It’s got to be one of the toughest local elections to figure out how to vote in.
Who should be the county’s public banker?
For the first time in more than a decade, there’s a contested race for County Treasurer/Tax Collector with incumbent Shari Friedenrich being challenged by her second in command, Dana Schultz.
Freidenrich lost control of the county’s investment funds last year after county supervisors raised complaints with how she treated employees and questioned whether her strategy was earning enough returns on the money, despite the investments being of the top earners in the state.
Freidenrich has criticized that move as illegal, a contention that county supervisors and county officials disagree with.
Schultz was Freidenrich’s second in command, and was moved into Freidenrich’s office after years managing other county departments to help address worker complaints against Freidenrich.
She’s now working directly for County CEO Michelle Aguirre and managing the investment fund as a member of county staff after Freidenrich tried to fire her when she filed to run for treasurer.
Orange County is the only California county to not have the elected treasurer oversee public investments.
After they took back investment authority, county supervisors also eliminated the Treasurer Tax Collector Oversight Committee – a key reform after Orange County’s 1994 bankruptcy – and replaced it with an Investment Oversight Committee, which met earlier this month.
To hear audio of the most recent Investment Oversight Committee meeting, click here.
Friedenrich – a Republican endorsed by the OC GOP and former Treasurer Tax Collector John Moorlach – approaches investments with a short-term strategy focused on things like treasury bonds.
To see how county investments were managed under Friedenrich’s stewardship, you can see the February 2025 county investment report here.
Schultz – also a Republican endorsed by the OC Employees Association and Republican County Supervisor Don Wagner – has been critical of Friedenrich’s approach, arguing it’s too conservative, leaving millions in potential gains on the table.
Schultz has diversified the portfolio and leaned more into market investments and other long-term strategies, an effort she said is appropriate to protect against volatile interest rates.
To see how county investments are managed under Schultz’s stewardship, you can see the February 2026 county investment report here.
Voice of OC got both Friedenrich and Schultz to answer a series of questions about the issues involved in their race and the administration of the Treasurer Tax Collector.
Do you think an elected treasurer should oversee OC’s investment pool as opposed to an appointed County CEO?
Shari:
In the 58 counties in the State, the voters elect the Treasurer to invest public funds. State law defines strict requirements for a Treasurer to be qualified to run, whereas the Board has no such restrictions.
I meet three of the four listed requirements, including being a CPA that is one of the most important certification to have due to the requirement by law to have annual independent audits and reviews of the records and books of the Treasurer’s assets held in the County Treasury.
The current Board has violated the exclusive right of the voters by seizing the investment authority from the current elected Treasurer.
The Board has also violated State law by illegally delegating their investment authority for County funds and other local agency funds in the County Treasury to an agent who is not the Treasurer.
State law clearly defines that the Board can only delegate the investment authority over county funds to the County Treasurer, not an unelected Bureaucrat and if this authority is not delegated as defined in GCS 27000.3, the Board remains as the agent.
Dana:
I believe Orange County’s investment authority is most appropriately administered through the Treasurer-Tax Collector’s office, under the direction and authority granted by the Board of Supervisors (Board). While California law allows the Board discretion in how that authority is delegated, maintaining investment operations within the Treasurer-Tax Collector’s office is more consistent with the structure and practices used by the overwhelming majority of counties throughout California.
That being said, this structure is most effective when the Treasurer-Tax Collector’s office is led by an official, elected or otherwise, who fosters a professional workplace culture focused on employee retention, collaboration, and respectful treatment the professionals responsible for carrying out the office’s day-to-day operations. Additionally, the office must be led by someone that not only possesses the financial expertise and operational experience to manage a complex department, but who also maintains the trust and confidence of the public, local agencies, schools and the Board that ultimately delegates that authority.
Unfortunately, the current environment has not provided the level of stability and confidence necessary for the Board to feel comfortable returning that delegated authority to the current incumbent. As the County’s current Chief Investment Officer overseeing the investment team, I remain committed to maintaining the Board’s trust in the financial management of the Orange County Treasury Pool. If elected, I will work to restore the confidence, stability and professionalism within the office so the delegation of investment authority can appropriately return to the Office of the Treasurer-Tax Collector.
What is your strategy for investments, regarding long-term vs. short-term?
Shari:
The pooled funds objectives are safety , liquidity, and lastly yield.
The proven results of my strategy when the Board delegated the investment authority to me as of 12-31-24 are reflected in the high ranking of the Orange County pooled funds in relation to other peer Counties for liquidity and yield (documents previously provided) and further provided in the monthly and quarterly reports where the report focuses pages on each objective available on the Treasurer’s website understanding that cash flow needs of Counties may vary.
