El Cerrito’s Bond Upgrade: Progress, But Claiming Victory Far Too Early

El Cerrito’s leaders are eager to celebrate. Last month, the City announced an upgrade to its bond rating, which highlights its financial strength and responsible management. On the surface, that sounds like a success story—especially for a city that once ranked among the bottom 3% of California municipalities for fiscal health.

But peel the onion. The State Auditor’s office still places El Cerrito in the bottom 20% of over 400 California cities. Coming off the formal High-Risk Watch List does not mean El Cerrito is suddenly healthy—it only means others are in worse shape. Declaring victory now is misleading and premature.

Progress That Doesn’t Tell the Whole Story

Yes, El Cerrito has made progress. The City has strengthened financial reporting and shown slight improvements in reserves. But much of that progress was built on one-time infusions. The $6.2 million in federal American Rescue Plan Act (ARPA) funds temporarily padded the General Fund. Those dollars are now spent, and the City’s own projections show reserves dipping below policy thresholds by FY 26/27. That’s not fiscal discipline—it’s borrowed time.

The State Auditor evaluates liquidity, reserves, pension obligations, and long-term liabilities. On each of these, El Cerrito remains below average. The removal from the “high-risk” designation is a technical reprieve, not a clean bill of health. Residents should understand: being less harmful is not the same as being strong.

A Heavy Pension Burden

At the heart of El Cerrito’s challenge lies its pension liability, which exceeds $80 million. That liability reflects a decades-long pattern of carrying more staff—and more high-cost management positions—than peer cities of similar size.

El Cerrito employs four battalion chiefs in its Fire Department, along with a fire marshal and a Fire Chief. The City Manager’s Office includes a City Manager, an Assistant City Manager, and an Executive Assistant to the City Manager. For a city with just under 26,000 residents, this is an unusually top-heavy structure. Other California cities of comparable population operate leaner organizations with fewer layers of management. Every one of those positions carries salary, benefits, and pension obligations that compound over time.

Residents Pay More, While Services Shrink

Instead of tackling structural costs, El Cerrito has leaned on raising or extending taxes. The Real Property Transfer Tax (RPTT), adopted in 2018, was initially proposed as part of a temporary fix and has since become permanent. Sales tax “add-ons” have been renewed or extended, with discussions to make temporary hikes permanent. Parcel taxes have been proposed as an additional revenue stream.

Residents are shouldering higher taxes, but services haven’t improved. City Hall is closed every other Friday, and operates on a 37.5-hour workweek. Library hours have been reduced while an expensive new library is still being pursued. Street repairs are postponed, leaving potholes unaddressed. Parks and pools lag behind regional standards. Public safety equipment replacements have been delayed. More taxes, fewer services—this is not the hallmark of financial health.

The Bond Rating Spin

The City points to its September 2025 bond upgrade as proof of financial stability. But context matters. In the municipal bond market, most U.S. cities hold ratings in the AA category, with the strongest at AAA. El Cerrito’s A+ rating is a modest improvement but not exceptional. Pair that with the Auditor’s bottom-20% ranking, and the conclusion is clear: the City remains financially vulnerable.

Calling this an achievement worth celebrating is like cheering for moving from an F to a D. Yes, it’s technically progress. However, it’s still far from satisfactory, and it should not lull residents into a false sense of security.

📊 Fact Box: El Cerrito’s Financial Reality

City’s Claim:

• Bond rating upgraded to A+
• Off the State Auditor’s formal High-Risk Watch List

Reality Check:

• Still in the bottom 20% of California cities for fiscal health
• $80M+ unfunded pension liability weighing down future budgets
• Reserves projected to fall below policy by FY 26/27
• Services reduced: shorter library hours, City Hall closed every other Friday, deferred road and park maintenance
• Residents are paying higher taxes while service quality declines

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Claiming Victory Too Early

El Cerrito has made progress, but claiming victory now is far too early. Until leadership addresses structural issues—such as pension obligations, a top-heavy management structure, and the ongoing reliance on one-time dollars and perpetual taxes—the financial position remains precarious. Residents are asked to celebrate, while the fundamentals continue to deteriorate.

Residents Deserve Better

El Cerrito’s residents deserve a City that:

• Reports honestly, including the Auditor’s risk scores, declining reserves, and pension liabilities.
• Commits to real fiscal reform, not temporary patches or revenue gimmicks.
• Restores services: longer library hours, regular street and infrastructure maintenance, upgraded parks and pools, and City Hall open five days a week.
• Rebalances staffing by eliminating unnecessary, top-heavy positions that drive long-term costs.

Contact Your Leaders

📧 City Manager:
Karen Pinkos – kpinkos@el-cerrito.gov

📧 City Council:

• 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

📧 City Clerk (for distribution to all Councilmembers): cityclerk@ci.el-cerrito.ca.us