The California State Auditor recently revealed its FY 2018-2019 rankings of the financial health and stability of over 450 California cities. The State’s online dashboard compiles City fiscal data and ranks each city from worst fiscal health to best beginning in FY 2016-2017. Since the data was first collected, the City of Santa Paula has made considerable progress to improve its ranking by 50 spots from FY 2016-2017 to FY 2018-2019.
The advisory panel that ranks California cities is made up of municipal fiscal health experts including representatives from Public Policy Institute of California, California Public Employee Retirement System (CalPERS), California Policy Center, S&P Global Rating Services as well as an advisor to the California Society of Municipal Finances Officers and the LoCC, and a professor at the School of Public Policy and Governance at the University of Washington. The advisory panel considers five main financial indicators to assess each city’s financial stability: (1) Financial Reserves, (2) Debt Burdens, (3) Cash Positions/Liquidity, (4) Revenue Trends, and (5) Retirement Obligations.
Based on the raw data, the City of Santa Paula improved most drastically in the financial reserves and revenue trends categories. In the ranking from worst to best, the City ranked 43 in financial reserves in FY 2016-2017, but has since moved up to 196, indicating improvement in the City’s ability to maintain its services during times of decreased revenue, increased expenditures and crises. Similarly, in just two short years, the City improved its revenue trends ranking from 91 to a whopping 355, a rank higher than the 75th percentile of over 450 California cities.
“The revenue generated from Measure T dramatically improved our City’s financial health and allowed the City to address community needs and projects that were not fully funded, which is even more important now due to the financial impacts of the coronavirus pandemic,” said Santa Paula Finance Director Christy Ramirez. “This achievement would not have been possible without the support of the Santa Paula community who voted to pass Measure T in 2016.”
On December 16, the Santa Paula City Council reviewed the Measure T Oversight Committee’s Annual Report that summarized the revenue generated in 2019 from the sales tax as well as the projects it funded. Of the $3.2 million the sales tax raised, the City allocated 55% to enhance public safety and police services, 30% to repair and maintain City streets and 15% to the City’s Parks & Recreation Department for youth services.
“As seen through the improvement in State rankings, the support of Santa Paulans for Measure T has allowed the City to prioritize the community’s needs while strengthening the City’s financial stability,” said Santa Paula City Manager Dan Singer.
With the City making monumental strides to improve their financial health, as seen through their ranking increases, the City hopes to use this momentum to propel them into further financial stability by assessing how they can improve their liquidity, debt and retirement obligations. For example, the City recently refinanced its wastewater bond in October of this year netting a present value savings of $5.8 million, and the water bond refunding had a net present value savings of $10.2 million.
Although the State’s rankings do not consider 2020 finances, the City also recently provided an update to Council on its fiscal health despite COVID-19 challenges.