The OC Bankruptcy loss of $1.5 Billion of public funds is an example of a strategy that invested in longer-term securities inappropriately for the pool participants.
I believe that the current strategy taken by the Board as the prudent investor does not properly consider all risk factors and is putting the public funds in the County Treasury at potential risk.
Dana:
As an Investment Manager of public funds, my strategy must follow the priorities established under California Government Code (CGC) – Safety, Liquidity, Yield – in that order. My investment approach, which I have followed since I assuming oversight of the investment function for the Office of the Treasurer-Tax Collector in 2023 and continuing in my role as Chief Investment Officer after the Board retained its investment authority in December 2024, is grounded in the statutory framework established under the CGC and the Orange County California Investment Policy.
Additionally as a Certified and Advanced Certified Public Funds Investment Manager, I incorporate industry best practices commonly used by other public fund investors, including cash flow matching, laddering maturities and maintaining a diversified portfolio.
Because the Orange County Treasury Pool contains both the County Funds as well as those of the Orange County Department of Education and Community College Districts (Schools), my responsibility is to ensure the safety of the principal of the funds, maintain sufficient liquidity to meet operational needs of (payroll obligations, school distributions, capital needs, unforeseen economic events, etc.) and prudently maximize the returns within allowable risk parameters when the market conditions support doing so.
I believe in a balanced and diversified investment approach that is disciplined, market-informed and data-driven. My team and I develop our investment strategy through thorough analysis of historical trends, economic conditions, credit quality, cash flow needs and ongoing consultation with peer agencies and industry experts.
What is your strategy for investments, regarding low risk vs. higher risk?
Shari:
With a 30+ year history of high rankings in investing public funds and never losing a dime of principal, the prior monthly reports available online at the TTC’s website reflect the risk levels and strategy employed when the Board had delegated the investment authority to me.
Cognizant that both the Treasurer in 1992 caused the loss of $1.5 Billion of public funds and the Treasurer in 2009 caused the loss of millions of dollars in public funds, my time as the prudent investor closely managed those risk levels that I believe were appropriate in the various interest rate markets.
The loss of millions of dollars of principal in pooled funds during the 2008-2009 Credit crises resulted from the Treasurer at that time purchasing over 30% of a specific investment type that ended up having significantly higher risk than expected.
Dana:
The Orange County Treasury Pool (Pool) should remain a conservative public investment portfolio. These are taxpayer, County and school funds, not speculative investment capital.
California Government Code and the Orange County California Investment Policy, which is more restrictive than state law, establish clear limits regarding allowable investments and prioritize safety of principal, liquidity and return on investments (yield) in that order. Within those limits, I support maintaining a diversified portfolio focused on high-credit-quality and secure investments with carefully managed duration and exposure limits. While yield is important, it should never come at the expense of the safety and security of public funds.
Because of these statutory safeguards, along with lessons learned from Orange County’s past investment failures, which must never be forgotten, my investment philosophy does not include speculative or high-risk investments.
There has recently been public misinformation suggesting that, under the Board’s retained investment authority, that my team was engaging in “high-risk” investments through the purchase of callable bonds. That characterization is inaccurate. While some callable bonds can carry elevated risk, the securities we have incorporated into the portfolio are conservatively structured European callable bonds with a single call date, selected specifically to align with the County’s and Schools’ projected liabilities and cash flow needs.
Additionally, these investments are limited to government-backed securities, such as U.S. Treasuries and Government Agencies, as well as high-credit-quality corporate bonds such as Apple or Walmart. Our strategy has maintained the safety and stability of the portfolio while prudently enhancing returns for participants in the Pool. This approach was further validated by Fitch Ratings’ recent reaffirmation of the Pool’s highest possible Fund Quality and Market Risk Sensitivity Rating available, AAAf/S1.
Through this disciplined approach, we have been able to safely secure rates approximately 20-40 basis points above the Treasury Par Yield Curve, generating an additional estimated $34.2 million on earnings if securities are called $57.6 million if held to maturity, for the benefit of Pool participants.
How much do you think should be spent total, on staff and brokers, as a percent of the portfolio?
Shari:
Consistent with Probate Code 16050 and with the limited expenses defined in state law that can be offset against interest income, the prudent investor must only incur costs that are appropriate and reasonable in relationship to the assets, overall investment strategy purposes and other circumstances of the public funds.
During my time as the fiduciary and prudent investor, the budgeted basis points expected to be charged to pool participants dropped from 10 basis points to less than 5 basis points. I focused on policy and operational changes that minimized costs of custodial banking fees, increased the dollar amount of trades reducing over trade volume.
