Supporters of the library initiative often focus on the size of the proposed building—a 20,000-square-foot library—and argue that El Cerrito simply needs something bigger and more modern.
But square footage alone does not determine cost.
Financing does.
And financing magnifies every unanswered question.
When voters are asked to approve a parcel tax that allows the City to issue bonds, they are not just approving a building. They are approving decades of financial exposure, structured so that virtually all risk is placed on homeowners and none on the City.
Financing Changes Everything
Bond financing front-loads spending and back-loads repayment. The larger the construction cost, the more dramatically interest multiplies it over time.
Using the upper end of the costs publicly discussed, here is what borrowing looks like.
Loan assumptions
- Principal: $75 million +
- Interest rate: 7 percent
- Term: 30 years
Results
- Monthly payment: approximately $499,000
- Total paid over 30 years: approximately $179.6 million
- Total interest alone: approximately $104.6 million
Bottom line:
Borrowing $75 million at 7 percent more than doubles the cost. Interest alone exceeds the original amount borrowed.
That means every assumption about cost, size, and scope matters—because those assumptions are locked into long-term debt.
What Happens If the Money Isn’t Enough?
The initiative authorizes funding for planning, construction, furnishings, and up to ten years of operations. What it does not do is guarantee that the parcel tax will be sufficient to deliver a 20,000-square-foot library as envisioned.
If costs come in higher than expected, several outcomes are possible:
- The project is downsized
- Features or programming are reduced
- Timelines are extended
- The parcel tax is increased within the allowed escalation authority
- The City returns to voters for additional funding
In every scenario, the City retains flexibility. Homeowners do not.
What Happens If There’s Extra Money?
The reverse question is just as important.
If the parcel tax generates more revenue than needed—because costs are lower, plans are scaled back, or timelines change—there is no automatic mechanism requiring refunds or tax reductions.
While funds are nominally restricted to library-related purposes, the initiative authorizes a wide range of expenditures, including financing costs, administrative costs, election costs, and legal defense costs. Over a 30-year period, those categories can expand considerably.
Once collected, the money stays under City control.
How Upfront Bond Financing Works
When a city needs a large amount of money immediately, it does not wait 30 years to collect taxes.
First, voters approve a parcel tax, creating a guaranteed revenue stream lasting decades.
Next, the City issues bonds right away. Using future tax revenue, it borrows a large lump sum—$37+ million dollars upfront.
Property owners then repay those bonds over time through annual parcel tax payments covering both principal and interest.
The money becomes available before a final plan exists and can be spent immediately on design, site preparation, construction, and related costs.
Why this matters:
Upfront bond financing transfers financial risk from the City to taxpayers. If costs rise, plans change, or assumptions fail, the tax obligation remains.
City Risk vs. Homeowner Risk
| Issue | City of El Cerrito | Homeowners & Property Owners |
|---|---|---|
| Upfront funding | Receives bond proceeds immediately | Pay the parcel tax for up to 30 years |
| Cost overruns | Can revise scope or downsize project | Pay the tax regardless of reduced scope |
| Construction delays | No direct financial penalty | Pay the tax even if the library is delayed |
| Interest rate risk | Passed through via debt structure | Embedded in total long-term payments |
| If costs exceed estimates | May issue additional debt or revise plans | Absorb higher long-term costs |
| If costs are lower than expected | Retains control over excess funds | No automatic refund or tax reduction |
| Bond repayment obligation | Debt not backed by General Fund | Legally obligated to repay principal and interest |
| Operating cost exposure | Covered for first 10 years | Risk of future taxes or service cuts |
| Project underperformance | No repayment obligation | Full tax obligation remains |
| Economic downturn | Insulated from revenue volatility | Tax obligation continues |
| Ability to exit | Can revise priorities | Cannot opt out |
What This Table Shows
This financing structure is not neutral.
Once voters approve the parcel tax, the City gains immediate access to bond money while transferring nearly all financial risk to property owners. If construction costs rise, plans change, or timelines slip, the City can adjust the project without absorbing financial loss. Homeowners, however, remain legally obligated to pay the tax every year for up to 30 years.
There is no built-in mechanism guaranteeing refunds or tax reductions if costs come in lower than expected. The City retains flexibility. Residents do not.
In effect, the City takes planning flexibility without financial exposure, while homeowners assume long-term financial exposure without control over outcomes.
And Again—Why Are We Seeing New Scenarios Now?
The City’s long-range plans have consistently identified the Plaza as the preferred library location.
What has changed is not the site. It is the level of scrutiny.
Only after residents began asking hard questions about cost, financing, and risk did new scenarios emerge. If alternatives were truly viable and competitive, they should have been fully analyzed before voters were asked to approve decades of debt.
The Question Voters Deserve Answered
This is not about opposing a library. It is about understanding the full financial commitment being asked of residents.
Before approving long-term financing, voters deserve clear answers to three basic questions:
- What happens if the money isn’t enough?
- What happens if there’s extra?
- Why does the City bear none of the financial risk, while homeowners bear all of it?
Until those answers are clear, approving the tax is not a vote for a library.
It is a vote for financial uncertainty locked in for a generation.
If you agree, share widely on social media and share the blog with your neighbors.
El Cerrito Committee for Responsible Government (ECCRG) 