PALMDALE – The most recent comprehensive financial analysis by the State of California auditor found that the city has one of the lowest fiscal distress risks in California.
Of the 453 cities analyzed, Palmdale ranked 410th lowest risk, placing it in the top 10% of California cities.
As part of its high-risk local government audit program, the state auditor has established a process to determine whether a local government agency is at risk of fiscal distress. The CSA made its findings public on a scorecard that ranks the financial health of 453 California cities from highest to lowest risk, using ten key financial metrics. The dashboard is available on https://www.auditor.ca.gov/local_high_risk/dashboard-csa.
A statement from California State Auditor Elaine M. Howle, CPA, on their website read: “We recognize that citizens and government rely on us for effective administration and management. and efficient public funds and programs. It is our job to make sure the California government stays ahead of the game. As the state’s independent external auditor, we provide non-partisan, accurate and timely assessments of the financial and operating activities of the California government in accordance with generally accepted government auditing standards. “
“Our board has made financial strength a top priority for Palmdale,” said Palmdale Mayor Steve Hofbauer. “Being ranked in the top 10% of the state’s most financially sound cities sends a great message to existing and potential new businesses looking to expand or relocate to Palmdale.”
“Thanks to the careful leadership of our City Council and the commitment they and our staff have to our residents and ratepayers, we continue to provide an exceptional level of services and programs to our community, even in these difficult times.” , City Manager JJ Murphy mentioned. “We will continue to work as good managers of public money, especially in the light of the confidence placed in us with the adoption of the AV Measure. Our commitment to you is that we will continue to be financially prudent and transparent in order to provide the best for our residents, businesses and visitors.
The state auditor analyzed the financial information of California cities to identify cities that may be exposed to tax difficulties. They have assessed the risk by performing various financial comparisons and calculations which they call financial indicators. They analyzed the finances related to government and business activities of each city, including the general fund or the main operating fund.
Their analysis was based on information from audited financial statements prepared in accordance with generally accepted accounting principles which they obtained through various sources such as city websites, the Federal Audit Clearinghouse, the Electronic Municipal Market Access website and the California State Controller’s Office. They also analyzed unverified pension information from the California Public Employee Retirement System and the State Comptroller.
They selected a set of 10 indicators that allowed them to assess the ability of each city to pay its bills in the short and long term. Specifically, the indicators measure each city’s cash position or liquidity, debt burden, financial reserves, income trends, and the ability to pay employee retirement benefits. They used a points-based system to rank and rank cities as high, moderate, or low risk of fiscal distress. They weighted the indicator results by assigning varying numbers of points to each indicator based on their assessment of the relative importance of each indicator.