OC treasurer race tests whether voters or board should control $16B fund

For the first time in more than a decade, Orange County voters face a contested race for treasurer, with incumbent Shari Friedenrich accusing the Board of Supervisors of illegally stripping her authority over the county's $16 billion investment pool just months before the election.

The race carries statewide significance: Orange County is the only one of California's 58 counties where the elected treasurer does not control public investments, raising constitutional questions about voter authority that will be decided at the ballot box.

The Board of Supervisors voted in December 2024 to remove investment authority from Friedenrich's office following employee complaints and concerns about her investment approach, according to Voice of OC. Schultz, who had served as Friedenrich's second-in-command, was designated Chief Investment Officer and now directly manages the fund — while simultaneously campaigning to replace the woman who once supervised her.

Friedenrich, who has more than 30 years of public fund investment experience and no record of principal loss, argues the transfer was unlawful. "In the 58 counties in the State, the voters elect the Treasurer to invest public funds," Friedenrich said, according to Voice of OC. "The current Board has violated the exclusive right of the voters by seizing the investment authority from the current elected Treasurer," she added.

Schultz, endorsed by Supervisor Don Wagner, frames the question differently. "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," she said, according to Voice of OC. She added that the arrangement works best "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."

On investment strategy, the candidates also diverge. Friedenrich said "the pooled funds objectives are safety, liquidity, and lastly yield," Voice of OC reported. Schultz, who has implemented a more diversified, longer-term strategy since assuming management, said "the Orange County Treasury Pool should remain a conservative public investment portfolio. These are taxpayer, County and school funds, not speculative investment capital," according to Voice of OC.

The debate echoes Orange County's troubled financial history. The county's 1994 bankruptcy, driven by an inappropriate longer-term investment strategy, produced $1.5 billion in losses — a cautionary chapter that shaped the treasury's conservative mandate ever since. Subsequent treasurers also caused additional losses during the 2008-2009 financial crisis.

Both candidates are Republicans drawing support from different party factions. Former Treasurer John Moorlach has endorsed Friedenrich, while Supervisor Wagner backs Schultz. The $16 billion Treasury Pool holds not only county government funds but also money from the Orange County Department of Education and the community college district.

The supervisors also dissolved the Treasurer Tax Collector Oversight Committee and replaced it with a newly formed Investment Oversight Committee — a structural shift Friedenrich argues further strips the elected position of its independence and accountability to voters.