On Tuesday, Will Provost, Assistant to the City Manager, and Claire Coleman, the newly appointed Budget/Financial Services Manager, presented the El Cerrito City Council Budget Study. Their presentation highlighted efforts to solicit community feedback and input and conveyed a robust plan for navigating the next two fiscal years.
The city has notably increased public engagement concerning the budget and its processes, providing more information earlier.
However, it seems the City Manager and her team have not adequately addressed public or State Auditor feedback. Particularly, despite repeated requests from El Cerrito residents for a senior center, it was omitted from the discussion. Moreover, community surveys have consistently opposed a permanent $300 tax for a new library, citing concerns about insufficient parking and unexplained costs in the proposed plan. Despite these concerns and the upcoming November ballot that necessitates prompt decision-making, the library issue was not covered in the presentation. The city has already invested significantly in unsuccessful library initiatives and costly consultations for a few meetings.
The financial segment of the presentation characterized the escalating costs as predominantly beyond control, citing insurance and interest rates as key factors. However, it overlooked substantial controllable expenses like labor and pensions, which are major fiscal challenges. The situation is further complicated by upcoming labor contract renewals, particularly since the city has already approved salary hikes for firefighters that surpass the planned budget. Should these increases be granted to other municipal workers, El Cerrito may encounter significant financial difficulties, with expenditures potentially exceeding revenue growth.
The cost containment strategies suggested were limited to one-time cost reductions, which lack sustainability. However, the State Auditor’s findings highlight the necessity for substantial reforms in El Cerrito’s financial management which include reductions in ongoing expenses to ensure long-term fiscal stability and restore public trust. Furthermore, the city’s organizational structure, which includes an Assistant City Manager and four battalion chiefs for a population of 25,000, may suggest overstaffing. A thorough analysis of staff size and composition could identify inefficiencies and potential cost savings.
To counter these rising costs discussed in the presentation, the city management projects a 10% increase in Real Property Transfer Tax (RPTT) and a 15% rise in sales tax revenue.
The presentation also omitted the topic of Real Property Transfer Tax revenue for services promised in 2018, amid a social media campaign claiming credit for these services. The El Cerrito Committee for Responsible Government is calling for evidence that the increased revenue has enhanced service levels instead of merely compensating for overspending.
Furthermore, the presentation disclosed that unrestricted reserves are projected to dip below 10%. Notably, El Cerrito’s reserves currently stand at $6.4 million, representing 13.3% of the budget, indicating the city’s intention to use general fund reserves to balance the FY25 budget. It’s important to remember from the midyear report that after addressing a $5.4 million overspend for FY24, only $6.4 million remains as unrestricted reserves, which is below the $8 million minimum recommended by the Government Finance Officers Association.
Residents have also criticized the City Manager’s use of city funds for networking trips and meals, highlighting a conflict of interest with the Assistant City Manager approving these expenses.
Buried in the extensive 511-page agenda packet for the meeting, essential information remains hard to access, with hundreds of pages of superfluous details obscuring important content.
In conclusion, while the City Manager and staff claim a strong financial standing, the reality presents a worrying picture of inadequate reserves, habitual overspending, and poor planning for future liabilities, challenging the sustainability of El Cerrito’s fiscal policies.
El Cerrito Committee for Responsible Government (ECCRG) 