At the August 27, 2024, Financial Advisory Board (FAB) meeting, an important financial policy recommendation was approved and will be sent to the City Council for consideration. This new policy specifies that the UNRESTRICTED General Fund (GF) reserves should be maintained at a minimum of 17% of the city’s GF expenditures. In comparison, the Emergency Disaster Relief Fund (EDRF) should be kept at no less than 13% of GF expenditures.
For a city like El Cerrito, where GF expenditures hover around $50 million, this policy means that:
• 17% of $50 million amounts to $8.5 million, which should be set aside for unrestricted purposes.
• 13% of $50 million comes to $6.5 million for the restricted EDRF, which cannot be used for other purposes.
The city’s current financial situation raises alarms. As of June 30, 2024, El Cerrito reported that its TOTAL General Fund balance was under $17 million. After subtracting the $9 million dedicated to the EDRF, the unrestricted General Fund balance is estimated to be just $8 million. This figure is already below the $8.5 million threshold recommended by the FAB policy.
However the situation worsened in July 2024. El Cerrito paid nearly $7 million to CalPERS to address its Unfunded Accrued Liability (UAL) debt. Additionally, a bond payment of several hundred thousand dollars was also due. At the same time, the city’s money market account saw a significant reduction of funds, further eroding any available reserves.
It’s evident that El Cerrito’s financial situation is precarious, and the unrestricted reserves may no longer meet the minimum thresholds recommended by the FAB. The city’s current financial management has left residents facing the possibility of a looming financial crisis.
Now more than ever, it’s critical to hold a town hall meeting to discuss these issues openly and transparently. Residents, city leadership, and financial experts need to come together to chart a path forward before the city’s financial health deteriorates even further. How El Cerrito will address its growing debt, shrinking reserves, and future expenditures must be part of this urgent conversation.
We need to prioritize planning for fiscal stability before it’s too late.
Call to Action:
Contact the City of El Cerrito and voice your concerns about the depleted General Fund reserves. Demand accountability and a clear plan for the city’s financial future. Your voice matters!
Contact Information:
• City Manager: Karen Pinkos
Email: kpinkos@ci.el-cerrito.ca.us
Phone: (510) 215-4300
Address: El Cerrito City Hall, 10890 San Pablo Ave, El Cerrito, CA 94530
Hashtags:
El Cerrito Committee for Responsible Government (ECCRG) 