"Unfunded Liability -
Our Children's Inheritance"

6/7/10: This morning the Mendocino County Grand Jury released a report on the Mendocino County Employee Retirement Association (MCERA) - the County's retirement system. Previous Grand Juries produced MCERA reports in 2003 & 2006.

I believe the Grand Jury's core findings are absolutely correct:

1. "Mendocino County’s short term thinking has resulted in the real possibility of financial disaster including bankruptcy."
2. A hugely unfair unfunded retiree benefit debt has been imposed on our children.
3. Almost all County and Retirement officials have ignored all criticisms from the Grand Jury, the media, and the public - including YourPublicMoney.Com.
4. Significant laws may have been broken.
5. It's past time for County and Retirement officials to start answering questions.

The last sentence in the Grand Jury report is -

The citizens of Mendocino County need to hear truth, not rhetoric.

For a copy of the Grand Jury report click here. The two earlier reports are listed below the 2010 report.

While we strongly agree with the report, there are a couple of areas of relatively minor concern, both resulting from how the Jury must produce its reports.

First, there are a number of simple and non-critical factual errors. And, there are far more problems with the County's debt and the Retirement Association than the Jury identified.

Now - I hate to say this, but I predict County and Retirement officials will once again ignore and/or deny these findings as they have for 10 years.

Were Laws Broken?

6/8/10: I pledged two years ago when I began to publish my analysis and deep concerns about the County's debt that I would be the best and most honest analyst I can be. I will not say "something is so" if I don't know with high certainty it is.

I have refused to speculate whether or not significant laws were broken.

But last September I told the Board of Supervisors my analysis of the Retirement Association's financial statements indicated there were not enough so-called "Pension Fund Excess Earnings" to have funded all the retiree healthcare payments.

I said the Supervisors needed to demand that the Retirement Association produce a report showing how payments for that benefit were funded. (Click to see a 3 minutes video of my statement.)

The Board did nothing.

Crossing the Line

In March the Retirement Board finally received precisely that report after a few members of that Board demanded it.

Based on that report - for the first time - I say to you I think significant laws have been broken. More must be known before we can be certain.

We are now in a whole new arena - the stakes are much higher.

Board of Supervisors

The day after the Grand Jury report was released I again addressed the Board of Supervisors. I gave a very specific description of how the law appears to have been broken.

My conclusion to the Supes:

It appears to me many laws have been broken - and this County’s citizens have suffered tens - even hundreds of millions of damages. Am I wrong?

Click here to see and hear the video of what I and the two gentlemen below had to say.

6/6/10: John Sakowicz produces and hosts "The Truth About Money" on KZYX Public Radio at 9AM on alternating Fridays. John has played a major role in raising the public's awareness of the problems in the County's Retirement Association.

I appeared along with Ted Stephens on John's show on May 28. The subject was an update on our County's debt and problems in our County's Retirement Association.

Ted is a financial advisor active in a wide range of issues regarding Mendocino County's debt caused by unfunded retiree benefits.

These are two audio files (MP3) - the first of host John Sakowicz's discussion with Ted, and then his discussion with me.

John Sakowicz & Ted Stephens (24 minutes)
John Sakowicz & John Dickerson (32 minutes)