Paul Fadelli Response to Budget Questions

As I wrote in my last post ECCFRG has asked all of the candidates a series of questions in regards to the budget crisis. Paul Fadelli sent in his response today so he is the first post to go up. We did allow each candidate a brief bio space also. The words below are all the candidate’s except for when I repeat the question. Mr. Fadelli has been on the council for 4 years and is currently Mayor Pro-Tem which means if he is re-elected he will be the Mayor. We thank Mayor Pro-Tem Fadelli for taking the time to answer our questions.

Brief Bio

I grew up in West County, going to school in El Cerrito and Richmond, and graduating from Kennedy High. I graduated college from UC Davis and got a Masters of Journalism degree from UCLA.

For more than two decades I worked for progressive Democratic legislators in the state and national capitols on a variety of policy issues. For ten years in Sacramento I was the staff director on the State Senate Committee on Energy & Public Utilities. Moving back to the Bay Area in the nineties, I was the VP at Kearns & West, a collaborative planning firm in San Francisco. Before becoming a City Councilmember in 2016, I worked for 11 years as the Manager of State & Federal Legislation at the San Francisco Bay Area Rapid Transit District (BART).

I am married and have two daughters — one that just graduated from high school, and the other who will be entering UC graduate school in the Fall.

1. What is your analysis of how the city became insolvent and what changes will you make to ensure it does not happen again?

El Cerrito is a small community that has been proud of being a “full service” city for many years. But the City didn’t necessarily respond adequately after the recession of 2008 with service, salary or staffing cuts to stay economically viable over the long term. With few new revenue sources, important reserves were often used and eventually depleted in order to keep services and staff at status quo levels. In addition, in later years, while maintaining positive economic outlooks, the council approved (sometimes unwittingly) expenditures to pay with reserves for:
• costs associated with the abolishment of Redevelopment Agencies in the State;
• costs associated with El Cerrito becoming a Sanctuary City when the county Sheriff, in retaliation, forced the City to seek more costly dispatch service; and
• costs to establish a new temporary Senior Center when the WCCUSD would not renew the lease at the existing site at discounted rate.
Obviously more scrutiny by Council over the past decade could have brought the question of reserves and budget sustainability forward. Over many years, the past city staff leadership had developed a somewhat insular budgetary process that resulted in little scrutiny or review, until new auditors blew the whistle. I have mentioned publicly that it is not only important to have transparency on budget issues for the public, but also better transparency between staff and Council as well. There was a culture of not wanting to give councilmembers bad news.

This Council and a new City Manager have been outspoken in acknowledging the need to structurally change the budget process to grow critical reserves over time. With the additional problems associated with Covid-19, this has resulted in changing from a two-year budget process to a one-year effort where amendments can occur to respond to changing economic circumstances.

2. How will you independently verify staff budget projections and analysis?

Working my whole life for elected officials I have often dealt with budgets – mostly dealing with specific policy programs and whether or not funding amounts were appropriate or adequate with respect to my member or agency’s needs. However, with issues involving El Cerrito’s solvency I have learned electeds, need to be even more detailed in reviewing and approving city budgets. There is much to do as a councilmember. I am not an accountant and will have to still rely on professionals, staff and the public scrutiny for questions and answers. As one of the two newest Councilmembers, I believe we both felt we asked many of the right questions during council meetings (especially about Measure V revenue and the impact on reserves), but often didn’t get a detailed helpful response back at the time.

3. Describe what you understand to be the working relationship between the City Manager and the City Council. Are there any changes you would like to see in the current culture, and if so, how would you go about it?

While City Councilmembers play important roles in their cities (setting policy, voting for budgets and ordinances and ceremonial obligations), it is important to remember that most of the authority by ordinance for production of reports, draft legislation and implementation of policies belongs to the city manager. It is a significant job with many management obligations. In addition, the Brown Act, dramatically limits any discussion among Councilmembers about policy matters and often keeps councilmembers out of the loop as to what’s occurring on certain events and issues. Often Councilmembers will only hear of a problem or another councilmember’s views on a key issue at the actual meeting. It is courtesy, too, for council to notify the City Manager know ahead of time of any issues that might be brought up. So that is to their advantage.
But the separate relationship between a Councilmember and the City Manager is important. Not just in El Cerrito, but in most cities, the City Manager is the conduit through which a Councilmember must go to meet with and discuss issues with staff. A good relationship can lead to more freedom in that direction, or less if not so good. When a Councilmember rotates to being Mayor, there is more to discuss and finalize as usually the mayor gets to prioritize what will be on agendas for Council to consider. But even agendas must be based on status of staff concerns, workloads and progress. Historically too, the city manager is responsible for public safety (fire and police) and hiring and firing all staff. There is not much changing this relationship as it is in ordinance. If a council/city manager sours, councilmembers can publicly criticize staff and management and eventually bring those concerns back to any rehiring process. But this would be a failure of the system.

