While serving in the California State Senate, I decided to prepare a fiscal ranking of the state’s 482 cities (there are now 483). Cities, like publicly traded corporations, are normally required to have their books audited annually by an independent certified public accounting firm. You may not be a shareholder, but you certainly are a stakeholder in the financial well-being of the city you call home.

To see how they were holding up financially, I used a simple per capita metric. Here’s the recipe. First, obtain the Annual Comprehensive Financial Report (ACFR), which contains the required annual audit of the city, and should be available from your city online. Second, go to the basic financial statements and find the statement of net position (balance sheet). Third, take the unrestricted net position (retained earnings in the private sector) and, fourth, divide it by the city’s population, which is usually provided in the footnote disclosures. Possible fifth step: If the city does not provide the number of residents it serves in the ACFR, there are other resources available online to obtain this critical statistic.

The per capita is one person’s share of either the positive position or negative deficit and can be easily compared and ranked with all the other cities.

While following this exercise, you may run into two problems. The first is that many cities do not have the ACFRs on their websites. So, you’ll have to contact the city’s finance director and request that a page with all of the ACFR links be provided. It’s customary and the appropriate transparency procedure that every municipality should follow.  

The second problem is that many cities do not complete their audits on a timely basis. I’m still waiting for the city of Fort Jones in Siskiyou County to issue its ACFR for the year ended June 30, 2019! Both dilemmas are true for too many of the few cities in Imperial County.

In my review of San Diego County’s 18 cities, La Mesa only recently provided its ACFR for the fiscal year ended June 30, 2024, on its website. Sometimes emails and telephone voicemails help. National City only completed its audit fieldwork on Nov. 12.  And, by looking at the rankings of these two cities, it’s obvious that their leadership is not making either timely reporting or sound fiscal standing a high priority. A late ACFR usually indicates a low concern for fiscal matters and should be a big warning signal to its residents that things need to improve.

To encourage cities to be prompt in completing and releasing their ACFRs, state Sen. Steven Choi, R-Irvine, authored Senate Bill 595, which was sponsored by the California Policy Center, to implement financial incentives for timeliness. It was approved by the state Legislature without opposition and signed by Gov. Gavin Newsom on Oct. 3.

Think about it. If one is delinquent in paying the real property tax payment on their home even one day to the San Diego County Treasurer-Tax Collector, a 10% penalty of the amount due is assessed.  So why is Sacramento allowing cities to be so complacent in their fiscal reporting responsibilities? Having due dates and penalties should at least be a two-way street.

In my review of five years of data, the city of Coronado (a positive $2,418 per capita) is consistently in first place. And the city of San Diego (a negative $1,380 per capita) is consistently in last place. And there is a nearly $3,800 spread between them! So now you know why San Diego parking meter rates went up last year.

In the top five, we also find Carlsbad, Del Mar, Vista and Poway. In the bottom five, we usually find La Mesa, National City, Escondido and El Cajon.

For explanations of the movement within the rankings, go to the California Policy Center’s website and review the following detailed analyses:

2020: City of San Diego Fell Behind $191 Million in First Year of Pandemic

2021: Can City Budgets Be Tightened Up, or Should Taxpayers Pay More?

2022: Federal Coronavirus Funding Boosted San Diego County’s City Finances

2023: San Diego County Cities Fare Well in 2023 Rankings

Why did Solana Beach move up one position over the last five years? Why did Santee drop one position? Better yet, San Marcos moved up two positions. What can your city duplicate that is improving San Marcos’ standing?

Why did Encinitas drop four places? And, on the other hand, the city of Del Mar has moved up the rankings by 11 places. What is its secret sauce?

The California Policy Center also provides a local fiscal health dashboard for California’s cities. This was previously done by the California State Auditor’s Office. But when it was dropped, supposedly due to budgetary reasons, the California Policy Center took over the job as a public service.  

The grades provided by the dashboard will be a huge assistance as you work with your city’s management and council. The rankings provide a “temperature gauge” for the fiscal health of the city you call home. The lower the position explains the impact on the services, including police and fire response times, that you expect and deserve.   

Major cities, like San Diego, Los Angeles and San Francisco, have strong public employee unions that tend to influence the outcome of who is elected to their city councils. When they control who becomes their bosses, they tend to get a little greedy in salary and benefit demands. And that’s why asking voters to increase their sales tax rate is a common and frequent solution. That’s why electing council members who represent the electorate (taxpayers) versus the city staff (tax eaters) is critical. Your vote matters to your fiscal future. 

Moorlach is a senior fellow at California Policy Center. He previously served in the California Senate and on the Orange County Board of Supervisors.