Why El Cerrito Must Go Beyond Minimum Pension Payments

At the most recent City Council meeting, the City Manager noted—accurately—that El Cerrito has never missed a CalPERS payment. But what went unmentioned is equally important: the State Auditor criticized the city for only making the minimum required payments.

Paying the minimum might check a box, but it doesn’t reflect sound fiscal management. CalPERS provides a payoff schedule—typically 20 years—assuming ideal market conditions and steady returns. But the reality paints a more sobering picture.

The Numbers Don’t Lie

Using data directly from CalPERS’ public actuarial reports, El Cerrito’s classic plans (which cover longer-tenured employees) show an alarming trend:

Unfunded Accrued Liability (UAL)

Valuation Year	Safety UAL	Misc UAL	Total
2014	$28.2 million	$13.3 million	$41.4 million
2023	$62.5 million	$25.4 million	$87.8 million

That’s a 112% increase in just nine years.

UAL Annual Payments

Valuation Year	Safety Payment	Misc Payment	Total
2014	$1.79 million	$960k	$2.75 million
2023	$5.50 million	$2.43 million	$7.93 million

Annual payments have nearly tripled, placing growing pressure on the city’s operating budget.

Funded Ratios

Valuation Year	Safety Funded Ratio	Misc Funded Ratio
2014	74.8%	71.8%
2023	64.0%	63.8%

Despite making every required payment, El Cerrito’s pension health has deteriorated over time.

The Impact of Raises on Long-Term Costs

Another recurring concern is how quickly the prior City Council rubber-stamped raises without adequate analysis of long-term costs. Management would provide a cost estimate, but rarely explained the underlying assumptions—such as the present value of future pension obligations tied to those raises.

A $10,000 salary increase may seem reasonable on paper, but it boosts lifetime pension payouts, sometimes for decades. This adds significantly to the city’s growing unfunded liabilities.

We hope the current City Council will take a more disciplined approach—restricting ongoing raises to what is supported by available and sustainable revenue, not temporary budget spikes or one-time windfalls.

Meanwhile, Housing Prices Are Falling

In ZIP code 94530, which includes El Cerrito, home prices are trending downward.
(Source: San Francisco Chronicle)

This suggests growing economic strain in the community, yet the city continues to increase labor costs and kick the pension liability down the road.

El Cerrito’s residents deserve transparency and fiscal leadership—not just technical compliance. Making minimum pension payments is not a strategy. It’s a gamble, and one that our city can’t afford in the long term.

It’s time for the Council to:

• Require clear, long-term cost estimates for all proposed compensation increases.
• Commit to above-minimum pension contributions, particularly when revenues are substantial.
• Tie compensation decisions to available ongoing revenue, not short-term funds.
• Publicly assess the city’s pension obligations in the context of current property values and economic conditions.

Paying the bill isn’t the same as paying it down.

Contact your Councilmembers and ask them to prioritize long-term financial health over short-term convenience:

• Mayor Carolyn Wysinger – cwysinger@ci.el-cerrito.ca.us
• Mayor Pro Tem Gabe 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