I am a voting resident of Hemet District 1. My neighbors and I have been discussing the blatant personal animosity between an individual named Sue Savage and the Hemet city council, city employees, and other elected officials. Frankly, we are appalled by what we are reading in the local paper and hearing at council meetings.
The questions below posed by Sue Savage are answered italicized:
Question 1. Resolution R-4588 Item H requires Hemet’s investment policy be reviewed annually to ensure compliance with new laws. The Investment Policy is dated July 8, 2014. Four years without an update. Is there a legal liability here?
I looked at the City of Hemet website and all the investment policy updates made by the city council were clear and plain to see. It seems policy updates are the responsibility of the city council NOT the office of the treasurer. Does Sue need to do more research?
Question 2. Pursuant R-4588 Local Municipal bonds shall be limited to five year maturities. 10 out of 16 municipal bonds are over five year maturities in last month’s report. Is there a legal liability here?
It seems Sue Savage does not know the difference between a local municipal bond and the reserve fund. The reserve fund is limited to 10 years and it contains three bonds and one CD. I easily found this information in the financial report.
Question 3. FDIC maximum is $250,000 per bank per account holder. The Bank of Hemet holds a $494,000 CD, nearly double FDIC coverage. The City Treasurer writes that the $244,000 uninsured funds are collateralized by The Bank of Hemet. There is no collateral on the face of The Bank of Hemet CD. We requested the collateral documentation claimed and have yet to receive it. Is there a taxpayer dollar safety liability here?
Of course the “face” of the CD does not mention collateralization. The Bank of Hemet carries the collateralization, not the CD itself. The collateralization is then applied to the CD. Learn something about banking!
Question 4. Judith Oltman said she manages using a “buy and hold” strategy. California’s Investment Guidelines state: “Continuous analysis and fine tuning of the investment portfolio are considered part of prudent investment management.”
Chasing false interest rates is a dangerous way to run an investment portfolio as anyone with portfolio management experience will say. The City of Hemet hasn’t lost a single penny of the investment portfolio in over 25 years. When cities all around us have had to declare bankruptcy during the recession, the Hemet portfolio actually made money and kept the city afloat. It seems Treasurer Oltman did a great job of managing the portfolio. If Sue wants to invest her own money in dangerous schemes she is more than welcome to proceed, just keep your hands off my tax dollars!
Question 5. Nearly a million taxpayer dollars are in unrated banks in Singapore, India and private banks. Only 14 of the 27 banks holding our CD dollars are top rated banks. How can we work with the City Treasurer to put taxpayer dollars in top rated banks complying with safety requirements?
A minimal amount of research will show that Treasurer Oltman HAS put our CD dollars in top rated banks! None of the banks holding city money has a rating less than an A. Most are A+ or higher.
Question 6. Hemet’s Investment Policy dictates maximum percentages allowed by investment type. Negotiable CDs are capped at 10 percent maximum of the total portfolio. Yet, nearly 11 percent of the portfolio is Negotiable CDs. How can we work with Hemet’s City Treasurer to bring Negotiable CDs into compliance with Hemet’s Investment Policy?
We should be asking how we can work with Sue Savage to teach her basic bookkeeping, money management, accounting and management of public money? Hemet’s investment policy that is set by the City Council and NOT the Treasurer’s office does not say this at all.
Question 7. As stated, the maximum percentage allowed for Negotiable CDs is 10 percent on Page 7. Yet, Page 5 states 50 percent of portfolio is allowed. Which one is correct? Correct that is, according to the State of California? Is there a legal liability here?
Again, Sue Savage fails to understand the difference between a Negotiable CD and a reserve fund. The City Council policy does not say this at all.
Question 8. Judith Oltman’s April report, shows Citibank’s rate of return is 0.45 percent. Citibank monthly statement shows only 0.15 percent. We brought this discrepancy to the May 8 City Council meeting, yet the discrepancy persists. This incorrectly skews the “Average Rate of Return.” How can this be rectified?
It seems the financial institution made an error. Why doesn’t she call the bank and ask them herself? It has been corrected in the Treasurer’s report.
Question 9. Section Five of The Investment Policy states the Treasurer shall submit a monthly investment report to City Council. California State Code also requires a monthly investment report.
• In 2016, Council meeting minutes show no investment reports filed in the months of July or August. The “Portfolio Balance as of September 2016” Investment Report was never filed. An end of August report was filed twice with different portfolio balances.
I looked online and easily found all the Treasurer’s reports, filed in full and on time. Sue was obviously looking at two different months, which of course, had different amounts. When this was brought to her attention, I heard she replied, “I don’t care.”
• In 2017, May, July, August and November show no investment reports filed as part of City Council meeting minutes. How can we work with Hemet’s City Treasurer to file timely investment portfolio reports in compliance with local and state code?
