In recent news that is likely surprising to no one, Irvine is a financially well-managed city. That’s according to a recent study from Marc Joffe, director of policy research for the California Policy Center.
Compiling the Fiscal Health Index for the Fiscal Times, “Joffe ranked the cities based on the ratio of a city’s general fund balance to its expenditures; the ratio of its long-term obligations to revenues; the ratio of pension contributions to revenues; change in local unemployment rate and change in property values,” the Register reported. Irvine ranked No. 1, with a perfect score, of the 116 cities evaluated.
“The city has no bond obligations and a general fund balance equal to 75 percent of annual expenditures,” Joffe wrote in a post explaining his methodology on the California Policy Center’s blog. “Pension obligations, when measured against overall revenue, are modest compared to other major California cities, in part, because the city contributes extra funds to its CalPERS plans each year (over and above the actuarially determined amount).”
Irvine’s success is no secret, though. We’ve often praised the city’s typically steady hand on the taxpayer’s purse. But a few other local cities also made the list, including two in the top five — and one of those was rather surprising. Huntington Beach came in fourth and Santa Ana came in fifth.
Santa Ana probably isn’t a city that comes to mind when it comes to fiscal health. It was not that long ago that the city was facing down the very real threat of municipal bankruptcy. But the city largely turned itself around under the stewardship of the previous City Council and former City Manager David Cavazos, who was recently removed from his position under dubious, and seemingly political, circumstances. Santa Ana is, by no means, perfect. It still spends too much and has sizeable pension liabilities, but a great deal of progress has been made.
“In general, I have found that governments get into trouble when they have a heavy debt burden, suffer declining revenue and have an insufficient general fund balance,” Joffe wrote.
The new Santa Ana City Council would be wise to remember that — and the sacrifices made by the previous City Council to get it to where it is today.
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