While serving in the California State Senate, I decided to prepare a fiscal ranking of the state\u2019s 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.<\/p>\n
To see how they were holding up financially, I used a simple per capita metric. Here\u2019s 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\u2019s 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.<\/p>\n
The per capita is one person\u2019s share of either the positive position or negative deficit and can be easily compared and ranked with all the other cities.<\/p>\n
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\u2019ll have to contact the city\u2019s finance director and request that a page with all of the ACFR links be provided. It\u2019s customary and the appropriate transparency procedure that every municipality should follow.\u00a0\u00a0<\/p>\n
The second problem is that many cities do not complete their audits on a timely basis. I\u2019m 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.<\/p>\n
In my review of San Diego County\u2019s 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.\u00a0 And, by looking at the rankings of these two cities, it\u2019s 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.<\/p>\n
To encourage cities to be prompt in completing and releasing their ACFRs, state Sen. Steven Choi, R-Irvine<\/a>, authored Senate Bill 595<\/a>, which was sponsored by the California Policy Center<\/a>, to implement financial incentives for timeliness. It was approved by the state Legislature without opposition and signed by Gov. Gavin Newsom on Oct. 3.<\/p>\n 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.\u00a0 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.<\/p>\n 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.<\/p>\n 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.<\/p>\n For explanations of the movement within the rankings, go to the California Policy Center<\/a>\u2019s website and review the following detailed analyses:<\/p>\n 2020:\u00a0City of San Diego Fell Behind $191 Million in First Year of Pandemic<\/a><\/p>\n 2021: Can City Budgets Be Tightened Up, or Should Taxpayers Pay More?<\/a><\/p>\n 2022: Federal Coronavirus Funding Boosted San Diego County\u2019s City Finances<\/a><\/p>\n 2023:\u00a0San Diego County Cities Fare Well in 2023 Rankings<\/a><\/p>\n 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\u2019 standing?<\/p>\n 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?<\/p>\n