Our View: Auditor’s Report Reveals Some Fiscal Red Flags

By
Editorial Committee

Saturday July 23, 2022

The state auditor’s most recent report of 470 California cities contains good news and some warning signs for those of us worried about the financial health of our communities.

The report measures 10 indicators, including reserves, debt burden and pension obligations through fiscal year 2020-21. It contains red flags for small towns such as Fillmore, Guadalupe, and Santa Paula. But there are also warning lights for larger communities, including Lompoc and Oxnard. Lompoc is flagged for lack of reserves, while retiree health benefits are the problem at Oxnard, according to the auditor’s report.

A summary of the report, provided to the Pacific Coast Business Times by the Ventura County Taxpayers Association, noted that the rankings trended positively toward newer municipalities, which tend to have new sources of revenue and fewer obligations.

“Older towns with their own police and/or fire departments, like Oxnard and Ventura, are saddled with more unfunded debt – public safety pensions are the most expensive – than newer towns like Thousand Oaks and Camarillo, which contract police and fire protection,” VCTA wrote in its analysis of the report.

For Santa Barbara County, the same could be said for a newer city like Goleta, the newer city in the county, versus Lompoc, an older municipality.

The Auditor rated Goleta, Camarillo and Thousand Oaks as less at risk in a recession because they have adequate general fund reserves, reasonable debt levels and strong revenue trends.

The state auditor, however, raised concerns about the town of Simi Valley and its ability to pay future retirement costs while delivering on its promise to provide retiree health care benefits to workers, although Simi Valley’s overall risk level is still classified as “low”.

Among the cities at intermediate risk are the three county seats: Santa Barbara, San Luis Obispo and Ventura — all older cities that provide their own services and have many retirement obligations.

The auditor’s report should prompt a thorough discussion about what makes a municipality fiscally responsible and how future obligations can be met with sound policies.

For slower-growing cities like Santa Barbara, San Luis Obispo, and Ventura, this should include a discussion of reasonable economic development priorities to provide sufficient tax revenue for the future and balance the scales with cities. faster growing like Camarillo, Thousand Oaks, Moorpark, Goleta and Pismo Beach.

Anyone can read the report at auditor.ca.gov/local_high_risk/dashboard-csa. Thanks to Bill Kiefer of NAI Capital at Oxnard for forwarding the summary of the VCTA report.

SLOWDOWN IN THE CHANNEL

The latest effort to slow down shipping traffic and protect the environment of the Channel Islands has begun recruiting corporate partners.

Called the Brand Ambassador Initiative, the program is an extension of the “Blue Whale and Blue Sky Protection” program launched in recent years as part of a voluntary speed reduction effort.

Nomad, a consumer electronics/lifestyle products company; Summit Coffee Roasting Company; and Peak Designs, an equipment and accessories company, joined as ambassadors. The brands ship with seven companies that have voluntarily reduced their speed, saving 16,000 tonnes of greenhouse gas emissions. It’s a win-win for cost-saving shippers, for marine wildlife and for the environment.

About Anne Wurtsbach

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