24/7 Wall St.: Best- and worst-run cities

• California is home to both the best and the worst
• Detroit%3F Yep%2C one of the worst
• Looking at a city%27s debt rating shows clear patterns

A federal judge granted Detroit's Chapter 9 bankruptcy filing earlier this month, making it the largest municipal bankruptcy in U.S. history. Bankruptcy is frequently the product of a history of problems. The unrelenting decline in manufacturing and the more recent collapse of the housing market resulted in a shrinking population, rampant unemployment and high debt, which have devastated the city.

In order to determine the performance of the nation's largest cities, 24/7 Wall St. reviewed the 100 largest U.S. cities by population. We considered a variety of factors, including the area's economy, job market, crime level, and welfare of the population. This year, the best-run city is Irvine, California, while the worst run is San Bernardino, California.

Identifying appropriate criteria to compare cities can be challenging because large cities vary so much. Some have wealthy tax bases, while others fight declining populations and home values. A few have been burdened by struggling industries, while others have healthier service- or innovation-based economies. Because of such differences, a spending or tax policy that can be frugal in one city can be disastrous in another.

Many of the cities that rank poorly have faced difficulties outside of their control. In San Bernardino, Stockton, North Las Vegas, and Hialeah — all bottom-ranked cities — homes lost more than 40% of their value in the past five years, inflicting a severe economic hit.

Cleveland, another poorly ranked city, has suffered from the national decline in the manufacturing industry. Like Detroit, the cities' poverty rates are more than double the national rate.

Still, some of those factors can be at least mitigated if a city is well-managed. It is the responsibility of city planners to prepare for the worst. Mayors, school boards, and city councils all have a role to play in that regard and must work with the resources available to keep budgets balanced.

In some cases, this means facilitating growth of emerging industries that attract skilled, educated, and well-paid taxpayers to a region. Seattle, Austin, and Scottsdale, all among the best-ranked cities, have managed to do this well.

Strong or weak fiscal management also has an impact on city ranking. Looking at a city's debt rating as an indicator of fiscal management shows a clear pattern. The debt of the majority of the best-run cities is rated Aaa by Moody's Investors Service. None of the worst-run cities received that perfect score. And some, such as Detroit, Stockton, and North Las Vegas, are rated below investment grade.

> THE BEST-RUN CITIES IN AMERICA

1. Irvine, California

> Population: 230,000 (86th largest
> Credit rating: not rated
> Violent crime per 100,000: 51 (the lowest)
> 2012 Unemployment rate: 5.7% (tied-10th lowest)

Irvine has a very well-educated population. Last year, 97% of Irvine adults had at least a high school diploma, and more than two-thirds had at least a bachelor's degree. The city is home of the University of California, Irvine, which is the top local employer. The heavy concentration of well-educated adults has also led to higher incomes. Irvine's median household income was around $96,000 last year, exceeding that of nearly every other large city. The typical Irvine home cost about $630,400 last year, more than any other large U.S. city except San Francisco. The city was also one of the safest in the nation, with only 51 violent crimes per 100,000 people.

2. Fremont, California

> Population: 222,000 (91st largest)
> Credit rating: not rated
> Violent crime per 100,000: 140 (3rd lowest)
> 2012 Unemployment rate: 6.5% (24th lowest)

Fremont was the wealthiest large U.S. city last year. It not only had the highest median income, but also the lowest poverty rate. A typical Fremont household earned more than $100,000 in 2012, or nearly double the national income that year. Meanwhile, the poverty rate of 6.7% was less than half the national rate. Home values in the city didn't escape the housing crisis unscathed, falling by nearly 12% between 2008 and 2012. Last year, however, a typical Fremont home was valued at $582,100, still more expensive than those in the vast majority of large cities. Sharing the San Francisco Bay area with Silicon Valley, Fremont is a hub for tech manufacturing — 17.5% of workers in the city are employed in manufacturing, one of the highest percentages in the nation.

