California City Overcomes Financial Crisis to Finalize 2020 Audit

December 19, 2024 TruthUSA

Analysis

The area situated north of Los Angeles County, which lies along the Southern California border, comprises Ventura, Santa Barbara, San Luis Obispo, and Kern Counties. According to the Caltrans District Map, this region encompasses District 7, excluding Los Angeles County, while Kern County is within Region 6, and Santa Barbara along with San Luis Obispo Counties fall under Region 5. Together, these counties contain a total of 36 cities.

One city, Taft, located to the west of Bakersfield and to the east of Santa Maria, resides in oil territory and is the last to publish its annual comprehensive financial report for the fiscal year ending June 30, 2020. Indeed, this delay spans several years. Discovering the reasons behind such a considerable tardiness has proven challenging, and the city’s finance director did not provide clarity on this unfortunate situation. However, being situated in oil country might shed light on the issue.

On the City’s website, there is a segment titled “Let’s Talk Taft.” Notably, enhancing fiscal transparency and the prompt delivery of current financial statements was not among the local priorities identified by its residents. Nonetheless, this section candidly shared the financial predicament of this small community:

“With the closure of our two prisons, Sacramento’s stringent regulations on the oil and gas industry, coupled with the economic downturn from COVID, our City is confronting a financial crisis. That’s the reason we initiated Let’s Talk Taft—a community engagement survey and discussion aimed at understanding your priorities and ensuring your needs are addressed as we move forward.

“In recent years, Taft has experienced a loss of almost $3,000,000 due to Sacramento’s oppressive regulations and state financial seizures. Gaining greater local control over our funding is essential for us to maintain self-sufficiency by safeguarding our resources from State or Federal intervention.

“In addition, we have been recently alerted that the charges for the Kern County Fire Department’s services will increase twofold over the next five years, which poses a significant concern. We wish to prevent any scenario where the City is compelled to diminish fire protection and paramedic services.”

Ed Ring, from the California Policy Center, outlined the situation in Taft, confirming the statements made on the city’s website in his piece titled “The Crossroads of Kern County.”

External independent auditors finally finalized their fieldwork on October 24, 2024, nearly three years later than the standard deadline for completing an audit. The chart below illustrates the per capita of the unrestricted net position for governmental activities across the cities in this region.

From the rankings for the fiscal year ending June 30, 2020, Taft is positioned at 28th place. Nevertheless, it maintains better fiscal health than eight of its neighboring cities, including Simi Valley, Oxnard, Ventura, San Luis Obispo, and Santa Barbara.

California’s COVID-19 lockdown began in March 2020, coinciding with the last quarter of the 2020 fiscal year. Remarkably, approximately 95 percent of the cities within this region managed to stabilize, either remaining unchanged in rankings or shifting by just one or two places.

The city of Camarillo moved up three places in ranking. This was due to an oversight on my part. Even with rigorous quality control measures in place, the unrestricted net position for 2019 was incorrectly reported. My rankings for this region for 2019, which were shared in “How Does Your Southern California City Rank on Fiscal Health?” on July 21, 2023, require adjustment. The correct unrestricted net position for Camarillo was $69,425,167, not $28,344,000. How does this affect the 2019 rankings? Camarillo ascends from 9th to 6th place, while Thousand Oaks, Paso Robles, and Goleta each fall down one place. My sincerest apologies for this error. Consequently, there was no alteration in Camarillo’s position from 2019 to 2020; one of the reasons for checking for major changes in the rankings.

Goleta is the only significant mover, experiencing a drop of six places. Its unrestricted net position deteriorated by $8.3 million after reporting revenues exceeding expenditures by $4.1 million while purchasing a new City Hall for $11.5 million. It remains unclear how this affected the city’s net equity; however, the annual comprehensive financial report for June 30, 2021, notably indicates the city’s position improved nearly fourfold.

Now Taft must persist in concluding its audits for the years ending June 30, 2021, and subsequent fiscal years. Only then will the rankings accurately depict the extent to which state policies aimed at curtailing local oil production and the importation of this vital resource from the Middle East are harming this critical area of California. One might question if the increase in greenhouse gas emissions from oil tankers traversing vast ocean distances surpasses the reductions achieved by the industrial adjustments impacting Taft.

The climate change initiatives being pursued by Sacramento may adversely affect specific residents in the Golden State. Those living in a city named after a former U.S. president are experiencing this through their local government’s failure to report its financial situation in a timely manner.

The opinions expressed in this article are those of the author and do not necessarily represent the views of The Epoch Times.

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