Overtaxed and Underperforming

El Cerrito recently distributed a mailer seeking support for an upcoming tax increase proposal while emphasizing the importance of accountability and transparency. However, examining the City Manager’s track record in these areas is crucial before embracing the rhetoric.

One concerning instance is the city’s expenditure of half a million dollars to settle a sexual harassment lawsuit, with the City Manager and Council remaining conspicuously silent. Additionally, no discernible policies or procedures were put in place to prevent a recurrence of such incidents.

Despite being home to a thriving senior population, with the Senior Center being a central hub, El Cerrito’s City Council made the baffling decision to slash the Recreation (Senior Center) budget by a staggering $263,743 (a 37% reduction) between FY2020 and FY2024, ultimately leading to the Senior Center’s closure.

El Cerrito introduced a transfer tax, Measure V, to fund the library at the station. Yet, none of the $18+ million collected under Measure V has been allocated for this purpose. Instead, these funds were misappropriated to cover irresponsible fiscal management.  There’s no reason to trust that any new tax measure will be handled differently than Measure V.

A critical issue raised in 2022 regarding the Real Property Transfer Tax remains unaddressed, with concerns about a potential budget shortfall. El Cerrito has taken no action to mitigate this risk.  EECRG brought up the issue then the then Vice-Chair of the Financial Advisory Board (FAB), wrote a lengthy comment about his concerns about the Real Estate Transfer Tax that was submitted as a public comment.. (pgs. 10-14). His projected scenarios are 1 million less in income than the El Cerrito scenario. 

Several significant financial decisions were made without proper scrutiny. For instance, the City Manager failed to present the City Council with a $450 monthly car allowance (the city has vehicles available for business use)  and a $1.1 million budget adjustment for Trucks to FAB for consideration. These actions have resulted in a perilously depleted level of non-restricted reserves, with further spending commitments amid declining Real Estate transfer tax receipts.

Despite the fiscal year ending on June 30, 2023, the City Council agenda did not mention the year-end close in July, August, September, but finally in October, violating established standards of financial reporting timeliness recommended by the GFOA.

Furthermore, El Cerrito falls short of the GFOA’s recommendation for a minimum of two months of unrestricted general fund reserves due to a depleted General Fund Balance. The GFOA recommends a minimum of two months of unrestricted general fund reserves. The City General Fund Budget is shy of $60 million; therefore, the General Fund Balance recommended amount is shy of $10 million, yet the City Manager and City Council have depleted reserves to half of the recommended level of unrestricted funds.  The lack of unrestricted reserves jeopardizes the city’s financial stability.

The state auditor’s evaluation ranked El Cerrito as the 13th worst-run city in California, with a particularly dire outlook on future retirement funding. El Cerrito has made no meaningful progress in addressing pension funding issues over the past three years.

The pension crisis in El Cerrito is especially concerning, with an $85 million Unfunded Liability, which increased from $70 million. The city’s lack of a clear plan to address this issue is alarming. As Greta Thunberg told the world…” it is time to panic.” And plan. And act.

Additionally, the City Manager’s frequent trips under the guise of official business raise questions about her commitment to addressing the concerns of El Cerrito’s residents. City officials must prioritize transparency, accountability, and the community’s well-being over personal interests and wasteful spending. She could accomplish this goal by spending more time with the public than she spends on the road.

A City of 25,000 people should not incur credit card expenditures at this rate.  Credit card expenditures continue to demonstrate that the City lacks financial or operational oversight and is unable to self-govern.

The City Manager’s claims of accountability and transparency ring hollow in the face of her leadership record. As El Cerrito considers a ballot measure to increase taxes, the city must undertake substantial reforms to ensure greater accountability to its taxpayers before seeking another financial bailout.

Here’s how you can help:

1. Share this post with other residents.
2. Attend the monthly Financial Advisory Board meetings in person.
3. Council meetings are both remote and in-person. The City Council meeting will be on tonight. The schedule is here.
4. Share your voice with the Council Members, the Mayor and the City Manager.
   • Karen Pinkos-City Manager kpinkos@ci.el-cerrito.ca.us
   • Councilperson Gabe Quinto gquinto@ci.el-cerrito.ca.us
   • Councilperson Carolyn Wysinger cywysinger@ci.el-cerrito.ca.us
   • Councilperson Tessa Rudnick trudnick@ci.el-cerrito.ca.us
   • Mayor Lisa Motoyama lmotoyama@ci.el-cerrito.ca.us
   • Councilperson Paul Fadelli pfadelli@ci.el-cerrito.ca.us

If you have ideas for a quick fix or hope for another gift from above, you are dreaming. If you want to discuss shifting blame, making excuses or justifying mismanagement, please start a separate Next Door thread.