3. Plano, Texas

> Population: 271,000 (65th largest)
> Credit rating: Aaa
> Violent crime per 100,000: 131 (2nd lowest)
> 2012 Unemployment rate: 6.0% (tied-13th lowest)

More than half of Plano's adult population had at least a bachelor's degree last year, one of the best rates in the nation. Plano's close proximity to Dallas, combined with efficient public transportation, offers residents easy access to jobs in the larger city. More than 12% of Plano workers were employed in the finance industry last year, roughly double the percentage nationwide, and more than nearly all other large cities. Employment in this traditionally high-paying sector could partially explain the relatively wealthy population in Plano. In 2012, the median household income in Plano was $81,475, more than $30,000 higher than the national median. The city is also a safe place to live. There were just 131 violent crimes per 100,000 residents last year, one of the best rates among major cities. Plano's housing market also remained strong, with just one out of every 255 homes in foreclosure in 2012, better than the vast majority of large cities.

4. Lincoln, Nebraska

> Population: 265,000 (67th largest)
> Credit rating: Aaa, stable
> Violent crime per 100,000: 397 (19th lowest)
> 2012 Unemployment rate: 3.4% (the lowest)

By many measures, Lincoln's economy has emerged from last decade's recession relatively unscathed. The city's unemployment rate was just 3.4% in 2012, the lowest among the nation's 100 largest cities. Between 2008 and 2012, home values remained flat in Lincoln even as they fell nearly 13% nationwide. And more homeowners have been able to afford their mortgage payments. In 2012, just one out of every 811 housing units was in foreclosure, one of the lowest rates among all large U.S. cities. Lincoln is home to the University of Nebraska-Lincoln, which is one of the city's largest employers. As the capital of Nebraska, many jobs in Lincoln are in the public sector.

5. Virginia Beach, Virginia

> Population: 447,000 (37th largest)
> Credit rating: Aaa, stable
> Violent crime per 100,000: 169 (6th lowest)
> 2012 Unemployment rate: 5.6% (9th lowest)

Virginia Beach's economy did not have particularly strong growth in 2012, expanding by just 1.9% that year, compared to the 2.5% national growth rate. Still, by most measures, the city had a healthy economy. The unemployment rate was just 5.6% in 2012, compared to a national rate of 8.1%. Median household income in the city was more than $10,000 higher than the national figure of $51,371, and just 8.8% of residents were living in poverty, tied for the third-lowest percentage among the 100 largest U.S. cities. The city was also one of the safest in the country, with a violent crime rate of less than half the national rate.

> THE WORST-RUN CITIES IN AMERICA

1. San Bernardino, California

> Population: 213,298 (9th smallest)
> Credit rating: not rated
> Violent crime per 100,000: 941 (26th highest)
> 2012 Unemployment rate: 16.0% (3rd highest)

In the summer of 2012, San Bernardino filed for bankruptcy in the face of a $46 million deficit. The filing came in the wake of falling tax revenues, poor financial planning, including inaccurate reporting from city officials, and a housing market in crisis. Last year, home values were about half what they were in 2008. Nationally, home values fell by nearly 13%. San Bernardino — population 213,298 — was at the time the second-largest city to file for bankruptcy, behind Stockton. City residents have not been faring much better than the city itself. Median household income was $37,244 in 2012, well below the typical income across the country. Further, San Bernardino's average unemployment rate was 16% last year, nearly double the national rate of 8.1%. Less than 11% of adults living in San Bernardino had a bachelor's degree or higher last year, the smallest percentage of any large U.S. city.

In assessing the best- and worst-run cities, 24/7 Wall St. reviewed data from a number of sources for the 100 largest cities in the country, as measured by population figures from the U.S. Census Bureau's 2012 American Community Survey. We relied on the U.S. Census Bureau's American Community Survey for income and poverty data, as well as graduation rates, health insurance coverage, and the change in home values between 2008 and 2012. Unemployment rates are from the Bureau of Labor Statistics and are 2012 averages. Moody's Investors Services provided the general obligation debt ratings as of December 23, 2013. Violent crime rates were obtained from the FBI's Uniform Crime Report for 2012. Gross metropolitan product data for 2012 were obtained from the U.S. Conference of Mayors' report U.S. Metro Economies. Foreclosure rates for the fourth quarter of 2012 were provided by RealtyTrac. Once we reviewed the sources and compiled the final metrics, we ranked each city based on its performance in all the categories. A few cities did not have credit ratings, foreclosure rates, violent crime rates; they were neither rewarded nor penalized for the missing data. All ranks, unless otherwise specified, are for the 100 largest cities. All data, unless otherwise specified, are for the full year 2012. All data represents the city as designated by the census. The exceptions are the Gross Metropolitan Product, which reflects the GMP of the metropolitan statistical area in which the city is located, and foreclosure rates, which are areas designated by RealtyTrac.

