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Old Mendocino County Courthouse Around 1915

California County Pension Debt

 

Mendocino County's Pension Debt



The Pension Debt:

Growth of the Debt & the Debt Today



Mendocino County's Unfunded Pension Debt


Choices -

Growth & Amount of Debt

Pension Related Payments

County Payments

$700 Million to Pay Debt!

Profound Funding Failure

 

What is County Pension Debt?

There are two forms of Mendocino County's Pension debt.

  • Net Pension Liability: This is the gap between how much money the Pension Fund should have today and how much it actually has(see Funding for more information). Only the County has to pay extra to eliminate this deficit.
  • Pension Obligation Bonds: The County sold Pension Obligation Bonds to eliminate Net Pension Liabilities in the past. They did so to obtain a lower interest rate. Pension Bonds are simply Net Pension Liaiblities restructured into bonded debt - the Pension Fund gets the money, but the County - which really means the People - keep the debt.

Growth of Unfunded Pension Debt

Three Surges of Unfunded Pension Debt

This shows the balance of Mendocino County's Total Unfunded Pension Debt (Net Pension Liability in red + Pension Obligation Bond balance in pink) from 1993 through 2014 (using most recent Pension Fund Valuation).

1996: The Net Pension Liability (in red) was $45 million. The County then borrowed slightly more than $30 million by selling Pension Bonds (pink).

2002: Net Pension Liability surged so that Total County Pension Debt was $100 million - more than twice as much as 6 years before. The County borrowed another $80 million by selling a second round of Pension Bonds.

2010: For the third time a surge in unfunded pensions doubled Total County Pension Debt to $210 million. But this time instead of borrowing more money by selling Bonds the County asked the voters to approve a one-half percent sales tax increase for 10 years. But unlike the Pension Bonds - which were sold by the County without a vote of the People - the County had to put the tax increase to a vote in the November 2010 ballot. It lost by the biggest defeat of a County-sponsored ballot measure in decades - 70% no. (Read about the "Measure G" campaign.)

Major Point!

Just like clockwork - every 7 years or so over the past 2 decades Mendocino County's unfunded pension debt doubled. And yet neither County or Retirement Officials have ever produced a report identifying what causes this to keep happening - much less laying out a comprehensive plan to stop creating more debt.

Unfunded Pension & All Other County Debt Today

Unfunded Pension Debt v. All Other Debt - 20 Years

In 1993 the County's unfunded pension debt was $34 million and all other debt was $26 million. Total debt was $60 million.

In 2013 the County's unfunded pension debt was $203 million and all other debt was $45 million. Total debt was $248 million.

Between 1993 and 2013 all other debt grew 68%. Unfunded Pension debt grew almost 600% - almost 9 times faster.



Total Mendocino County Long-Term Debt - 2014
Total Mendocino County Debt
2014
Long-Term Debt (Millions)   Change
1993 2013 $ %
Unfunded Pension Debt ($34) ($203) ($169) 597%
All Other Debt ($27) ($45) ($18) 68%
Total Debt ($60) ($248) ($187) 310%
% of Total Debt
Unfunded Pensions 56% 82%
All Other Debt 44% 18%
Total Debt 100% 100%

Major Point!

Today Mendocino County's unfunded pension debt is more than 4 times larger than all other debts combined. Unfunded pension debt grew nearly 9 times faster than all other debt over the past two decades.

 

This is the first page in "The Pension Debt" section. The "Last Section" buttom takes you to the first page in the four-page preceeding section - "Background". The "Next Page" is next in this section.

 
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