It seems the Hemet City Council does not talk about the city’s investments in every meeting. If Sue wants this changed then she must talk to the city council, NOT the Treasurer’s office. Maybe the council can get her approval on the agenda before every council meeting, but this has nothing to do with the Treasurer’s office.
Question 10. How do we work with Hemet’s City Treasurer enabling her to provide the highest interest income for the taxpaying citizens of Hemet?
Our Treasurer has done a superb job of protecting taxpayer money. If Sue wants to place her own money in risky investment schemes she is free to do so, but again keep your hands off my taxpayer dollars!
• The Bank of Hemet’s $494,000 CD pays $1,976 annually. Federal Agency Issues would pay $15,314 annually. Investing in Federal Agencies would increase interest revenue $13,338 annually. Money desperately needed by the City of Hemet and the deserving taxpayers.
I heard Sue claimed she knew a place where she could get $400,000 the very next day. I would like to know where she thinks she can get that much money in one day. Not only is this preposterous, it is dishonest.
• Moving 12 of the 71 items in the city’s $65 million portfolio to obtain competitive interest rates would increase city revenue by $402,000. This additional interest could start tomorrow and would not involve a single layoff or cut in budget.
Again, please tell us where you can get interest that pays $402,000 in a single day. Maybe you could get that kind of interest in 20 years, but not one day.
Question 11. City Council has expressed concern regarding Treasurer’s Report numerous times in the past on:
March 28, 2017
Mayor Pro Tem Meyer questioned the rate of return.
June 13, 2017
Karlee Meyer voted no to approving the receive and file of the investment report, Perciful, Brown, Wright, Krupa approved.
June 27, 2017
Mike Perciful and Karlee Meyer voted no to approving the receive and file of the Investment report. Brown, Wright, Krupa approved.
July 11, 2017
Judith Oltman gave a work study on the city investments and the ad Hoc Investment Committee was formed to review the investment policy.
Sept 26, 2017
Karlee voted no to approving the receive and file of the investment report Perciful, Brown, Wright, Krupa approved.
March 13, 2018
Investment policy was presented to council for approval. City attorney was asked to review te policy for any updates from the state. The review was shelved.
Thank you for recapping this Sue, as anyone can see Mayor Pro-Tem Karlee Meyer has no understanding of public money management, city policies, and who is responsible for them or any basic understanding of management.
The city is sliding every closer to the brink of bankruptcy. Per these minutes, city council is concerned.
Question 12. The State Auditor wrote Hemet would go bankrupt this year. A citizen asked me how Hemet can be going broke with $65 million in the bank. Simple, Hemet’s $87 million dollar debt exceeds our 65 million in the bank. Why wasn’t the $402,000 increase in interest revenue implemented yesterday?
It seems that Savage is again mistaken, as the state auditors said nothing like this.
This ends my questions.
The City Treasurer recall petition is awaiting approval by City Attorney Eric Vale and City Clerk Sarah McComas.
If anyone should be recalled it should be Karlee Meyer for failing to have a grasp of public policy and law in the time she has been in office. We should thank our lucky stars that we have an independently elected City Treasurer who can guard our hard-earned tax dollars.
We have emailed our 12 concerns to the California State Auditor. They advised forwarding our concerns to The State Attorney General and Representatives.
We ask City Council to take the following three actions:
Action 1. Discuss the legal liability of both the City Council Members and the City Treasurer for disregard of State of California and Hemet’s Investment policy.
Again, it’s the city council who sets the policies – not the treasurer.
Action 2. Direct Judith Oltman or Lorena Rocha to remove the CD from the Bank of Hemet, providing Hemet Taxpayers with safety and yield on their portfolio dollars and complying with State of California and Hemet’s investment policy.
Action 3. Direct Hemet’s Investment Portfolio be restructured to provide the highest interest rate possible allowing an increase in revenue.
I would like to know what qualifications Sue Savage has that she can dictate investment policy to anyone. It seems like she has no background in finance, public money management, auditing, accounting or even basic bookkeeping. If she wants to play fast and loose with her own money, she is welcome to.
In summary, we request a position on the Ad Hoc Investment Policy for the city. Councilwoman Linda Krupa has explained why this isn’t gonna happen, so we thank Ms. Krupa for the 1.5 hours she spent with us yesterday. We believe Ms. Krupa has something more wonderful than the Ad Hoc in mind and look forward to that presentation.
It does NOT seem Sue Savage is qualified for any position or any form of authority pertaining to public money management or anything else. Sue does not speak for all of the good taxpayers of Hemet or for the voters of District 1.
We thank Mayor Pro Tem Karlee Meyer for meeting with us for over an hour and a half suggesting an Investment Committee be formed so taxpayers can watch over our own taxpayer dollars.
We want to caution Mayor Pro-Tem Karlee Meyer from further association with Sue Savage, who does not speak for us. The rest of the population of Hemet ought to thank Treasurer Judith Oltman for her long service in safeguarding our money from fiscal fools.
We assume Council Persons Wright and Brown understand our concerns.
Name withheld by request.