With regard to general fund reserves, Bobadilla said this has been an area of weakness due to previous management decision making and historically poor financial planning. “Montebello has more than ample cash on hand at any given time, and liquidity is not an issue for us.” “More specifically: the information the state uses for its liquidity calculation is limited to general fund cash on hand as of June 30,2021,” Bobadilla said. The city was ranked fifth in the state because of insufficient general fund reserve, high debt, and has only enough cash and investments to cover 55 percent of its unpaid bills at year end.īut City Manager Rene Bobadilla, in an emailed statement said he strongly disputes and disagrees with both the state auditor’s methodology and calculations that generate their ratings. The city’s -$577,433 in general fund unrestricted fund balances also contributed its poor ranking as did its a “high risk” liquidity ranking. According to the State Auditor’s report, San Gabriel had a net pension liability of $75,697,699 in FY 2020-21. Nevertheless, its score was dinged heavily for the city’s exorbitant pension obligations.
The city received “low risk” rankings for both its debt burden and its revenue trends, reflecting positive results of some of these actions. Preliminary results from the most recent fiscal year that ended this past June 30 indicate that for the first time since Jthe city will end the year with $9.5 million in reserves, exceeding the reserves goal of 17%.Īlso, the spokesperson said that in May 2019 San Gabriel implemented a fiscal sustainability policy to recover from the negative unrestricted reserves position, and that it has generated a positive net change in fund balance for four consecutive years, in spite of the COVID-19 environment. The rankings are not a reflection of where the cities’ finances currently stand, but rather a snapshot of financial health based on an analysis of the prior fiscal year’s audited financial statements – which, in the case of this year’s report, is FY 2020-21.Ī spokesperson for city of San Gabriel said in a written statement that this year’s ranking does not accurately represent the city’s current finances. The annual report was launched in 2019 and calculates financial risk scores for 482 cities based on a number of factors including reserves, debt burden, liquidity, revenue trends, pension funds and obligations, and post-employment benefit funds and obligations. Montebello, West Covina and Los Angeles also ranked in the top 20 most at-risk cities. The City of Redondo Beach stumbled in its financial footing and went from 33rd on the list to 12th. The City of Torrance, another regular on the risk list, showed a slight improvement by dropping from position four to position six and moving from the high risk category to the moderate risk zone.
Montebello, on the other hand, saw its ranking worsen from seventh place to fifth.Īll three cities were put in the high risk category, which is reserved for cities at “high risk for the potential of waste, fraud, abuse, or mismanagement, or that have major challenges associated with their economy, efficiency, or effectiveness,” according to the California State Auditor. San Gabriel also remains in dire financial straits, but dropped from second place in Fiscal Year 2019-20 to third place for FY 2020-21. Top of the list for the fifth year in a row is the City of Compton. The state auditor’s office released its annual list of California’s most financially at risk cities and multiple LA County towns once again earned the undesirable honor of inclusion.
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