MOORLACH UPDATE — City Rankings – Vol. 3 — February 10, 2018

The state of California has 482 cities, all required to have their annual financial statements audited by an independent certified public accountant or certified public accounting firm. We just have not found a repository that provides all of these Comprehensive Annual Financial Reports (CAFRs) in one place.

Consequently, I am providing a resource with the data. And it is done in a metric format, using the unrestricted net position (UNP) divided by the city’s population.

The bottom 32 cities were provided in MOORLACH UPDATE — City CAFR Rankings – Vol. 1 – February 7, 2018. The next 50 worst are provided in MOORLACH UPDATE — City CAFR Rankings – Vol. 2 — February 8, 2018.

Today I am releasing Volume 3: the cities ranked between 400 and 351 in the chart below. This grouping represents about 8.6 percent of the state’s population.

Combining Volumes 1-3: These 132 cities comprise nearly 45 percent of California’s residents, but are only 27 percent of its cities. Stated differently, nearly one-half of Californians are living in the bottom quartile of cities.

Three Orange County cities are in Volume 3. They are Fullerton (#386), Orange (#367, and in my District), and Fountain Valley (#362).

What observations can we make? Here are three to consider. Most of Orange County cities with large unrestricted net deficits tend to be full service, having their own Police and Fire Departments. Contract cities utilizing the Orange County Sheriff and the Orange County Fire Authority (OCFA) have the pension liabilities reported on the County of Orange and OCFA balance sheets. This is a dilemma for discussion at another time.

They are also older cities. For instance, Fullerton was founded in 1887, two years before Orange County splintered off of Los Angeles County. These legacy cities have larger retired populations than those recently incorporated in South County.

And they are looking for alternative resources. The voters in the city of Fountain Valley approved Measure HH in 2016, raising its sales tax rate an additional 1 percent. Here was the ballot question:

To maintain 911 emergency response times, fire stations, police officers/firefighters/paramedics, anti-gang/drug programs, after school, senior programs; upgrade first responder disaster communication; repair stormwater systems to prevent flooding, streets/potholes/parks; other general city services, shall the City of Fountain Valley establish a one-cent sales tax providing $11.5 million annually for twenty year term, requiring public disclosure of expenditures, independent audits, all funds only for Fountain Valley?

One year ago today, the Los Angeles Times provided the following story in their “California’s Pension Crisis” series, titled “Costs push cities toward the brink,” by Judy Lin (see https://www.pressreader.com/usa/los-angeles-times/20170210/281500750997569). The city of Richmond is featured. It also approved a sales tax ballot measure in 2014 for an increase of 0.5 percent.

Increasing the sales tax is a solution. But, instead of referring to potholes, it should be honest and mention the pensions (see MOORLACH UPDATE — Pension Tax Begins — December 21, 2016).

Cities with budget struggles considering a sales tax increase measure should communicate to its residents that every pension reform currently available has been implemented and that a citizens accountability committee has certified that all excessive costs have or will be trimmed

Then the city council should keep the tax increase small, targeted, and limited in duration and commit that there will be no increases in salaries or benefits until a positive unrestricted net position is achieved (see MOORLACH UPDATE — Secretive and Expensive Union Deals — November 3, 2017).

Rank City Population UNP UNP Per Year of
(Thousands) Capita CAFR
400 Azusa 49,762 ($47,761) ($960) 2016
399 Maywood 28,016 ($26,683) ($952) 2015
398 Oxnard 207,772 ($197,253) ($949) 2016
397 Placerville 10,743 ($10,169) ($947) 2015
396 Calexico 40,921 ($38,429) ($939) 2016
395 Big Bear Lake 5,047 ($4,713) ($934) 2017
394 San Bruno 45,295 ($42,134) ($930) 2017
393 Petaluma 60,941 ($55,662) ($913) 2017
392 El Cajon 102,803 ($92,231) ($897) 2017
391 Pinole 18,975 ($17,015) ($897) 2016
390 Modesto 215,080 ($191,484) ($890) 2017
389 San Luis Obispo 46,724 ($41,497) ($888) 2017
388 San Leandro 88,274 ($77,776) ($881) 2016
387 Grover Beach 13,438 ($11,773) ($876) 2017
386 Fullerton 142,234 ($123,501) ($868) 2017
385 Atwater 30,406 ($25,983) ($855) 2016
384 Lompoc 44,042 ($37,631) ($854) 2017
383 Santa Rosa 176,799 ($149,789) ($847) 2016
382 Millbrae 23,168 ($19,446) ($839) 2017
381 Auburn 14,096 ($11,812) ($838) 2016
380 Newark 45,422 ($37,879) ($834) 2017
379 Chula Vista 267,917 ($222,843) ($832) 2017
378 Chico 93,383 ($77,226) ($827) 2017
377 Fremont 231,664 ($190,950) ($824) 2017
376 Eureka 27,120 ($22,017) ($812) 2016
375 Nevada City 3,208 ($2,589) ($807) 2015
374 Carson 93,674 ($75,486) ($806) 2016
373 Glendale 201,748 ($162,510) ($806) 2017
372 Bell 36,408 ($29,273) ($804) 2017
371 Covina 49,011 ($39,203) ($800) 2017
370 Seaside 34,165 ($26,815) ($785) 2017
369 Jackson 4,838 ($3,708) ($766) 2016
368 Brisbane 4,722 ($3,507) ($743) 2016
367 Orange 140,882 ($103,910) ($738) 2017
366 Albany 18,988 ($13,976) ($736) 2016
365 Salinas 162,470 ($116,218) ($715) 2017
364 Cloverdale 8,931 ($6,345) ($710) 2016
363 Blythe 19,660 ($13,750) ($699) 2015
362 Fountain Valley 56,709 ($39,063) ($689) 2017
361 King City 14,480 ($9,903) ($684) 2015
360 Hermosa Beach 19,616 ($13,287) ($677) 2017
359 Rolling Hills Estates 8,059 ($5,396) ($670) 2017
358 Rohnert Park 42,067 ($27,943) ($664) 2017
357 Willows 6,187 ($4,100) ($663) 2017
356 Escondido 151,492 ($99,262) ($655) 2017
355 Hemet 81,868 ($52,490) ($641) 2016
354 Marysville 11,973 ($7,614) ($636) 2016
353 Susanville 15,046 ($9,198) ($611) 2017
352 Merced 84,464 ($51,206) ($606) 2016
351 Healdsburg 11,800 ($6,976) ($591) 2017

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