Orange County CA economy, NLC fiscal conditions, and DIVER CAFR Filing Index

Categories: Commentary, Uncategorized |

October 20, 2014

This week we offer some summary statistics on the economy of Orange County, CA, summarize the results of the National League of Cities’ Fiscal Conditions Survey, and mark the beginning of the annual “CAFR watch”.

Strong Orange County Economy Supports San Joaquin Toll Road

The marquee deal in the municipal bond market this week is a $1b refinancing sale by the San Joaquin Hills Transportation Corridor Agency.  SJHTCA operates the SR-73 toll road in Orange County, CA.  In its rating report, Fitch highlighted the Orange County economy as credit positive.

Orange County has the 5th highest DIVER Geo Score of all California counties.  San Mateo, San Francisco, Santa Clara and Marin are ranked higher.

California County Economic Statistics

(Population > 1,000,000)


Source: DIVER Analytics-Data Access Module, U.S. Census Bureau, Realtytrac, Bureau of Labor Statistics

Like most of southern California, Orange suffered during the recession, but its economy has been steadily regaining strength.

Southern California County DIVER Geo Scores

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Source: DIVER Analytics-Data Access Module, DIVER Data Solutions

NLC Fiscal Conditions Survey Reports Improving City Fiscal Conditions

The National League of Cities recently released its 2014 survey of City Fiscal Conditions.  According to NLC, “more city finance officers report improved conditions this year than in the 29 year history of the survey”.

Percent of Cities “Better Able/Less Able” to Meet Financial Needs

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Source: National League of Cities

The survey asks city financial officers to list factors that are impacting the fiscal health of their cities, and to indicate whether the factor had a positive or negative impact over the last year.

Given the low level of reported inflation it is interesting that wages and prices/service costs were most frequently listed as a negative factor impacting budgets.

When asked to rank three most negative factors, city officials cited infrastructure needs (52%) most frequently.  OPEBs (51%) and pensions (47%) are also among the three most negative factors for many.

Health of local economy (81%) and value of city tax base (73%) were the dominant factors positively impacting city budgets.

The CAFR Watch Begins

We are now 112 days past the June 30 fiscal year-end observed by most municipalities.  As municipal analysts begin the wait for annual audited CAFR filings, we thought it would be a good time to look at our DIVER CAFR Filing Index.  This index measures how long after its fiscal year end a city or state files its CAFR.

DIVER CAFR Filing Index (selected cities)

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Source: DIVER Analytics-Data Access Module, DIVER Data Solutions

Of the major cities, we can expect to see New York City and Washington, D.C. file soon.  If history holds, we will nee to wait until February to see anything from Los Angeles or Philadelphia.

In other news, this week Lumesis announced a strategic partnership with Municipal Bond Information Services, LLC (MBIS) to boost municipal bond market transparency. The joint commitment will enhance pre-trade price transparency and post-trade operational practices. As part of the partnership, Lumesis and MBIS will channel MBIS’s pricing and comparable bond data through DIVER’s Advisor platform.

This is a busy week for the Lumesis team. Gregg, Mike Vossler and Pete Newman will be in Harbor, MD for the NSCP National Meeting and Mark Harries and I will be in Chicago for the NFMA Advanced Seminar.

Have a great week,


Mike Craft
Managing Director, Credit, Lumesis, Inc.


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