Hermosa Beach Treasurer’s race pits incumbent Siemensma against financial advisor Pedersen [UPDATED]

Karen Siemensma is seeking her fourth term as Hermosa Beach City Treasurer

by Kevin Cody

Hermosa Beach City Treasurer Karen Siemensma maintains a low political profile, though her position has greater financial power than any single councilmember.

During the 2023-2024 fiscal year, Siemensma’s investment of the city’s $58.7 million portfolio generated $1.8 million in interest, making interest one of the city’s largest sources of revenue. 

Siemensma (formerly Siemensma-Nowicki) is seeking election on November 5 to a fourth term.

Hermosa Beach City Treasurer candidate David Pedersen is a planning commissioner and financial planner. Photo by Kevin Cody

David Pedersen, a nine-year veteran of the Hermosa Beach Planning Commissioner, is challenging Siemensma for city treasurer’s seat.

As with councilmembers, the city treasurer’s position pays approximately $500 a month. The treasurer’s primary responsibility is improve interest returns on the city portfolio. But investments of city funds are strictly regulated by the State and City, who emphasize safety over returns.

“Safety of principal is the foremost objective of the city,” states the Hermosa’s investment policy, approved by the council in 2013.

The majority of city funds are invested in LACPIF (Los Angeles County Pooled Investment Funds), and the state managed LAIF (Local Agency Investment Fund).

Both offer the advantage of liquidity. Money can be transferred in and out of the funds on a daily basis. Their disadvantage is their generally low interest rates.

City funds may also be invested in U.S. bonds and bank issued Certificates of Deposits (CDs) with maturity dates of not more than five years. 

Stock market investments are prohibited.

Though both Siemensma and Pedersen have extensive financial experience, the only qualification required of the city treasurer candidate is to be a registered Hermosa voter.

John Workman, Hermosa’s city treasurer for 18 years, from 1993 to 2011, owned Triangle Hardware. Workman invested all of the city’s portfolio in LAIF. During his last year in office the city’s portfolio earned just .37 percent in interest.

Workman was defeated in his 2011 reelection campaign by investment banker David Cohn, who promised voters higher returns by putting some of the city funds into bonds and CDs.

Siemensma was elected in 2013 after Cohn resigned for personal reasons two years into his term. Since then, she has increased the city’s investments in bonds and CDs to approximately 20%  percent of the city’s portfolio.

Siemensma said she relies on the city’s five financial brokers for advice on which bonds and CDs to buy. City finance director Vicki Copeland and City Manager Suja Lowenthal must approve her investments, Siemensma said.

Siemensma earned a bachelor’s in accounting and a Master’s in Business from Pepperdine University. She is a CPA (Certified Public Accountant) and CFF (Certified in Financial Forensics). She has served on the boards of Leadership Hermosa and the Hermosa Chamber of Commerce. She owns her own accounting firm, specializing in nonprofits. 

She said she is seeking a fourth term to “keep the momentum going.”

The roughly 3% return on the city’s investments in fiscal year 2023-2024 was in the top 90% of state municipalities, Siemensma said she was told by one of the city’s investment brokers.

If reelected, Siemensma said, she plans to increase the city’s investment in bonds and CDs after the State and County fund interest rates drop. Because interest rates have been falling, and fund rates lag behind bond and CD rates, the fund rates are currently higher than most bond and CD rates, she said. 

Siemensma said her involvement in the city budget is limited to submitting her interest projections to the city every August, in advance of council budget deliberations.

Pedersen received an engineering degree from USC and an MBA from UCLA. He is the founder of Hermosa Advisors Financial Planning and a state registered (Series 65) financial advisor. He grew up in Long Beach and has lived in Hermosa since 1995,

In addition to nine years on the Hermosa Planning Commission, Pedersen served on the city’s Economic Development Committee, Green Task Force and Leadership Hermosa.

Pedersen said he views governance as a “team sport,” and plans to take a participatory role in the city’s financial affairs by working with the city’s newly formed Administrative Services Department, and by being accessible to residents. 

Despite the financial background required of the city treasurer, Pedersen said he believes it should be an elected position.

“Hermosa is fortunate to have smart people with financial investment expertise and I am happy to provide voters a choice,” Pedersen said. ER

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