With About $500 Million in Outstanding Debt, Victorville Nears Insolvency, Says Auditor | KCET
With About $500 Million in Outstanding Debt, Victorville Nears Insolvency, Says Auditor
Not only is the high desert city of Victorville facing a Securities and Exchange Commission probe, an independent auditor last week doubted the city's "ability to continue" amid $480 million in debt and concern about tens of millions of dollars in bond proceeds that were moved between agencies without proper approval, according to The Bond Buyer, a daily public finance newspaper.
The long-term debt is mostly split between the city, its redevelopment agency and the Southern California Logistics Airport Authority, which owes about $330 million and oversees a logistics and industrial park that integrates air and train cargo. The two agencies are controlled by the city council.
As explained by the San Berenardino Sun, insolvency is predicted "for the city by the end of the fiscal year due to ongoing losses, asset deficiencies in major funds and a lack of liquidity."
The city has a projected deficit of $5.3 million--about 11% of the general fund--through the end of the current fiscal year. The airport authority has a $101 million deficit.
"The city has already slashed many of its employees from the payroll, and many citizens complain of deteriorating infrastructure and crime. Nevertheless, Victorville is still investing in ambitious and unnecessary plans, such as a 32 square mile expansion and the High Desert Corridor (E-220), a new highway connecting Lancaster and Victorville," opined the blogger at the Mojave Desert Blog, which advocates for desert wilderness preservation. "Most residents probably would prefer the City reinvest in existing infrastructure and open up a new east-west route within the city (the Nisqualli overpass) to alleviate burdensome traffic before expanding the city limits and building an unwanted highway."
The auditing firm Mayer Hoffman McCann PC was was recently in the spotlight after State Controller John Chiang called it a "rubber stamp," a charge stemming from the company's relationship with the city of Bell in L.A. County, which found itself as the nation's example for public financial scandal.
Victorville's population has grown nearly 50% in the past decade to 111,000. It is located about 85 miles by car from downtown Los Angeles.
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