Employee Pension and Benefits

Lost in the din of cheering about the progress of going from the 8th worst-ranked City in California to only the 13th worst (out of 482, yay us!) was the fact that El Cerrito is tied with its Rogue’s gallery peers as the least prepared to tackle the future costs of employee pension and benefits.   So long as we enjoy this dubious company, El Cerrito’s bond rating and operating deficit will remain stuck in the basement.  

Despite the “aggressive” cost-cutting, much of it temporary pay freezes, and the federal windfall that plugged a gaping general fund hole, the City has made zero meaningful progress toward determining how it will pay the long-term liabilities. Sure, many cities have a pension and OPEB (mainly retiree health benefits) funding deficit, but, as the report showed, El Cerrito is one of the least prepared. That distinction is notable because fixing it will take the most resources. Recalling how painful the recent cuts were and the battles they entailed, and how lucky we got ($6.5 million from ARPA and the City’s ability and willingness to skirt the use restriction rules), the casual observer might conclude that pension and OPEB are a festering wound, and they would be right. Adding salt to the wound, RPTT will be a LOT less than the $3.5 million received last year and assumed in the budget. In conclusion, we are looking at dwindling resources and a future of reduced services.

As Greta Thunberg told the world…” it is time to panic.” And plan. And act.

(N.B. If you have ideas for a quick fix or hope for another gift from above, you are dreaming. If you want to talk about eliminating waste, get rich quick development schemes, past fraud, manager pay, no new taxes or shifting blame, please start a separate NextDoor thread.)

Step 1. Plan. Create and codify INTO LAW a Pension Funding Policy.

There are many good examples of Pension Funding Policies out there, and the City’s financial advisory firm is well-equipped to assist in this process, provided the City is committed to committing a fixed set aside each year to fund its Policy. These policies have many elements, but this article focuses on the money piece. The Policy MUST require the City to budget and set aside a meaningful amount of money every year to bring down the unfunded liability. This means paying more than our normal plus amortization cost every year (aka the Actuarily Required Contribution or ARC). 

Unfunded pension liability is a debt owed to CalPers on which we pay 6.8% annually, the amount CalPERS expects to earn on its investments. This is very expensive debt, even for a City barely hanging on to a BBB rating. It’s like keeping your credit card outstanding and paying the minimum while still running up expenses, using ever more of your regular income as your balance increases. Are there other ways to pay down this debt other than sending prepayments to CalPers in dribs and drabs (which, BTW, is still better than nothing)? Fortunately, yes.

This is where a Section 115 Trust comes in. Many of you are familiar with trust funds, heck, some of you may be living off one (marry my kid, please). A trust is a vehicle for segregating money for a specific use or person. California Employers’ Pension Prefunding Trust (CEPPT) is an IRC Section 115 Trust (commonly called a “115 Trust”) that public agencies establish exclusively to set aside money to prepay pensions. Once this money is deposited into the fund,it is legally segregated from general fund assets. The plan sponsor is the governing body, i.e., the City Council or an outside sponsor. This is key to its value and one reason it beats stashing the money in a general fund restricted reserve (which, see above, is ALSO better than nothing!). Once in the Trust, the money can only be used to pay down long-term pension and OPEB obligations (which would actually be two separate trusts). 

What happens to the money in the 115 Trust? They can be invested with CalPers or with a third-party administrator. There are many third-party investment managers out there seeking this money that claim they can beat CalPers. A competitive process is generally held to hire an investment manager.

As some have pointed out, you can create a 115 Trust with a negligible initial investment. This is meaningless and the equivalent of doing nothing. If the City takes the time, and money, to create a trust which then carries a $0 balance for years, this is WORSE than doing nothing and would and should be used as evidence that the entire creation was a sham intended to make it LOOK like our fair City was committed to paying down its debt.

Step 2: Act: We are looking at YOU City Council!

Time to act. The only way to accomplish this and give it sticking power is to make the Policy Law. We are calling on the City Council to create a Pension Cost Management Committee charged with adopting a Pension Funding Plan. We are calling on FAB to make recommendations to the Committee and City Council for affordable but meaningful pension funding levels.   We recommend that this be put in place and numbers finalized so that they can be included in the F.Y. 2023-24 City Budget and the long-range plan. 

