ORANGE : City Agrees to Delegate Financial Authority

The City Council has agreed to adopt a “line of succession” for the treasurer’s office in the wake of the county bankruptcy.

The decision came last week after securities attorney Michael B. Jeffers issued a 25-page report on ways the city can avoid entanglements in vulnerable investments.

The city had $28 million invested in the county pool when the county declared bankruptcy Dec. 6. Jeffers’ report noted that the city’s investment committee decided in April to cap funds in the pool at $20 million.

Jeffers said that former City Treasurer Mark Weiss should have been withdrawing property taxes that automatically went into the county fund. Failure to do so was an “administrative breakdown” that occurred when an extended illness kept Weiss from his duties for most of the year, the report said.

Weiss, who resigned in October, said that city officials knew he was out sick and should have removed the funds from the county pool.

The advisory committee, the city manager and the City Council all were aware that the taxes were going into the county fund and not coming out, Weiss said. “This was all approved by the investment advisory committee,” he said, adding that an $8-million tax revenue anticipation note went into the pool without his knowledge.

“They are looking for somebody to point their fingers at, and I’m not around to defend myself,” Weiss added.

But City Manager David F. Dixon said that Weiss, an elected treasurer, was the only official with the authority to withdraw funds from the county pool.

Dixon also said he had a memo dated May 20 in which Weiss said that the investment committee had decided to impose the cap and that he would continue to withdraw the funds.

Weiss maintains that he had delegated his powers to another official, who could have withdrawn the money.

The new procedure approved by the council delegates authority to various officials should the treasurer or finance director be absent for an extended period of time.