Paramount is at low risk for “financial distress,” according to the California State Auditor’s office.
The state agency recently ranked California cities by financial risk. Compton ranked no. 1 out of 471 cities, putting Compton at the top of a list of 18 cities (or 4%) at high financial risk. Paramount was ranked 300th in the state, placing the town among 217 cities in the top 46%.
An interactive map on the State Auditor’s website shows the neighboring city of Downey at moderate risk for financial trouble. Bellflower, another “low risk” city, ranked 271st in the state—meaning that Paramount is deemed to be in a better financial position than Bellflower.
The State Auditor assessed California cities based on liquidity (having enough cash to pay its bills) a city’s debt burden versus its income, financial reserves, revenue trends, and retirement obligations.
For liquidity, Paramount ranked 91 out of 471 cities.
For debt burden, Paramount ranked 341 out of 471 cities.
For reserves, Paramount ranked 271.
For for revenue trends, Paramount ranked 66th in the state.
For pension obligations, Paramount ranked 273.
The State Auditor’s Office cited a lack of transparency as a factor in ranking the neighboring city of Compton as being most at risk.
“Because the city of Compton did not publish required audited financial statements, we ranked this city as having high fiscal risk due to the lack of transparency over its finances,” according to the “Overall Risk” page at the auditor’s website.
“Federal regulations require cities that spend $750,000 or more in federal awards in a fiscal year to have an audit performed. In accordance with state law, cities subject to this requirement must submit this information to the State Controller or notify the State Controller of their exempt status. The State Controller did not report the city of Compton as exempt from this reporting requirement,” the auditor’s website said.