State Auditor Removes High-Risk Designation For Blythe

The California State Auditor late last year announced that it was removing its high-risk designation for the city of Blythe, stating that the city had sufficiently addressed challenges related to its long-term financial stability.

“We’re very, very happy about it, because obviously as a city in our situation, we’re trying to grow and we’re trying to bring new business,” Mallory Crecelius, interim city manager and city clerk, said in an interview with The Riverside Record. “And having that designation is not great, so we’re very happy.”

According to Crecelius, the auditor’s office initially reached out to the city at the end of 2021 saying that the agency was considering a potential audit of the city.

“We met with them,” she said. “We provided a lot of information, because although we were in a bad financial position, we’d made a lot of improvements dating back all the way to 2009 when we realized there was a significant problem and we started making drastic cuts and taking drastic steps to improve our financial position.”

And while the city was making the necessary changes, Crecelius said the ongoing recession at the time made it difficult for the city to move forward as quickly as officials had hoped.

Following that initial audit, the city was given 10 risk areas to address, including low financial reserves, the need for additional sources of revenue, the lack of a long-term plan, enterprise fund deficits, an unpaid golf course loan, the need for public safety resources, unaddressed vacant buildings, utility rates and service fees that didn’t cover the costs, poor oversight of city contracts and the lack of a permanent city manager.

“None of them were about financial mismanagement,” Crecelius said. “I don’t think a single one of them was saying we did anything to mismanage the funds. We just didn’t have enough money to basically do what we needed to do as a city.” 

Following the report, the city checked in with the auditor’s office every six months, Crecelius said, to provide an update on where the city was at in addressing the 10 areas of concern. And, as of last March, she said they had mostly addressed the list of concerns.

“After March, they were like, ‘You know, you’ve pretty much done everything that we’ve asked,’” she said. “‘You still don’t have a permanent city manager, and you still don’t have that strategic plan, but we don’t really think that those two things should stop us from closing you out.’”

After some confusion between the city and the auditor’s office, and additional questions about how the city was handling the state’s closure of Chuckawalla Valley State Prison, the city was told that the high-risk designation would be removed.

And while Crecelius said this is a step in the right direction for Blythe, she acknowledges that there is still work to be done.

“I hope we can keep this momentum and keep that moving, because it’s, I think, still a little bit too early to tell exactly what the prison closure means for the city,” she said. “But we’re very hopeful that with all of these other things that we have, all the irons in the fire, that we are able to continue and bring some new growth to the area.”