"I want to commend staff and City Manager Bakaly... I think you guys have done a fantastic job in the last week or so under a lot of pressure to put together and find what a treasurer does, cannot do... and take some of the mystery out of what this office is about," Cohn told the council following his fourth quarter investment report. "I am thoroughly in favor of what is in that staff report."
In addition to safeguarding the city's finances, the council also approved a request for the city manager to return within 90 days with a proposed code of ethics for those in an elected position.
"We have a lot of safeguards here; I think this is good," Councilman Peter Tucker said in support of the resolution. "I think the people in the community know our money is safe."
Councilman Michael DiVirgilio called the new updates a long overdue upgrade to the city's operations.
"I think this goes a long way to modernize the organization," DiVirgilio said. "Circumstances often drive improvements... I am glad we are making these improvements tonight."
On Wednesday, DiVirgilio also added that talk of the security of city finances under Cohn will most likely a thing of the past now that the council has enacted the new measures.
"I think a sign of our success with last night's improvements would mean that we won't need to talk about it," DiVirgilio said. "We won't need to talk about this anymore because the process will be working."
Earlier in the meeting, Cohn presented the city's fourth quarter investment report and projected $165,000 in investment income for the city for the 2012-2013 fiscal year. That figure represents a 59% increase in interest income over the previous fiscal year, according to the report.
According to Cohn, the city's general fund has also risen during his time in office from $21 million to $25.7 million and the city's investments are now more diversified.
At the end of his report, Cohn also reassured residents that he will continue to perform his duties as city treasurer.
"I have and will continue to fulfill my obligation to the residents of Hermosa Beach and uphold the constitution of California and the United States of America," Cohn said.
