El Cerrito Wins CSMFO Budget Award: What Does It Really Mean?

El Cerrito recently received a budget award from the California Society of Municipal Finance Officers (CSMFO), a recognition that may appear to reflect sound financial management. However, it is important to understand what this award actually measures—and more importantly, what it does not.

What is the CSMFO Budget Award?

The CSMFO budget award is granted to municipalities based on how well their budget documents meet a set of established criteria. The award is split into different categories, including Operating Budget Meritorious and Excellence Awards, as well as Capital Budget ,Meritorious and Excellence Awards.

To qualify for these awards, a city must meet standards related to:

• Clarity and Organization – The budget must be well-structured, with a table of contents and numbered pages for easy navigation.
• Transparency – The budget should include a transmittal letter that outlines key financial and policy considerations.
• Detail and Documentation – The budget must provide thorough descriptions of revenue sources, expenditures, financial policies, and staffing levels.
• Identify Goals– The city should identify goals and demonstrate how performance is measured against them.
• Financial Forecasting – Some award levels require multi-year financial projections and analysis of financial trends.

What the Award is NOT About

Receiving a CSMFO budget award does not indicate that a city is in good financial health. The award focuses on the quality of the budget presentation, not whether the budget itself is fiscally responsible or sustainable. It does not assess whether a city is living within its means, avoiding excessive debt, or maintaining healthy reserves.

For example, as indicated in the November 18, 2025 city council meeting, the city plans to use $960,965 in reserves (table 5).  Therefore, a city could (and has) repeatedly used one-time reserves to cover ongoing expenses, it could still win the award. That means a municipality facing serious financial challenges—such as El Cerrito’s ongoing use of reserves to cover spending—can still receive recognition for its budget document, even if the fiscal reality remains precarious.

The Reality of El Cerrito’s Finances

While this award may be used to imply fiscal responsibility, it does not reflect the city’s financial decisions or their long-term impact. A well-presented budget does not guarantee fiscal health. Cities like El Cerrito, which have relied heavily on reserve funds to cover spending shortfalls, can still win the award because the criteria do not require balanced, sustainable budgeting—only well-prepared documents.

Additionally, the CSMFO budget award does not take into account El Cerrito’s nearly $90 million pension liability or its BBB bond rating, both of which are significant indicators of financial strain. These financial burdens further highlight the gap between a well-organized budget document and true fiscal stability.

The Takeaway

Residents should view the CSMFO budget award as an acknowledgment of El Cerrito’s ability to present financial data effectively, not as an endorsement of the city’s financial stability. Transparency in budgeting is valuable, but it must be coupled with genuine fiscal responsibility. Without structural reforms, responsible spending, and long-term financial planning, no award can change the reality of budget shortfalls and financial mismanagement.