MORE TAXPAYER MONEY, PLEASE

The last blog focused on the unbalanced budget and the eminent use of general fund reserves to balance the budget.

This episode spotlights on MORE TAXPAYER MONEY, PLEASE.

When finding a solution to the operating crisis facing El Cerrito, the only plan coming from City leaders is more taxes. That’s not a plan, but unlimited overdraft protection for a City that can’t live within its means.

The City Manager often speaks about accountability, fiscal responsibility, and transparency. These are hollow words, duplicity, and empty talk. The City has done little to address the budget problems. El Cerrito remains the 13th most troubled among over 400 cities in California and currently running unreported deficits of over $1.5 million.

El Cerrito City Management continues to place all the blame for its fiscal problems squarely on the disruption caused by the Pandemic, forgetting that the agency consistently operated with annual deficits before the Pandemic struck. COVID simply accelerated the process and amplified existing problems.

The $13.7 million in Real Property tax and $6 million federal gift from taxpayers that filled El Cerrito’s operating deficits for the last three years and funded the general fund balance may be exhausted soon. The City Manager excludes millions in planned expenditures from every budget only to return after budget adoption to ask for case-by-case permission to spend. The Council may ask a question or two, but ultimately they rubber stamp each request –

Suppose a Councilmember questions her actions. In that case, the  City Manager threatens them regarding service cuts, death spiral, layoffs, and other public relations scare tactics.

Service cuts, bailouts, more taxes and layoffs are the only City’s only options when the City Manager relies heavily on short-term non-sustainable measures like hiring freezes, cutting vacant positions and omitting planned expenses to address the over expenditures.

Those upcoming operating deficits will likely continue and exhaust the general fund balances, and the only solution will be more taxes. The real death spiral is the City Management’s and Council’s insistence on repeating the same failed cost-cutting measures and expecting a different outcome.

The City Manager now takes credit for the general fund balance, but the balance didn’t increase because of the City’s financial expertise.

The general fund balance increase is compliments of $6 million from Uncle Joe Biden and the $13.7 million in Real Property Transfer Tax  – NOT FINANCIAL PROWESS.

Without the bailout and tax initiative, the City would still be on the State’s watch list – one of the ten most financially irresponsible Cities. Without a turnaround in El Cerrito’s finances, the City will likely be on the watch list again.

The City needs long-term, sustainable measures to provide financial security and better service delivery. It may be time to step down or be replaced since current leadership cannot achieve these goals.

El Cerrito residents don’t get lulled into thinking the City cares about a library or senior center – the City has had plenty of time to develop a funding plan but has given residents nothing but empty words and substandard fiscal management. Consequently, the City is subject to usury interest rates –  a rate of interest that is considered to be excessive as compared to prevailing market interest rates. One alternative is additional taxes for El Cerrito.

All of this can be attributed to poor fiscal management by the El Cerrito City Council and Leadership.

Before El Cerrito gets another taxpayer bailout, reforms need to be implemented to make the agency more accountable to taxpayers.

El Cerrito residents, the City needs you. Please attend the monthly Financial Advisory Board meetings in person. Council meetings are both remote and in-person. City leadership is less likely to lie with witnesses present.

The next FAB meeting will be on July 25^th.   The schedule is here.

The City Council meeting with be on August 15^th. The schedule is here.