These are California’s most financially strapped cities. Is yours on the list?
The state budget is flush with a $21 billion surplus. The longest-ever economic expansion in California history has unemployment at historic lows.
But the wealth is not spread evenly among California cities, where some local government budgets are straining with debt and declining revenue.
The California State Auditor’s Office on Thursday unveiled a new online dashboard revealing the fiscal health, or lack thereof, of 471 cities in the Golden State, paying special attention to 18 “high risk” communities.
Using data from the 2016-17 fiscal year, the dashboard measures a city’s fiscal health using 10 metrics, with a city scoring points based on how they have addressed that topic.
The metrics include a city’s liquidity, debt burden, general fund reserves, revenue trends, pension obligations, pension funding, pension costs, future pension costs, retiree health care expenses.
The 18 high risk cities soon could be getting visitors from the state, California State Auditor Elaine Howle said in a press conference Thursday morning.
“The next step for us, is to reach out to these cities,” Howle said.
Howle said employees of her office will contact representatives from each of the 18 cities in question and ask if they have a plan to deal with their finances. If the answer is no, Howle said the next step is for her office to get legislative permission to go in and do an audit.
The 18 cities declared to be high risk are:
Compton, in Los Angeles County, has not published required audited financial statements in five years, according to Howle. That landed the city at the top of the auditor’s list.
Atwater, in Merced County, has struggled for years with a deficit, even borrowing money from its water fund to keep city services operating.
Blythe, located near the Arizona border, struggles with having enough cash to pay for services.
Lindsay, in the Central Valley, is “functionally bankrupt,” according to the Sun-Gazette. The city has the money to pay annual expenses, but not build up reserves.
A state audit found that Calexico, on the border with Mexico, spent a $4.1 million surplus into a $4 million deficit in a two-year period, according to KYMA.
Six years ago, San Fernando, in the San Fernando Valley, was rocked with scandal, resulting in the city declaring a fiscal emergency. Since then, the city has worked to shrink its deficit, from $6 million in 2014 to $1 million in 2018, according to the Los Angeles Daily News.
El Cerrito, in the Bay Area, has low reserves and faces mounting pension obligations.
San Gabriel, in Los Angeles County, is struggling with pension funding, obligations and cost.
Maywood, in Los Angeles County, has struggled with a series of problems, including a 2016 state audit showing the city $15 million in debt, according to the Los Angeles Times.
Monrovia in the San Gabriel Valley is struggling with debt and pension obligations. Its city manager in 2017 warned CalPERS Board of Administration that a planned pension rate increase could leave the city “insolvent.”
Vernon, five miles south of Los Angeles, has fewer than 200 residents. It’s short on cash and burdened by retiree health costs. It’s almost entirely industrial, and has more public employees than residents, according to the Libertarian think tank California Policy Center.
Richmond in Alameda County routinely makes the list of financially distressed California cities. It’s dealing with a steep pension burden and weak cash reserves.
Oakland is the biggest city on the auditor’s list of financially distressed California cities. The report notes it’s struggling with its pension debt and retiree health costs. The city is projecting a deficit this year.
Tiny Ione in Amador County is home to a state prison and Cal Fire’s main training academy. It made the list of financially distressed California cities because of its tight cash reserves.
The Monterey County Weekly in a 2018 report noted that Del Rey Oaks has “long struggled to keep itself solvent.” It’s been using cannabis tax revenue to climb out of debt, but it’s still on the list California’s most financially distressed cities.
Marysville in Yuba County used furloughs to balance its budget as recently as 2016. Its residents passed a sales tax increase that year. The state auditor notes that the city still has challenges with debt, pension obligations and retiree health costs.
A state audit in 2015 said West Covina had “serious and pervasive deficiencies” in its financial management. It balanced its budget this year with layoffs.
Retiree health costs and tight reserves land La Habra of Orange County on the auditor’s list of financially distressed California cities.
