I REPORT YOU DECIDE-by Barry Levinson
California Policy Center working with Civic Partner, a firm that collects and analyzes municipal finance data, has ranked over 490 California cities and counties with respect to their bankruptcy risk.
That report contains the complete list. To compile the ranking, they collected and analyzed audited financial statements published by most cities and counties in California. Local governments typically produce audited financial statements if they issue municipal bonds or if they receive more than $500,000 in federal grants annually.
Cities and counties with default probability scores much higher than 0.1% have substantially elevated risk. Where does the City of Fullerton rank among the 492 cities and counties listed in this comprehensive study?
FULLERTON RANKS FIRST!
Winner winner chicken dinner.
It ranks first (i.e. highest probability of Default/Bankruptcy) among all cities in Orange County with a risk factor of .27%.
So the next time a city official tells you that Fullerton is in good financial shape, please remember this study.
http://californiapolicycenter.org/californias-most-financi…/
Pack it tight Mr Internal affairs and just maybe the south Fullerton soccer leagues can be soaked.
Barry Levinson
#1 by A closer look on November 11, 2014 - 12:00 pm
To say Fullerton is in danger of bankruptcy is beyond a stretch.
Let’s take a closer look at this study.
Fullerton ranks 72nd out of 490 cities.
Fullerton’s risk factor is .27 percent, meaning Fullerton’s chance of declaring bankruptcy is roughly one in 400. With odds like that, I’d bet the farm that Fullerton will not be declaring bankruptcy anytime soon.
I’d be happy to make a wager, putting up $4,000 of my money against $10 of yours. It would be the easiest $10 I’ve ever made.
And the separation between Fullerton and cities with higher rankings is infinitesimal, separated by percentage points in the one-hundreth percentile range of each other.
Fullerton’s chance at declaring bankruptcy is one in 400 while a city with a much more favorable ranking might be one in 600. Big deal.
Oh, and this introductions was added about a week ago:
Introduction: Due to the healthy response generated by this study, and justifiable expressions of concern by many whose cities we found to be financially stressed, we would like to state that the rankings developed herein are based on information contained in 2013 financial statements, that is, financial statements for the fiscal year ended June 30, 2013. Therefore the data we used is nearly 18 months old. In a few cases, we couldn’t find 6-30-2013 financial statements and had to rely on 6-30-2012 financial statements. Therefore it is important to emphasize the rankings we have produced are based on the financial condition of California cities then, not now. It is possible that many of these cities have improved their financial condition. If we were able to assess the financial health of California’s cities as of 6-30-2014, these rankings would inevitably have changed.
It is also important to acknowledge that any attempt to rank the financial health of a city, or any financial entity, will rely on criteria and formulas that are debatable. How much emphasis to place on historical performance, debt, unfunded liabilities, cash flow, general fund balance, budget deficits vs surpluses, interest and pension expense, and a host of other relevant data will inevitably result in differing results.
#2 by a real close look on November 11, 2014 - 8:12 pm
The thing is a pyramid scheme. Your children will be left holding the bag. I believe that a correction is imminent.
#3 by K Sanchez on November 12, 2014 - 6:09 am
“correction is imminent”, yes, I believe that is the case also