Another Voice - County's debt a serious problem

Full story: The Ukiah Daily Journal

Because we are a politically diverse group of experienced financial professionals, John Dickerson of www.YourPublicMoney.Com requested we review his work on Mendocino County's debt.

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I love mendo

San Francisco, CA

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#1
Feb 1, 2010
 
I wonder percentage of the county's funds are used to pay debt? I heard Supervisor Pinches compare their county debt to a homeowners or business debt. A better analogy would be credit card debt accrued while on a spending spree buying heroin. You felt good for a while, now you used up the product, you are sick and you expect your kids to pay your bill.
original

Yuma, AZ

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#2
Feb 1, 2010
 
me to?
John Dickerson

Ukiah, CA

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#3
Feb 3, 2010
 
The California State Controller's Office publishes annual compiliations of the finances of all kinds of local governments in the state - cities, special districts, school district - counties ...

The most recent I've analyzed is 2007. According to the SCO data (which is provided by all the Counties including Mendocino), Mendocino County's payments on debt were the highest of all counties as a percent of total expenditures - 11%. Orange was 2nd with 8%. The average for all 58 counties was 2.3%- Mendocino was 4.6 times more than average.

If you go to my website www.YourPublicMoney.Com - click "Data, Video, Articles" at the top -
scroll down the left column - about 5th is "County Comparison". Click it (pdf file). It shows 7 difference measures of County debt with Mendocino compared to all other counties. Mendocino has the most debt on 6 of those measures and is 2nd in 1.

John Dickerson
Blackbeard

Rio Linda, CA

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#4
Feb 3, 2010
 
I guess its good to know my property tax money is being spent on something because as a rural county resident I do not see any other benefit to the tax's paid. If I walked five miles I could catch the bus.
Tough Love

Newark, NJ

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#5
Feb 4, 2010
 
There is only ONE way to get your financial house in order w/o bankruptcy..........

To significantly reduce the pension formula for FUTURE years of service for CURRENT (yes CURRENT) employees, and to eliminate retiree healthcare (or significantly reduce the subsidy).

NOTHING else will work EVER, let alone SOON ENOUGH!

Whether it be by ballot initiatives, State Constitutional change, or challenge in the FEDERAL courts (where conflicted State-level Plan participant judges who would be negatively impacted by such changes are removed from the decision-making process) we MUST find a way to implement these Pension reductions ASAP
Blackbeard

Concord, CA

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#6
Feb 5, 2010
 
Tough Love wrote:
There is only ONE way to get your financial house in order w/o bankruptcy..........
To significantly reduce the pension formula for FUTURE years of service for CURRENT (yes CURRENT) employees, and to eliminate retiree healthcare (or significantly reduce the subsidy).
NOTHING else will work EVER, let alone SOON ENOUGH!
Whether it be by ballot initiatives, State Constitutional change, or challenge in the FEDERAL courts (where conflicted State-level Plan participant judges who would be negatively impacted by such changes are removed from the decision-making process) we MUST find a way to implement these Pension reductions ASAP
Cuts to social welfare programs. They are being abused anyway so get rid of the programs.
Been around

Mill Valley, CA

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#7
Feb 5, 2010
 
Tough Love wrote:
There is only ONE way to get your financial house in order w/o bankruptcy..........
To significantly reduce the pension formula for FUTURE years of service for CURRENT (yes CURRENT) employees, and to eliminate retiree healthcare (or significantly reduce the subsidy).
NOTHING else will work EVER, let alone SOON ENOUGH!
Not a bad idea. Reducing or freezing all salaries would also help.
John Dickerson

Ukiah, CA

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#8
Feb 5, 2010
 
I know local and state governments other than Mendocino County have very serious financial problems regarding retiree benefits that absolutely must be confronted.

But I haven't analyzed any other government's finances enough to have a professional opinion about them.(I've had 30 years of financial and economic analysis experience and education - it's what I do.)

