Free Classifieds
Letters
News
Editorials
Human Interest
Environment
Government
Education
Crime
Farm and Garden
Food & Dining
Wine
Events
Hospitality
Health
Art
Music
Real Estate
Business
Legal
Sports
Parks
Pets
----
Boonville
Elk
Fort Bragg
Gualala
Laytonville
Leggett
Mendocino
Navarro
Piercy
Point Arena
Ukiah
Willits
Mendocino County Insolvency:
Three to Five Years?
April 11, 2011 Guest Editorial
by John G. Dickerson
It's time for anyone who gives a damn about our County to start paying very close attention.
Mendocino County's debt payments are the highest per resident of all California Counties; they will more than double in three years. The group that controls government financial reporting in the US is almost certainly going to force County officials to disclose its finances are far worse than we've ever been told. The State and Feds are cutting county funding while increasing costs. Our economy probably won't boom anytime soon.
Mendocino County has no cash reserves. It borrows millions of dollars of short-term operating loans so it can make payrolls. But its credit rating has steadily fallen; we're two steps away from Junk Bonds. We'll likely get there within 3 years. That could easily cut off access to operating loans, which would force County employees to sometimes wait weeks to get paid.
Then what?
Sometime around 1780 Samuel Johnson said - "Depend upon it, sir, when a man knows he is to be hung in a fortnight, it concentrates his mind wonderfully."
Our County is to be hung in a fortnight.
County officials are trapped between a rock they mostly didn't create - the bad economy - and a hard place they mostly did - huge unfunded pensions. As a result the County cut about 350 jobs in the last 3 years. They're going to be forced to cut nearly that many more over the next 3 years. Nearly half the County's jobs will evaporate. Maybe I'm wrong in details - but I'm right in general.
And those cuts don't include the impact of the County being forced to report - finally - just how bad things are.
The Governmental Accounting Standards Board establishes the rules that state and local governments must follow in preparing financial reports. They now realize their rules have a loophole that allowed trillions of unfunded pension debt to be created by state and local governments without reporting it to the people - or forcing government officials to confront the problem.
They are preparing more accurate rules that will hit our County like a ton of bricks. If current proposals are implemented in 2015 our County's reported debt will leap from $100 million to around $500 million. Yearly pension expenses will jump from about $20 million to $65 million.
County officials will be forced to admit their assurances that they've delivered "balanced budgets" for the past 2 decades has been a charade - a hoax - based on what is essentially fraudulent governmental financial reporting. It will be impossible to pretend our County has anywhere near a balanced budget - or ever has.
Then what?
I've laid these threats out as best I can in my latest
newsletter at www.YourPublicMoney.com. My next newsletter
will be what I think our "real" financial problems are. The
one after that will be what I think we need to do.
Agree with me - or not. But know this - our County's
finances are going to get far - far worse. Very few of you
have any idea how bad it's going to get.
John Dickerson, a Redwood Valley resident and financial analyst, has reported on the County's debt for three years.
