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Supplemental Information
Last update 3/10/11.
This is a collection of memos and reports, videos and recorded audio, a list of key data sources used by
YourPublicMoney.Com, and reports from a Peer Review Group of financial professionals who reviewed our analysis and conclusions regarding Mendocino County's debt. Also available are reports from the Mendocino County Grand Jury and Actuaries for the County's Pension Fund.
Most of the titles of items below are links. Most links will open a new window and leave this window on your screen. Close the new window when you're done with it.
Some items are not links; the underlying documents are not available on line. For these items we tell you where you can find the documents.
For the pdf files (portable document format) you need a free copy of Acrobat Reader available by clicking here.
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Memos and Reports
YourPublicMoney.Com produces memos and larger reports from time to time about the issues addressed in this website. Many originally appear as Supplementary Information in the website that provide more detail about specific topics being discussed.
We post new Memos and Reports every few weeks - check back.
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Mendocino County's Long Term Debt: (8/31/11) This is the third major revision of my comprehensive analysis of our County's debt. 26 page report with a 3 page summary - pdf file (1.17 MB)
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County Comparisons: California County comparative debt measures, rank ordering, and graphs based on the Annual Counties Report from the State Controllers Office - pdf files
- The "CSAC Affair": (5/23/11) County officials didn't attempt to refute any of my findings until they wanted voters to approve a sales tax increase. They asked the California State Association of Counties (CSAC) if my finding that our County is the most indebted per capita in California is correct. The first report from CSAC said I was wrong - real wrong. Supervisors started waving the report around. I challenged the CSAC analysis on his data. A week later he admitted he "couldn't replicate his results" - and it look like I was correct (with a qualification or two). After that - not one peep from County Supervisors. - pdf file (204KB).
- BOS Debt Actions: (UPDATED - 4/26/11) A Sampling of Board of Supervisors actions regarding debt since 1996 - 15 years of deeply flawed financial management of retiree benefits - pdf file (210KB).
- Two Huge Financial Threats - County of Mendocino - Next Five Years: (4/5/11) A two page summary of the report below.pdf file (164KB)
- Two Huge Financial Threats - County of Mendocino - Next Five Years: (4/5/11) Two major financial threats are likely to push Mendocino County into insolvency within the next five years - more than doubling of debt payments within 3 to 4 years and a loss of ability to borrow short term operating loans.19 page report with 2 page summary - pdf file (902KB)
- Bad News Just Got Much Worse - Pension Fund Payments to Double: (2/28/11) In January 2011 Mendocino County's Pension Fund's Actuary - Buck Consultants - admitted they made very serious errors in their analysis of the Pension Fund over many years. As a result they recommend the County's payments to the Pension Fund increase from $9 million to $13 million. This was the same error discovered 2 years ago in Stanislaus County. One year ago Supervisor Smith strongly assured the public Buck hadn't made the same mistake here - but it did.9 page pdf file (496KB)
- Independent County Audit Committee - Concept: (8/11/10) My initial proposal to organize such a Committee in Mendocino County. - 6 page pdf file (316KB)
- Mendocino County's Financial Time Bombs - In Place and Lit: (8/5/10) A month ago I saw what I'm afraid is the specific path that will lead Mendocino County to financial disaster. - 6 page pdf file (467KB)
- How Pension Funds Work : (8/4/10) Actuaries plan and analyze pension funds. You can't know how our County got this deep in debt or what needs to be done about it if you don't understand what they do. This is my best effort to explain the basics as simply as I can. For concerned citizens who want to and officials who need to understand. Be prepared to spend a few hours. It's important. - 35 page pdf file (658KB)
- Unfunded Pension Payment Schedules (Amortization) : (6/21/10) The County of Mendocino was required to begin to make Unfunded Pension Deficit payments in fiscal year 2010-11 on top of its normal yearly contributions. This paper describes how payment schedules developed by the County's Retirement Association are deeply flawed, and presents corrected schedules. The method being used by the County to determine annual payments doesn't even pay interest expense for the first 12 years and therefore increases the County's debt.- pdf file (401KB)
