After passing a budget with no real cuts (except to seniors) in June the City Council will only meet once a month in July, August, and September (as per usual) because there is not hurry when you are on the verge of bankruptcy.
While Albany City Staff are preparing recommendations on how to spend the federal money (ARPA) our city staff continues to prepare budget documents that tell us nothing. Today’s post is going to focus on issues that state auditor brought up. I did a public records request to the state auditors office for the documents supporting their recommendations. Because after the report was released we heard the City Manager and Finance Director say that the auditors were wrong on many things. I wanted to see the source documentation. It is exhausting to continually be gaslighted about these things when the facts support our conclusions.
In no particular order here are issues the State Auditor brought up and the City denied.
- Cost of the TRAN Loans
This one actually made me laugh. Because I have heard the Finance Director deny the costs multiple times. When I got the state audit paperwork they based it on the City’s own accounting system reports. So one could speculate either the Finance Director is being deliberately deceptive or he doesn’t know what is going on. I am attaching the document here. Some parts were redacted by the State.
2. The City is not following The Government Finance Officer Association (GFAO) guidelines
The State Auditor stated that the Government Finance Officers Association (GFOA) provides a framework for “Recommended Budget Practices” . This framework states that “A good budget process is characterized by several essential features including:
· Incorporates a long-term perspective,
· Focuses budget decisions on results and outcomes,
· Involves and promotes effective communication with stakeholders”
They added “The GFOA also recommends that budget documents should contain a financial overview (consisting of financial statements and accompanying narrative, charts, and graphics) which includes comparisons of prior period actual results, current period budget and/or estimated actual results and budget period projected figures. The rationale for this recommendation is that stakeholders need to have the financial plan of the government clearly identified in order to make the best budgetary decisions. (p.65)
Even further, the GFOA explicitly recommends that a government should prepare a summary of both the proposed and final budget as most stakeholders do not want to take the time to read and understand the details of a budget. A concise summary of key issues, choices, and financial trends is therefore needed to inform and direct the reader to the appropriate location for additional information. (p.68)”
Take a look at the budget documents. This is not at all the process or product we are seeing. There is no real 5-year plan. Stakeholders are not only not involved but criticized for speaking up. There are no comparisons to prior years.
Here is a document with more of what the state auditor specifically saw.
In addition, you can look at the prior Finance Director’s report for mid-year 2016 below. While not stellar it does break things down. She left a few months later and Mark Rasiah took the job. 2016/2017 after he took over is when the city started its big downslide. Though in fairness to Mr. Rasiah decisions made back as far as 2008 have affected things.
3. The City’s salaries are high in comparison to other cities.
The State Auditor used Richmond, Alameda, Pinole, Hayward, and Albany. They used these cities in our area and as cities that El Cerrito has also used to create comparisons from (though EC likes to throw in cities like Walnut Creek also).
Below is their analysis and a few of their supplemental documents (there were many-they spent some serious time on this issue). The highest discrepancies were with fire battalion chiefs and some police positions.
“The auditor identified 15 key positions in management and public safety which command high salaries and are commonly found in California cities.
Based on the auditor’s analysis of salary data, the auditor identified that El Cerrito’s firefighters have base salaries that are about 6% higher than the average of our comparison cities, respectively Additionally, the city’s fire engineers have a top salary that is about 2.5% higher than the average of our comparison cities. Based on the auditor’s analysis of salary data, the auditor identified that El Cerrito’s battalion chiefs salaries are approximately 1 to 11 percent higher than the average of similar positions at other agencies. Based on the auditor’s analysis of salary data, the auditor identified that the higher amounts that El Cerrito’s firefighters earn total to about $55,000 annually. We determined that most of El Cerrito’s base salaries are comparable to those of the comparison cities.
The auditor analyzed El Cerrito’s 2020-21 personnel budget and identified eight individuals whose salaries currently exceed the city’s control point before factoring in furlough days that two of those employees have. The auditor estimated that the total annual cost of these salaries is approximately $123,000.”
Here are a few of the supplemental documents that were used to support this conclusion.
Control Points shows which city staff are getting paid above the steps designated.
Comparison Data looks at our salaries compared with the cities named above.
So what do we do? We keep on keeping on. We must keep the pressure on. The City Council has not been able to shift the direction of the City Manager and Finance Director. While the newer Council Members ask many tough questions and even voted against the budget it is not enough. In 2022 there will be an election with two seats up. One incumbent Gabe Quinto is expected to run and one Janet Abelson is not. We need to get both of those seats filled with council members that believe in transparency and addressing the budget. However, if/until we can get our change on the City Council we need to keep the pressure on. I firmly believe that if the public did not uprise about the budget we would be in even worse condition.
Things we want to see
- An ordinance to FORCE the city to have a reasonable reserve and spend it only in specific circumstances. This is something that has received huge resistance from the City Manager. However, the City Council and City Manager cannot be trusted to do this themselves. If they don’t want to do it we will be organizing a citizen-driven petition to do so. With about 2,500 signatures we can force the City Council to either accept the ordinance we will then write or they will have to call a special election. Obviously, we would prefer that City Council would direct the Financial Advisory Board to do this. But if they won’t we will go the petition/special election route. This is too important. It must be done.
- A Five-Year Budget.
- A review of everything we spend and the costs. Everything needs to be looked at even our favorites. The Swim Center, Public Safety, City Recycling (we provide our own trucks rather than outsource like other cities). What can we afford and what can we not afford? What are the trade-offs? What does the public think is most important? This discussion needs to start very soon. Put one topic on the agenda every month and do a deeper dive.
- Address our pension costs. The City’s own reports show this is quickly getting out of control. We may need to look at different formats for pensions moving forwards (we can’t change past contracts). We also need to follow through on funding the 115 plan to start putting aside money for pension costs. We made some preliminary moves on this but it needs to be funded.
- We need to spend the ARPA funds and do it correctly. Look above at what the Albany Staff recommends. We have outdated fire equipment. We are not prepared for an emergency. There are ways to spend that money responsibly rather than just using it to delay making other cuts.