El Cerrito City Manager Newsletter: A Concerned Citizen’s Observations

Posted byeccrgPosted inBudget, City Council Meetings, City Staff, election 2024, FAB Meetings, Financial Crisis, Financial Mismanagement, GFOA, leadership, library, Pension, performance management, Plan, UncategorizedTags:, , ,

The El Cerrito City Manager recently published her monthly newsletter, and as concerned citizens, we believe it’s important to take a closer look at the finance section she provided. For your convenience, here is the El Cerrito September City Manager Newsletter. But before diving into the city’s narrative, some key pieces of information are missing from the newsletter that deserve attention.

El Cerrito’s Credit Rating and Financial Struggles

El Cerrito’s current BBB credit rating is one of the biggest issues not addressed in the newsletter. When the current city manager took office, the city had an A- credit rating. That’s a significant downgrade, and it should concern everyone in the community. A lower credit rating makes it harder and more expensive for the city to borrow money when it needs to fund projects or manage its debt.

Another major red flag is that El Cerrito remains on the State Auditor’s high-risk list, which flags municipalities at risk of fiscal insolvency. El Cerrito has been on this list for 3.5 years, and despite reassurances from city leadership, there’s been no meaningful improvement.

Let’s not forget the elephant in the room: El Cerrito’s CalPERS UAL pension liability. The city currently owes $85 million in unfunded pension liabilities, and this massive debt will continue to grow if not properly addressed.

Financial Reserves: A Closer Look

In the September 17, 2024, council meeting packet, the city’s financial reserves were reported as follows:

  • June 30, 2023: $23,143,081
  • June 30, 2024: $22,957,167

That’s a decrease of $185,914 in reserves over one year. It might not sound like much, but considering the long-term trend of deficit spending and dwindling reserves, it’s a troubling sign.

To make it even simpler: the 2023 number is bigger than the 2024 number. El Cerrito readers, do you agree that our reserves should be growing, not shrinking?

Budget Discrepancies: Predicted vs. Actual Spending

Now, let’s talk about the budget. According to the FY 2024 budget document, the city predicted spending $48,435,585 for the fiscal year. However, the unaudited actual expenditures reported in the council meetings totaled $52,340,189. That’s nearly $4 million more than originally planned.

The question for El Cerrito residents is: Did the city spend more than predicted or less than predicted? The numbers clearly show overspending, yet there seems to be little accountability or explanation for this.

Clarifying the Terminology

It’s also important to understand the financial terms are often used in these discussions. Here are a few key definitions:

  • Reserves: Funds set aside by the city, often used as a financial safety net for emergencies or unexpected costs.
  • Expenditures/Expenses: The total amount of money spent by the city in a fiscal year on various operations, programs, and services.
  • Total General Fund Reserves: The overall amount of money the city has saved in its general fund, which can be used to cover shortfalls or emergencies.
  • Unrestricted General Fund Reserves: A portion of the general fund that is not earmarked for specific purposes and can be used at the city’s discretion for any necessary expenses.

Revenues Are Up, Services Are Down

Here’s another puzzle: In FY 2018, the city had actual revenues of $35,783,921. By FY 2024, the unaudited actual revenues had increased to $52,154,276—an increase of nearly $16 million.

But despite this significant revenue growth, services have been cut. For example, the city still has no senior center. Library hours have been reduced and there are no performance standards for management. Why are services being reduced or stagnant when revenues are increasing?

Join the conversation, attend council meetings, and ask tough questions about the city’s finances. It’s our community, and it’s up to us to make sure our voices are heard.

It’s time for El Cerrito residents to demand more transparency and fiscal accountability from our city leadership. With growing revenues and shrinking services, we deserve clear answers on how our money is being managed. Let’s ensure the city is prioritizing fiscal responsibility and delivering the services our community needs.

Contact Your El Cerrito City Council Members and City Manager

If you have concerns about the city’s financial situation or any other issues, it’s important to reach out directly to your city council members and the city manager. Below are their contact details. Let your voice be heard and ask for the accountability and transparency our community deserves.

El Cerrito City Council Members:

El Cerrito City Manager:

Feel free to reach out to your council members and city manager via email or phone to express your concerns or ask questions about the city’s finances. It’s our community, and it’s up to all of us to stay informed and engage.

#ElCerrito #FinancialResponsibility #CityBudget #TransparencyMatters #FiscalAccountability #ElCerritoCommunity #MunicipalFinance #CivicEngagement #PublicServices #ContactYourCityCouncil

Leave a comment