Anaheim Mayor Says California State Auditor’s Office Report Wrong
“Contrary to the state report, Anaheim is doing very well,” says
Anaheim, California – Our city has emerged from the challenge of our time with an economic recovery underway and a bright future ahead.
You wouldn’t know from a recent report on California cities that ranked Anaheim alongside El Cerrito and Calexico.
The report, by the California State Auditor’s Office, generated titles as expected. But he was wrong.
No one takes financial health more seriously than I do. I look forward to discussing Anaheim’s budget, pensions and debt.
But I challenge the methodology of the report and the characterization of our city.
Full-service city, enviable economy
Anaheim is a full-service city with police and fire departments, water and electrical services, and the West Coast’s largest convention center.
At its largest extent, our annual budget is $ 2 billion with our debts and obligations spread across what is California’s 10th largest city.
In a typical year, Anaheim welcomes more than 25 million visitors to our theme parks, convention center, and sports and entertainment venues. Our economy is the envy of the cities questioned by the listener.
Like almost all cities, we have pensions and debt. This should come as no surprise to anyone. As a fiscally conservative city, we take on obligations knowing we can meet them.
Reduce pensions, debt
After the 2012 reforms, around 70% of our pension obligations are now funded. We are on the right track to fully fund pensions as old schemes gradually disappear and give way to newer, more profitable schemes.
Much of Anaheim’s debt comes from $ 510 million borrowed for the 1990s Anaheim Hotel expansion.
There is good debt and bad debt. Our resort debt is clearly good. The return on investment nearly quadrupled the revenues of the city’s hotels, from $ 46 million in 1999 to $ 163 million in 2019.
Some of Anaheim Resort’s debt was paid off in 2019 with the possibility of paying off the balance by the end of this decade, years ahead of schedule.
This should free up some $ 100 million per year for our general fund.
Epic pandemic challenge met
The silence of the report on Anaheim’s handling of the pandemic crisis is revealing. Few cities could have resisted what Anaheim did and made it through on their own.
After years of growth and balanced budgets, we had to deal with a $ 100 million deficit in the general fund. The pandemic has hit Anaheim about as hard as any city. This is not bad management, just bad luck.
Yet we did it intact with a balanced budget and continued investments in parks, libraries, roads and public services.
Anaheim has passed this epic stress test by continuing to meet our obligations and without “crowding out” service to our community.
Yes, federal aid has helped to make up for lost income. And, yes, we borrowed $ 139 million to fill the remaining gaps in our annual budgets.
But we were faced with an impossible choice: to borrow or cut to the bone. The alternative? Public safety response times delayed, libraries closed and services decimated for the most needy in our community, including those living in homelessness.
Our ability to raise funds when needed is a testament to our financial strength. Our investment grade credit ratings on Wall Street allowed us to issue bonds at a favorable rate and made borrowing not only fiscally responsible but also smart.
Our bond offering was well received and contrasts sharply with the sensational picture drawn up by the auditor.
We have assumed this new obligation knowing what the State Auditor does not: Anaheim attracts billions of investments that will create new revenue for our city for years to come.
Reports come and go. But Anaheim’s track record and outlook speaks for itself.