Examining the Vulnerability of California Cities

Dan Walters of the Sacramento Bee points to both city bankruptcies, questionable pensions, and more recent events to paint the picture.

CityNews has covered the some of the events that Walters includes, like CalPERS shifting to lower assumed investment earnings and the effort to cut potentially scandalous pensions like that of a former Vernon official.

There are also a couple resources out there now showing potentially troublesome situations in the state, State Auditor Elaine Howle’s high-risk local government agency audit program that came into effect July 1 of this year and the White House affiliated National Resource Network.

Howle’s program lays out five criteria of risk that local government’s face such as ability to pay retirement obligations, revenue growth rate, and ability to respond to financial emergencies. The program named six cities failing at least four of the five criteria, with Richmond being the only one to botch all five. Closer examination by Walters shows that Richmond is in fact piling on the debt.

The National Resource Network identifies “economically challenged” American cities by considering unemployment, population declines, and poverty rate. Of the 297 “economically challenged” cities they listed, 77 of them are in California. Of which, a “high unemployment and poverty rates and low levels of educational attainment.”

Dan Walters’ full SacBee report can be found here.


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