A recent public comment submitted by a concerned El Cerrito resident—featured on page 735 of the June 3, 2025, City Council agenda packet—highlights urgent and deeply troubling issues regarding the city’s financial practices. The letter, written by Janos Szlatenyi, outlines not only a critique of the city’s current fiscal approach but also a clear warning: without immediate and strategic reform, El Cerrito risks financial collapse.
While the Council has expressed commitment to financial health, the ongoing reliance on reserve funds without a credible plan for replenishment undermines that message. Even more alarming, motions that would allow civic recommendations to be publicly discussed are routinely dismissed without a second. This signals a troubling disregard for public input and weakens democratic deliberation.
CalPERS and Compounding Liabilities
Szlatenyi’s comment draws attention to the city’s pension liabilities and the flawed assumptions underpinning long-term projections. The CalPERS presentation to Council revealed that the city is depending on overly optimistic yield assumptions—approximately 9.5%—while more realistic long-term discount rates are likely to settle closer to 3.6–4%. If the market experiences a correction of just 15–20%, combined with a modest economic downturn, El Cerrito could face insolvency in as little as four to five years.
This risk is most acute over the next 24–36 months, during which time financial pressures, taxation fatigue, and economic stagnation may converge. With such a rigid cost structure and limited ability to react within one budgeting cycle, the city is exceptionally vulnerable.
Surface Solutions vs. Structural Change
The letter makes it clear: service studies and new tax proposals are distractions—not solutions. They consume time and resources without addressing the city’s underlying fiscal imbalances. Instead, the focus must shift to structural reform.
Two key recommendations stand out:
Develop a Long-Term Financial Plan: One that rebuilds reserves, addresses unfunded liabilities, and creates a savings buffer large enough to absorb multi-year downturns. This plan should target unrestricted fund reserves in line with Government Finance Officers Association (GFOA) best practices—between 20% and 200% of operating expenses, depending on foreseeable needs. Suspend New Spending Until Stability Is Achieved: The city must avoid initiating any cyclical or optional spending until it consistently achieves 5–7% annual structural savings over at least five years.
A City on the Brink
El Cerrito cannot afford to defer hard decisions any longer. Unless unrealistic financial promises stop and meaningful reforms begin, the city will be forced to make devastating cuts to services, staff, or both—this time under the duress of crisis, not preparation.
The letter closes with a stark reminder: debating aesthetic projects or minor policies is futile on a sinking ship. It’s time to patch the holes—not punch new ones.
City leaders should take this public comment seriously. Its inclusion in the public record—on page 735 of the June 3, 2025 City Council agenda packet—should not be seen as a formality, but as a civic warning. One grounded in research, responsibility, and genuine concern for the city’s future.
📄 View the full agenda packet here
The rainy days are coming. The question now is whether El Cerrito’s leadership will act before the storm becomes a flood.
El Cerrito Committee for Responsible Government (ECCRG) 