Tax collector-treasurer hopefuls discuss issues

Candidates Sandie Arnott, Joe Galligan, Richard Guilbault and Dave Mandelkern all argue they are best suited for the office which comes up for election June 8. Arnott is currently the deputy tax collector, working under retiring tax collector-treasurer Lee Buffington, while the others come from outside the county structure. Galligan is a certified public accountant and former Burlingame councilman. Guilbault is an investor who founded his own firm. Mandelkern is an elected community college trustee who has founded and sold companies.

In-office interviews with each individually were held to help the Daily Journal determine endorsements. To allow each candidate a forum to express their opinions on the issues discussed, candidates were given the same questions and asked to answer each in approximately 50 words. Responses were edited for grammar, punctuation and length. Answers are arranged alphabetically by the candidate’s last name.

1. What qualifications or experience make you best suited for the position of tax collector-treasurer?

Arnott: Twenty years of experience in this office; currently the deputy treasurer-tax collector, acting assistant tax collector and constitutional alternate on the SamCERA board of retirement; 18 certifications; qualify under (a) (1) of GC 27000.7, although not effective until 2015; I know every function, critical detail and responsibility tied to this office.

Galligan: California adopted county treasurer educational requirements in 1996. The county adopted the law for the year 2014. Two of the candidates don’t have the qualifications and would not be on this ballot if the law was in place for this election. I have a finance degree, am a certified public accountant, passed the Series 7 general securities exam and was on the Burlingame City Council for eight years and mayor for two years.

Guilbault: My background, education and work history speaks directly to the requirements of this office. I have worked as a statistician for Hewlett-Packard, vice president of investments for Dean Witter and Prudential Securities. I have taught college-level investment courses and provided professional testimony for securities litigation. I am president of my own investment firm where I have managed successful investment portfolios for individuals, nonprofits and government agencies for over 27 years.

Mandelkern: I represent every person in the county as an elected community college trustee, overseeing a balanced $100 million annual budget and $500 million capital improvement fund. As a Silicon Valley entrepreneur, I’ve started my own software company, taken it public and have experience dealing with Wall Street, investment bankers and creating investment policies.

2. How do you view the position of tax collector-treasurer — ie: as a manager charged with hiring the right people, as a hands-on investor, as an advocate or some combination?

Arnott: The treasurer-tax collector should be a leader charged with all of the above. The position calls for planning, organizing, directing and reviewing the operations of the office. The ability to bring together a diverse group of people to work together to perform mandated services with a focus on excellent customer service is key.

Galligan: I believe the county treasurer is the treasurer for the entire county, not just the tax collector office. I would help all of the departments with their budgets and find common efficiencies. I would hire a corporate bond portfolio manager since that responsibility requires due diligence in researching the stability of the underlining corporation.

Guilbault: The treasurer/ tax collector needs to be all of the above, but most of all, an advocate for all the taxpayers. The idea of electing a treasurer/tax collector with no direct Wall Street experience to understand all aspects of investing, and then compensating by relying on outside consultants, is a recipe for another disaster like Lehman Brothers or Orange County. Not one of my opponents has 27 years of fiduciary investment and management experience.

Mandelkern: Our treasurer-tax collector should be a strong advocate for the taxpayers of San Mateo County, aggressively representing our interests and defending our property taxes against raids from Sacramento. I’ll also bring professional management expertise, make sure that we efficiently collect all the property taxes and revenue that we’re entitled to and invest our money wisely and safely.

3. How would you change the county’s investment policy, if at all?

Arnott: I believe the policy should require that the pool be rated annually, that we maintain A-rated securities or rated per state code.

Galligan: Under the new proposed investment policy, 5 percent of the portfolio could be invested in one corporate bond versus 10 percent. Today, there is a pool value of $2.9 billion. That exposes one investment to $145 million of losses. The Lehman Bros. loss was $155 million. The average California county lost only $15.5 million, or just 10 percent of what San Mateo County lost. Our exposure is still too high so I would require even stronger restrictions on the investment policy.

Guilbault: This is a critical time to review and scrutinize current investment policies. We must understand what has worked and what has gone so wrong. A citizen advisory committee might be in order. As a taxpayer, you should never have to ask the treasurer if the money is safe.

Mandelkern: I’ll insist on an updated investment policy, reflecting lessons learned from our current treasurer’s loss of $155 million: Further limits on exposure to a single issuer; clearer guidelines dealing with downgrades to investment ratings; and tighter investment maturity restrictions. The investment process should be strengthened to include outside professionals and automated compliance monitoring.

4. If elected, how would you work with other county departments and the public to fulfill the job?

Arnott: I’d like to improve communications with a focus on education in the area of investments, school bonds, tax collection and banking trends. It’s important for our office to be accessible, transparent and accountable. I am perfectly amenable to setting up regularly scheduled meeting with a preference toward teleconferencing as a green effort.

Galligan: As the county treasurer, I believe the role is to help all departments. There are duplicative jobs that could be shared. I would also help find tax money that is incorrectly going to Santa Clara and San Francisco counties and bring them back to San Mateo County where they belong.

Guilbault: I believe it is very important to work closely with our school boards and key stakeholders in the county, state and federal government to develop best practices, report transparency and cutting-edge technology.

Mandelkern: The public should receive outstanding customer service when dealing with the county. I’ll work with the assessor and controller to create a "one stop shop” for property tax payments and assessment issues. As the county’s chief revenue collector, I’ll work closely with the medical center to improve payments and reduce their deficit.

5. What are you thoughts on the civil grand jury recommendation to combine the tax collector-treasurer and controller into one appointed chief financial officer position?

Arnott: There would be a loss of transparency and public accountability. There could exist a potential for pressure to be placed on an appointed individual to produce interest earnings inconsistent with stated objectives, internal strategy and the financial markets. Internal controls are compromised with no distinct separation of two separate disciplines. Although efficiencies might be created, there is also significant financial power within one office versus two.

Galligan: CPAs separate certain duties so it is more difficult for theft and easier to find irregularities. Proper internal control duties would not have someone collect the money and write the checks, and also in control of the county books and records. Right now, Lee Buffington banks all the money but checks are written by the controller. Separating duties keeps proper checks and balances.

Guilbault: I fear that if these offices were combined, the checks and balances intended by our county charter would be greatly compromised. The cost savings are very dubious at best. The controller, not the treasurer, is the accountant (CPA) for the county, and this should stay that way.

Mandelkern: Each position should remain an elected office in order to provide accountability to the public as well as effective oversight and audit. An appointed official wouldn’t have authority to speak out on behalf of taxpayers, or stand up to the Board of Supervisors. An appointed chief financial officer could cost the county more money, not save money.

Candidate bio information:

Name: Sandie Arnott

Age: 57

City of residence: Broadmoor

Occupation: Deputy tax collector-treasurer; acting tax collector

Education: 18 certifications

Name: Joe Galligan

Age: 54

City of residence: Burlingame

Occupation: Certified public accountant

Education: Bachelor of accountancy, College of Santa Fe; masters of science in taxation, Golden Gate University

Name: Richard Guilbault

Age: 59

City of residence: Burlingame

Occupation: Investment advisor

Education: Master of science in systems management, University of Southern California; bachelor of science in business management, San Jose State University

Name: Dave Mandelkern

Age: 50

City of residence: Hillsborough

Occupation: Retired entrepreneur; elected trustee of the San Mateo County Community College District

Education: Bachelor and master degrees, Stanford University