Facing Facts in El Cerrito: The Fiscal Conversation We Deserve

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As El Cerrito prepares its FY 2025–2026 budget, city staff are touting a “balanced” financial plan. But residents should take a closer look. Beneath the headlines and hopeful proclamations lies a sobering fiscal reality: We are inching toward more profound structural instability, masked by one-time funding shifts and unsustainable reserve draws.

The $4.5 Million Ask and the Reserve Drain
City staff have proposed $4.5 million in new, unbudgeted spending. Rather than funding these items through sustainable revenues, the city relies on reserves that barely meet the minimum guidelines of Government Finance Officers Association (GFOA). In other words, this $4.5 million request depletes reserves to a level lower than GFOA recommendations. At the same time, we are spending savings we can’t afford to lose—especially with another economic downturn that is always possible.

Even more troubling, this isn’t a one-time problem. The city’s own reserves chart—buried deep in the staff presentation—shows a downward slope. No plan is shown for turning it around. How low will we go before serious service cuts or tax increases hit the table?

What’s the Real Deficit?
Residents deserve transparency. The city talks about being “balanced,” but there are no precise projections of actual future deficits in the latest materials. What are the expected shortfalls in FY 2026, 2027, and beyond? What’s the plan to cover them?

The $89 Million Elephant in the Room: Unfunded Pension Liability
Any discussion of El Cerrito’s $89 million in unfunded CalPERS pension debt is absent from the city’s latest budget materials. This figure, from the last available reporting, is not a small change—it is one of the city’s largest obligations.

With stock markets running flat this year and CalPERS likely to miss its investment target, we can reasonably expect the city’s required pension contributions to rise again. Yet no projections for UAL (Unfunded Actuarial Liability) payments were provided, and there’s no analysis of how recent raises have impacted the long-term pension obligation. This is a serious oversight.

Missing Services, Crumbling Infrastructure
Meanwhile, basic services continue to erode. The city continues to promote the idea of a new library, even as there is still no senior center—just years after the original facility was shut down and leased out. Capital maintenance appears to be lagging across the board. Declining infrastructure, disappearing services, and empty promises—these are the symptoms of a city prioritizing image over fundamentals.

Inconsistent and Unverifiable Revenue Figures
The numbers themselves also raise red flags. The figures presented for the Real Property Transfer Tax (RPTT) do not match previously reported amounts, and city and county numbers are inconsistent. Residents should not have to reconcile inconsistent revenue data from public sources. We deserve accuracy and honesty.

Cash Flow Warnings Ignored
The city knows it walks a tightrope every fall, as reserves drop to a critically low point before December’s property tax receipts arrive. Yet this cash flow crunch is mentioned only in passing. One-time revenue infusions do not fix structural deficits. They mask them.

Time for a Real Conversation
El Cerrito residents aren’t asking for miracles. But we are asking for transparency, accountability, and honest dialogue. Open and frank public conversation about the city’s serious financial condition must exist. That includes precise projections of deficits, full disclosure of pension obligations, and honest discussions about what we can—and cannot—afford.

Before committing to another building, campaign, or considerable promise, let’s focus on maintaining what we already have.

📢 Take Action
Contact your City Councilmembers today and ask them to prioritize fiscal responsibility and community services over symbolic projects and unsustainable spending:

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