- GASB Preliminary Views - Major Changes to Pension Accounting-Reporting : (6/21/10) GASB (Government Accounting Standards Board) is developing very major changes in how the finances of retiree benefits will be reported. These changes would have a very major impact. - pdf file (327KB)
- Statistical Analysis - Pension Payments to County Retirees: (5/25/10) In spring 2010 the Retirement Association released a list of all projected pension payments to retirees for 2010-2011. This is a statistical analysis of that data. 5 page pdf file (205KB)
- Our Summary of the "Kroll Report" : (4/7/10) The Kroll Report is the most comprehensive analysis of a case of terrible mismanagement of the funding of local government retiree benefits. There are some interesting parallels with Mendocino County. - pdf file (194KB)
- The Executive Summary from the "Kroll Report" - dated 8/8/06 : This is the Executive Summary of the Kroll Report. They summarize what went wrong and why, why it took so long to get to serious effective reform, and a list of powerful recommendations that are highly relevant to Mendocino County. - pdf file (260KB)
- Excerpts from First Mendocino County Debt Report dated 10/16/08 (NOTE - zip file link below): (2/4/10) The purpose of this excerpt from the original 45 page report is to show Mendocino County citizens the breadth, depth, and extent of this report that County officials have not made even one attempt to refute in the 16 months since it was published. - pdf file (915KB)
- Excerpts from First Mendocino County Debt Report dated 10/16/08 (NOTE - zip version): (2/4/10) A "zip version" of the report above - should download in 1/3 less time, but you have to be able to "un-zip" the file. pdf file (656KB)
- Supervisors in the Frying Pan - Two Huge Issues - 2009/10 Budget Report Card: Grade F: (12/1/09) Mendocino County's Pension Fund was $130 million below its target investment returns in the past 2 years. If nothing changed the County's payments would jump from $6 million to $60 million in a decade. This memo describes the two immediate challenges they faced. The BOS receives a failing grade. - pdf file (282KB)
- Lies, DAMN LIES, and Actuarial Statistics: (8/27/09) The Value of the Pension Fund is calculated by subtracting Total Pension Obligations from the value of Pension Fund Assets. But there are two types of Asset Values - the real Market Value, and the calculated Actuarial Value. It's extremely not to misuse or confuse the two, as County Officials are doing. - pdf file (371KB)
- The 800 Pound Gorilla: (8/27/09) A 1 page summary of the paper below - pdf file (296KB)
- The 800 Pound Gorilla: (8/27/09) 6 pages - The Market Value of the County's Pension Fund is about $113 million less than it needs to be to pay all the pensions it owes in the future. County officials are focusing on trying to reduce payments to the Fund over the next few years to help get through the current budget crisis. But they are ignoring the "800 Pound Gorilla". - This debt will grow 8% a year until it is eliminated. This is a very dangerous situation and there are no good solutions - pdf file (367KB)
- Unfunded Pensions - Situation: (4/30/09) Report immediately after County learned its Actuary predicts a $125 million Unfunded Pension Obligation as of 6/30/09 - pdf file (351KB)
- Questions for 3/18/09 Meeting: (3/12/09) Memo for meeting arranged by 2 Supervisors with me and Retirement Association officers - questions, data, analysis. Retirement officers did not prepare for these questions and for the most part have made no attempt to answer them. pdf file (398KB)
- Two Stories: (5/10/09) These narratives give a sense of how the County Board of Supervisors has approached issues relating to its debt including telling the people the truth - web page in new window.
- Retiree Healthcare Debt Brief: (10/8/08) Analysis of Mendocino County's Retiree Healthcare debt-with AON consulting valuation attached - pdf file (519KB).
Grand Jury Reports
The Mendocino County Grand Jury has produced three reports regarding Mendocino County's unfunded pension debt and the Mendocino County Employees Retirement Association (MCERA) in the past decade.
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New Pension Finance Reporting Rules - Summer 2012
The Governmental Accounting Standards Board (GASB) is the most important source of financial accounting and reporting standards for state and local governments in the U.S. GASB is one year away from imposing far more stringent requirements on how governments report the finances of their pension benefits.
