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Orange County Supervisors this week quietly took away investment authority from OC Treasurer-Tax Collector Shari Freidenrich – right on the heels of the 30th anniversary of Orange County’s bankruptcy.
Called the banker for the county along with community and school districts, Friendenrich’s primary responsibility is the deposit, investment, collection and paying out of public funds.
According to county documents, she is responsible for overseeing the County of Orange’s $12 billion investment pool and serves as a trustee for the $20 billion Orange County Employee Retirement System.
During the 1994 scandal – the first municipal bankruptcy of its kind in America filed on Dec. 6 that year – there was an over-reliance on former Treasurer Robert Citron, an oversight error that cost county taxpayers over $1 billion in repayments to Wall Street investors.
In the wake of the bankruptcy, Wall Street made sure to force certain financial oversight mechanisms in the form of citizen oversight panels along with a host of suggested long term reforms – nearly all of which were eventually squashed.
Now, regarding this week’s surprise action, it’s unclear why county supervisors made the move and hardly anyone at the County of Orange is saying much – with county supervisors and Friendenrich not responding to calls for comment.
Questions began mounting on Tuesday morning, just after a very short item delegating investment authority to the Treasurer Tax Collector was pulled from consideration by county supervisors.
The approval is something considered an annual ministerial action.
Except this year, the delegation of investment authority didn’t happen.
At the start of Tuesday’s meeting, the county’s clerk of the board simply announced that a request had been received that morning to delete the item.
“Adopt resolution approving 2025 Investment Policy Statement and delegating investment authority to Treasurer-Tax Collector,” read item 31F on the county supervisors’ supplemental agenda.
County officials did respond to a request for comment about the action, with County Spokesperson Molly Nichelson issuing the following statement late Tuesday in response to my questions.
“The investment authority that the Board delegates to the Treasurer-Tax Collector (Treasurer) automatically expires at the end of each year,” Nicholson wrote in an email response to questions.’ The Board may, but is not required to, renew this delegation by adopting a resolution for the next calendar year..”
So who does that leave in charge of the county’s investment portfolio? Who currently manages and oversees investment trades?
“If the Board does not delegate the authority to the Treasurer,” Nicholson’s statement concluded, “the responsibility defaults to the CEO who is responsible for implementing and administering Board policy.”
Freidenrich is in her fourth term in office, originally elected as Orange County’s Treasurer-Tax Collector in November 2010. She was later re-elected after running unopposed in 2014, 2018 and 2022.
Her term followed the controversial term of former Treasurer-Tax Collector Chriss Street, who was preceded by John Moorlach, who took over after Citron and eventually served as a county supervisor for two terms and later as a state senator.
While officials are being quiet about Freidenrich’s administration of the office of the Treasurer-Tax Collector, there are indications that there may be issues inside the department.
A May 2019 Performance Audit report looking into the Treasurer-Tax Collector published stark findings and it’s unclear how those challenges have been addressed.
“In the six years evaluated, the TTC has had the largest percentage of employees who have left their departments, with percentages twice as high than the other two departments in the past two years. Most significantly, in 2019, 34% of TTC employees separated or transferred out of the department,” states the report completed by Arroyo Associations Management Consultants.
That study found that the Treasurer Tax Collector’s office had the lowest full-time employees of any similar agency in Southern California with only 78 full time equivalents – compared to 123 in similar-sized San Diego County.
In addition to several problems noted, the report highlighted problems in staff retention.
“With many managerial positions open, there is a potential for critical failure should the current staffing levels continue. Since the start of the engagement in July 2020, there were two vacant positions out of six total management positions in the Treasury Division with 50% of the filled positions having less than two years of tenure. There have since been further departures by managers from the Treasury Division.”
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