Understanding El Cerrito’s Special Tax Bond Risks

A concerned citizen recently raised critical points about El Cerrito’s proposed $21 million bond issue for a new library, and these concerns deserve serious attention. Many residents might assume that a financial analysis of the city’s creditworthiness is required for this bond approval—but that’s not the case. Here’s why:

The Reality of Special Tax & Assessment Bonds

Unlike traditional municipal debt, this bond is a Special Tax & Assessment—not general obligation indebtedness. This distinction is crucial. It means:

• The creditworthiness of the City of El Cerrito does not matter to bond buyers.
• The use of funds (whether the library is actually built as promised) is irrelevant to the lenders.
• The only thing that matters to bondholders is the ability to collect and remit taxpayer payments.

In other words, bondholders aren’t taking a risk on El Cerrito. They’re taking a risk on you, the taxpayer. Your secured property tax bill—and ultimately, your home—is the guarantee for repayment, not the library itself.

The Condo Conundrum: A Risky Partnership

One of the most concerning aspects of this proposal is how the City plans to structure ownership of the library building. The library will be part of a divided interest condominium arrangement with a private housing developer, meaning:

• The library will share a building with 200 apartment units.
• There will be a condo association, where both the City and the developer hold ownership stakes.
• Issues affecting the residential portion—fire, plumbing, security, and access—could spill over and impact library operations.

Being in a condo association with a private developer is a risky proposition. Who will pay for unexpected maintenance costs? Who has ultimate control? If problems arise, taxpayers could find themselves footing the bill with no real say in the governance of the property.

Who’s on the Hook for the Bonds?

The concerned citizen rightly points out that no government entity—including the City of El Cerrito—has any obligation to make payments on the bonds. The ONLY source of repayment is the property tax assessment levied on homeowners. This means:

• If projections fall short, homeowners bear the full risk—not the City, not the developer.
• The bond effectively serves as “free money” for El Cerrito and the housing co-developer, at the expense of taxpayers.

For context, residents should review the Official Statement from the El Cerrito Public Finance Authority regarding a past Special Tax & Assessment bond issue—the Swim Center project—to understand how these financing mechanisms work.

The City’s Financial Crisis: A Manufactured Burden on Residents

This financial structure would be concerning under any circumstances, but what makes it worse is that El Cerrito’s City Manager has already decimated the city’s bond rating. Years of mismanagement have left the city with a tarnished financial reputation, making it impossible to fund projects through traditional municipal bonds.

Now, instead of addressing fiscal mismanagement, the City wants residents to foot the bill directly through a new special tax on their property bills. This is not an accident—it’s the direct result of poor financial decisions by city leadership.

Let’s be clear: The city’s bond rating is in shambles because of reckless spending, lack of financial oversight, and a refusal to make tough but necessary budgetary decisions. And now, city leaders want to shift the burden onto homeowners.

Take Action: Write to the City Council and Clerk!

If you are concerned about the financial risks of this project, make your voice heard. Write to the El Cerrito City Clerk and ask that your letter be included in the City Council packet so that council members are forced to acknowledge taxpayer concerns.

📧 City Clerk Email: cityclerk@ci.el-cerrito.ca.us

📧 2025 Council Member Emails:

• Mayor Carolyn Wysinger – cwysinger@ci.el-cerrito.ca.us
• Mayor Pro Tem Gabriel Quinto – gquinto@ci.el-cerrito.ca.us
• Councilmember Lisa Motoyama – lmotoyama@ci.el-cerrito.ca.us
• Councilmember Rebecca Saltzman – rsaltzman@ci.el-cerrito.ca.us
• Councilmember William Ktsanes – wktsanes@ci.el-cerrito.ca.us

📢 Demand Transparency & Fiscal Responsibility!

El Cerrito taxpayers should demand answers:

• Why should residents bear the financial risk for a city that has already failed to manage its finances responsibly?
• What safeguards exist to protect property owners?
• Who will manage and control the condo association?
• What happens if the developer faces financial issues?
• Why isn’t the City being more transparent about these risks?

The library is an important community asset, but its financing and structure matter. Before it’s too late, El Cerrito residents must demand clarity, accountability, and a full understanding of the long-term implications.

📢 Speak up now before it’s too late! Your home, taxes, and community’s financial health are at stake.

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