Request for Action
From: City of Huntington Beach Finance Commission
To: City of Huntington Beach City Council
In reviewing the recent transactions that converted the properties Elan and Breakwater from privately owned residential income properties to "workforce housing", the Finance Commission has determined that the scope of these real estate investments is outside of the city's primary investment objectives.
According to the Huntington Beach Treasurer's invest policy, the investment practices and policies of the City of Huntington Beach are based upon state law and prudent money management. The primary goals of these practices are:
1) To assure compliance with all Federal, State, and local laws governing the investment of public funds under the control of the City Treasurer.
2) To protect the principal moneys entrusted to this office. 3) Achieve a reasonable rate of return within the parameters of prudent risk management while minimizing the potential for capital losses arising from market changes or issuer default.
Elected and Appointed Public Officials owe a fiduciary duty to their citizens with regard to the officials' handling of the public's money. In accepting a fiduciary duty, the City Council accepts a legal commitment to act in the best interests of their beneficiary, the citizens. It is the conclusion of the Finance Commission that Real Estate investments that require the city to forgo property tax collection for any particular property does not represent the "best interest" of the citizens of Huntington Beach, nor does it show prudent money management or prudent risk management.
The City of Huntington Beach Finance Commission, therefore, respectfully requests the City of Huntington Beach City Council to consider proposing an amendment to the City Charter that would restrict this and future City Councils from contracting with any entity for any real estate investment that would require the City of Huntington Beach to forgo regularly collected property taxes on investment property, unless those purchases are approved by the voters of the City of Thank you for your consideration in this matter SUPPLEMENTAL
COMMUNICATION
City of Huntington Beach Finance Commission
Meeting Date: 7/18/23
Agenda Item No. 22(23-433)