Special Report

The Best and Worst Run Cities in America

5. Lincoln, Neb.
> Violent crime per 1,000 people: 4.84 (32nd lowest)
> Poverty rate: 17.3% (28th lowest)

> Adult population graduated from high school: 92.9% (6th highest)
> Credit rating: Aaa (stable outlook)
> Population: 259,041

Lincoln, Neb., is one of only two state capitals to make our best-run cities list. It also has a much lower median household income compared to the very high incomes of most of the best-run cities on our list. Lincoln’s income is just $47,526, ranking only 35th among the 100 largest cities in the country. Despite the less affluent tax base, however, Lincoln’s economy is healthy. The city had an average unemployment rate of just 3.73% over the past 12 months, the lowest among the 100 cities considered, as well as the fourth-lowest vacancy rate. Mayor Chris Beutler explained to 24/7 Wall St., “Over the past five years, we’ve incorporated citizen input into a multifaceted outcome-based budget process where we ask residents what their priorities are and what they want their city to be. It’s been very well received and has helped build a culture of citizen ownership and involvement that has guided our decision making and solidified citizen support.” Moody’s has awarded an Aaa rating to the city’s debt, explaining: “The city’s financial position will remain sound given management’s conservative budgeting practices, ample revenue-raising flexibility and alternate liquidity provided in the Special Revenue fund.”

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4. Fremont, Calif.
> Violent crime per 1,000 people: 2.37 (11th lowest)
> Poverty rate: 6.6% (the lowest)
> Adult population graduated from high school: 90.2% (15th highest)
> Credit rating: not rated
> Population: 214,613

For a large city to have weathered the worst of the recession is impressive. To do it in the particularly hard-hit state of California is especially notable. Like most of the state, home values dropped nearly 15% between 2007 and 2010. Nevertheless, the city has a vacancy rate of just 5.6%, good enough to make the top five among large cities. Fremont also has a poverty rate of just 6.6%, the lowest in the country, and a violent crime rate of just 2.37 per 1,000 people.

3. Madison, Wis.
> Violent crime per 1,000 people: 3.92 (21st lowest)
> Poverty rate: 18.7% (40th lowest)
> Adult population graduated from high school: 95.1% (3rd highest)
> Credit rating: Aaa (stable outlook)
> Population: 233,777

Madison, the other capital city on our list, was incorporated in the mid 1800s, and exists today as one of the most well-run cities in the Midwest. Madison is not a particularly wealthy city, with a median household income of just over $50,000. Nevertheless, the capital has a perfect Aaa (stable) credit rating, as well as extremely low unemployment and home vacancy rates. According to Madison city administrative analyst Tim Fruit, “Over the past few years, we have really made a significant effort toward more carefully planning our six-year capital improvement program. In the past, the out years were not well scrutinized. Now, we try to analyze and balance the out years much more carefully.”

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2. Irvine, Calif.
> Violent crime per 1,000 people: 0.55 (5th lowest)
> Poverty rate: 12.3% (9th lowest)
> Adult population graduated from high school: 95.7% (2nd highest)
> Credit rating: not rated
> Population: 212,982

Irvine has a violent crime rate of just 0.55 per 1,000 people, the fifth lowest among the major cities on our list. The city is also among the best 10 for home vacancy, unemployment, median income and high school graduation rates. In 2008, CNN Money rated it the fourth-best place to live in the U.S. According to Craig Reem, director of public affairs and communications, “We are seeing a gradual improvement in our local economy that allows us to move from recession ready, to recovery ready. The City Council plans conservatively: This past fiscal year (2010-2011), we outperformed our budget expectations by nearly $14 million.”

1. Virginia Beach, Va.
> Violent crime per 1,000 people: 1.88 (8th lowest)
> Poverty rate: 7.5% (3rd lowest)
> Adult population graduated from high school: 93.1% (5th highest)
> Credit rating: Aaa (negative outlook)
> Population: 439,172

Virginia Beach is, by our measurement, the best-run city in the U.S. Located on the eastern shore of Virginia, the city is one of the most prosperous in the country. Out of the 100 largest cities, it has among the 10 lowest violent crime, unemployment, and poverty rates, as well as among the 10 best for median income, high school graduation and health insurance coverage. Moody’s listed Virginia Beach’s three main strengths as a “large and diverse tax base stabilized by the presence of military bases,” the city’s “strong and carefully managed financial position,” and “comprehensive financial policies and conservative budgeting approach.” The city’s credit rating is a perfect Aaa.

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