2. Detroit, Michigan

> Population: 701,524 (18th largest)
> Credit rating: Caa3, negative
> Violent crime per 100,000: 2,123 (the highest)
> 2012 Unemployment rate: 18.6% (the highest)

In July, Detroit became the largest city in American history to file for bankruptcy. The city has had to cope with high debt, a declining population, and extremely poor management — former Mayor Kwame Kilpatrick is currently in prison for corruption. The city faces a long road to recovery — even now its bankruptcy is being disputed in court by its pension plans. Detroit may have to resort to selling valuable pieces of art from its collection. Residents are struggling as well. The city's 18.6% unemployment rate was the highest among large cities in 2012, and its median household income was less than $24,000, the lowest of any large city. More than 30% of housing units were vacant last year, far more than any comparable city.

3. Newark, New Jersey

> Population: 227,718 (38th smallest)
> Credit rating: A3, negative
> Violent crime per 100,000: 1,155 (18th highest)
> 2012 Unemployment rate: 15.0% (4th highest)

After spending years working to revitalize Newark as mayor, Cory Booker was elected New Jersey's newest senator. Booker's legacy, however, remains mixed, with some unconvinced he has produced real improvements or long-lasting changes. The city still faces massive challenges: As of 2012, barely two-thirds of adults 25 and older had a high school diploma; 15% of the workforce was unemployed; and the city's violent crime rate was nearly three times the national rate. The city's school district has worked to improve the quality of education. Last year, it moved to base compensation on performance, and it recently announced broad restructuring plans, according to The Newark Star-Ledger. However, the city's financial management is still lacking. Moody's has criticized Newark officials for not filing budgets and audits in timely manner, and points to the city's use of financing to cover cash shortages.

4. Miami, Florida

> Population: 413,864 (42nd largest)
> Credit rating: A2, negative
> Violent crime per 100,000: 1,172 (15th highest)
> 2012 Unemployment rate: 10.3% (24th highest)

Miami's credit is rated A2 with a negative outlook, one of the worst among large cities. Roughly one in 10 jobs in Miami is construction related, more than the vast majority of the largest U.S. cities. Miami's poverty rate of 31% last year was roughly double the national rate. Job growth in Florida's construction industry has improved somewhat recently, but the sector has a long way to go after it was slammed by the housing crisis. Between 2008 and 2012, Miami home values fell by nearly 40%, one of the worst drops among major U.S. cities. Last year, one in every 19 homes in the area were in foreclosure, worse than all but one other large city. On the other hand, Miami has recently been experiencing a boom in condo construction.

5. Stockton, California

> Population: 298,000 (59th largest)
> Credit rating: Ca, developing
> Violent crime per 100,000: 1,548 (5th highest)
> 2012 Unemployment rate: 18.3% (2nd highest)

The housing downturn, as well as years of poor fiscal management by city officials, led Stockton to file for bankruptcy in 2012. Even as it is preparing to exit bankruptcy, pension obligations still loom over the city's finances. Stockton's debt currently carries a Ca credit rating from Moody's, lower than that of any other major city. The local economy struggles as well. Stockton's average unemployment rate of 18.3% in 2012 trailed only Detroit among large cities. Also, one in every 40 homes was in foreclosure in the fourth quarter of this year, again one of the highest rates among large cities. Crime remains a major issue, with 1,548 violent crimes per 100,000 people last year, worse than all but a handful of major cities.

24/7 Wall St. is a USA TODAY content partner offering financial news and commentary. Its content is produced independently of USA TODAY.