Laguna Beach council authorizes moving $25 million to outside manager; orders third‑party review of city treasurer hours

Laguna Beach City Council on June 24 authorized moving at least $25 million from funds currently held by the elected city treasurer into a balanced investment portfolio managed by the local agency METER and directed a third‑party review of the hours and duties required of the elected city treasurer.

The action responds to staff analysis showing most of the city’s portfolio was concentrated in very short‑term vehicles and that spreading maturities to match the city’s predictable “dry” months would likely improve long‑term returns. City Manager Dave Kiff told the council the move would reduce the large overnight concentration while preserving the treasurer’s ability to meet cash‑flow needs.

The vote matters because Laguna Beach has an elected city treasurer and specific California law duties for that office. Council directed the city manager to transfer funds that staff characterized as “not needed for immediate liquidity” to METER for investment aligned to cash‑flow needs, and separately authorized a competitive, third‑party review to determine how many hours are reasonably required to fulfill the treasurer’s statutory and municipal duties.

City Treasurer Laura Parisi addressed the council during the discussion, saying she manages roughly $99 million in short‑term deposits and that her practice has been to keep funds available for the May–October “dry” period. Parisi warned the council that moving a large amount into longer maturities could reduce interest income if rates fall, and said she already maintains a contingency within the short‑term pool to meet unanticipated disbursements.

Kiff said staff’s intent is to balance liquidity with opportunity: “We have so much of our portfolio in short‑term investments we may not be taking advantage of historically high rates in the 2–4% range that could be locked in now for longer maturities,” he told the council. He also said the July 2024 council direction—that funds not needed for immediate liquidity be invested by METER—had not yet been fully implemented and that transferring $25 million would be a step toward that policy.

The council also asked staff to return with more detailed cash‑flow documentation and to include the incoming finance director in further analysis before any larger transfers are made. Kiff said the new finance director starts shortly and that staff will continue to collaborate with the treasurer and METER on timing and portfolio composition.

Council members emphasized the distinction between the treasurer’s legally mandated duties and additional functions that historically had been assigned to the office. As part of the package the council also approved the city manager’s request to competitively contract for a review of the treasurer’s hours and duties so the council can better understand which tasks are required by the California Government Code and which are local assignments that could be reallocated to staff if the council chooses.

The council’s action explicitly preserved the statutory duties of the treasurer while creating a process to clarify hours and responsibilities. The third‑party review is intended to produce a time‑and‑duty analysis that councilors said they will use to decide whether certain non‑statutory duties should remain with the elected treasurer or be moved to city staff.

Council direction scheduled follow‑up reporting and asked staff to document cash‑flow forecasts so the council can revisit the size and timing of transfers later this year once the new finance director is on board.