How long will the City Council let the City Manager and Finance Director mismanage El Cerrito?

At the May 25, 2021 Financial Advisory Board Meeting the ineptitude of the Finance Director reached new lows. 

  1. Last month FAB recommended that the budget not consider the ARPA (American Rescue Plan Act) funds and establish a one million dollar surplus without it.  The Finance Director presented a five year budget using the 2.4 million to create the surplus.
    The Finance Director specifically indicated the ARPA funds would not be included in the calculation for this year’s surplus, however, you can see above the budget with the $2.4 million bailout money.  You can see the full 5 year forecast here. In the cash flow document he does not show the bailout money but he also does not show the TRAN payment. The way he presents the data is deceptive and confusing.
     
  2. At the May 8th Budget meeting, Mayor Fadelli asked that the staff come back with $1 million in cuts. Per the Finance Director, at this meeting, in the next SIX months Management Partners is going to come up with a list of cuts. Management Partners has been under contract with the city since June 2020. Why will it take them that long to develop a list? Their current contract ends before September so why are they producing deliverables afterwards? The scope of their agreement not only included the deliverables, but included the duration. Either way, the Finance Director and City Manager are responsible for the performance of the Contractor.
  1. Another year has gone by and the Finance Director and City Manager have not delivered on promised and required reductions in expenditures.  They are now discussing making the necessary $1 million of cuts a year a year from now in FY 22/23. If they do not make that cut the reserve will immediately drop to 8.8%.
  1. The City is also ignoring the requirement for an additional emergency disaster reserve fund (EDRP) of $6 million which was supposed to be funded at 1 million a year for 6 years. This is something FAB pushed hard for a few years ago. And like many financial policies it has been ignored. 
  1. One of the members asked about how cuts happen. The chair said the Council would direct the City Manager to work with the Departments and identify cuts.  Council is supposed to take the list and make a decision. But we are now in a situation where the Mayor requested this happen and it is not happening. So is that not an issue with the City Manager’s job performance? What happens at your job when the boss requests something and does not receive it?
  1. Once again the Finance Director was not able to give a coherent explanation of the TRAN costs. If we borrow 8.5 million and pay back 8.75 it seems pretty clear our costs are $250k. 

Both the Finance Director and the City Manager are blatantly ignoring direction from the City Council. We can argue that the City Council needs to give super specific instructions with specific direction and deadlines. 

What we are seeing is that the City Manager won’t make cuts, the Council won’t make the cuts, and Management Partners will come back in 6 months with the same cuts they provided last year and suggest them again. And in the meantime more time passes with no cuts. And the Finance Director is saying “we run a tight ship”.  “We are turning the corner.”

We must ask the City Council what their standard is for financial stewardship for El Cerrito and how long they are willing to wait for said monetary/fiscal stewardship?

How long will The Council allow the City Manager and Finance Director mismanage the city? I get they have been trying to be supportive but the insubordination and incompetence cannot be ignored anymore. It was 2018 when the independent auditor first brought up this financial crisis and barely anything has been done as El Cerrito is climbing up the list of cities on the verge of bankruptcy.

The buck needs to stop somewhere and it stops at the City Council.

The next meeting is Tuesday June 1, 2021. Please call or write in with public comment and let The City Council know what you think of the job performance of the City Manager and Finance Director. The link to the meeting will be found here.

2 thoughts on “How long will the City Council let the City Manager and Finance Director mismanage El Cerrito?

  1. I was struck by some additional/different points.
    (1) The Finance Director making excuses for how they are scrambling to get the budget book together in time for the June 1 Council meeting. Excuse me? How can this have been left to the last minute? Are they aware that the city is in an ongoing fiscal crisis, resolution of which being literally an existential issue for the city?
    (2) Management Partners to deliver suggested budget reductions. Now, I’d understand hiring an outside expert to help the city restructure its operations, apply innovative management and contracting methods, change the culture of city operations. That’s hard stuff to do to yourself. But identifying budget cuts? That’s a basic function of organizational management and reflection of priorities. That’s just not something that you farm out to a consultant, and it’s certainly not something that minimally competent management *needs* to farm out.

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    1. I agree that it is ridiculous that he is claiming to be scrambling to get the budget together. As I have written before this budget should have been started in February so there would have been time and a process. And I would be shocked if Management Partners came up with anything different than before. So why we continue to throw money at them I do not know.

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