Bill to increase oversight of public trustees passes committee

Compromise retains appointments by Guv
The Colorado Statesman

A bill aimed at increased oversight over public trustees in Colorado was dramatically altered on Monday to retain the state’s governor-appointed public trustees, but would still require more local and state oversight over how they conduct operations.

House Bill 1329, sponsored by Rep. Ray Scott, R-Grand Junction, would give county commissioners more control over the budgets of public trustees, and would require a biannual state audit of public trustees appointed by the governor, requiring the use of state procurement codes, which require a comprehensive bidding process for all purchases and services worth $20,000 or more.

The House Local Government Committee on Monday backed the proposal by a unanimous vote.

In its original form, the bill would have turned the duties of appointed public trustees over to elected county treasurers in certain counties, potentially putting into jeopardy the jobs of 10 public trustees in the state appointed by the governor. The bill was immediately focused on Weld, El Paso, Mesa and Douglas counties, as those counties had expressed an interest in opting into the proposed guidelines.

But Scott offered an amendment on Monday before the House Local Government Committee that would retain those gubernatorial-appointed positions. The motion came after Rep. Dan Pabon, D-Denver, brokered a compromise with stakeholders to allow for the positions to remain while still aiming to increase oversight. Pabon, who is not a member of the House Local Government Committee and was not an original sponsor of the legislation, said he felt compelled to work on a compromise, noting that everyone is a “little unhappy.” The compromise involved the governor’s office, the Colorado Department of Local Affairs, public trustees, county commissioners, and several other stakeholders.

“This has been a diligent process making sure that all stakeholders are spoken with,” Pabon testified. “As you know, and as we all know, this is a legislative process. Did everyone get everything they could have possibly wanted out of this? Probably not. But this is the compromise.”

Scott offered similar comments, stating, “We came together and made some decisions on what made the best sense for public policy going forward.”

Concerns arose over the 100-year-old system when issues over costs and spending popped up between appointed trustees and county commissioners. In Weld, Mesa, El Paso, Douglas, Arapahoe, Jefferson, Boulder, Pueblo, Adams and Larimer counties, public trustees are appointed by the governor. The state’s two other largest counties, Denver and Broomfield, have unique systems. In Denver, the post is held by the elected clerk and recorder, who appoints a deputy to run the trustee office. In Broomfield, the trustee is appointed by the City Council.

Elected treasurers in the other 52 counties also serve as the public trustee, as is required by Colorado law.

Critics of the appointed trustee process point out that the appointed trustees are only required to provide annual reports of their activity to the governor’s office, with few details other than reporting of the number of foreclosures and transfers of deeds of trust. Quarterly reports are submitted to county officials, but few additional details are offered. County commissioners believe those reports should at the very least include a listing of expenditures.

El Paso County Commissioner Peggy Littleton, a Republican and a vocal proponent of ending the gubernatorial appointments and increasing oversight, said the compromise was only “better than a poke in the eye with a sharp stick.” She would rather eliminate the gubernatorial appointments, but more importantly, Littleton would like the commissioners themselves to have audit control.

“If we’re going to allow county commissioners to have oversight over the budget, then we should have audit control as well,” she said. “We have oversight over the budget, the counties should be able to audit how those budgets are expended.”

By law, public trustees’ budgets are paid for through fees collected from foreclosure attorneys and banks. The counties receive any surplus revenue the trustees collect as a result of those fees. Excess revenues have been valued as high as $1 million or more.

Highlighting the issue is a recent skirmish between Mesa County commissioners and Public Trustee Paul Brown over private office space rented by Brown. He first rejected a demand that he move his trustee operations into empty county office space to save money, but later backed down and agreed to move. Brown spent about $28,000 last year on rent and other office expenses related to the private office space.

He explained that when he took over as public trustee, the private office space had already been rented. That being said, Brown is working on a plan to move into county office space.

Brown said he is pleased with the compromise in the sense that it preserves his $72,000 per year job, adding tongue-in-cheek, “Needless to say, the amendment eliminated the provision for firing me, so that’s nice.”

Brown has no objections with the current version of the bill, but he doesn’t believe it would do much, noting that appointed trustees are already required to present budgets to county commissioners.

“I just don’t see that it’s that big of a deal, we’re audited every year,” said Brown.

Also offering a neutral position was Patty Bartlett, Logan County treasurer and public trustee, and president of the Colorado Public Trustee Association.

“The Public Trustee Association has taken a neutral stance on this bill,” she said. “Until it’s either approved or it dies, we probably won’t have any comment.”