El Cerrito’s Budget Crisis: A Call for Financial Leadership

Many of us remember last year’s budget cycle when Claire Coleman and Will Provost led the outreach and budget presentations. Although their presentations lacked substantial community input, they were both articulate easy to understand and extemporaneous. This year, the City Manager decided to shift the spotlight, offering the Finance Director, Crystal Reams, additional stage time. Maybe it wasn’t such a good idea, particularly since she was on one of her infamous junkets and notably not present.

Tuesday night, Crystal appeared without Claire or Will. She was audibly stumped 1:22 into the video when she couldn’t locate her notes and could not present without them. While we acknowledge that she recently earned her CPA (Certified Public Accountant), it’s essential to recognize that this role is not just about audits or accounting. The position of Finance Director and Treasurer demands comprehensive command over the city’s financial landscape and the ability to speak confidently and fluently about fiscal matters.

ECCRG cautioned from the outset that Crystal might be out of her depth. Her previous role as an Accounting Manager in another municipality, which she held for less than five years, doesn’t seem to have fully prepared her for the complexities of El Cerrito’s financial challenges. Prior to that, she served as a Senior Accountant. This is particularly concerning given that the City once had a highly capable individual in this role. Unfortunately, the City Manager failed to retain them.

Fortunately, El Cerrito still benefits from Claire’s expertise. However, our concerns about the Finance Director’s readiness remain pressing because both leads and limits the team. This apprehension was further validated when Crystal referred to a proposed $2.3 million reduction in unrestricted reserves to be used “discretionary spending.” The Unrestricted General Fund is designated for specific purposes—none of which include covering planned cost overruns.

Adding to our concerns, it’s perplexing to be reassured that everything is going well when the budget tells a different story. The original budget had a projected surplus of $33,952, but now there’s a projected deficit of $960,955—nearly $1 million worse off. This deficit represents an additional drain on reserves, compounded by the $2.3 million in proposed reductions, further depleting the city’s financial safety net. This dual strain on reserves raises serious questions about the accuracy of financial planning and oversight. Of equal concerns is her inability to use language the audience can understand, instead choosing acronyms like GAAP and other accounting terms.

Council Member Quinto remarked that budgets will be tight. From the public’s perspective, budgets seem tight only when it comes to services for the community, while there’s plenty of funding allocated for increased employee compensation and hiring consultants. This disparity suggests a misalignment of priorities that warrants scrutiny.

While increased insurance costs have been mentioned- which are not under their control, there’s been no clear acknowledgment of rising CalPERS costs – which the city can control. The city’s failure to act when interest rates were low has likely resulted in costly consequences for taxpayers. It could be argued that Measure G was essentially needed to cover the additional interest payments to CalPERS, a point that deserves transparent discussion.

Additionally, there has been no clear breakdown of the increase in departmental spending. Transparency in these areas is crucial for building public trust and ensuring that taxpayers understand where their money is going.

We commend the councilmember who showed grace by suggesting on meeting with the Finance Director privately to address these issues rather than publicly questioning or criticizing her. However, the underlying problem persists: El Cerrito is in a fragile financial position. We need leadership that can articulate our fiscal realities clearly and confidently, without relying on a script.

The community deserves transparency, accuracy, and a Finance Director who is not only technically proficient but also capable of effectively communicating the city’s financial health. As stakeholders in El Cerrito’s future, we must continue to advocate for the financial leadership our city urgently needs.