These new rules are going to have a huge effect - they'll hit our County like a ton of bricks.
I produced a video and three reports.
Videos
Click here for a list of video programs you need to view these videos.
These are best viewed on high-speed internet connections.
Some people can't pause the videos or rewind - most should be able to. If you have that problem, you may want to download the video. Windows users - right click- then "Save Target As" - give it a name and browse to the folder to which you want to save it.
- BOS Being Told of Buck Error in Stanislaus - Supervisor Smith's Denial - released 3/2/11: Snippet of me telling County Supervisors on 2/2/10 that an "Actuarial Audit" in Stanislaus County in December 2008 reported that their Pension Fund's Actuary - Buck Consultants - committed very substantial errors that will force that County's payments to its Pension Fund to significantly increase. As of the date of the release of this video Buck has been our County Pension Fund's Actuary for well over 10 years. The video shows Supervisor Kendall Smith flatly denying Buck made the same mistake here - which we found out one year later they did. (video - 3 minutes 46 seconds).
- Bill Gates on Public Pensions - released 8/14/10 - "Gates interviewed at the July 2010 Aspen Ideas Festival - asked about if the US has a problem with unfunded state and local government pensions - Gates states "only fradulent accounting" allows governments to pretend they have balanced budgets. (video - 5 minutes).
- Comments on Grand Jury Report on Retirement Association and Violations of Law - released 6/20/10: My comments to County Supervisors on 6/9/10 (the day after the County Grand Jury released its third report on our County's Retirement Association in the decade) focusing on very possible violations of law (video - 5 1/2 minutes).
- Retirees at Board of Supervisors 4/2/10 - "We've Been Betrayed": Mendocino County Retirees tell Board of Supes how they feel about termination of County funding of retiree health benefits (video - 16 minutes).
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First Do No Harm - 12/9/09: The video that exposed the "political fraud" of funding Retiree Healthcare with so-called "Pension Fund Excess Earnings". Since this video was released the County abrogated its previous commitment to pay for this benefit, and as of mid-2011 this benefit is no longer being paid by the Retirement Association. Our problem wasn't that retirees were getting healthcare benefits - it's the fact it was paid for by increasing the County's long-term debt. (a serious video - slightly over 50 minutes).
- My Fundamental Criticism of "Pension Fund Excess Earnings" - released 10/15/09: I laid out my analysis of why the County and Retirement Association's use of so-called "Pension Fund Excess Earnings" is so deeply flawed for County Supervisors in their 9/9/09 meeting (2 1/2 minutes).
- Board of Supervisors - 9/15/09 - Part A: Good discussion of changes needed in County Planning process (planning for the County, not the Building Department). You see frustration at the lack of County Executive leadership. 15 minutes.
- Board of Supervisors - 9/15/09 - Part B: Supervisor Colfax gets very angry at another Supervisor - mostly uncut. 20 minutes
- Board of Supervisors - 6/3/09: Working on fiscal year 2009-10 budget. Issue - layoffs in Sheriff's Department. You will see for yourself the desperate situation. - 8 minutes.
Peer Review Group
Three financial professionals reviewed our analysis of Mendocino County's debt with a focus on the cause of most of that debt - unfunded retiree obligations. The group was organized at the end of 2009. In early February 2010 the Group published a letter in the Ukiah Daily Journal and provided the County Board of Supervisors with a more detailed report about their findings. Both are available below.
Actuarial Valuations and Audits
We received very bad news in January and February 2011. Mendocino County's long time Actuary - Buck Consultants - admitted in January they had been making a very significant error for a number of years. As a result the County's payments to the Pension Fund needed to increase from $9 million to $13 million next year.
A month later another Actuary - EFI - produced an "Actuarial Audit of Buck's 2009 Valuation. They found more significant errors. If their recommendations are adopted the County's payments to the Fund would increase to $17 million.
Data Sources
These are some of the more important sources of data and information we used in our analysis of Mendocino County's debt.
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