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& Arthur Young
• Arthur Young has evaluated prior LAFCO reports for other proposed
cities. We found that LAFCO uses a very conservative approach in
developing its budget analyses and that once cities are official-
ly formed, the actual financial position of the cities we re-
viewed bas been much stronger than LAFCO originally estimated.
For the four most recently incorporated cities in Los Angeles and
Ventura Counties, their June 30, 1986, General Fund fund balance
ranged from over one-third to nearly two-thirds of their actual
General Fund expenditures for that · year. These factors lead us
to conclude that the financial outlook for the proposed City of
Santa Clarita should be viewed with a high degree of optimism.
In conclusion, given Arthur Young's municipal finance and audit
experience and LAFCO' s revised budget estimates, it appears that a
very healthy financial outlook exists for the proposed City of Santa
Clarita with first year revenues exceeding expenditures by 2~
percent.
Very truly yours,
ARTHUR YOUNG
By:
David C. DeRoos
jm