Stop Creating More Debt!
New Video - Message to Supes

2/16/10: We are releasing today a video that shows very interesting exchanges between two financial professionals and three County Supervisors about the County's debt, the Retirement Board, Retiree Healthcare, and several other topics.

Wendy Pollitz

Click the link at the end of this article to view the video.

Three financial professionals reviewed my analysis of Mendocino County's debt. Their personal political beliefs ranged from "quite conservative" to "quite liberal". The point was to assure readers that partisan politics have nothing to do with their report.

The Ukiah Daily Journal published a report to the public from the Review Group on January 1, 2010. A link to the report is also below. Some concluding remarks:

"The County’s debt is unsustainable, even in the short term. The County should not take on any more debt! ... The increase of debt should be staunched immediately as one would cauterize a bleeding wound."

Imagine the "Joy" in the Board of Supervisors meeting on February 2, 2010 when two of the three Group members - Wendy Pollitz and Ted Stephens - delivered this message.

Ted Stephens

They listened politely to Wendy. But by the time Ted got up they were "ready to rumble".

Supervisors Colfax, McCowen, and Smith engaged in lengthy exchanges with Ted and explanations of how they see things.

Supplemental Information: Peer Review Group Stirs Up Mendocino County's Board of Supervisors (Video - 24 minutes)

Supplemental Information: Financial Professional Peer Review Report to the Public (Ukiah Daily Journal 1/31/10) (pdf file - 92KB).

County's Next Year Deficit
Self-Created

2/16/10: County officials say next year's budget deficit is $7.5 million. That's on top of millions that have already been cut over the past 2 years.

This shows payments on debt in 1995, County projections for 2011, and the projected deficit.

(1) = Are payments of Unfunded Retiree Healthcare payments of debt or not? In general, we believe it is - but it's debatable. (See First Do No Harm below.) Also, this value comes from a 2008 analysis of the County's retiree healthcare benefit. The County since then increased the amount retirees pay - the 2011 number may be $1 million to high - or so.

The County's deficit next year is $7.5 million. Payments on Pension Obligation Bonds alone are more than that. The County borrowed $110 million by selling Bonds in 1996 and 2002 because the Pension Fund's deficits were too deep.

And now, despite that previous borrowing the Pension Fund's deficit as of June 2009 was either about $65 million or as much as $130 million - depending on how you value the Fund's investments.

Mendocino County would not face a deficit next year - and the forced layoffs and service cuts that will result - if it hadn't been forced to borrow over a hundred million dollars to cover retirement fund deficits - deficits that should never have developed.

Why Didn't Our Supervisors Know?

1/31/10: Buck Consultants has provided Actuarial services for Mendocino County's Pension Fund for over a decade. Stanislaus County's Pension Fund terminated its relationship with Buck a year ago.

That County, its Retirement Board, and the Retired Employees of Stanislaus County (RESCO) all allege that Buck seriously damaged their Pension Fund by using flawed assumptions and data.

RESCO filed suit in November against Buck in Federal Court claiming damages of $40 million.

Two members of our Board of Supervisors recently told YourPublicMoney.Com they had never heard of these allegations against Buck until we told them.

The Modesto Bee has published numerous reports about this story over the past year.

Stanislaus and Mendocino Retirement Systems are members of the State Association of County Retirement Systems (SACRS). Mendocino Retirement officials say a major benefit of membership is keeping up to date on important developments in other Counties.

Why was our County Board of Supervisors not even told about these charges?

Supplemental Information: Articles from the Modesto Bee (pdf file - 342KB).

First - Do No Harm
500 Viewers Since December

2/16/10: About 120 people watched First - Do No Harm since our last newsletter - that makes about 500 since we released the video in early December.

This is the first video of a series that will examine Mendocino County's debt. It's an in depth investigation of the County's deeply flawed funding of its retiree healthcare benefit.

The video shows how the County's approach to funding retiree healthcare -

• Is a Major Contributor to Excessive County Debt
• Significantly Damaged the Pension Fund
• Has Led to Unavoidable Deep Cuts in This Benefit
• Hid the True Source of Funds From the Public
• Was a Hollow Commitment

Click here to see First - Do No Harm.

Crucial County Elections

1/11/10: This is a very critical moment for those who support reform of Mendocino County's finances to act.

Candidates for County office must file from 2/15 through 3/12.Right now they are deciding "Will I run?" and "What's my platform?"

Potential candidates need to see they can run as financial reformers and win.

Indeed, nothing is more important to the future of Mendocino County than to stop the debt from getting worse and figure out how to pay the debt without gutting public services.

The four County offices to be elected this year that are important for financial reform are two County Supervisors, the Auditor-Controller, and the Treasurer-Tax Collector. (Three other offices to be elected - Sheriff, DA, and County Clerk - while very important, do not have the same impact on the County's financial management).

YPM Readers Can Help

You can make a key contribution.

Write Letters to the Editor!

This is probably the best thing most YPM readers can do over the next six weeks. So far there have been very few "normal citizen" letters in local papers. Potential candidates need to see growing broad concern about the County's debt.

Talk to Colleagues, Family and Friends

Now's the time for a "buzz" about the debt to pick up steam. Bring up in your conversations how much of a problem the County's debt is and it desperately needs to be fixed. Ours is a small County - a few hundred people talking about this will make a big impact.

Talk to Potential Candidates

If you know someone considering running for office, tell them the importance of fixing our County's debt.