City of Indian Wells issued the following announcement on Nov. 24.
Every two years, the California State Auditor develops a report that scores cities based on their risk level for waste, fraud, abuse and mismanagement or major challenges associated with its economy, efficiency or effectiveness. The newly released report has ranked the City of Indian Wells in the ‘low’ category for overall risk and scored the City with 97.42 out of 100 points. This score means that throughout all of the cities in the State, Indian Wells is ranked 4th best in regards to fiscal health (ranked #450 out of #453 cities statewide).
“This report is an indicator of where we stand financially against other California cities,” said Kevin McCarthy, Finance Director. “Due to our low debt burden and general fund reserves, we received an almost perfect score on this report, which should reassure our residents that taxpayer dollars are being spent responsibly and that the City prioritizes fiscal responsibility.”
Some of the factors that the report uses to rank cities include general fund reserve amounts, revenue trends and pension costs. Addressing pension liabilities has been a long-standing Council priority and in 2017, the City made a $1.25 million payment toward unfunded pension liability to drastically reduce the City’s debt. As a result, taxpayers were saved $6 million and the City currently does not carry any debt.
The only category where the City scored ‘moderate’ risk was in revenue trends. This is due largely in part to the revenue effects of COVID-19 and the loss of Transient Occupancy Tax (TOT) and sales tax brought in by visitors. The City is constantly adjusting to new revenue projections and has cut approximately 17% from the fiscal year 2020/21 budget (with no service level changes for public safety) in response.
“As a result of COVID-19, financial projections are constantly in flux,” explained Chris Freeland, City Manager. “To make sure we remain transparent with our residents, we have created a financial portal on our website with up-to-date information for residents. Thankfully, although Indian Wells is adversely affected by a dip in tourism revenue, we had strong financial footing to begin with and are in a good position to weather an economic downturn.”
As stated in the report, Indian Wells is one of “21 cities likely to have sufficient budget reserves to help absorb revenue reductions.”
For more information on the State Auditor Report on the Fiscal Health of California Cities, visit the dashboard at www.auditor.ca.gov/local_high_risk/dashboard-csa.
Original source can be found here.
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