Friday, September 17, 2021

California auditors list Anaheim as a high risk of financial distress and mayor disputes

Anaheim Mayor Harry Sidhu criticizes the national economy report Claims that Anaheim is one of the cities with the highest overall risk of financial distress in the state.

Sidhu wrote in an article on August 26: “Our city has shaken off the challenges of the times, the economic recovery is underway, and the future has a bright future.” statement“You wouldn’t know this from a recent report on California cities, which ranked Anaheim alongside El Cerrito and Calexico.”

The office of California auditor Elaine M. Howle released an online tool that ranks California cities based on financial indicators calculated using the latest audited financial reports.

In the 2019-2020 fiscal year, Anaheim ranked eighth among the cities with the worst fiscal health in the state, with the worst being Compton and the best being Cali Mesa.

According to the state’s auditor’s website, this ranking means that Anaheim “is facing the risk of financial difficulties and must immediately assess and respond to its weak financial situation to prevent a decline in city services.”

“resident Critical services provided by cities may be reduced, such as firefighting, police, road maintenance, and parks. “

According to the state’s 2019-2020 data, the city’s population has just exceeded 350,000, and the unemployment rate is 11%.

Last fiscal year, Anaheim’s long-term debt (excluding retirement obligations) exceeded US$2 billion, while government revenue was close to US$1.25 billion.

“[Anaheim] According to the New York State website, in the event of a financial emergency such as a recession, there may not be enough reserves to cover its expenses” because the city’s general fund expenditures and transfers in the 2019-20 fiscal year were nearly 440 million U.S. dollars.

“[Anaheim] At the end of the year, there is only enough cash and investment to pay 80% of its outstanding bills”, but a city “should have enough cash and investment to pay 150% of its bills” can be considered low risk.

“In the past few years, instead of increasing, the city’s general fund income has fallen by an average of 1%. This may limit the city’s ability to respond to economic changes and pay for rising service costs,” the state website said.

Anaheim “The estimated pension obligations to the California public employee retirement system in fiscal year 2027-28 are significant compared to its current total government revenue.”

Sidhu filed a report from the National Audit Office, claiming that they “made a mistake.”

“No one takes fiscal health more seriously than I do. I welcome discussions about Anaheim’s budget, pensions and debt. But I disagree with the methodology of the report and the description of our city,” Sidu wrote.

Sidhu said that Anaheim’s theme parks, convention centers, and sports and entertainment venues typically receive more than 25 million visitors.

Sidhu wrote: “Our economy is the envy of what the auditors call the city.”

“Like almost all cities, we have pensions and debts. This shouldn’t surprise anyone. As a fiscally conservative city, we know we can meet their obligations.”

Sidhu said that approximately 70% of the state’s pension obligations are now funded and are expected to be fully funded as new, more cost-effective plans are implemented.

The city’s debt was partly due to the $510 million borrowed for the expansion of the Anaheim resort.

Sidhu said: “Part of the Anaheim Resort’s debt has been repaid in 2019, and it is possible to repay the balance before the end of this decade, a few years earlier than planned.” Approximately US$100 million is set aside for the city’s general fund each year.

Sidhu said that the national auditor did not mention Anaheim’s handling of the COVID-19 pandemic.

“The pandemic is hitting Anaheim as badly as any city. It’s not bad management, it’s just bad luck,” he wrote.

Sidhu wrote that Anaheim borrowed $139 million to fill the remaining gap in the budget, adding: “We are faced with an impossible choice-borrow money or cut off the bones. Alternative? Delay the public Safe response time, closure of libraries, and reduction of services for the most in need of help in our community, including those who are homeless.”

Sidhu continued: “We have taken on this new obligation, knowing what the national auditors don’t know-Anaheim is attracting billions of dollars in investment, which will create new revenue for our city in the coming years.”

Margarita Fernandez, a spokesperson for the California State Auditor General, told The Epoch Times via email that their “rankings are based on risk indicators, which use information from their most recently audited financial report (starting from the 2019-20 fiscal year) Calculated.”

The audited financial report for the 2020-21 fiscal year has not yet been released; however, considering that federal funds have been increasing city revenues, the state studied the performance of cities during the pandemic.

The state expects that 18 cities have not received enough stimulus funds to make up for the loss of income related to COVID-19, and Anaheim is not one of the cities on the list.

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This News Originally From – The Epoch Times

California auditors list Anaheim as a high risk of financial distress and mayor disputes
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