Local Fiscal Health Dashboard Scoring Table

 

SACRAMENTO REGION, CA (MPG) - California Policy Center released a Local Fiscal Health Dashboard on Oct. 4 that tracks the financial health of California cities, counties and school districts. The interactive database allows users to track how elected officials are managing local budgets, support ongoing budget decision-making and identify financial red flags.

The new dashboard is especially timely for California voters who have local tax and bond measures on their November ballots. Each city, county and school district has been awarded a fiscal health score and letter grade from A to F, depending on how well they have managed their finances. Government entities are also identified and color-coded as low, moderate or high-risk for fiscal distress.

"We're excited to be able to offer local officials and voters this important tool for tracking their city's fiscal performance," said Lance Christensen, vice-president of government affairs at the California Policy Center. "Today, many local governments are asking taxpayers for more money to fund lower-quality services. Californians have the right to know where their hard-earned dollars are being effectively used and where they are not."

Sacramento-area cities had mixed results, from an "A" for Elk Grove while Folsom flunked the test. The grades for several cities in the region, listed alphabetically, include Citrus Heights, B; Colusa, C; Dixon, B; Elk Grove, A; Galt, B; Gridley, B; Lincoln, B; Live Oak, C; Marysville, C; Rancho Cordova, B; Sacramento, D; West Sacramento, B; and Yuba City, D.

The Local Fiscal Health Dashboard fills a void in government transparency data left after the California State Auditor's Office unexpectedly discontinued its popular Local Government High-Risk Dashboard in October 2023. California Policy Center's new dashboard was created to replace and expand on that data to ensure local governments maintain transparency and accountability when it comes to their budgets.

California Policy Center's dashboard uses public data from Annual Comprehensive Financial Reports (ACFR) that local governments are required to submit every year to get access to federal funds. The dashboard provides key financial metrics to allow local elected officials, analysts, reporters and citizens to understand how cities are performing overall and in comparison to other cities, and spotlight concerning financial trends.

"The public should have access to the tools necessary to ensure government budgets are transparent and government officials are held accountable," Christensen said. "Californians can't allow government officials to sweep bad fiscal news under the rug."

Tracking local financial metrics, such as liabilities and revenue trends, is crucial. California has more than $1.6 trillion in unfunded liabilities (debt) at both state and local levels. Many cities have potentially catastrophic unfunded pension liabilities. Other municipalities are making budget decisions based on incomplete, missing or delayed financial reports.

Cities are required to file their Annual Comprehensive Financial Reports, often referred to as annual audits, every year. Most municipalities submit the financial reports within nine months of fiscal year end (as required by the federal and state governments) but many others are routinely and egregiously late in filing their required annual financial reports, according to the California Policy Center. That means local officials are left to make budgeting decisions without current fiscal information.

Out of 482 cities, 86 (or 17.8%) received an "A" grade; 21 (4.4%) received an "F" grade, indicating they are at high-risk of fiscal catastrophe and 70 cities (14.52%) are delinquent in submitting their 2023 Annual Comprehensive Financial Report. (Sixteen cities are exempt from reporting.)

But 189 cities, counties and school districts have still not submitted Annual Comprehensive Financial Reports for 2023. Twenty-six of those cities, counties and school districts that are missing their 2023 Annual Comprehensive Financial Report are asking voters to OK a local tax increase on the November ballot and/or approve new bonds totaling $534.6 million in new borrowing.

"When cities don't turn in their fiscal reports on time, city officials have to make important budget decisions without the data they need," Christensen said. "Even worse, many of the cities that aren't on top of their financial reports are proposing tax increases and putting local bond measures on the ballot "

Based on the dashboard data, California Policy Center has identified 10 of the best and worst performing cities statewide when it comes to financial health. The dashboard designates the level of financial risk as low, moderate or high.

This financial risk determination is achieved by evaluating each entity on 10 key fiscal metrics: General Fund Reserves, Debt Burden, Liquidity, Revenue Trends, Pension Costs, Pension Funding, Pension Obligations, Other Post Employment Benefit Obligations, Other Post Employment Benefit Funding, and Net Worth.

The 10 cities earning the highest fiscal health scores and an "A" grade are Eastvale (Riverside County), Indian Wells (Riverside County), Danville (Contra Costa County), Rancho Mirage (Riverside County), Lake Forest (Orange County), La Quinta (Riverside County), Laguna Woods (Orange County), Dublin (Alameda County), La Mirada  (Los Angeles County) and Jurupa Valley (Riverside County).

Ten of the worst performing cities are considered high-risk for fiscal stress, including the ability of the city to pay its bills in the short and long term.

Cities earning the lowest fiscal health scores and an "F" grade are Ukiah (Mendocino County), West Covina (Los Angeles County), Richmond (Contra Costa County), Calexico (Imperial County), San Gabriel (Los Angeles County), Oakland (Alameda County), Orange (Orange County), Pinole (Contra Costa County), Atwater (Merced County) and Escondido (San Diego County).

Other cities that received an "F" include San Buenaventura/Ventura, Grover Beach, Banning, Lake Elsinore, Folsom, Costa Mesa, Montebello, Downey, Monrovia, Hayward and Lindsay. With many cities having yet to file Annual Comprehensive Financial Reports for Fiscal Year 2023 and in some cases, Fiscal Year 2022, this list of worst cities is subject to change. Some cities with poor financial metrics are often late filers.

Information about California cities, counties and school districts can be found at californiapolicycenter.org/fiscal-health-dashboard.