But I have dug into Mendocino County's debt for years and am confident in my conclusions. I've realized something very fundamental.

The retiree benefits could have been EXACTLY what they are and the County could have managed them so that absolutely no debt was created.

WHAT the benefits are is definitely an important public issue. But what I found is they weren't in themselves the cause of the County's Debt.

The County's incredibly flawed - and frankly devious - approach to funding those benefits is what caused the debt.

I now believe changes in the retiree benefits will not address the core problem that created our County's debt.

The core problem is the County's horribly flawed approach to financial management. I could go on and on.

Just one example - the County's main financial planning document - the Budget - is a one year cash flow. It ignores the hundreds of millions of unfunded retiree obligations the County developed.

Our County will create another $10 million of unfunded pension obligations this year - and no one inside the County's financial management is even aware they are doing that because there is no place in their planning systems that would make them see it.

That's just one of dozens of problems - some of which are intensely more personal about County officials.

I've come to believe the fundamental problem is that politicians are rewarded by the electorate for promising more than they can deliver - and then pushing the part they can't deliver off into the future when it will be someone else's problem.

And - folks - I know that sounds "TEA PARTY-ish" - but I'm a life long Democrat who thinks government can and do good things.

What really p***** me off about all this is

1) County officials have not told us the truth,

2) they have run our County hugely in debt which is going to force deep cuts in public services and infrastructure

3) they do not manage our County's money competently or transparently

4) they have forced totally unfair and huge payments on to our kids - to the tune of a half billion dollars that will be extracted from our weak local economy over the next 25 years that won't produce one minute of services or one dime of infrastructure.

GGRRRR!!!
Freedom_Planning

United States

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#9
Feb 5, 2010
 
John Dickerson wrote:
1) County officials have not told us the truth,
Some might say it's a crime, or just a crying shame?
County worker

Mill Valley, CA

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#10
Feb 5, 2010
 
Freedom_Planning wrote:
<quoted text>
Some might say it's a crime, or just a crying shame?
A few weeks back the Board of Supervisors mentioned that an elected official was receiving a longevity bonus. Has anyone heard more on that claim? To the best of my knowledge, there is absolutely no justification for a such a bonus to be paid to any elected official. Someone needs to clean up this mess.
Been around

Mill Valley, CA

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#11
Feb 5, 2010
 
County worker wrote:
<quoted text>A few weeks back the Board of Supervisors mentioned that an elected official was receiving a longevity bonus. Has anyone heard more on that claim? To the best of my knowledge, there is absolutely no justification for a such a bonus to be paid to any elected official. Someone needs to clean up this mess.
Can you spell "criminal charges"?
Doomer

Covelo, CA

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#12
Feb 6, 2010
 
John Dickerson wrote:
I know local and state governments other than Mendocino County have very serious financial problems regarding retiree benefits that absolutely must be confronted.
But I haven't analyzed any other government's finances enough to have a professional opinion about them.(I've had 30 years of financial and economic analysis experience and education - it's what I do.)
But I have dug into Mendocino County's debt for years and am confident in my conclusions. I've realized something very fundamental.
The retiree benefits could have been EXACTLY what they are and the County could have managed them so that absolutely no debt was created.
WHAT the benefits are is definitely an important public issue. But what I found is they weren't in themselves the cause of the County's Debt.
The County's incredibly flawed - and frankly devious - approach to funding those benefits is what caused the debt.
I now believe changes in the retiree benefits will not address the core problem that created our County's debt.
The core problem is the County's horribly flawed approach to financial management. I could go on and on.
Just one example - the County's main financial planning document - the Budget - is a one year cash flow. It ignores the hundreds of millions of unfunded retiree obligations the County developed.
Our County will create another $10 million of unfunded pension obligations this year - and no one inside the County's financial management is even aware they are doing that because there is no place in their planning systems that would make them see it.
That's just one of dozens of problems - some of which are intensely more personal about County officials.
I've come to believe the fundamental problem is that politicians are rewarded by the electorate for promising more than they can deliver - and then pushing the part they can't deliver off into the future when it will be someone else's problem.
And - folks - I know that sounds "TEA PARTY-ish" - but I'm a life long Democrat who thinks government can and do good things.
What really p***** me off about all this is
1) County officials have not told us the truth,
2) they have run our County hugely in debt which is going to force deep cuts in public services and infrastructure
3) they do not manage our County's money competently or transparently
4) they have forced totally unfair and huge payments on to our kids - to the tune of a half billion dollars that will be extracted from our weak local economy over the next 25 years that won't produce one minute of services or one dime of infrastructure.
GGRRRR!!!
How much of pension plan underfunding has to do with poor investments thanks to the Federal Reserve and Wall Street hucksters' creation of risky derivative schemes which many pension fund managers invested in? From what I've been reading, nearly every large pension fund in the country is underfunded, as is social security and medicare. It is currently mathematically impossible to pay back our federal debt at this point, let alone on the state and local levels. I recommend people stock up on food.
Minnie

