King City ranks number two on most distressed California city list
The California Policy Center and Civic Partner have released a list of the most financially distressed California cities and counties. The new CPC report, “California’s Most Financially Stressed Cities and Counties,” describes financial conditions in the ten most challenged municipalities and provides credit scores for almost 500 California local governments.
The most financially distressed local municipal governments in the CPC survey are:
1. Compton
2. King City
3. Sutter Creek
4. Ione
5. Maywood
6. Atwater
7. Huron
8. Chico
9. Calipatria
10. Ridgecrest
11. San Fernando
12. Blythe
13. Firebaugh
News Channel 5 spoke with King City manager Michael Powers. He said he knows nothing about the study, but told us many cities have their ups and downs financially.
“Everyone’s got an opinion about the health of cities and how to measure that and try to analyze that. I haven’t even had a chance to take a look at this version of how to do that,” said Powers.
Marc Joffe, a consultant to Civic Partner who co-authored the CPC study said “Due to improving economic conditions, most local governments have very little risk of succumbing to bankruptcy over the next year.” However, Joffe says, “Many cities and counties remain vulnerable to an economic downturn. Our study highlights those that are most at risk.”
Ed Ring, CPC’s Executive Director noted that, “While cities may not be in near term jeopardy, they face longer term issues arising from pension and employee retirement expenses. Cities and counties need to aggressively manage their costs not only to avoid bankruptcy but to maintain appropriate service levels over the next 5-10 years.”
The cities were ranked using a credit scoring method previously developed by Public Sector Credit Solutions in a project commissioned by the State Treasurer’s Office.
The scoring algorithm considered general fund balance, general fund surplus or deficit, change in annual revenues, debt burden and pension obligations as reflected by the local government’s actuarially required contributions.
The list excludes Stockton and San Bernardino, both of which remain in bankruptcy. No California city has filed for bankruptcy since the summer of 2012.
