This is a brief description of Mendocino County's debt.

Supplemental Data Sheet: If you see this Icon you can click it to see the data sources, numbers and graphs for that section. It will open a New Window with a pdf file. You need a free copy of Acrobat Reader available by clicking here.

Growth of the Debt

1996: County develops $45 million of "Unfunded Pension Obligations" - borrows $31 million in "Pension Obligation Bonds" ("POB").

2002: County again develops Unfunded Pension Obligation, this time around $70 million. Borrows an additional $76 million by selling more POB.

2008 - 09: Two major events caused the County's debt to explode over the past two years

• Unfunded Retiree Healthcare: New accounting standards forced the County to disclose it has about $130 million of "Unfunded Retiree Healthcare Obligations".
• Unfunded Pensions: For the third time in 13 years the County again develops an Unfunded Pension Obligation. It will be between $80 - $125 million as of June 30, 2009 - depending on the value of the Retirement Fund's investments on that date.

Where Did It Come From?

The financial management of Retiree Benefits caused 85% to 90% of the debt - around $320 million.

"Real Estate" and a broad range of "Other" debt make up 10% to 15% of the debt.

The "Unfunded Pensions to be Determined" slice in the pie is the difference between our low and high estimates of the Unfunded Pension Obligation as of June 30, 2009.

Debt Payments

This graph shows the amount of debt payments (dollars on the left) and the percentage of the County's property tax income consumed by those payments (percent on the right).

The County keeps about 40% of property taxes; the rest goes to cities, school districts, etc.

Debt payments were around $13 million in 2009. The Unfunded Retiree Healthcare and Pensions over the past two years will drive debt payments into the $20 to $25 million range by the end of next year.

Compared to Other Counties

According to financial data reported in the State Controllers Office's 2007 Annual Counties Report, of all California Counties Mendocino County:

• Has the highest amount of debt per capita .
• Pays the highest debt payments per capita.
• Incurs the highest interest expense per capita.

In terms of the percentage of County property tax revenue consumed by debt Mendocino County has:

• The highest percentage consumed by interest expense (44%).
• The second highest percentage consumed by debt payments (68%).

As a percentage of total County expenditures Mendocino has:

• The highest percentage of debt payments (11% of total expenditures)
• The highest percentage of interest expense (7%)

Supplemental Data Sheet - County Comparison: Click for pdf file (397KB).

Or click the "Next Page" button below to go to The Main Cause of Mendocino County's Debt.