State Auditor Examines Fiscal Health of Cities

The California State Auditor recently unveiled an online dashboard that ranks the top California cities facing fiscal challenges based on information about their fiscal health. The rankings are based on an evaluation of five factors: cash position/liquidity; debt burden; financial reserves; revenue trends; and retirement obligations. According to the State Auditor, the goal of providing this online interface is to provide interested parties a “data driven” view of each city’s risk assessment.

For anyone involved in contract negotiations, it’s definitely worth taking some time to peruse the data and reports on the dashboard. You’ll see that the State Auditor is very focused on how cities are addressing pension liabilities and other post-employment benefits (OPEB). In several reports (e.g. City of Hemet) the State Auditor has urged cities to explore ways to pay down unfunded pension and OPEB liabilities. The State Auditor has also urged at-risk cities to explore ways to reduce ongoing expenses. For example, the State Auditor recommended that the City of Hemet consider outsourcing landscape maintenance for its parks, which could save the city up to $300,000 a year.

Many of the State Auditor’s recommendations are things that public agencies are already doing, or trying to do, throughout the state. But it’s nice to have the validation of the State Auditor behind these proposals.


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