The idiom, the fish rots from the head, is true for the Golden State. Because California has 482 cities, I provide rankings by Caltrans regions. One is San Diego and Imperial Counties. But three cities in Imperial County have been extremely tardy in completing this accounting function.
For the year that ended June 30, 2020, the city of Calipatria’s independent outside auditors finally completed its audit work on Oct. 23, 2023. And two other cities in Imperial County have not completed their required annual audits for the same year end.
These two cities are Westmorland and Holtville. The city clerk for Westmorland, Christine Pisch, explains the city’s delinquency as follows, “Due to being understaffed the city was behind on audits for 4 years. As of the end of 2023 we have been currently working on the audits past due.”
While serving in the California State Legislature, I wanted to submit a bill that would scholarship cities and counties that were having difficulty in meeting this important reporting requirement. The necessity is certainly there. And with Mr. Newsom throwing money around every year of his term in office, he certainly could have shared the wealth with municipalities that are struggling to make ends meet.
As San Diego County cities entered the COVID-19 lockdown in March of 2020, there seemed to be very little impact on their standings.
With an unrestricted net position of only $1.3 million in 2019, the city incurred expenses in excess of revenues of $923,368. On the balance sheet, the pension and debt liabilities increased by $814,135 and $864,013, respectively. Along with the reduction in receivables of $259,437, these movements explain the bulk of the $3,582,454 decrease in its unrestricted net position. With a population of a little more than four thousand residents, this created a swing of $827 per capita, dropping Del Mar seven places.
The city of Solana Beach enjoyed revenues in excess of expenditures of $1,118,834 million and a reduction in internal borrowing of $727,623 explaining the bulk of its $2,423,610 improvement in unrestricted net position. It moved up two places.
Chula Vista had a similar situation, with a slight reduction in its unrestricted net deficit combined with an increase in its population, allowing it to skip over the city of Santee and moved up two places.
The second story is the minimal increase in overall population for the county. With 2.8 million residents, an additional 676 is almost like no increase at all.
The third story is the combined unrestricted net deficit of the 18 cities, totaling $2,248,767,779. If the city of San Diego were removed from the listing, the net deficit would only be $25,844,779. The city of San Diego’s unrestricted net deficit grew by $190,666,000. San Diego holds roughly half of the county’s population, but 99 percent of its total net deficit.
It’s fortunate that federal funding was good for cities the past four years. With the economy showing signs of fraying, those cities with higher per capita net deficits will need to watch their financial status a little more closely.
