Thursday, August 25, 2011

Will a Mendocino Special District Be the Next Muni Bankruptcy in California?

We're still tracking down details on this one, but the Mendocino Beacon has an intriguing report concerning the finances of the Mendocino Coast Recreation and Parks District. After a lively public board meeting last week, many are suggesting that the district may soon have to declare bankruptcy.

Apparently, the district's problems are largely due to debt incurred in the construction of the Regional Park; when it went into default on those loans, a $200,000 personal loan from a citizen helped get the district out of immediate trouble. Now, however, that citizen is going to be left waiting for about $100,000 in payments until the MCRPD can come up with the money. Its proposed budget for next year essentially assumes that fundraising efforts will make up for a $600,000 shortfall. The board's vice chair described its problems as follows:
"We can think creatively all we want about different operating structures but the reality is we are upside-down in money. The only option for additional revenue is the property tax measure, and it is going to take a certain amount of time, a year and a half. So every time we pull back and say we are not going to do it now and revisit it in six months, pushes that down the road. Right now, if we go forward and put the tax measure on the June ballot, we still will not see revenues until December 2012, backing off this decision perpetuates us being grossly under-funded."
Apparently, the district is still reaching out to a bankruptcy attorney in Santa Rosa to get a sense of what its options are. But it doesn't look good.


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