Today the State Auditor released their annual list of cities at high risk of financial difficulties. This list is based on FY 18/19 figures which was a better year for many municipalities. However, El Cerrito dropped from #7 to #6 largely based on lack of reserves (El Cerrito not only has no reserve but owes an 8.5 million dollar loan due at the end of the fiscal year.
At the meeting on November 17, 2020, the City Council again DID NOTHING!!! Okay, Councilperson Fadelli did say that he hoped the restructuring of the police saved money. City Council did direct the City Manager to come back with more information on what Rec programs are no longer supporting themselves and what cuts are suggested. However, they did not pin the timing of that recommendation down. Both Councilpersons Fadelli and Pardue-Okimoto did say that they believed it should be ASAP and the Mayor stated the cuts should be done before the third quarter as the city manager had suggested in the recommendations with the fiscal report.
Councilperson Rochelle Pardue-Okimoto brought up the issue of the projections for sales tax and why the estimate was what it was. (see this blog post for issues with projections) She asked to compare the current sales tax with the beginning of the shut down in March. The Finance Director gave another hard to understand answer (2:49 in the video). He did say that El Cerrito gets some sales tax revenue as part of a county pool for taxes paid for online purchases which has mitigated some of the other sales tax revenue decreases. The Finance Director insists his figures are good. He also said that Honda of El Cerrito sales tax is down 49%. That is a huge financial loss of revenue for the city.
Councilperson Pardue-Okimoto also asked about Franchise Taxes. The Finance Director said it is the lowest in 4 years but he still wants to watch it until the end of the year. Because why act now! (okay I added that last part). She also questioned the business tax numbers and reflected on how that might affect sales taxes.
Councilperson Fadelli did ask about when actions would be taken. The City Manager then said any reductions would be staff reductions and thusly service reductions. She said that they have been in negotiations with unions which is necessary for staff layoffs or salary cuts. She also said she wanted to wait until the end of December. Both to have more information on city finances and because she did not want to do layoffs before the holidays. Councilperson Fadelli also asked about staff revenue projections (Thank you!) and brought up the issues raised in our last blog post. The City Manager was very dismissive of those numbers and stated no one knows how people are doing projections. I would like to very clearly state that those numbers were BASED ON ACTUAL NUMBERS for the first 4 months of the year rather than the Finance Director’s fantasies. I hope that next meeting the council members push further and specifically ask “Why are the payroll numbers being projected for the rest of the fiscal year at 200k a month less than what the actual costs have been for the first 4 months of the year.” If you send a comment to the council or a council member please ask that question. If you get an answer forward it to me at firstname.lastname@example.org.
The Finance Director dug in on his projections and the council seems unwilling or unable to really challenge him. Councilperson Pardue-Okimoto did say that his idea that things would be better in 3-6 months may not be realistic due to many reasons. (Remember she is a nurse). The vaccine could take a long time for distribution, many people will not get the vaccine, and many people have made lifestyle changes such as a parent leaving work to take care of children that means they will need recreation services less.
Everyone needs to be warned because of the slowness of staff and council to respond (was I the only one who predicted a Rec financial issue at the beginning of COVID?) the next round of cuts is going to hurt. Popular recreation programs will be cut. Beloved staff will be laid off. This is going to be painful. People are going to suffer from either losing their job or losing a needed services. And also know that if we had run a more economically efficient city and had an actual reserve this would not have been as bad as it is going to be. If staff and council had taken it seriously when the auditor first brought up that the city might not be able to continue as a going concern this would not have been so bad. No one could have predicted a pandemic but we could have had reserves.
The City Council and staff and the community are also going to have to recognize that Public Safety (Fire and Police) are over half the budget and that if we are going to dig out of this some cuts need to happen there. The county grand jury reported on police staffing in the county this year and found that El Cerrito had the second-highest ratio of police officers per 1,000 residents at 1.8 with (San Pablo was #1). The state average is 1.48 and the county average is 1.09.
Our Fire Department had 4 Battalion Chiefs to Albany’s 0 and is known to be top-heavy. (At this meeting one Battalion Chief retired-can we replace that position with an firefighter rather than a manager?) Almost no one wants to cut fire services in our city but surely there is a way to level down management and run more efficiently.
Links to articles are below as are the email addresses of our current council members.
Emails of the City Manager and City Council Members
Karen Pinkos-City Manager email@example.com
Greg Lyman-Mayor firstname.lastname@example.org
Paul Fadelli Vice Mayor email@example.com
Councilperson Pardue-Okimoto firstname.lastname@example.org
Councilperson Janet Abelson email@example.com
Councilperson Gabe Quinto firstname.lastname@example.org