- Published on Wednesday, 07 August 2013 13:09
According to a Newmaxx article regarding analysis by the Manhattan Institute, several Chicago pension funds are in worse financial shape than the worker pensions in Detroit. One is only 25 percent funded, and where the other 75 percent of the money will come from is anyone's guess. And there are about a dozen major California cities having systemic problems paying their bills.
Here is the Institute’s worry list, based on bond ratings and other data, of the top 20 cities to watch for financial troubles in the wake of the Detroit story:
1. Compton, Calif.
Compton has teetered on the brink of bankruptcy after it accrued a general-fund deficit of more than $40 million by borrowing from other funds, depleting what had been a $22 million reserve.
2. East Greenbush, N.Y.
A New York state audit concluded that years of fiscal mismanagement — including questionable employment contracts and illegal payments to town officials — left East Greenbush more than $2 million in debt.
3. Fresno, Calif.
Fresno had the ratings of its lease-revenue bonds downgraded to junk-level by Moody's, which also downgraded its convention center and pension obligation bonds due to the city's "exceedingly weak financial position."
4. Gulf County, Fla.
Fitch Ratings warned that Gulf County's predominately rural economy is "narrowly focused," with income levels one-quarter below national averages and economic indicators for the county also comparing unfavorably to national averages.
5. Harrisburg, Pa.
Harrisburg is at least $345 million in debt, thanks largely to municipal bonds it guaranteed in order to finance upgrades to its problematic waste-to-energy trash incinerator.
6. Irvington, N.J.
Irvington has a violent crime rate six times higher than New Jersey's average, with Moody's citing "wealth indicators below state and national averages and tax-base and population declines due to increased tax appeals and foreclosures."
7. Jefferson County, Ala.
Jefferson County, home to the city of Birmingham, has been dealing with the collapse of refinancing for a sewer bond. It filed for bankruptcy protection in 2011 over a $3.14 billion sewer bond debt.
8. Menasha, Wis.
Menasha defaulted on bonds in 2007 it had issued to fund a steam plant which has since closed and left the city permanently in the red and, as of 2011, had $16 million in general fund revenue, but had $43.4 million in outstanding debt.
9. Newburgh, N.Y.
Newburgh was cited by Moody's for "tax base erosion and a weak socioeconomic profile," with 26 percent of its population below the poverty line and its school district facing a $2 million budget gap.
10. Oakland, Calif.
Oakland is trying to get out of a Goldman Sachs-brokered interest rate swap that is costing it $4 million a year. According to a recent city audit, Oakland has lost $250 million from a 1997 pension obligation bond sale and subsequent investment strategy.
11. Philadelphia School District, Pa.
Philadelphia's school district, the nation's eighth-largest, faces a $304 million deficit in its $2.35 billion budget, and is seeking $133 million from labor-contract savings to prevent further cutbacks.
12. Pontiac, Mich.
Pontiac, where the emergency manager has restructured the city's finances, was downgraded by Moody's, reflecting the city's history of fiscal distress and narrow liquidity.
13. Providence, R.I.
Providence, rumored to be filing for bankruptcy for more than a year, experienced consecutive deficits through fiscal 2012, has a high-debt burden and significant unfunded pension liabilities, as well as high unemployment and low income levels.
14. Riverdale, Ill.
The credit rating for Riverdale is under review by Moody's because the city has not released an audit of interim or unaudited data for the year that ended April 30, 2012.
15. Salem, N.J.
Salem is under close fiscal supervision after it issued bonds to finance the construction of the Finlaw State Office Building, which was delayed by construction issues, and its leasing revenues are not enough to cover the debt payments and the maintenance fees.
16. Strafford County, N.H.
Strafford County regularly borrows money to cover its short-term cash needs after it spent two-fifths of its budget on a nursing home, which lost $36 million from 2004 to 2009.
17. Taylor, Mich.
Taylor has a large deficit and is vulnerable due to significant declines in the tax base, limited financial flexibility, and above-average unfunded pension obligations.
18. Vadnais Heights, Minn.
The Minneapolis suburb of Vadnais Heights had its debt rating downgraded to junk last fall by Moody's after the city council voted to stop payments to a sports center financed by bonds.
19. Wenatchee, Wash.
Wenatchee defaulted on $42 million in debt associated with the Town Toyota Center, a multipurpose arena, and has ongoing financial issues due to the default.
20. Woonsocket, R.I.
Woonsocket faces near-term liquidity shortages necessitating an advance in state aid, a high-debt burden and unfunded pension liabilities, with Moody's citing the city's continuing difficulties in making spending cuts because of poor management and imprecise accounting.