Oxnard ranked among state's most financially at-risk cities
Oxnard ranked No. 8 on California's list of most financially at-risk cities among the state's 482 municipalities.
The California State Auditor’s Office released the list in October, which ranked the cities’ ability to pay bills based on 10 indicators from the 2020-2021 fiscal year.
Oxnard officials blamed a technicality for the high ranking during the Feb. 21 meeting where the list was presented to the City Council, but remained optimistic about the city's financial future.
“I think we’re in really, really good shape,” Mayor John Zaragoza said earlier this month.
David Grau, president of the Ventura County Taxpayers Association, wasn’t as positive about the news. He said last month Oxnard should take the ranking more seriously as it shows a downward trend.
Indicators used to create the list included general fund reserves, debt burden, cash on hand and future pension costs. Oxnard earned a "moderate risk" classification.
Other Ventura County cities fared better in the ranking. Camarillo was near the bottom of the list, indicating the strongest financial health among local municipalities based on the state's indicators:
Oxnard ― 8
Santa Paula ― 77
Ventura ― 152
Moorpark ― 219
Fillmore ― 231
Simi Valley ― 244
Ojai ― 282
Port Hueneme ― 305
Thousand Oaks ― 396
Camarillo — 398
An Oxnard staff report about the result pointed to the impact of a 2021 court ruling that forced the city to reimburse three enterprise funds about $36.5 million from the general fund for fees that were collected illegally. The infrastructure fees had been incorporated into a 2012 utility rate study later approved by the council, but were ultimately struck down in court after a legal challenge.
The city has three years to pay back the $36.5 million, but the state recorded the entire expense in the 2020-2021 fiscal year. Staff said in the report the move brought down the score for the city’s general fund reserves, which accounts for 30% of the overall ranking.
If the impact of the reimbursement was removed from the equation, staff argued in the report, Oxnard would have ranked 69.
Zaragoza noted even though the enterprise funds must be repaid, the money will stay within city coffers.
Oxnard officials anticipate a much higher score on next year's list.
“There’s still a number of fundamental financial challenges that any city our size has, but we won’t be in the top 10,” assistant chief financial officer Mark Sewell said last month.
One of the city's challenges is a $323 million pension debt.
In March of last year, the City Council initiated a validation process with Ventura County Superior Court to determine whether the city could issue a bond to help pay down the debt.
The move brought a response by the Ventura County Taxpayers Association, Howard Jarvis Taxpayers Association and Oxnard resident Aaron Starr, who made arguments during the litigation process.
Superior Court Judge Benjamin Coats ruled in favor of the city in December.
Katie Casey, an Oxnard spokesperson, said the city filed an order based on the ruling. When the court enters a judgment, the three parties involved in the lawsuit can appeal.
Grau, of the taxpayer association, said they will.
The city is being disingenuous by pointing to one cause for the low score, Grau said. Instead, it should look at the overall trend.
Since 2016, the city has fallen 93 places on the state’s list.
Grau said the low score could cause worry among residents over whether their city has the ability to pay its bills. The city may have to cut services or raise taxes to heal the city’s financial standing, he added.
Grau said the city can’t rely on raising its 9.25% rate.
“(The ranking) has to be taken seriously,” he said. “I think the City Council should be alarmed.”
Brian J. Varela covers Oxnard, Port Hueneme and Camarillo. He can be reached at brian.varela@vcstar.com or 805-477-8014. You can also find him on Twitter @BrianVarela805.
This article originally appeared on Ventura County Star: Oxnard ranked among state's most financially at-risk cities