Antigua and Barbuda

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#13
Feb 6, 2010
 
It is really interesting how many projects the county is currently pursuing such as looking for a new site for a new courthouse. Are these people out to lunch or what? There is no money for those projects. So stop wasting time and energy. The county employees except for management are constantly being short changed.
The whole health system could be easily reformed without Congress. Just give people tax credits on money that they spend for their health care and they can choose whatever they want.

The wall street scam artists that are in bed with the international bankers are responsible for the reduction in all of the investments and they are still robbing the country non-stop (now at 28 trillion). Time to put an end to this before the country falls. End the Fed, stop voting Republican or Democrat and recall or impeach the present administrations and representatives. Get some honest people in Congress, people that can't be bought off. Most of the current ones are all bought and paid for and have jobs waiting for them anyway in corporate America. They vote for anything that gets put in front of them. If it is one thing that this country doesn't need any more of it is laws. Start repealing some instead.
Minnie

Antigua and Barbuda

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#14
Feb 6, 2010
 
What else is new when it comes to corrupt govt. at all levels. People get greedy, full of themselves and complacent. If the govt. were under the microscope of people that were truly involved and interested in their own welfare as well as the welfare of others, this wouldn't happen. However, most people do not get involved and are self-absorbed in their own little worlds, and have the attitude of leaving it "to the government" to take care of them and figure it out. When are the schools going to mandate that our children understand the Constitution and Bill of Rights and start getting involved. Only then will things start to change and be carried forward. Every person who lives in this country needs to wake up and get involved, that is if you want to live here. Only then will things change. The govt. should be afraid of the people, not the other way around.
John Dickerson wrote:
I know local and state governments other than Mendocino County have very serious financial problems regarding retiree benefits that absolutely must be confronted.
But I haven't analyzed any other government's finances enough to have a professional opinion about them.(I've had 30 years of financial and economic analysis experience and education - it's what I do.)
But I have dug into Mendocino County's debt for years and am confident in my conclusions. I've realized something very fundamental.
The retiree benefits could have been EXACTLY what they are and the County could have managed them so that absolutely no debt was created.

WHAT the benefits are is definitely an important public issue. But what I found is they weren't in themselves the cause of the County's Debt.
The County's incredibly flawed - and frankly devious - approach to funding those benefits is what caused the debt.
I now believe changes in the retiree benefits will not address the core problem that created our County's debt.
The core problem is the County's horribly flawed approach to financial management. I could go on and on.
Just one example - the County's main financial planning document - the Budget - is a one year cash flow. It ignores the hundreds of millions of unfunded retiree obligations the County developed.
Our County will create another $10 million of unfunded pension obligations this year - and no one inside the County's financial management is even aware they are doing that because there is no place in their planning systems that would make them see it.
That's just one of dozens of problems - some of which are intensely more personal about County officials.
I've come to believe the fundamental problem is that politicians are rewarded by the electorate for promising more than they can deliver - and then pushing the part they can't deliver off into the future when it will be someone else's problem.
And - folks - I know that sounds "TEA PARTY-ish" - but I'm a life long Democrat who thinks government can and do good things.
What really p***** me off about all this is
1) County officials have not told us the truth,
2) they have run our County hugely in debt which is going to force deep cuts in public services and infrastructure
3) they do not manage our County's money competently or transparently
4) they have forced totally unfair and huge payments on to our kids - to the tune of a half billion dollars that will be extracted from our weak local economy over the next 25 years that won't produce one minute of services or one dime of infrastructure.
GGRRRR!!!
Minnie

