Four vie for treasurer job

Without the 2008 Wall Street bankruptcy that left the county fighting to restore even some of the $155 million leached from its investment pool, the current fight to replace the longtime county tax collector-treasurer could easily fly under the radar.

But with fingers still pointing over the Lehman loss, the race to fill the shoes of retiring Tax Collector-Treasurer Lee Buffington drew four candidates with strong opinions about how the 66-employee office is run and what they would do differently if elected in June.

Sandie Arnott, 57, is currently the deputy tax collector/treasurer and acting assistant tax collector — a position which gives her hands-on experience in the office but also leaves her vulnerable to claims of what her opponents say she should have known about Lehman. Richard Guilbault, 59, is a retired investment advisor and founder of Guilbault Asset Management who unsuccessfully challenged Buffington in 1998. Joe Galligan, 54, is a certified public accountant who may be best known to the public for eight years on the Burlingame City Council. Dave Mandelkern is a Silicon Valley entrepreneur who serves as an elected trustee on the San Mateo County Community College District Board.

The paths to candidacy are as different among the contenders as their experience. For Mandelkern and Guilbault, it was schools. Specifically, the draw was schools who lost a significant chunk of money in the county investment pool and which each say they can help through advocacy, better oversight and — in Guilbault’s case — a credit card whose users accumulate credit toward their property taxes while guaranteeing school revenue.

Arnott, who has spent 20 years in the office, said she and Buffington always planned to leave the office "together.” But after illness led to his decision to retire, Arnott said she was left to choose between running for the position herself or essentially training his elected replacement.

"No one knows that office like I do. No one,” she said.

Galligan’s reason is succinct: "I was asked to the dance.”

Galligan said Buffington, who he knew through several years of both being in public office, approached him about the position once he decided to retire.

Multiple functions

But while the push is varied, each candidate believes he or she is best to run an office with multiple functions like tax collection, revenue services and managing the county investment pool which involves money from more than 1,000 accounts of cities, districts and agencies.

One challenge is explaining to voters just what the office does, or conversely what they hope it can do.

Mandelkern sees himself as an outsider, not part of the county system and with no formal accounting or financial education. He has founded and sold multiple companies and said he now wants to use that experience — and a desire to advocate for both schools and taxpayers — to shore up county revenue by preventing tax assessment losses based on technicalities, improve billing at the San Mateo Medical Center, invest in automated compliance software and revamp the county investment policy.

He wants the policy to mandate sales when bonds are downgraded and doesn’t necessarily agree with two independent analyses commissioned by the county which gave it a clean bill of health after the Lehman losses.

The fund had 5.9 percent of its $2.6 billion in Lehman Brothers — too much according to all candidates but Arnott who disagrees with her opponents that the situation was preventable. Arnott, like Buffington, said the office followed the tenets of the conservative policy and was not risky.

Guilbault urged the city of South San Francisco to withdraw its Lehman holdings before the collapse as part of its financial oversight committee. Guilbault was later commended for saving the city approximately $6 million before the bankruptcy and said that shows he has the skills to be a hands-on manager for San Mateo County.

"The fact is I was watching ... I understood what was being done,” he said.

He also conceded he might have been lucky.

Guilbault highlighted his experience managing people and portfolios and although much attention is focused on the job’s investment function, brings two ideas to the table about property taxes. Approximately 7 percent of homeowners charge their property taxes instead of paying cash, he said. Rather than see them paying a finance charge, Guilbault wants the county to set up a voluntary impound account similar to those used by banks to roll property tax into house payments. He also suggested an affinity credit card which he said gives users credit toward property taxes while guaranteeing schools a concrete revenue stream established by a company like Visa in return for interest. Aside from giving schools definite numbers, those funds can’t be snatched back by the state, Guilbault said.

"It’s an idea. The next treasurer needs to go outside the box,” he said.

A good tax collector/treasurer would also spot red flags in investments like Lehman or at least invest in monitoring software like Bloomberg, he said.

Simply being a certified public accountant, he said, is not enough.

"Filing 1040s has nothing to do with managing $2.6 billion,” he said.

Different perspectives

But Galligan, the candidate who is a CPA and who recently received a Series 7 investment certificate, sees the job differently. He plans to manage the office but hire a firm to oversee a portion of the investments. Had the current office done that, it may have avoided the Lehman debacle, he believes.

Much as Mandelkern wants to be an advocate in Sacramento, Galligan wants to be an advocate for San Mateo County by convincing business to keep their accounting offices here. For example, United Airlines hands its taxes to Oakland even though its planes are in San Mateo County because that is where they keep offices, Galligan said.

He is the person to do this because there is turnover and less public recognition on the Board of Supervisors, he said.

Although Galligan and Arnott are at odds in the race, they both agree that Mandelkern’s mandatory selling idea is wrong for the office. While Galligan pointedly said it shows Mandelkern doesn’t know what he’s doing, Arnott spoke more generally.

"I don’t think it’s good investing. You don’t just panic,” she aid.

Although Arnott’s current job focus is more squarely in tax collection, she knows she is "guilty by association” in the Lehman situation.

While Arnott said naysayers needs to look at the entire portfolio and not just performance by a single quarter, she believes it can be improved by paying to have funds rated annually and hiring an outside investment advisor. She also wants to better educate pool investors so they know how to read quarterly reports and what questions they should be asking.

The impacted school districts lambasted Buffington after the bankruptcy for what they said was a lack of transparency and communication and Arnott said she told Buffington he had to "get out there” and talk. He told her it was under control, she said.

If elected, she wants to continue streamlining services and consolidating where possible. Arnott said she pushed to cross-train cashiers and move revenue services from the South San Francisco courthouse to the Probation Department across the parking lot to avoid work losses on monthly court furlough days. She wants tax collection to also happen in South San Francisco to spare northern county residents a trip to Redwood City and also allow them to print pay stubs from home computers.

She said her opponents offer many promises to voters, such as changing the hospital billing or collecting more money for schools, but that many of them aren’t responsibilities of the office.

Arnott considers herself more worker bee than politician, campaigning for the job instead of just the chance to hold an elected office.

"I love what I do. If I didn’t, I wouldn’t be going out for this,” she said.

Michelle Durand can be reached by e-mail: michelle@smdailyjournal.com or by phone: (650) 344-5200 ext. 102.