Finance

California’s Youngest City May Be the Nation’s Shortest-Lived

Jurupa Valley is at risk of insolvency. But unlike many cities, its fiscal problems really aren't its fault.
December 2013
 

Jurupa Valley is the youngest city in California, but it could soon become one of the shortest-lived municipalities in history. Incorporated just two years ago, Jurupa may be insolvent after 2014, officials says, unless the state steps in to help.

One key difference makes this suburban city of 100,000 stand out from the likes of San Bernadino, Detroit and other bankrupt cities: Jurupa’s fiscal insolvency really isn’t its fault.

Just two days before Jurupa became a city in 2011, California legislators, in an effort to balance the state’s budget, raided a fund that had been set up to help new municipalities. That fund, which derived its revenue from vehicle license fees, provided extra cash to newly incorporated cities in order to help balance a property tax inequity that new jurisdictions faced thanks to a state proposition passed in 2004. The revenue loss has also hurt other Riverside County cities, including Eastvale, Menifee and Wildomar. But it’s hit Jurupa Valley the hardest. The city lost out on $6.8 million in its first year, or 47 percent of its budget.

“We’re trying really hard to make state legislators understand we’re not coming up there for a handout,” says Mayor Verne Lauritzen. “Just fix what you did to us. We’re not asking for anything special.”

Over the past two years, the city has cut to the bone to stay alive—it contracts out all its services and it rents space in a strip mall for city hall offices—while unsuccessfully lobbying Sacramento to reinstate the fund for new cities. If the state doesn’t reopen the fund, it’s conceivable that Jurupa Valley could become the last city to incorporate in the state.

“We should have been dead a long time ago,” Lauritzen says. “We have positioned ourselves to where we can last 18 months or so before we run out of money. So we have one more shot.”

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