Antigua and Barbuda

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#15
Feb 6, 2010
 
That would seem to be in line with the way this county does things. Management and the politicians make out like bandits and leave the county workers and the tax payers holding the bag.
County worker wrote:
<quoted text>A few weeks back the Board of Supervisors mentioned that an elected official was receiving a longevity bonus. Has anyone heard more on that claim? To the best of my knowledge, there is absolutely no justification for a such a bonus to be paid to any elected official. Someone needs to clean up this mess.
lookn

United States

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#16
Feb 7, 2010
 
We have a 2 to 4 billion dollar pot industry in our County and we have millions being collected by the sheriff department from raids yet the funds being gotten are being spent on such things as a armored troop transpot to the tune of 100,000 dollars. Something is wrong with this. We have created a non taxable industry, Which has resulted in ineffective enforcement. The enforcement actions in reality have created somewhat of a price support and cost the taxpayers millions. Maybe our direction should be a county medical MJ farm where the profits go towards paying down our debt or full scale legaliztion and taxation.
Realist

Mill Valley, CA

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#17
Feb 7, 2010
 
lookn wrote:
Maybe our direction should be a county medical MJ farm where the profits go towards paying down our debt or full scale legaliztion and taxation.
That may be the single most idiotic idea I have ever read.
Munched

United States

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#18
Feb 7, 2010
 
lookn wrote:
We have a 2 to 4 billion dollar pot industry in our County
Thanks for the over-hype. That's why grower patients in Sonoma County and Oakland with the minimal doctor's recommendation, can grow and store 6X the amount per patient (which allows flexibility for new enrolling patients) as in Mendocino County.

It's legitimate compassion without the hands tied behind the back, financial burden overhead of dancing in court to Lintott's two step edge.

Whatever industry in Mendocino is being cut off at the knee caps, so the collectives in other counties would rather grow indoors or sunny spots where they are at, rather than lose any more crops to the Mendocino task force goons and asset forfeiture buddies, feasting on the carcass of whatever industry you claim.
lookn

United States

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#19
Feb 7, 2010
 
What we hace created iis a econonmic base in our county that is untaxed, really unregulated and in 90 percent of the cases is not within the law. It has increased crime and thoses costs assocated it with it, has effected our taxpaying citizens civil rights, our publics safety has greatly declined, this industry as a whole has inflicted environmental harm to our publics lands, has created a reputation for the County that not all of its citizens care to be assocated. It has raised havok on our communites, its youth,and has created a gold rush type image across the nation that has attracted undiserable folks and organized crime to our county. Over-hype I think not.
Realist

Mill Valley, CA

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#20
Feb 7, 2010
 
lookn wrote:
What we hace created iis a econonmic base in our county that is untaxed, really unregulated and in 90 percent of the cases is not within the law. It has increased crime and thoses costs assocated it with it, has effected our taxpaying citizens civil rights, our publics safety has greatly declined, this industry as a whole has inflicted environmental harm to our publics lands, has created a reputation for the County that not all of its citizens care to be assocated. It has raised havok on our communites, its youth,and has created a gold rush type image across the nation that has attracted undiserable folks and organized crime to our county. Over-hype I think not.
Now THAT I can agree with!

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