City of San Diego Fell Behind $191 Million in First Year of Pandemic

City of San Diego Fell Behind $191 Million in First Year of Pandemic

High-rise buildings in downtown San Diego, Calif., on Oct. 4, 2023. (John Fredricks/The Epoch Times)

John Moorlach

John Moorlach

5/15/2024

Updated: 5/15/2024

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Commentary
The state of California issued its annual comprehensive financial report some 15 months after the customary due date, making it the last of the nation’s 50 states to complete this required task (see Long Overdue Financial Report for California Brings Bad News, March 18, 2024).
Don’t think for a minute that the Franchise Tax Board will give you any grace should you file your personal income tax returns late, especially with the financial shape Gov. Gavin Newsom has put his state in (see California Has Largest Unrestricted Net Deficit in US, March 19, 2024).
The idiom, the fish rots from the head, is true for the Golden State. Because California has 482 cities, I provide rankings by Caltrans regions. One is San Diego and Imperial Counties. But three cities in Imperial County have been extremely tardy in completing this accounting function.
For the year that ended June 30, 2020, the city of Calipatria’s independent outside auditors finally completed its audit work on Oct. 23, 2023. And two other cities in Imperial County have not completed their required annual audits for the same year end.
These two cities are Westmorland and Holtville. The city clerk for Westmorland, Christine Pisch, explains the city’s delinquency as follows, “Due to being understaffed the city was behind on audits for 4 years. As of the end of 2023 we have been currently working on the audits past due.”
The finance supervisor for Holtville, Adriana Anguis, has chosen not to respond to my numerous calls and emails over the last six months. She is more than happy to include her smiling face on the city’s website, but it’s hard to figure what else she provides in the way of fiscal leadership, as the last financial audit one can link to is for the year ending June 30, 2018.
Even Imperial County, home of the Salton Sea, is tardy on its 2022 annual report (see Elected County Auditor-Controllers Behaving Badly, Oct. 3, 2023).
While serving in the California State Legislature, I wanted to submit a bill that would scholarship cities and counties that were having difficulty in meeting this important reporting requirement. The necessity is certainly there. And with Mr. Newsom throwing money around every year of his term in office, he certainly could have shared the wealth with municipalities that are struggling to make ends meet.
Since the cities in San Diego County are concerned about fiscal transparency and fulfilling the role of what cities should do, I have decided to split this region and provide the rankings for the fiscal year ending June 30, 2020. One can only wait so long. For the 2019 review of the per capita analysis for each city’s unrestricted net position, see San Diego in Last Place in Regional Fiscal Rankings, July 7, 2023.
As San Diego County cities entered the COVID-19 lockdown in March of 2020, there seemed to be very little impact on their standings.
The big story is the lack of movement within San Diego County’s 18 cities in their rankings. Usually, the top and bottom cities stay in their places, which they did. This explains 10 of the cities. The middle eight cities stayed even or moved up, with the city of Del Mar being the reason. COVID-19 had major impacts during this fiscal year. One being Del Mar citing those wishing to enjoy a diversion from the pandemic lockdown by observing sunsets on its spectacular beaches.
With an unrestricted net position of only $1.3 million in 2019, the city incurred expenses in excess of revenues of $923,368. On the balance sheet, the pension and debt liabilities increased by $814,135 and $864,013, respectively. Along with the reduction in receivables of $259,437, these movements explain the bulk of the $3,582,454 decrease in its unrestricted net position. With a population of a little more than four thousand residents, this created a swing of $827 per capita, dropping Del Mar seven places.
The city of Solana Beach enjoyed revenues in excess of expenditures of $1,118,834 million and a reduction in internal borrowing of $727,623 explaining the bulk of its $2,423,610 improvement in unrestricted net position. It moved up two places.
Chula Vista had a similar situation, with a slight reduction in its unrestricted net deficit combined with an increase in its population, allowing it to skip over the city of Santee and moved up two places.
The second story is the minimal increase in overall population for the county. With 2.8 million residents, an additional 676 is almost like no increase at all.
The third story is the combined unrestricted net deficit of the 18 cities, totaling $2,248,767,779. If the city of San Diego were removed from the listing, the net deficit would only be $25,844,779. The city of San Diego’s unrestricted net deficit grew by $190,666,000. San Diego holds roughly half of the county’s population, but 99 percent of its total net deficit.
It’s fortunate that federal funding was good for cities the past four years. With the economy showing signs of fraying, those cities with higher per capita net deficits will need to watch their financial status a little more closely.
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John Moorlach

John Moorlach

Author

John Moorlach is the director of the California Policy Center's Center for Public Accountability. He has served as a California State Senator and Orange County Supervisor and Treasurer-Tax Collector. In 1994, he predicted the County's bankruptcy and participated in restoring and reforming the sixth most populated county in the nation.

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