Aug 20, 2015 3:55 PM by News Staff
The state auditor’s office says that after studying Chico’s finances they believe the city is rebounding from years of financial troubles.
Chico was one of six financially struggling cities selected for review under a new “high risk audit program” initiated in the wake of bankruptcies in Stockton, Bell and other cities.
The “high risk” refers to the likelihood a local government will mismanage, waste, or abuse funds, or a city that faces major economic challenges.
Chico was chosen as a “high risk” city because of ongoing deficits in the general fund, lack of reserves, and red flags for mismanagement.
The news for Chico is good though, in a letter to Mayor Mark Sorenson, State Auditor Elaine Howle said “the state auditor concludes that the city of Chico is taking reasonable steps to address high risk factors. Chico’s actions have included strengthening budget policies to address fund deficits, reducing personnel costs by eliminating positions and consolidating operations to increase efficiency.
Chico’s steps in the right direction mean the city will not be subject to a full-blown audit, but it will continue to be monitored.
In the past two years the city's deficit has been reduced from $15 million to $4.5 million. The city allocated $900,000 towards the deficit for the 2015-16 fiscal year, and they hope to balance the budget by 2019.
“We are proud of the tremendous work to straighten the fiscal mess created by years of mismanagement,” Mayor Mark Sorensen said. This independent conclusion validates the significant actions taken by the City Council and Administration in 2013 to present to set Chico on a healthy financial future.