City is the most financially sustainable in Tulare County, according to California State Auditor
FARMERSVILLE – When asked what Tulare County’s most financially healthy city is, most people think of Exeter, which at one time boasted a high per capita rate of millionaires, or Visalia, long the economic engine and tax base builder for the area. But the answer is actually Farmersville, and has been for the past three years.
Finance director Steve Huntley shared that fact with the Farmersville City Council on Feb. 8 during his mid-year budget report. Farmersville’s overall risk was listed as low and was ranked 357 of 471 cities, with ‘1’ being the worst. That was the highest ranking of any city in Tulare County, higher than neighboring Exeter (No. 140) and the county’s largest city in Visalia (No. 298). The rankings were made by the California State Auditor, which analyzes the financial risk in key areas for all 471 cities in California and then releases the ranking on its Local Government High-Risk Database. The most recent rankings are for the 2018-19 year, but the database shows Farmersville had held the top spot in Tulare County finances since 2016-17 (No. 388) and including a high mark (No. 448) in 2017-18.
“While these rankings do not reflect all the relevant factors impacting a city, it is a good starting place for most evaluations,” Huntley said.
Farmersville is the only city in Tulare County to be considered a low risk in every major category. The city fared well in revenue trends (405), pension obligations (351), pension funding (387), pension costs (365) and future pension costs (375). Its lowest ranks came in liquidity (No. 69), debt burden (241) and general fund reserves (241), the latter two being the most weighted factors in calculating overall risk.
“These scores also point to Farmersville’s strengths of good budgeting, avoiding and/or eliminating debt, maintaining reserves, and living within its means by not over-extending departments or programs or incurring excessive debt,” Huntley wrote in his report.
Since 2015, Farmersville’s expenses have come in under budget, revenues have exceeded projections in three of the last six years and revenues have outpaced expenses four of the last six years. The city has been able to increase its general fund reserves to about 25% of its average tax revenues. Half way through the current fiscal year, Farmersville’s revenues are more than $1 million higher than projections.
Farmersville’s biggest issue this year is completing funded projects. The city has only spent 26% of its capital improvement budget with just six months left to complete 20 of its 39 projects totaling around $10 million. The lag is not for lack of effort as Farmersville has completed seven projects including improvements to East and West Walnut Avenue, a new crosswalk at Freedom Drive, and improved percolation system at the wastewater treatment plant, which is now three-quarter of the way complete on what is the largest project ever undertaken by the city with a price tag of $19 million.
That recent financial trend was very different prior to the 2017 fiscal year when Farmersville was projected to end its second straight year with deficit spending, had instituted a hiring freeze and froze salaries of all existing employees.
Since 2017, Farmersville has passed two revenue measures and adjusted its utility rate to bring them more in line with surrounding cities. That November voters passed Measure P, a half cent sales tax estimated to generate nearly $300,000 annually, and Measure Q, a commercial cannabis tax estimated to generate up to $3.5 million annually.