During the May 20, 2025 presentation to the El Cerrito City Council, NHA Advisors—serving as the city’s financial advisor—essentially blamed CalPERS for El Cerrito’s $80 million + Unfunded Accrued Liability (UAL), citing underperformance in investment returns.
But that explanation doesn’t hold up to scrutiny. The presenter indicated that many cities are experiencing $80 million pension liabilities, but that was a misrepresentation. Other cities of similar size who rely on CalPERS are not facing pension liabilities near this magnitude. In fact, many neighboring cities with similar populations and economic challenges are in far better shape. The real issue isn’t CalPERS—it’s El Cerrito’s staffing and financial strategy decisions.
How El Cerrito Compares
| City | Population | Pension Liability (Approx.) | Maintains Own Fire? | Maintains Own Police? |
|---|---|---|---|---|
| El Cerrito | 25,000 | $89.2 million | Yes | Yes |
| Hercules | 26,000 | $63 million* | No (contracts with ConFire) | Yes |
| San Pablo | 31,000 | $59.5 million | No (contracts with ConFire) | Yes |
| Albany | 20,000 | $48.7 million | No (contracts with Alameda County Fire) | Yes |
| *Estimate pending updated ACFR verification. |
The data reveals a pattern: cities contracting out fire services—particularly with Contra Costa County Fire Protection District (ConFire)—carry significantly lower liabilities. El Cerrito, by contrast, retains both fire and police services internally, and 63% of its total UAL is tied to these two departments. Even more alarming, no other city of El Cerrito’s size owes more than $80 million in unfunded liability, and no other city its size spends 16% of its annual operating budget on pension payments.
That level of ongoing cost diverts money from essential services—everything from road maintenance and facility repairs to recreation programs and emergency preparedness. NHA also claimed that other cities have “similar” pension liabilities, but what they failed to mention is that those comparative cities are roughly twice El Cerrito’s size. Comparing raw liabilities without considering population or operating budget size is misleading at best and deceptive at worst.
The Pitfalls of Using the Same Firms Over and Over
El Cerrito’s financial narrative continues to be shaped by the same consulting firms—firms that have advised the city for years, sometimes decades. That repetition breeds comfort, not accountability. When the same advisors are hired to review, explain, and justify the very decisions they helped shape, the result isn’t transparency—it’s narrative control. Over time, that control turns into spin. The story becomes so polished, so selective, that it no longer resembles the truth.
This cycle undermines public trust and stifles honest assessment. Reports become exercises in validation rather than correction. The same voices repeat the same talking points—until distortion replaces data. Cities serious about fiscal health rotate their advisors, require independent peer review, and welcome fresh perspectives.
El Cerrito has done the opposite. It has relied on a closed circle of consultants whose familiarity has turned into complacency. The result: recycled analysis, missed red flags, and mounting liabilities hidden behind professional gloss.
Missed Financial Opportunity
NHA also noted that El Cerrito created a Section 115 Pension Trust several years ago to set aside funds for future obligations. While perhaps well-intentioned, the city’s choice of a highly conservative investment strategy has sharply limited its returns. Had the city instead sent the initial $1.4 million contribution directly to CalPERS, it would have realized roughly double the investment return over the same period. CalPERS’ pooled investments—though not risk-free—consistently generate stronger long-term returns than low-yield, bond-heavy portfolios. And because CalPERS charges 6.8% interest on outstanding pension debt, paying down that debt directly is one of the most effective ways to reduce long-term costs. By contrast, most other cities with Section 115 Trusts are in surplus positions, allowing them to invest more aggressively—often outperforming even CalPERS. El Cerrito’s delayed contributions and limited risk tolerance turned a valuable tool into a missed opportunity.
Conclusion: A Structural Problem, Not a Market One
Blaming CalPERS obscures the city’s responsibility for its financial posture. Structural choices – excess staffing, drive El Cerrito’s pension crisis: maintaining high-cost public safety managers- 4 batallion chiefs, layers of police management and internally; electing a conservative investment posture while underfunded; reusing the same financial advisors without demanding independent review; and delaying meaningful pension reform or regional collaboration.
Until these issues are addressed, residents will shoulder the burden—through higher taxes, reduced services, or continued instability. The time for honest, data-driven planning is long overdue.
El Cerrito Committee for Responsible Government (ECCRG) 