California cities, including those in Ventura County are experiencing significant tax revenue growth. This according to the State Auditor’s August 17 report, adding: “Because of increased revenues from the American Rescue Plan Act of 2021 and property tax revenues increasing, most cities are well positioned to increase or improve services for residents or reduce taxes and fees.”
Additionally, the Auditor noted cities can use American Rescue Plan funds to replace public-sector revenue lost due to COVID-19, and “the vast majority of California cities will receive more stimulus money than they lost during the pandemic.”
All Ventura County cities will receive more stimulus money than they lost in tax revenue during the pandemic.
The Auditor analyzed key financial data about California cities to identify those cities that could be facing fiscal challenges. Specifically, the indicators measure each city’s cash position or liquidity, debt burden, financial reserves, revenue trends, and ability to pay for employee retirement benefits.
We looked at cities within Ventura County and identified a couple of losers and a couple of winners. The data covers fiscal year 2020 thru 2021.
Higher Risk of Financial Distress
Ventura, currently ranking in the bottom 27 percent of California cities, is considered at Moderate Risk of Financial Distress.
Ventura set-aside the bare minimum in General Fund reserves; is burdened with a high level of long-term debt; and projected annual payments to its CalPERS pension plan in fiscal year 2027-28 are significant compared to its current total government revenues. Ventura does not offer post-employment benefits, which reduces overall financial risk.
Ventura should carefully evaluate its financial position and possibly reduce services or other expenses, to prepare for unforeseen challenges and does not become distressed in the future.
Oxnard, currently ranked in the bottom 10 percent of California cities, is also considered at Moderate Risk of Financial Distress.
Oxnard set-aside the bare minimum in General Fund reserves; is burdened with a high level of long-term debt; projected annual payments to its CalPERS pension plan in fiscal year 2027-28 are significant compared to its current total government revenues; and the city set-aside 0 (zero) funds to cover promised post-employment benefits like health and dental for retired employees.
Oxnard may need to reduce services or other expenses, to deal with a major economic event, such as a recession.
Lower Risk of Financial Distress
At the other end of the spectrum, the cities of Thousand Oaks & Camarillo both ranked in the Top 94 percent of California cities.
The two cities set-aside substantial General Fund reserves; have modest levels of long-term debt; projected annual payments to CalPERS in fiscal year 2024-25 are moderate compared to total government revenue; and both cities set-aside sufficient funds to cover promised post-employment benefits like health and dental for retired employees.
Although Thousand Oaks’ and Camarillo’s overall financial position are relatively strong, weak revenue growth may impact long-term financial futures.
Local governments have the most direct impact on our daily lives, so it is critical that they have their finances in order. When they don’t, essential services are at risk of being downsized. But when they do, they can better serve their communities. So, we encourage elected officials to use the website and find out how your city is doing. Understanding the financial situation and the factors that impact it allow city officials to tackle challenges and leverage their successes. And residents can use the same information to advocate for your community and hold city officials accountable.