In a striking turn of events, Orange County Treasurer/Tax Collector Shari Friedenrich who secured a resounding victory in the June primary, finds herself at odds with county supervisors over proposed budget cuts and shifts in investment oversight. Friedenrich, a Republican endorsed by the county GOP and reelected to her post four times over the past decade, is raising critical concerns about the stability of her office.
The recent budget deliberations have highlighted a growing rift between Friedenrich and the county supervisors. During a public meeting, Friedenrich was cut off while addressing her concerns about the proposed budget cuts, which include a reduction of 15 staff positions. This move has sparked a debate about the core duties of her office and the potential impact on the county’s financial stability.
Budget Cuts and Core Duties
Friedenrich has warned that the proposed staff reductions will materially impair her ability to perform the statutory core duties assigned to her office. These duties include collecting property taxes, which account for over 90% of the county’s discretionary revenue. She emphasized that the consequences of these staffing reductions are not theoretical but pose real risks to treasury operations, financial reporting, and tax administration.
The proposed cuts represent about a 20% reduction in her staff of 78 workers. Friedenrich has accused county supervisors of hiding the trims to her office and expressed concern over the lack of transparency in this year’s budget process. She noted that the budget materials do not fully present her department’s requested staffing and budget recommendations, making it difficult for the public to evaluate the differences.
Investment Oversight and Management
The tensions between Friedenrich and the county supervisors extend beyond budget cuts to the management of the county’s $16 billion investment pool. Last year, supervisors voted to take away management authority of the investment pool from Friedenrich, citing her tightly-wound management style and high office staff turnover rate. This decision was seen as a move to ensure stability in the office, which is largely viewed as the county’s banker.
Friedenrich has admitted the need for improvement in her management style and has accepted coaching from the CEO’s office. However, she points to a record of high returns on investments amongst California treasurers, a claim backed by the former chairman of the citizen oversight panel that used to oversee her work. This panel was a reform implemented after the county’s bankruptcy filing in 1994, which was the largest municipal bankruptcy in U.S. history at the time.
Over the past year, county supervisors have dismantled most of the 1994 reforms, including moving investment powers to their own CEO’s office. They have also set up their own Investment Oversight Committee to oversee investments but make all the appointments themselves, offering taxpayers limited information about the panel or its members. Friedenrich has blasted these moves, challenging their legality, a claim that supervisors deny.
The Political Landscape
The political landscape in Orange County has become increasingly complex, with Friedenrich facing challenges from within her own party. Dana Schultz, Friedenrich’s former deputy who is now in charge of investments under the CEO’s office, challenged her former boss directly in the June primary. Schultz received backing from the county general employee union and a direct endorsement from Republican Supervisor Don Wagner.
Despite these challenges, Friedenrich secured a significant victory in the June primary, with voters seemingly rejecting the thesis put forth by top county officials. This victory has left her in a peculiar position, as she continues to face resistance from county supervisors. During the supervisors’ meeting, Friedenrich was publicly shut down, and not one county supervisor commented on her concerns or responded to questions about the cuts to her department.
The outgoing County CEO, who spearheaded the shift to remove Friedenrich’s control of the investment fund, did not comment on any of Friedenrich’s public comments over cuts to her department or respond to questions about it afterwards. The Treasurer/Tax Collector announced that the 15-position cut she’s been asked to manage in the budget is unmanageable and will threaten core functions of her office.
