A new Marin County civil grand jury report largely endorses a plan to dramatically restructure the oversight of county finances by replacing two key elected officials with an appointed finance director.

Measure B, which would abolish the elected positions of Marin County auditor-controller and treasurer-tax collector, will take effect if a majority of Marin voters approve it on Nov. 4.

The grand jury's endorsement, however, comes with one caveat: that the finance director be hired under a long-term contract to help insulate him or her from influence by county supervisors, to whom the employee will answer.

There is nothing in Measure B that would require such a contract.

"There is nothing that would preclude the Board of Supervisors from doing that," said County Administrator Matthew Hymel, who recommended the restructuring to supervisors this summer. "But we didn't think it should be put into the legislation because there are circumstances where that may not be in the best interests of the county."

The League of Women Voters of Marin County has also recently decided to support Measure B. The restructuring still has opponents, however, among them the Marin United Taxpayers Association and the county's current auditor-controller, Richard Arrow.

"I truly believe in transparency, accountability and especially the checks and balances in government that an elected official provides," Arrow said.

The grand jury's reasons for supporting the restructuring followedclosely the rationale previously cited by Hymel.

First of all, the separate operation of the two departments has become a barrier to the full utilization of the county's expensive new MERIT computer system, which has already cost the county at least $20 million. Secondly, the timing is right, because Arrow has announced he will retire effective Dec. 31, and the treasurer-tax collector, Michael Smith, has said he will not seek re-election when his term ends in 2010. And thirdly, if the director of finance is an appointed position, job candidates will not have to reside in Marin County, as elected officials do. That will make it easier for the county to recruit a top-flight candidate.

In its report, the grand jury notes that in addition to accounting skills the new finance director will also require "a solid grounding in the technological tools available to make financial management more efficient and cost effective."

The grand jury largely discounts the cost savings argument for the restructuring. Hymel has estimated the consolidation should save the county about $100,000 per year. The grand jury reports that it "was told that initial savings, even if realized, would most likely be offset by increased costs in implementing the proposal."

In its report, the grand jury states that it is fully persuaded that consolidation of the two offices makes sense. "The issue of whether a new office of director of finance should be elective or appointive is more complex, with strong arguments on both sides," the jury observes.

Currently, the auditor-controller and the treasurer-tax collector, as elected officials, are independent of the Board of Supervisors and serve watchdog functions on supervisors' activity, the grand jury notes. The jury's report recalls how in 2000 Arrow took away a former supervisor's county credit card that had been used for personal expenses and established formal regulations for future credit card use.

"The appointed individual would be hired by and responsible to the Board of Supervisors, which would put him in a delicate position," said Fielding Greaves, president of the Marin United Taxpayers Association. "He might be more reluctant to question the expenditures of the people who appointed him."

Under the proposal, the independence of the new finance director would be fortified by requiring a vote of four of the county's five supervisors to fire the director. In addition, an outside independent audit would be conducted annually to verify proper financial management of the new office and a new financial audit advisory committee - consisting of county supervisors, county staff and residents - would be established to review the annual audit.

But the grand jury sees the need for one additional safeguard. If the position were elected, the finance officer would in effect have a four-year contract, the jury writes in its report.

It concludes: "A similar long-term contract for an appointed finance officer would carry with it much the same sort of job guarantee that encourages independent action."