Trust In Public Trustees

HB13-1049 by Representative Ray Scott and Senator Kent Lambert

SB13-022 by Senator Kent Lambert and Representative Ray Scott 

HB13-1051 by Representative Dan Pabon and Senator Lucia Guzman

Background:

In one of the Denver Post's biggest stories of 2012, it was found that almost every county with a public trustee appointed or reappointed by Governor Hickenlooper was involved in the misuse of public money. I won't go into the nitty gritty, you can certainly click the link above to do that, but the scandal broke on the heels of increasing scrutiny of the appointment system. 

For about the past 100 years, Colorado has had a system of the Governor appointing the public trustees of first and second class counties, of which there are 11 in the state (64 counties total). The other 53 counties are third class and have their elected treasurer act as the public trustee.  

At this point you're probably wondering, what is a public trustee anyway? Are they important? 

Colorado is the only state in the country that has a system of public trustees. It arose during the late 1800s when a bad economy forced many mining operations to foreclose. In order to facilitate the transaction of foreclosed property in a way that protected the rights of the borrower, the position of public trustee was legislatively created. With extra relevance since 2008, public trustees administer foreclosures, deeds of trust, and collect taxes on accounts for land purchase contracts within their county. 

Since 2010

Three years ago the foreclosure fiasco in Colorado was raging. Public trustees handled much more business than usual which brought them into the spotlight of public awareness. At the same time, salaries were increased from $43,500 to $72,000 exclusively for the 10 second class appointed trustees. (Denver county was later made first class with their elected clerk and recorder acting as the public trustee). 

In 2012, Representative Ray Scott sponsored HB12-1329 which had the original intention of changing many second class counties, those with an appointed public trustee, to third class counties, those with the elected treasurer acting as public trustee. The affected counties would have been Mesa, Weld, and El Paso. 

The bill was seriously derailed though. Instead of altering the mechanism for appointment, it instead created an auditing system for all public trustees. Third class trustees are now to adopt an annual budget and present it for approval to the board of country commissioners, but appointed trustees (second class counties) are only required to submit individual annual audits. 

Back at it

Representative Scott is back this session with two bills, one sponsored in the House (HB13-1049), and one sponsored in the Senate (SB13-022), both again attempting to change second class public trustees to third class, which would do away with their being appointed by the Governor. 

While the bills seem redundant on one another, the House version only changes El Paso and Mesa counties to third class; the Senate version transforms all counties except Broomfield and Denver to third class and tinkers with the salary scale. Instead of the aforementioned $72,000, the treasurers acting as trustees would receive a treasurer salary plus $12,500 for having both duties.

Also in the works is HB13-1051 by Representative Dan Pabon and Senator Lucia Guzman, two of the more influential Democrats in the legislature. It's a bit more complicated. Denver is a first class county which means their elected clerk and recorder acts a the public trustee. Their bill would make the elected clerk of Denver an officer equivalent to a second class county and would have that first class trustee execute a surety bond of $25,000 to protect their performance. 

Keeping track

Both of Rep. Scott's bills are being heard later this month. 1049 will be heard in the House committee Local Government, then Appropriations on Wednesday, January 30th. 022 will be in the Senate committee State, Veterans, & Military affairs Wednesday, January 23rd. Because Rep. Scott is a Republican, and both of those committees are chaired by Democrats, I predict some interesting action on them. Rep. Pabon's bill 1051 has not be scheduled yet. 

Stay tuned!