Twenty Year Retiree Healthcare
Benefit Terminated
New Video

5/13/10: There are many faces of Mendocino County's debt. These are 150 of them - County retirees who slammed the Board of Supervisors on April 20 for what they repeatedly called "Betrayal".

Board of Supervisors Meeting - 4/20/10

County retirees recently learned that after 20 years of paying for their retiree health insurance, the County is about to stop.

Click to hear for yourself why these retirees say they've been betrayed (new video - 16 minutes).

Should County retirees have their health insurance paid for? Many citizens are adamantly opposed - many are in favor.

But that's not YourPublicMoney.Com's issue.

We take no position on what retiree benefits should be. However, we absolutely take the position that whatever the County says they will be, they should be properly funded and their true cost and debt must be reported to the people.

Past County and Retirement officials assured future retirees they could count on free retiree health insurance. Whether or not they should have said that - they did!

And they did NOTHING to secure that promise.

Officials said they were paying retiree health benefits out of "Pension Fund Excess Earnings". Bull! They paid $31 million out of the underfunded Pension Fund in the last 11 years and every dime increased our County debt. Period!

The funding for retiree healthcare was doomed from the start. There's no way it could be sustained.

Whether or not retirees should have relied on what officials told them, many retirees planned their retirements based on what our elected officials told them.

We hold these truths to be self-evident. County officials have four core financial duties:

• Tell the Truth!
• Manage Competently and Transparently
• Protect Our County's Finances
• Don't Burden Our Kids

County and Retirement officials spectacularly violated every one of those duties. And in particular - they didn't tell the truth - to retirees, to employees, or to the people.

Cutting Retiree Healthcare
Doesn't Help County Deficit

5/14/10: The County is terminating its payments for retiree healthcare. Does that reduce the County's deficit?

No. For two reasons.

First - the County and Retirement Association have been raiding their underfunded Pension Fund for decades to pay retiree healthcare. The payments weren't directly coming out of the County. But - of course - every dime increased the County's pension debt and so eventually that money must be paid by the County. With interest - in the future.

Second, even if we assumed the County was paying retiree healthcare directly (which it should have been), there's still a deficit.

This shows payments on debt next year and the projected deficit.

According to an actuarial report in August 2008 next year's county retiree healthcare payment would have been around $5.5 million, if the benefits had remained the same as in 2008. Assuming no payments are made either by the County or Pension Fund, that debt won't have to be paid. (It will be paid by retirees directly.)

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 (Click for an explanation).

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 Retiree Health Benefit Failed

5/13/10: Why - and How - did the County terminate its retiree healthcare benefit? What went wrong? Who's been hurt?

Our video First - Do No Harm lays it all out for you. Nearly 800 people have watched it since we released it in late December. We're told we made a complicated situation easy to understand.

Click here to see First - Do No Harm.

Archived Newsletters

5/13/10: Our first newsletter went out to 151 people on October 27, 2008. It was about the November County Supervisor elections.

We've just sent our 15th newsletter. It's going to nearly 800 people.

And - we've just added an archive of our previous newsletters.

(Check out the previous 14 by clicking here).

Crucial County Elections

5/12/10: Mendocino County voters will elect four County officials this year whose positions are important for financial reform - 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).

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.

Which Candidates Will Confront the Debt?

YourPublicMoney.Com focuses on one issue - the four financial duties of County officials listed above.

We'll be talking to candidates in the next few weeks - I'll report my best take on who can and will, and who can't or won't finally confront our County's horrid debt and do what needs to be done.