4. How will you evaluate the city manager’s performance and hold them accountable?

This Council set 3-4 goals for the new City Manager. We will review progress on achieving those goals when the option to renew her contract comes before us in the future.

5. What role do you you think short-term borrowing has in the budget? If there is no role then what is your plan to eliminate it? If there is a role then what do you see as the impact on the city’s bond rating, borrowing costs and our ability to finance other capital projects?

It would be great not to have to have seek and utilize short-term borrowing. It turns out that to pay the bills, El Cerrito has been using this method for some time. The negative budgetary aspect of this tool only became apparent to me and others when our new auditor raised concerns about it. It was necessary to seek another short term loan this year, and probably for one or two more years, until our budget straightens out with recent actions. It is a goal of Council not to have to seek short-term loans in the future. Bond ratings will improve for El Cerrito with that reality.

6. What are the details of your plan for El Cerrito getting out of the financial situation we are in?

Council has set the course for El Cerrito’s finances with a strategy that will eventually begin accruing reserves by 2023 or 2024 depending upon circumstances with the recession and Covid -19. The approach focuses on cuts and a 3-year recovery, so that important services residents like will not be decimated. Council approved over $600k in cuts for FY 19-20 and, for FY20-21, over $4 million has been cut from 10% across-the-board cuts in all departments, negotiated cuts with represented and unrepresented labor groups, no COLAs, a hiring freeze, keeping vacancies open, increasing management contributions to PERS, freeze car allowance payments. The next few years will be tough and lean. Council must still cut $1.5 million or more from programs before October. To me everything is still on the table as we determine what the future economic forecast looks like. I have publicly said I want to permanently get rid of the monthly car allowances. Additional services and management salaries are likewise still on the table. I have raised the concern that we can’t just cut expenditures, but have to also think about building/seeking new revenues:

  1. assisting our permit office to expedite building projects and restart housing development along San Pablo Avenue;
  2. encourage retail and workspace development at BART Plaza TOD development;
  3. determine potential revenue to have fire department charge for EMS calls to El Cerrito and Kensington residents;
  4. conduct regional lobbying to state and federal officials to secure needed local funds;
  5. consider increasing recreational fees for certain programs without reducing accessibility;
  6. consider the possibility of another cannabis dispensary (first one is still not open).

    7. What do you see as the issue behind the over 1 million dollar amount of overtime for the Fire Department? How would you resolve this issue and keep El Cerrito fire safe.

    Out of control fire overtime is an issue we have to resolve. I was hoping the state auditor would have done her review and presented facts and procedure on how to deal going forward. But the audit will not start for some time and, in the meantime I and other councilmembers, have asked for a full report and recommendation from our fire chief and city manager. Overtime when used correctly and prudently can save money when the full costs of hiring and employing personnel is considered. I think in El Cerrito overtime became a systemic way of doing business because certain employees benefitted. With circumstances in El Cerrito changing (new retirees, new PEPRA rules for PERS etc.) it may be advantageous to consider filling the vacant fire slots, which could assist fire efforts and lower overtime costs. But we will have to see what is reported back and what recommendations are made

8. What changes would you make with the police budget?

I am hoping the police budget will be an ongoing issue for some time as we move toward a broader discussion and evolution of changes in how we provide and assure safety for El Cerritans. As with every El Cerrito department, the police budget has been reduced by 10 %. In addition to the elimination of SROs, Council has reviewed other police operations which could result in the reduction of staff during the budget process. Other changes with respect to how we handle 911 calls and mental health calls may not actually help to reduce the budget…but I want to learn from other cities and be open to positive changes that encourage less confrontational incidents wherever we can.

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