PowerPoint Presentation

Mendocino

Californias Most Indebted County

Why? How Bad? What Can We Do?

November 14, 2011

Click When ReadyMendocinoMost Indebted County in CaliforniaPer Resident #1 Most Debt#1 Debt Payments#1 Interest Expense

Percent of Property Tax#2 Debt Payments#1 Interest Expense

Percent of County Budget#1 Debt Payments#1 Interest Expense

Data from State Controller Annual Counties Report Click When ReadyMendocino County DebtTotal Debt = $290 MillionEstimate June 30, 2011

Click When Ready85%Unfunded Pension Debt

Other 7%Real Estate 8%Growth of DebtClick When Ready

Click When ReadyHow Pension Funds are Supposed to WorkOver the Long - Term

HaveUnfunded Pension DebtOverfunded Pension AssetHow Mendocino Countys Pension Fund WorkedDigging the HoleClick When Ready

Amount of Money the Pension Fund was Supposed to HaveOnly the County Must EliminateUnfunded Pension DebtThird Pension Deficit Crisis

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Achieved Less Than Half of Funding RequirementLast 20 YearsCauses of Unfunded Pension Debt$220 Million - June 2010Click When Ready

Investment Earnings Lower than TargetRetiree HealthcareAll Other# 1 Cause Poor Investment ReturnsPercent Returns Over/Under Target21 Independent County Pension Funds 1996 - 2008

Data from State Controller Annual Public Retirement Systems Report Click When Ready# 2 Cause - Diversion of Pension Funds To Pay Retiree HealthcareCreated 25% of Pension DebtPension Fund paid about $45 million for Retiree Healthcare benefit since 1993.

County-Retirement Officials said it was paid from Pension Fund -

Excess EarningsClick When Ready

The Absurdity of Excess EarningsAs Defined in the County Employee Retirement ActJohn Dickerson Board of Supes 9/22/2009Click When Ready

Click When ReadyThe Absurdity of Excess Earnings

How Pension Funds are Supposed to WorkClick When ReadyCounty Debt PaymentsClick When Ready

ProjectedWere Here

Click When ReadyAnnual Percentage ChangeClick When Ready

HoldOfficialsAccountable