City of King Announces First Positive General Fund Balance in 16 Years

At the State of the City Address on Wednesday, February 16, 2022, Mayor Mike LeBarre announced the City of King has achieved a positive balance in its General Fund. According to Mayor LeBarre, “We are very proud of this accomplishment. It took focus, dedication and working together as a team to achieve this major city goal. It wasn’t easy but we all knew it had to be done for our community and our future.” This milestone marks the first time the City has retired all debt in its General Fund since June 30, 2005. At that time, the City of King incurred significant debt and liability from a failed downtown development. That was followed with the impacts of the Great Recession, Police scandal, and a fire that destroyed a major sales tax producer, which all combined to devastate the local economy over a relatively short period of time. In 2014, the California Policy Center ranked King City the second most financially distressed city in California. By 2015, the City’s General Fund of roughly $7.5 million had accumulated a negative fund balance of approximately $5 million. Paying down the debt and achieving long-range financial stability has been established as one of its top priority goals over the past several years. However, a number of pressing needs in the community has forced the City to find ways to balance paying down debt while also making major investments to address urgent needs. City Manager Steve Adams stated: “The progress has required a tremendous team effort involving City officials, staff, community organizations and volunteers. Critical to the effort has been an annual process of establishing budget priorities, development of a long-range financial planning process, conservative fiscal management principles, restructuring City operations, and a number of revenue generation strategies. These included revenue ballot measures, extensive grant efforts, sale of unused assets, economic development efforts, and new enterprise operations.” City Manager Adams emphasized that the efforts must continue and added: “retiring the City’s General Fund debt is a big step, but the length of King City’s financial crisis has led to a lot of deferred maintenance and other significant unfunded needs. Therefore, the City is still working on additional budget and revenue strategies to address these remaining challenges.” Contact City Hall at 385-3281 for more information.