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All data sources are listedin the section Data Sources and Downloads.
Long Term Leases,
or Certificates of Participation
The residents of Mendocino County enjoy the distinction of being the most indebted citizens per capita for total County debt and Pension Obligation Bonds in the State of California as of the most recent comparative information available in 2003.
Long Term Lease/Purchase Obligations Per Capita
California Counties, 2003
It's not quite so bad when it comes to what the State Controller (Counties Annual Report) classifies as Long Term Leases – we're only the 9th most indebted per capita out of California's 57 counties. As of 2003 our County was obligated to pay a total of $56 Million in future lease payments. (What's up with Plumas County?!?)
We're not exactly sure of this, but we believe state law prohibits counties from entering into certain types of real estate financing contracts (like mortgages), but counties have figured out a creative way to get around this restriction. In this regard, just about all counties do this. The County sets up a nonprofit corporation that it entirely controls that then buys real estate and finances it through mortgages. The nonprofit leases the property to the County. At the end of the lease the County usually buys the property for a nominal amount. In the meantime the County fully guarantees the payment of the mortgage by the nonprofit corporation to the lender.
The County enters into a financing arrangement with the nonprofit called "Certificates of Participation (COPS)" that provides the nonprofit with the funds it needs to pay the mortgages. As we say, we're not sure we have this exactly right, but we think we're generally correct.
A large number of the County's buildings are financed in this manner, including in Ukiah the County's Administration Center on Low Gap Road, the Public Health complex on Dora, the Social Services building on South State, and numerous other facilities in Ukiah and throughout the County.
Click to go to next page, Largest County Interest Expense in California (share of budget).
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