These and other common sense and cost-effective changes safely increased the net yield to the pool participants without increasing any risks.
My current policies not yet implemented in operations will continue to streamline operations to meet the expectations of taxpayers to have government operations be efficient and cost effective while still ensuring we are investing in our operations to maintain high quality professionals responsible for safeguarding billions of dollars of public funds.
Dana:
I believe the current staffing and expense structure is highly-efficient and significantly below what would be typically charged by an investment firm hired to manage a public fund portfolio, which often average approximately 43 basis points, or 0.43%, of assets under management. External Brokers serve an important role by providing market access, pricing transparency and competition, and trade execution. However, overall expenditures related to investment operations should always remain reasonable, transparent and appropriately controlled.
Under my oversight of the investment function, we have maintained a highly qualified internal investment and compliance team at the cost approximately 3 basis points or less. More importantly, the true measure of success is not simply cost, but whether the team is operating effectively, ethically and in compliance with applicable laws and policies while protecting public funds and maintaining strong financial reporting, transparency and oversight.
I believe the County of Orange Investment Team, operating under the authority of the Board of Supervisors and with oversight from the County Executive Office, has performed exceptionally well in achieving those objectives.
Do you think county investments should follow a predetermined strategy or react to market movements?
Shari:
When I was delegated the investment authority, the fiduciary is responsible for establishing the investment strategy.
The online report at the Treasurer’s website reports document the proven results of that strategy that considers all risk factors consistent with the duties of the fiduciary and under my investment authority, the County of OC had high ranking for safety, liquidity and yield compared to peer counties understanding that cash flow needs may be different.
Dana:
As mentioned previously, a public fund investment portfolio should follow a disciplined, predetermined strategy ground in policy, statutory requirements, cash flow needs and prudent risk management. It must always prioritize Safety, Liquidity and Yield, in that order, while still adapting appropriately to changing market conditions.
The county should not engage in speculative market timing. Instead, responsible portfolio management requires ongoing evaluation of interest rates, economic conditions, liquidity needs, credit markets and duration positioning.
While the overall investment strategy and risk framework remains consistent, adjustments to duration, weighted average maturity and types of securities purchased may be appropriate depending on market conditions and interest rates trends. These adjustments must always be made conservatively and with the preservation of principal as the top priority.
For example, with recent market expectations indicating a continued downward trend in interest rates and the potential for future rate cuts, it has been prudent to strategically extend portions of the portfolio’s duration to safely lock in higher yields for a longer period of time. It is important to note that California law and the Orange County California Investment Policy limit the maximum maturity of securities able to be purchased to five years, which is still considered relatively short-term when compared to investment products such as U.S Treasury bonds that can extend to 30-year maturities. At the same time, strategies must remain flexible and prepared to adjust if economic conditions or market trends shift in a different direction.
Please outline what the basic investment mix should be under current conditions. How should it change if interest rates go down? And how should it change if interest rates go up?
Shari:
My proven results are well documented in the reports that over the last 15 years have experienced markets where interest rates were stable, rising, and falling. All results were reported to the Treasury Oversight committee and the Board.
My decisions were based on the requirement that a fiduciary consider all risk and return objectives in establishing the investment strategy.
Dana:
The specific investment mix should always remain within the parameters established by California Government Code and the Orange County California Investment Policy, while adapting prudently to economic and interest rate conditions.
Under current conditions, I support maintaining a diversified portfolio emphasizing liquidity, high-credit-quality securities, and staggered maturities to balance safety and yield. This typically includes a mix of U.S. Treasuries, Government Agencies, highly-rated commercial paper, money market instruments and other authorized investments.
If interest rates are expected to decline, strategically extending duration may help preserve higher yields before rates fall further, while still maintaining appropriate liquidity and safeguarding principal.
If interest rates are expected to rise, maintaining shorter durations and greater liquidity may help reduce market volatility and allow reinvestment at higher future yields.
Regardless of market conditions, investment decisions should remain conservative, policy-driven, data-informed, and focused on the principles of Safety, Liquidity and Yield.
What is your view on the reported instability in the Treasurer/Tax Collector’s office regarding managing employees?
Shari:
The Treasurer’s role is to develop and implement policies after considering input from the voters of the County and that are in the people’s best interest enduring the policies are in compliance with State law.
The Treasurer hires an At-Will Executive Manager that in the past has had a working title of Assistant Treasurer-Tax Collector that is tasked with implementing the Treasurer’s policies. These includes hiring Division Heads who assist the Treasurer-Tax Collector in fulfilling fr the duties as defined in State or as delegated by the Board.
