The City of El Cerrito has released its FY 2025 budget document, providing a detailed look at the fiscal year 2024 financial data. A quick glance reveals a concerning trend: the city’s spending continues to outpace its revenue, leading to significant deficits. Notably absent from the budget is any mention of how the city plans to address its substantial $85 million pension liability.
The data presents a stark picture of fiscal mismanagement. The General Fund Budget has seen an 88% increase from 2015 to 2024, rising from $29,252,065 to $54,992,117. This equates to an annualized increase of 7.3%. In comparison, the Consumer Price Index (CPI) for the same period increased by only 39.7%, with an annualized increase of 3.4%.
To put this into perspective, if the 2015 General Fund Budget had only grown by the CPI’s 39.7%, the 2024 budget would be $40,865,135. However, the actual 2024 General Fund Budget stands at $54,992,117, significantly higher than what could be justified by inflation alone.
A deeper dive into specific expenditures reveals an even more troubling trend. The budget for Professional Services has ballooned from $2,446,700 in 2015 to $7,375,364 in 2024, marking a 115.8% increase and an annualized increase of 8.9%. If the Professional Services budget had only grown by the CPI’s 39.7%, it would be $3,418,040 in 2024, less than half of the actual figure.
This unchecked growth in spending has resulted in a substantial deficit. For FY 2024, the General Fund Revenues are projected at $48,682,963, while expenditures are expected to be $54,992,117, resulting in a deficit of $6,309,154. The citywide financial picture is equally bleak, with revenues of $76,510,997 and expenditures of $89,300,458, leading to an equally concerning trend of deficit spending.
Looking at specific FY25 department budgets, the Fire Department budget has increased by 82.3% since 2014, reaching $14,873,622. The Community Development budget has skyrocketed by 228%, and the Police Department budget has seen a 31.6% increase, now at $3,279,542. Alarmingly, this increase in the police budget has coincided with a rise in crime during the same period.
Despite these increases, there is no clear solution for the city’s continued reliance on General Fund reserves to balance the budget. The FY 2025 projections indicate slight improvements, but the fundamental issues remain unresolved. The General Fund projections for FY 2025 estimate revenues at $51,518,444 and expenses at $51,484,492. While this suggests a balanced budget, it does not address the accumulated deficits or the looming pension liabilities.
The explosive growth in spending, particularly in Professional Services and specific department budgets, raises serious questions about fiscal responsibility and sustainability. Without a clear plan to manage the pension liability and control spending, El Cerrito faces an uncertain financial future.
This financial mismanagement is attributed to the City Manager and City Council, whose delayed response to the state auditors’ recommendations and residents’ pleas for engagement and cost containment has exacerbated the city’s fiscal woes. Despite a budget season marked by significantly increased public engagement and thoughtful deliberation, the City Manager and Council waited over three years to begin addressing these critical issues.
Their reluctance to act swiftly has contributed to the unsustainable growth in expenditures and reliance on General Fund reserves, further jeopardizing El Cerrito’s financial stability.
For more detailed information, the budget document can be accessed here.
This analysis underscores the need for comprehensive fiscal reform in El Cerrito to ensure long-term financial stability. Addressing the root causes of the spending increases and implementing stringent budget controls will be crucial steps in this process.
The Next City Council meeting is Tuesday, June 4th. Please attend or share your thoughts remotely.
Note: This blog post draws heavily on insights conducted by a concerned citizen. Any errors and omissions are ours.
El Cerrito Committee for Responsible Government (ECCRG) 
Another weird and concerning thing about this trend is that there isn’t even an increase in city services to go along with this rapid rise in services, more accurate that services have been reduced at the same time that expenditures have soared. We have fewer police officers and no bike patrol on the greenway. No senior center. Recycling Center no longer accepts most materials. No passport service at city hall. No city funding for July 4th festival, which now relies on donations. None of the free summertime kids activities that we used to have, like the “girls sports day” or the “play in the streets day”. No longer have a city staff person assigned to economic development. Just what are we even getting for this huge increase in spending?
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Unfortunately, the city has Bern in denial for a long time. However, more citizen engagement has been instrumental in getting their attention
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you think that citizen engagement has gotten their attention? I see very little citizen engagement and no sign at all that city “leaders” have become attentive to concerns about mismanagement, overspending, poor services.
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There has been considerable attention at the BOD and FAB. FAB isn’t recorded and the city could characterize it any way they wanted. This meant they could say FAB agreed with their proposals whether or not FAB was presented with the proposal before they moved it forward.
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