Torrance City Treasurer’s Reputation on Trial

Torrance City Treasurer, Dana Cortez

When City Treasurer Dana Cortez talks about transparency its not just a campaign slogan, she means it. Cortez could have signed a Confidentiality Agreement presented to her by the City Attorney, but she refused. The Agreement likely would have prevented any evidence prepared by the City pertaining to her job performance from being disclosed to the public. By not signing, Cortez took a significant personal risk knowing that her reputation was on the line, but in deference to the voters that elected her Cortez wanted everything out in the open.

Cortez forced the City’s hand and she now has her wish in the form of a 300 page staff report prepared by the City to justify why her compensation should be slashed by over 50%. Perhaps most telling in this whole drama is that despite being on the job for eight years, Cortez says that with the release of this 300 page report it is the first time that she is hearing about these concerns as nobody within City Hall has approached her to raise these specific issues before now.

As an elected official Cortez does not receive a formal employee performance evaluation but her activities are reviewed by an oversight committee comprised of the City Manager, the City Attorney, the Finance Director, herself and the Deputy City Treasurer.  Presumably, these concerns could have been brought forward by the oversight committee, but according to Cortez they were not.

The staff report is mostly fluff containing nearly 150 pages of job descriptions, internal procedures, and org charts, but it does some provide some eye opening information. In it, the City alleges that the Treasurer’s Office suffered from an an overall lack of reliability due to errors, omissions, and high staff turnover.

With regard to high staff turnover, the report revealed that since June 2011 fifteen employees had ended employment in the 7 person department with 8 resignations, 3 retirements, 2 discharges, and 2 transfers to other departments. Two of those 15 people had very negative feedback about the department based on documentation provided by the City.

One employee who resigned in March 2017 wrote that:

“The City Treasurer has been disrepectful on too many occasions, provided little to no support, provided mis-information, engaged in hostile and demeaning conversations, made false accusations, and kept me in the dark on critical issues; all of which has made it unbearable for me to be here any longer … to be harassed, bullied, and disrespected while in the performance of my duties is more than anyone should have to deal with.”

An e-mail from former Deputy City Treasurer, Shiela Abalayan, who wrote to the Council after the meeting last Tuesday was also included in the report. No information from Abalayan during her tenure with Torrance was included in the staff report (nor was her exit interview), but in her e-mail Abalayan claimed that:

“Watching her speak in the City Council meeting last Tuesday, brought back all the negative feelings and bad memories and experiences I had with Ms. Cortez. I was not her first victim, the lady before me … was fired on her 50th birthday. Who in her right senses does that to an employee? What does that tell you about the kind of person she is … employees would rather leave than to work in a very hostile and stressful department caused by the department head, Ms. Dana Cortez”

In speaking with Cortez about these allegations she acknowledged that high turnover had been a challenge for the department as people just don’t stay at one job for 25 years like they used to. In reference to the specific feedback, she said she had no idea it was the 50th birthday of her former employee on the day that person was fired and that the termination was the result of a long process that so happened to conclude on that day.

With regard to the other employee who resigned in March 2017, she cited her own challenges she had with the employee recalling on one occasion, when she was out of the office recovering from a skiing accident, that the employee had put up a sign in the office window during a regular working day saying that the Treasurer’s office was closed.

With regard to errors and omissions the City, among other things, produced the following:

• A report from July 2013 – April 2018 of financial transactions that come from the Treasurer’s system and feed into the general ledger listed 560 errors due to transactions that were not posted or that were posted incorrectly;
• Monthly investment report for June 2017 submitted to Council contained an error. The submitted report stated “as of May 31, 2017.” It was corrected and resubmitted to correctly state “as of June 30,2017”.
• A duplicate monthly payment was made to CalPERS in December 2017 of $1,279,736.56. CalPERS ended up applying the over payment to the January 2018 invoice.

In reference to these errors, Cortez responded by saying “I’m not perfect, but I will always be honest and act with integrity.” She acknowledged the errors and took responsibility for them as they occurred within her department. She said the Investment Report contained the right numbers, but had a “scrivener’s error” that was quickly corrected. The over payment to CalPERS was due to a new employee that just made a mistake. According to her, the list of financial transactions is something that had been an ongoing challenge for the department due in part to the high turnover and was something they were continually working to correct.

Cortez’s initial inkling that something was afoot came last year when the City Manager proposed realigning several of the duties that had previously fallen under her department. With regard to that realignment she penned a memo to the City Manager dated November 21, 2017. In it she states,

“I am completely supportive of progress and any changes that promote efficiencies, productivity, and growth. It is equally my duty to share concerns that I believe to be material to this beloved organization. As an elected official I strongly believe that it is my duty to be the voice of the people. The position of City Treasurer per the Charter is to be the acting steward of the the people’s tax dollars. Since I take this responsibility seriously I feel it is my duty to mention concerns I feel are noteworthy.”

She then expressed concern that the “City of Torrance is diluting its ability of taking full advantage of the separation of duties and checks and balances that have existed in the City for years.” She also expressed a concern about the appearance of impropriety because “currently in the Finance Department there are two key division managers with huge authority over many of the key functions that are between a mother and her daughter … the relationship of these two key staff members could be viewed as a concern.”

In response to Cortez’s memo, Finance Director Eric Tsao sent a memo to the City Manager dated December 17th, 2017. In that memo, Tsao wrote:

“It is all too apparent from the onset that the City Treasurer has been and remains in disagreement with the City Manager’s decision to return the above functions from her office to the Finance Department … The transition of the above duties can be best described as a “Very Hostile Takeover.”

Cortez begs to differ with that characterization. She claims her office was very cooperative during the transition and went above and beyond to provide whatever support the Finance Department needed. She did, however, describe an office environment that had become challenging and territorial. She remarked it felt as if members of the Finance Department were almost purposely looking for mishaps that might occur in her department in order to curry favor with city management.

With regard to her future, no matter the outcome of Tueday’s meeting she plans to stay on as Treasurer. She said Assistant City Manager, Aram Chaparyan, had recently directly asked her if she intended to resign as a result of these allegations and that she told him she did not as she plans to honor the will of the voters.