Supervisors look at more changes to handling of Orange County’s investments ...Middle East

The OC Board of Supervisors on Tuesday, Feb. 25, considered more changes to oversight of the county’s $17 billion investment fund, following its recent decision to take management duties away from the elected treasurer-tax collector.

On Tuesday, the board also finalized a new county investment policy, replacing the guidelines that had been in place under Treasurer-Tax Collector Shari Freidenrich.

In December, when the supervisors did not renew Freidenrich’s investment authority, oversight of the investment pool automatically transferred to interim CEO Michelle Aguirre.

Because of that, county staff are now recommending the existing Treasury Oversight Committee, which was created in 1995 in response to the county bankruptcy, also be replaced.

County officials said the committee, which is appointed by the treasurer-tax collector,  should not – and can’t under existing law – exercise oversight authority over the CEO’s management of the investments. Instead, a proposed Investment Oversight Committee would be designed to do so. The proposal would shift Audit Oversight Committee members to take on investment monitoring.

“We looked at different ways to shift oversight responsibility, from the Treasury Oversight Committee, where the members are nominated by the treasury-tax collector, to the Audit Oversight Committee, which I think the general consensus is much more robust, much more engaged, much more probing, and frankly, exercises greater scrutiny over the operations of the county executive office, so it’s a robust oversight committee,” County Counsel Leon Page said.

David Carlson, chair of the treasury oversight committee, said dissolving the group would be a step backward.

“The elimination of the treasury oversight and the people serving on that committee with a particular background and skill set basically eliminates a level of oversight,” Carlson said.

The supervisors considered on Tuesday dissolving the committee and also adding a school district representative – because districts are a significant investor in the fund – but did not make a final decision.

“We certainly, I think, have the goal of making sure that we have strong oversight, autonomy, public participation, stakeholders at the table,” Second District Supervisor Vicente Sarmiento said. “I do think that we need more time just to make sure that the public is aware of what we’re doing, we consider all our options.”

“These are substantive changes that we’re making to the oversight structure,” Sarmiento added, saying the board, the public and the treasurer-tax collector’s office, “need some time to understand this.”

The Board of Supervisors on Tuesday did decide to terminate the county’s voluntary investment pool, which allowed local agencies to deposit excess funds with the county’s treasury for investment.

As of December, voluntary investment pool participants accounted for less than 1% of the county’s multi-billion dollar investment fund, officials said. Participants included several cities, water districts and other local agencies – about 20 as of a December investment report.

County staff reported to the board that management of the program had become “administratively burdensome.” The program is to be terminated by June 30, giving the treasurer time to return funds to participants.

Since elected in 2010, Freidenrich has served as the county’s elected banker, responsible for collecting taxpayer dollars, as well as the manager of the county’s investments.

The management changes to the investment fund came amid reports from former staff that Freidenrich created a hostile and toxic work environment in the treasurer-tax collector office.

A 2022 independent investigation said Freidenrich threw office keys at one employee, violating the county’s workplace violence policy, and stood over another, threateningly pointing her finger at the employee’s face, though the report said that did not rise to the level of a violation.

“We were taken aback by many of the comments that were being shared with us about the working environment, but also about the impact that toxic working environment was having on the management and the duties and the carrying out of the tasks for the treasurer-tax collector’s office,” Fifth District Supervisor Katrina Foley said. “There’s an eight-page frequently asked questions, timeline document that our public information officer has put out for us to explain everything that has been going on.”

In that FAQ release, county officials said Freidenrich’s management of the office has had financial impacts such as:

• Delays in the deposit of property tax checks held by the treasurer led to stale checks, reduced yield and impacts to taxpayers including incorrect late fees and penalties.

• Delays in refunds to schools of $550,000 in overcharged administration fees over a period of 3 years.

• There were delays in filing tax liens in 2023 and 2024 (tax liens for 2024 amounted to $31.4 million, for example), and a property tax auction hasn’t been held since 2021.

• Increased costs due to numerous complaints and HR investigations.

“The taxpayers expect the treasurer-tax collector to do its duties in a common sense, efficient and cost-effective manner,” Freidenrich said in a detailed statement Tuesday responding to several of the issues the FAQ raises.

“With tax auctions (foreclosures), the tax collector is the seller of last resort and conducts what is known as a ‘buyer-beware’ auction sale. Fixed auction costs are high and reduce owners’ realized equity at sale,” she said in one of her directed responses. “With the highest secured collection rate in the state at 99.2% and a strong real estate market for sellers, our need to conduct foreclosure auctions is minimal.”

She also defended the handling and depositing of property checks, saying more than 500,000 are received annually and are recorded daily as they come in.

“Over 14 years, with 500,000 checks annually, yes, it is possible that a few went astray, not in numbers of any significance,” she added.

Carlson defended Freidenrich’s management of the investment pool, adding that she has been addressing the concerns about her office’s atmosphere.

“Here we have a situation where, at a time of chaos, we have the most experienced person in Orange County not able to do her job, despite what the voters have declared at the last election,” Carlson said. “She needs to be a good manager, no question about that, but what she really needs to be evaluated on, for the sake of the voters who voted her in the position, is safety, liquidity and yield.”

Fourth District Supervisor Doug Chaffee said staff from the CEO and Human Resources departments have made efforts to address Freidenrich’s management issues and treatment of employees.

“The board cannot simply sit idly by as a county elected department creates an environment which is ripe for fiscal mismanagement, plus the welfare and well-being of our county employees being put at risk,” Chaffee said.

Freidenrich previously told The Orange County Register that she retained an executive coach following the 2022 HR letter and that she strives to be respectful and ethical when dealing with workers.

“I can assure you, everything I’ve done in my career … has been to assure the work gets done properly,” she said. “The performance of my duties is key and that is what I focus on.”

Third District Supervisor Don Wagner said the board’s recent decisions have been a long time coming. He and Foley heard “hair curling” stories from staff in the office that prompted them to act, he said.

“We’ve seen many, many years ago, predecessors of ours allow what turned out to be too much independence at the treasurer-tax collector role, and the opportunity to exercise some oversight is critical,” Wagner said. “My hope for this county family is that if ever situations like this arise again in any department, it (will) not take so long to come to a board office, come to our staff, raise an issue, and allow us to do our oversight role, which was, frankly, too long in coming.”

Related Articles

Read More Details
Finally We wish PressBee provided you with enough information of ( Supervisors look at more changes to handling of Orange County’s investments )

Also on site :

• George Strait, 73, Goes Viral for Wildly Generous Gift to Wounded Military Veteran
• Two Minors Admit to Felony Charges following Bomb and Shooting Threat at Ventura High School
• 2000s Rock Icon Makes Jaw-Dropping Career Move & Fans Are Here for It