LAKE COUNTY, Calif. – A recently released study of California's cities and counties ranks the various jurisdictions based on the financial stresses they face and the possibility of default, with local governments among those rated.
In its report, the California Policy Center completed 492 assessments of the state's cities and counties, using municipal finance data to look at bankruptcy risk.
Specifically, the center – working with the firm Civic Partner, which collects and analyzes municipal finance data – used four metrics to reach its conclusions: general fund balance/general fund expenditures, general fund surplus or deficit/general fund revenues, change in annual revenues (total government funds), and interest and pension expenses/total governmental fund revenues.
Those metrics were used to calculate a default probability score to reflect how likely a local government is to “either declare bankruptcy or default on its general obligation bond issues within one year.”
The center said cities and counties with default probability scores much higher than 0.1 percent have “substantially elevated risk.”
Cities and counties were ranked from No. 1 to No. 492, with No. 1 being the worst. That ranking went to Compton, which had a 4.01 percent default probability.
At No. 492 was rural Plumas County, with a default probability of zero percent.
On the local level, the cities of Clearlake and Lakeport were analyzed, as was the county of Lake.
In the case of Clearlake, it was ranked No. 38, with a default probability of 0.35 percent.
City Manager Joan Phillipe didn't immediately respond to a request for comment about the rating.
The county of Lake earned a ranking of No. 361, with a default probability of 0.04 percent, an overall rating that put it in a better position than neighboring Mendocino and Sonoma counties.
County Administrative Officer Matt Perry said he found it comforting to learn that, compared with many other counties and cities, the county of Lake continues to be in a stable financial condition.
“This illustrates the Board of Supervisors' commitment to control ongoing operating costs and maintain a healthy general fund reserve,” he said.
On the local level, the city of Lakeport fared best, earning a ranking of No. 366, with its default probability – like the county's – also set at 0.04 percent.
“With a forward thinking city council and hardworking individuals at the city of Lakeport, the city has been able to keep a balanced budget, without affecting service delivery while maintaining fiscal sustainability,” Lakeport City Manager Margaret Silveira told Lake County News.
“The council has made decisions to move forward with much-needed deferred infrastructure with low-interest loans and grants for future economic development and a fiscally sustainable future,” Silveira added.
Around the region, the following rankings were made:
– City of Chico, No. 8, 0.88 percent default probability;
– City of Cloverdale, No. 15, 0.56 percent default probability;
– Glenn County, No. 33, 0.37 percent default probability;
– City of Vacaville, No. 56, 0.29 percent default probability;
– Mendocino County, No. 58, 0.29 percent default probability;
– Contra Costa County, No. 60, 0.28 percent default probability;
– City of Orland, No. 90, 0.24 percent default probability;
– Marin County, No. 111, 0.22 percent default probability;
– City of Ukiah, No. 116, 0.22 percent default probability;
– City of Woodland, No. 123, 0.21 percent default probability;
– City of Napa, No. 156, 0.18 percent default probability;
– City of Santa Rosa, No. 161, 0.18 percent default probability;
– Butte County, No. 169, 0.17 percent default probability;
– Yolo County, No. 178, 0.17 percent default probability;
– Sonoma County, No. 0.17 percent default probability;
– City of Sonoma, No. 185, 0.16 percent default probability;
– City of Willits, No. 244, 0.11 percent default probability;
– City of Colusa, No. 277, 0.09 percent default probability;
– City of St. Helena, No. 280, 0.09 percent default probability.
The full list can be seen at http://californiapolicycenter.org/californias-most-financially-stressed-cities-and-counties/ .
Email Elizabeth Larson at This email address is being protected from spambots. You need JavaScript enabled to view it. . Follow her on Twitter, @ERLarson, or Lake County News, @LakeCoNews.
Policy center ranks cities and counties for financial stresses
- Elizabeth Larson
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