Our View: Auditor’s report reveals some budget red flags
The state auditor’s most recent report on 470 California cities contains some good news and a few warning flags for those of us concerned about the fiscal health of our communities.
The report measures 10 indicators, including reserves, debt burdens and pension obligations through the 2020-21 fiscal year. It contains red flags for smaller cities such as Fillmore, Guadalupe and Santa Paula. But there are also warning lights for larger communities, including Lompoc and Oxnard. Lompoc gets flagged for lack of reserves, while retiree health benefits are the problem in Oxnard, the auditor’s report says.
A summary of the report, provided to Pacific Coast Business Times by the Ventura County Taxpayers Association, noted that the rankings tend skew positively toward newer municipalities, which tend to have new revenue sources and fewer obligations.
“Older cities 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 cities like Thousand Oaks and Camarillo, which contract out for police and fire protection,” VCTA wrote in its analysis of the report.
For Santa Barbara County, the same might be said for a newer city like Goleta, the county’s newest city, as compared to Lompoc, an older municipality.
The auditor ranked Goleta, Camarillo and Thousand Oaks as less at risk in the event of a recession, because they have adequate general fund reserves, a reasonable debt load and solid revenue trends.
The state auditor noted concern, however, about the city of Simi Valley and its ability to pay future pension costs while fulfilling its promise to pay retiree health care benefits to workers, though Simi Valley’s overall risk level was still graded as “low.”
Among cities with intermediate risk are the three county seats: Santa Barbara, San Luis Obispo and Ventura — all older cities that provide their own services and have plenty of pension obligations.
The auditor’s report should prompt an extensive discussion about what makes a fiscally responsible municipality — and how future obligations can be met with sensible policies.
For slower growth cities like Santa Barbara, San Luis Obispo and Ventura, that should include a discussion about sensible economic development priorities, to provide for sufficient tax revenue for the future and balance the scales with faster growing cities 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 at NAI Capital in Oxnard for forwarding the VCTA’s summary of the report.
SLOWING DOWN IN THE CHANNEL
The newest effort to slow maritime traffic and safeguard the Channel Islands environment has begun signing up corporate partners.
Called the Brand Ambassador Initiative, the program is an extension of the “Protecting Blue Whales and Blue Skies” program launched as a voluntary speed reduction effort in recent years.
Nomad, a consumer electronics/lifestyle products company; Summit Coffee Roasting Company; and Peak Designs, a gear and accessories company, have joined as ambassadors. The brands ship with seven companies that have voluntarily reduced speed, saving 16,000 tons in greenhouse gas emissions. This is a win-win for shippers who save costs, for marine wildlife and for the environment.