Seven Cities in Los Angeles County Achieve Significant Financial Gains in Recent Rankings

Analysis

Compton finally released its annual comprehensive financial report for the fiscal year ending June 30, 2022, allowing for a precise ranking of the 88 cities within Los Angeles County for this period. Unfortunately, it has received the laggard award for the second consecutive year.

By examining the accompanying chart, you’ll notice that seven cities made impressive gains in the rankings, jumping by double digits, while another seven cities experienced a drop of seven places or more. Let’s take a closer look at the year’s significant performers and underachievers and explore the reasons behind this volatility, especially since 74 cities in the county remained relatively stable.

To begin with the most improved, the city of Commerce soared into the top 10, climbing a remarkable 25 places. The primary reason for its $40.4 million boost in the city’s unrestricted net position (UNP) was revenues exceeding expenditures by $37.5 million.

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“On a positive note, the City of Commerce adhered to the budgetary plan for fiscal year 2021/2022 and successfully replenished the reserves utilized during the pandemic, while also rebuilding services that were limited during that time. The current challenge is to wisely and effectively reestablish and innovate the delivery of city services in this new inflationary environment post-pandemic. The options and strategies to tackle these challenges will be integral to the annual budget process, which begins in spring 2023.”

Manhattan Beach experienced the largest upward shift, rising 34 places to secure the 18th position. This significant change was driven by $65 million in revenues exceeding expenditures, contributing to the impressive $68 million growth in its unrestricted net position.

Glendora jumped to 31st place, advancing 12 positions, attributed to revenues exceeding expenditures by $39.4 million, which in turn enhanced its unrestricted net position by $37.8 million.

Avalon on Catalina Island continued its positive trajectory, rising 16 places post-COVID-19 lockdown, fueled by a revival in tourism that led to revenues exceeding expenditures by $4.2 million, contributing to a $4.9 million increase in its unrestricted net position.

La Verne experienced revenues exceeding expenditures totaling $49.4 million, which lessened its unrestricted net deficit by $43.3 million, allowing for a rise of 14 places.

Monrovia surged 12 places, moving out of the bottom ten cities, thanks to $64.8 million in revenues exceeding expenditures, which led to a reduction of $62.6 million in its unrestricted net deficit.

Cities like Commerce, Manhattan Beach, and Glendora, along with Burbank, moved ahead of Diamond Bar, despite an improvement in Diamond Bar’s unrestricted net position. Other cities such as Hawaiian Gardens, Pico Rivera, Calabasas, and Bellflower improved their per capita figures, prompting Diamond Bar to drop eight places. This kind of movement among mid-tier cities also explains Temple City’s fall of eight places and Paramount’s decline of seven places; despite improving its unrestricted net position by $25 million, it faced an increase in its unrestricted net deficit by $20.2 million due to restrictions on an additional $28.3 million, which accounts for three-fifths of the increase, while an uptick of $17 million in net investment in capital assets alongside $10.4 million in unearned revenue likely explains the remaining changes.

Not every city recorded favorable annual results. South Gate reported expenditures exceeding revenues by $3.9 million. While it decreased restricted assets by $12.6 million, this was neutralized by a $22 million reduction in internal balances, leading to a $17.3 million increase in its unrestricted net deficit and a drop of 11 places.

Bell Gardens remained stable, but its population declined by 3,372 (8 percent), which affected its per capita enough to lower it nine positions to 63rd place.

Monterey Park had revenues exceeding expenditures of $11.1 million; however, it increased its unrestricted net deficit by $26 million, slipping down ten places. This was partly due to an addition of $30 million to restricted assets, adversely impacting its unrestricted net position.

When considering the remaining cities in the rankings, it’s worth excluding the cities of Industry and Vernon because they have minimal populations. Furthermore, despite all the stadium activity, the city of Inglewood, under its well-known mayor, continues to struggle, dropping to the 86th position.

A significant issue facing California is the delay in ACFR submissions, starting from the top level. The state of California has yet to publish its ACFR for the fiscal year ending June 30, 2023.

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