The Division Heads manage the day-to -day operations and staff in compliance with the Treasurer’s policies under the oversight of the Executive Manager and the Treasurer.
The Treasurer’s responsibility is to efficient and cost effective to cut waste, fraud and abuse of public funds produce accurate, timely and complete work products in compliance with legal and regulatory requirements while ensuring . Every action taken by the Treasurer in setting the Office’s policies since taking office in 2011 has been taken with this responsibility in mind.
Dana:
A healthy organizational structure is essential to protecting public funds and maintaining operation stability. The Treasurer-Tax Collector’s office manages critical financial functions that require experienced staff, continuity, professionalism and strong collaboration. Concerns regarding instability, turnover, morale or workplace culture should be taken seriously because retaining institutional knowledge and maintaining employee trust is vital to effective public service.
Strong leadership should be ethical, respectful, transparent and accountable. Employees should feel valued, heard and empowered to raise concerns without fear of retaliation. Strong leadership is not about intimidation or politics; it’s about building trust, maintaining professionalism and creating a stable environment where public servants can focus on protecting the County’s and School’s financial interests.
Having worked in the office under the reported unstable environment surrounded by workplace culture concerns, I can personally attest that the challenges have had a significant impact on staff morale, retention, and day-today operations. High turnover, loss of institutional knowledge, and operational disruptions can create unnecessary risk in an office responsible for managing billions of dollars in public funds and critical taxpayer services.
During my time in the office, I worked hard to foster a more professional, collaborative and supportive environment for staff while helping maintain operational stability and continuity, Unfortunately, many employees and stakeholders remain concerned about the direction and culture of the office since my departure. These concerns are the primary reason I made the difficult decision to run for Treasurer-Tax Collector.
I believe the office can and should return to a culture centered on professionalism, accountability, teamwork and respect – one that prioritizes both the employees that serve the public and the residents, schools and agencies that rely on the office every day. It is time for positive change!
What is your view on the importance of having independent community oversight over county investments?
Shari:
A fiduciary’s sole responsibility is to manage the assets in the best interest of the beneficiaries. As an active CPA, trust but verify, is a best business practiceI often use to as we prepare work products and safeguard public funds.
This documentation related to trust, but verify is important as it is easily providable for all internal and independent oversight. The oversight builds the public trust and integrity in local government operations.
After the bankruptcy, significant changes were made in State law to safeguard public funds and including adding restrictions to those running for Treasurer, defining the process for approving investment policies and defining the process for independent oversight of public funds to ensure the accountability and transparency to the public of their money.
Without transparency of their actions to the public, the current Board has dismantled the majority of these protections at the County of Orange and no longer follows State law related to the statement of investment policy, and the treasury oversight committee, among other areas.
Dana:
Independent oversight is extremely important, which is why I commend the Board’s action to dissolve the Treasury Oversight Committee (TOC) and establish the Investment Oversight Committee (IOC).
The TOC was originally established following the County bankruptcy to provide oversight of the treasury operations. After California Government Code provisions became permissive rather than mandatory regarding such committees, many counties dissolved their TOCs altogether. In Orange County, the prior TOC structure did not provide the level of independence that many believe is necessary for effective oversight. Committee members were nominated by the Treasurer, and the agendas for and annual reports from the TOC were prepared by the Treasurer-Tax Collector’s Office itself. While the committee included knowledgeable and dedicated individuals, the structure created concerns regarding the independence of the oversight process because the office being overseen maintained significant influence over the committee’s operations.
The IOC was established when the Board elected to retain its investment authority amid publicly expressed concerns regarding leadership and workplace culture within the office. The intent of the IOC structure was to create a more independent and transparent oversight framework that operates separately from the treasury and investment functions it oversees.
The IOC retained many of the valuable perspectives previously represented on the TOC, including participation from the Auditor-Controller, County Executive Office, Superintendent of Schools, and public members, while also incorporating representatives from the Board of Supervisors to help ensure active oversight of staff exercising the Board’s delegated investment authority. The current public members also bring extensive professional experience in auditing, finance and government oversight, including Certified Public Accountants and other highly qualified professionals.
Importantly, IOC meetings are open to the public and now recorded and published for public access helping increase transparency, accountability and public engagement in the County’s investment operations.
Independent oversight, transparency, public reporting and strong governance are essential to maintaining public trust and ensuring the continued protection of County, school and taxpayer funds. I strongly encourage members of the public to remain engaged and informed regarding the County’s treasury and investment operations.