Interactive database gives letter grades to cities, counties & school districts

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** CPC Launches Local Fiscal Health Dashboard for California’s Cities, Counties & School Districts
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Dear John,

California Policy Center released a new Local Fiscal Health Dashboard ([link removed]) this week 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 will 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 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.”

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 last October. 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.

CPC’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 over $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 ACFRs — often referred to as annual audits — every year. Most municipalities submit their ACFRs 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. That means local officials are left to make budgeting decisions without current fiscal information.

Out of 482 cities, 86 (or 17.84%) received an “A” grade; 21 (4.36%) received an “F” grade, indicating they are at high-risk of fiscal catastrophe; and 70 cities (14.52%) are delinquent in submitting their 2023 ACFR. (16 cities are exempt from reporting.)

A whopping 189 cities ([link removed]) , counties and school districts have still not submitted ACFRs for 2023. Twenty-six of those cities, counties, and school districts that are missing their 2023 ACFR are nevertheless asking voters to okay 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,” said Christensen. “Even worse, many of the cities who aren’t on top of their financial reports are proposing tax increases and putting local bond measures on the ballot.”
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Best and Worst Performing Cities

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 ten 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.

Best Performing Cities Statewide: The following 10 cities earned the highest fiscal health scores and an “A” grade:
* Eastvale – 100 (Riverside County)
* Indian Wells – 98 (Riverside County)
* Danville – 98 (Contra Costa County)
* Rancho Mirage – 97 (Riverside County)
* Lake Forest – 97 (Orange County)
* La Quinta – 97 (Riverside County)
* Laguna Woods – 96 (Orange County)
* Dublin – 96 (Alameda County)
* La Mirada – 96 (Los Angeles County)
* Jurupa Valley – 94 (Riverside County)

Worst Performing Cities Statewide: 10 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. The following cities earned the lowest fiscal health scores and an “F” grade:
* Ukiah – 38 (Mendocino County)
* West Covina – 38 (Los Angeles County)
* Richmond – 43 (Contra Costa County)
* Calexico – 44 (Imperial County)
* San Gabriel – 45 (Los Angeles County)
* Oakland – 46 (Alameda County)
* Orange – 46 (Orange County)
* Pinole – 47 (Contra Costa County)
* Atwater – 47 (Merced County)
* Escondido – 47 (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 ACFRs for FY 2023 — and, in some cases, FY 2022 — this list of worst cities is subject to change. Some cities with poor financial metrics are often late filers.)

For a regional breakdown of best and worst cities click here ([link removed]) .

Methodology

CPC’s Local Fiscal Health Dashboard uses public data from Annual Comprehensive Financial Reports that local governments are required to complete and share with the public annually. Similar to the now defunct State Auditor’s High-Risk Dashboard, the new Local Fiscal Health Dashboard provides a metric for evaluating the financial health of government entities and designates their level of financial risk as low, moderate or high.

The methodology used in creating CPC’s Local Fiscal Health Dashboard was developed by the Hoover Institution’s State and Local Governance Initiative ([link removed]) , which examines state and local municipal data nationwide. The Hoover Institution’s methodology is based on the one used by the State Auditor with some changes made to address data availability. CPC’s dashboard takes a comprehensive look at not just California’s cities but also counties and school districts, and was developed in partnership with CPC senior fellow Marc Joffe, who also contributed to the previous State Auditor’s High-Risk Dashboard.
What can local officials do to course correct if their city is fiscally off track?

California Policy Center has also released a Municipal Finance Triage Guide to help local elected officials better evaluate what they can do to improve their budget forecasting, planning and management, and help at-risk cities proactively address foreseeable challenges.

The guide distills government budgeting advice that addresses both short-term and long-term solutions for fiscal health, as well as incorrect assumptions that often lead to poor budgeting practices.

It also provides answers to common objections elected officials may encounter when endeavoring to reform government budgeting practices.

Read the Municipal Finance Triage Guide here ([link removed]) .

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New Podcasts ()
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** Radio Free California Special Episode: Kill Bills!
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On a special episode of the Radio Free California podcast, Lance Christensen, CPC's Vice President of Government Affairs, joins CPC president Will Swaim to break down the end-of-session bill-signing frenzy that will lead to hundreds of new California laws. Listen now. ([link removed])

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** Radio Free California #356: Kamala Harris Loves Small Businesses to Death
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During her recent dog-and-pony with Oprah, presidential candidate Kamala Harris revealed her plan to stimulate small business development. Kamala’s problem with immigration has become Gavin Newsom’s. Bonus track: CPC president Will Swaim and Steven Greenhut talk about the history of Chavez Ravine. Listen now. ([link removed])

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** Kamala Harris Loves Small Business to Death
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In her infomercial with Oprah Winfrey, Vice President Kamala Harris attempted to reveal new, more conservative features of her dimensionless campaign for president. Among these: She loves small business. But, as CPC president Will Swaim explains, it's hard to think of a presidential administration that has done more to destroy small business than this one. Read Will's commentary ([link removed]) in National Review.


** California’s Teacher-Housing Folly
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Tony Thurmond, California's Superintendent of Public Instruction, doesn’t want voters to think about the failing schools that they appointed him to fix. Instead, he has unveiled a plan to build teacher housing to distract from his abysmal record and curry favor with government unions. CPC Policy and Research Associate Andrew Davenport examines Thurmond's plan in his article in City Journal ([link removed]) .
SUPPORT CPC ([link removed])

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