Friday, July 13, 2012

Why are some public trustees appointed?

Over the years, I've received some questions about why the public trustees are elected or appointed through a variety of different mechanisms. As has been featured numerous times in recent news articles, ten of the state's 64 public trustees are appointed by the governor.

Apart from the ten who are appointed by the governor, most public trustees are also the elected county treasurers. The Denver public trustee is the county clerk and recorder, and the Broomfield public trustee is appointed by local government officials.

Why the differences?

One of the extremely few sources that explains the origins of this system is a 2002 article in one of the journals of the Colorado Bar Association, The Colorado Lawyer ["A Brief History of Colorado’s Public Trustee System (1894-2002)," February 2002, p. 67]

In the article, author Willis Carpenter notes the following:

Yes, it is unique. No other state has a public trustee system, although deeds of trust are used as security for real estate loans in many of the jurisdictions in this country. Over the years we have asked others why the office of public trustee was created in Colorado by legislation adopted in 1894. Two rather vague responses were received. There was some awareness that the system grew out of the hard times surrounding the Panic of 1893; and, in one book published in 1955, the authors alluded to abuses perpetrated by private trustees in the late 1800s. Yet, the question lingered until now, when the time seemed propitious to dig into the matter and come up with an answer.
Carpenter goes on to examine the origins of the system  in the silver crashes of the 1890s and complaints about private trustees. In a special legislative session of 1894, the general assembly passed legislation creating a public trustee system that, for the first time, would allow for a right-of-redemption period for property owners facing foreclosure.

According to Carpenter:

The bill, as amended and initially adopted, provided for public trustees to be appointed by the Colorado Supreme Court in counties of the first and second class, which included only Arapahoe (Denver), Pueblo, and El Paso Counties. In all other counties, the Treasurer was designated and declared to be the public trustee, and County Treasurer was an elective office.
As more counties were added in Colorado, and when Denver County broke off from Arapahoe County, the system continued to evolve and new appointed public trustees were added. Carpenter notes that another possible rationale for the appointment process was due to some recent [in 1894] scandals in the Arapahoe county government, making the appointment process an effort to separate the public trustee office from local political considerations in the more urbanized counties. (Arapahoe county was by far the most populous county at the time, and included most of what is now the city and county of Denver.)

It is difficult to know for sure, but initially the Supreme Court appointments were seemingly justified by supporters on the assumption that the public trustees would be appointed in a non-political fashion. But according to Carpenter:

In that regard, the drafters of Substitute H.B. 48 were to be disappointed because the justices reported that they considered the matter entirely political and divided the appointments among members of their own political parties.
 The original appointment system was again reformed in 1907:
Appointment of public trustees by the Colorado Supreme Court ended in 1907, when the patronage was transferred to the governor and the term of office increased to four years. The term of office was reduced in 1929 to two years, where it remained until again increased to four years in 1990.
Since it seceded from Arapahoe County, Denver has developed a separate system in which the county clerk and recorder is the public trustee, and the creation of the City and County of Broomfield in 2001 added an additional variation in which the public trustee is appointed by the county commissioners.

Overall, however, the original system of appointments and elected treasurers remains largely intact.