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Mendocino California’s Most Indebted County Why? How Bad? What Can We Do? November 14, 2011

Mendocino California’s Most Indebted County Why? How Bad? What Can We Do? November 14, 2011.  Click When Ready. Mendocino Most Indebted County in California. Per Resident – #1 – Most Debt #1 – Debt Payments #1 – Interest Expense Percent of Property Tax #2 – Debt Payments

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Mendocino California’s Most Indebted County Why? How Bad? What Can We Do? November 14, 2011

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  1. Mendocino California’s Most Indebted County Why? How Bad? What Can We Do? November 14, 2011  Click When Ready

  2. Mendocino Most Indebted County in California • Per 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  Click When Ready Data from State Controller – Annual Counties Report

  3. Mendocino County Debt Total Debt = $290 Million Estimate June 30, 2011 Real Estate 8% 85% Unfunded Pension Debt Other 7%  Click When Ready

  4. Growth of Debt  Click When Ready

  5. How Pension Funds are Supposed to Work Overfunded Pension Asset Have Unfunded Pension Debt Over the Long - Term  Click When Ready

  6. How Mendocino County’s Pension Fund “Worked” Digging the Hole Amount of Money the Pension Fund was Supposed to Have Unfunded Pension Debt Only the County Must Eliminate  Click When Ready

  7. Third Pension Deficit Crisis  Click When Ready

  8. Achieved Less Than Half of Funding Requirement Last 20 Years  Click When Ready

  9. Causes of Unfunded Pension Debt $220 Million - June 2010 Retiree Healthcare Investment Earnings Lower than Target All Other  Click When Ready

  10. # 1 Cause – Poor Investment Returns Percent Returns Over/Under Target 21 “Independent” County Pension Funds 1996 - 2008  Click When Ready Data from State Controller – Annual Public Retirement Systems Report

  11. # 2 Cause - Diversion of Pension Funds To Pay Retiree Healthcare Created 25% of Pension Debt Pension Fund paid about $45 million for “Retiree Healthcare” benefit since 1993. County-Retirement Officials said it was paid from Pension Fund - “Excess Earnings”  Click When Ready

  12. The Absurdity of “Excess Earnings” As Defined in the County Employee Retirement Act John Dickerson – Board of Supes – 9/22/2009  Click When Ready

  13. How Pension Funds are Supposed to Work The Absurdity of Excess Earnings  Click When Ready  Click When Ready

  14. County Debt Payments We’re Here  Click When Ready Projected

  15. Annual Percentage Change  Click When Ready  Click When Ready

  16. Hold Officials Accountable

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