El Cerrito’s Financial Stability: Smoke and Mirrors?

The City of El Cerrito recently issued a press release announcing that it has received a Government Finance Officers Association (GFOA) budget award. Yet, a quick search on the GFOA website reveals that El Cerrito is not listed as a recipient. This absence raises a serious question: Is the city misleading residents about its financial standing?

The city has made similar claims about winning the GFOA award in past years, but there’s no official record of this except in 2016 It’s concerning, especially given that El Cerrito has been struggling financially for quite some time. El Cerrito’s fiscal issues have made it a fixture on the California State Auditor’s list of cities most likely to become bankrupt, currently ranked at #13. How does a city on the brink of financial ruin claim to be recognized for sound financial practices?

A History of Financial Distress

El Cerrito was heavily reliant on short-term borrowing through Tax Revenue Anticipation Notes (TRANs) and experienced a drop in its bond rating to BBB- before a slight recovery to BBB. This low rating reflects serious concerns about the city’s fiscal health. On top of that, the city’s unfunded pension liabilities have ballooned to nearly $100 million—almost double the city’s annual operating budget.

Even more troubling is the City’s reluctance to provide transparent financial data. There have been repeated calls for the City to release its unrestricted general fund reserve balance, a metric that gives a true picture of available resources and fiscal health. Instead, City Manager Karen Pinkos only released the general fund balance, which lacks context and doesn’t adequately reflect the City’s financial stability. By withholding this critical information, the City leaves residents in the dark about its true financial condition.

Misleading the Public?

The City’s press release and celebratory social media posts on Instagram and Facebook seem designed to distract from the city’s ongoing financial troubles. The narrative of receiving a prestigious financial award creates a false sense of security, making it appear as if El Cerrito has its finances under control when, in fact, the opposite is true.

Given the city’s troubled financial history, this could be more than just a misunderstanding—it may be part of a larger effort to shape public perception and deflect from real issues. Residents deserve to know whether the city is being honest about its financial awards, and if not, what else might be misleading in its communications.

Why It Matters

Transparency and accountability are not just buzzwords; they’re essential for trust in local government. When a city like El Cerrito repeatedly asks residents to approve tax increases while failing to address the root causes of its financial woes, it’s reasonable to question its credibility. El Cerrito has one of the highest fire department staffing levels in the state for a city its size, and yet, crime rates remain high, and essential services have suffered. Why is there such a disconnect between spending and service outcomes?

Meanwhile, instead of taking decisive action to reduce expenses and rightsize operations, the city celebrates unverified awards and downplays the severity of its financial situation. This pattern of behavior erodes trust and prevents meaningful conversations about real solutions.

Next Steps

It’s time for residents to demand transparency from their city officials. City Manager Karen Pinkos should be asked to provide documentation verifying any GFOA awards the City claims to have received. You can reach her at kpinkos@ci.el-cerrito.ca.us or (510) 215-4300.

Additionally, residents should insist on the release of the unrestricted general fund reserve balance instead of the general fund balance, so they can have an accurate picture of El Cerrito’s financial health. With nearly $100 million in unfunded pension liabilities and ongoing concerns from the State Auditor, we must get the full story.

Let’s not be distracted by press releases that paint a rosy picture when the reality is far more troubling. El Cerrito has been on the State Auditor’s list of cities most likely to go bankrupt for a reason. Until the city starts addressing its core financial issues and providing honest, transparent information, residents have every right to be skeptical.

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