In the realm of public finance, the goalposts seem to shift whenever it suits those in power. In El Cerrito, we’ve seen this play out with how the city measures the health of its General Fund reserves. When the City meets the Government Finance Officers Association (GFOA) guidelines, it’s cause for celebration. But when the numbers don’t add up, new, less robust guidelines are quickly adopted. This practice of “moving the goal line” raises serious concerns about transparency and accountability in city management.
The GFOA Guidelines: A Moving Target
Let’s start with the GFOA guidelines, which recommend that municipalities maintain a General Fund unrestricted reserve of at least 17% of their annual expenditures. This standard is designed to ensure that cities have enough of a financial cushion to weather economic downturns or unexpected expenses.
On June 20, 2023, city management proudly announced that, “as a result of these significant strategies, coupled with a robust real estate market and funding from the Federal Government, the City continues to maintain a positive General Fund balance that well exceeds the Government Finance Officers Association (GFOA) recommended standard of 17% of General Fund expenditures.”
But as the real estate market cooled and federal assistance was used to balance the budget rather than to invest in the community, the city found itself falling short of the GFOA’s 17% guideline. Now, the city management is claiming victory by a different measure: “As a result of these significant strategies, the City continues to maintain a positive General Fund balance well above the City’s 10% reserve level policy.”
The problem is clear. When the city can’t meet the GFOA’s 17% guideline, it simply lowers the bar to 10%, declaring success based on its own, more lenient standard. This isn’t just moving the goal line; it’s redefining the game to guarantee a win.
The Ongoing Financial Strain
This pattern of behavior is especially troubling given the city’s current financial situation. According to city management, the total budget for FY 2025 tells a story of continued financial strain.
On June 18, 2024, the city revealed that “with all funds combined, the Proposed FY 2024-25 Budget recommends total expenditures of $71,613,889 and provides funding for all City services, including Police, Fire, Recreation, Community Development, Public Works, and City Management. At this time, total revenues are projected to be $68,057,453. These funds will continue to be monitored and updated as the lingering impacts of inflation, rising interest rates, and uncertain economic conditions continue.”
In other words, the city is once again planning to spend more than it takes in. While the General Fund budget for FY 2024-25 projects a small surplus of $33,952, this is a drop in the bucket compared to the overall budget gap. And yet, the city is already hinting that deficits are likely to continue.
The Implications of Moving the Goal Line
So, what does this all mean for the residents of El Cerrito? By continually adjusting the benchmarks for financial success, city management obscures the true state of the city’s finances. This lack of transparency prevents meaningful public discourse about the city’s fiscal health and hinders accountability.
Moreover, by lowering the reserve target, the city is taking on greater financial risk. A 10% reserve might be enough to get by in the short term, but it leaves the city vulnerable to future economic shocks. And as the city’s financial challenges persist, the temptation to move the goal line even further will only grow.
Call to Action
It’s time to hold our city leaders accountable. We need to demand that El Cerrito adhere to the established GFOA guidelines and resist the urge to move the goal line whenever it’s convenient. Transparency and accountability are non-negotiable if we want to secure a stable financial future for our community. Let your voice be heard—attend city council meetings, ask tough questions, and advocate for responsible financial management. Our city deserves leadership that plays by the rules, not one that changes them when it suits their agenda.
Let’s work together to ensure that the goal line stays where it belongs.
El Cerrito Committee for Responsible Government (ECCRG) 