The City of Stanton, and other cities in Orange County, find themselves in a precarious financial position as revenues continue to fall below expenses, and reserves are dwindling.
Stanton, for instance, has a structural deficit of roughly $2 million per year, and has $8 million left in reserves. That means that city finance officials have four years to figure out a solution, or they will find themselves following Stockton and San Bernardino into a self-made bankruptcy.
Writers for the OC Register listed other cities that have dangerously low reserves, including Cypress and Placentia, where reserves funds have balances equivalent to less than 1 percent of their annual expenses. Other cities highlighted for low reserves were Santa Ana, Garden Grove, and Costa Mesa.
Cities like Stanton have already cut to the bone to stave off further draw=downs on their reserve accounts.
From the Orange County Register:
As San Bernardino limps toward bankruptcy, one Orange County city may not be far behind.
Stanton is just $8 million away from financial catastrophe. If costs continue unabated, city budget planners say Stanton will be broke in four years.
“It’s easy math,” said Terri Marsh, Stanton director of administrative services. “We have a deficit of $2 million a year and there’s only $8 million (in reserves) left.”
Read the full article here.