Low Voter Turnout

Low voter turnout has allowed Gabe Quinto to keep his seat on the Council. As readers of this blog will likely surmise, this author is not pleased.  Akin to a few other Contra Costa County results like the Sherriff’s and County Assessor’s races, El Cerrito lacks accountability, transparency and humanity in El Cerrito.

Even so, it is notable that the incumbent, Gabe Quinto, was not the frontrunner.   Carolyn Wysinger led the pack in her first bid for Council, receiving 6,063 or 37% of the vote. As the city’s newest Councilmember, Wysinger has an opportunity to help send a message to the City Council and the City Manager that mediocrity is no longer acceptable; El Cerrito needs to make immediate and substantial structural changes in the FY23 mid-year budget, including a reduction in expenditures and Service Delivery improvements.   

It’s not the first time independent candidates have lost.  Wysinger herself was unsuccessful in her previous run for office.  Like Floy Andrews, who lost her 2022 primary race for County Assessor to an incumbent who had been censured for multiple ethics violations, Vanessa Warheit is a capable candidate who faced an uphill battle against an entrenched incumbent. For the best results in any election, high turnout is key. In the 2022 general election, only 59% of El Cerrito’s eligible voters turned out to vote – an incredibly sobering figure, given the city’s current financial straits and inadequate services. 

Although the East Bay Times posted the El Cerrito press release, the only local newspaper that issues endorsements did not cover or make any endorsements in this year’s El Cerrito City Council election. The Times claims they omitted El Cerrito because “there were too many races in larger cities”.   Maybe the writer of this blog is mistaken, but the races in all East Bay cities are typically similar for each election. It is our hope that the East Bay Times will choose to cover our city in upcoming elections; future candidates are encouraged to reach out to them to ask for this, and members of the El Cerrito community are encouraged to do the same.

Complacency continues to hurt our City. El Cerrito ranks #13 of 430 California cities on the State Auditor’s High-Risk Dashboard – meaning our City is among the top 3% worst-managed cities in the entire State. El Cerrito also has a BBB- bond rating – just one step above junk bonds. 

The City has so far missed opportunities to address a long list of  issues that continue to keep us on this woeful list, including:

  • Excessive spending began before the initial state auditor report.   From FY 2015-2019, general fund spending increased from $29 million to $40 million, far more than the inflation rate.
  • Using ARPA funds to balance the city’s budget instead of using government funding to help residents and local businesses recover from the pandemic
  • The Measure V money should have helped fund the senior center, yet the senior center was closed.
  • The reserve increase was less than the $1 million recommended by the City’s finance committee, even though Measure V brought in over $5 million and ARPA bought in over $3 million. 
  • Despite the state auditor’s warning that the City should not count on one-time money or big money from real property transfer tax in its budgeting, City leadership continues to budget based on a steady increase in tax money
  • For five consecutive years, the City received a 0 from the state auditor for future pension costs
  • The City has not made any structural changes to the budget, despite the fact that direct instructions to do so from the State Auditor CityHall is open just 16 hours per week. And closed for the entire week between Christmas and New Year’s.
  • The Council sorely needs community input and feedback yet does nothing to solicit or receive it.

Although the City blames the pandemic for its lack of service delivery,  service delivery in many departments was severely lacking prior to 2020; the Covid pandemic illuminated and exacerbated existing problems. It’s infrequent for leaders who led during inadequate service delivery and a fiscal crisis to recover successfully, particularly when they do not own any portion of the downfall.  

As a result, the incoming Council Member, along with newcomers Council Members Tessa Rudnick and Lisa Motoyama, must take the lead on positive change. The vote for the FY 2022 budget was 3-2, so Wysinger’s election could potentially swing things in the Council Chamber.

Progress is possible, but it is fragile – and in El Cerrito, the battles for our most basic services and our democracy remain.   However, there’s no power for change more significant than a community discovering what we can do.   Here are a few ways to participate: 

  • Attend the City Council and Financial Advisory Board meetings; if you can’t attend in person, tune in online.
  • Develop actions to strengthen the inclusion of excluded groups – such as seniors, underserved communities and youth – in decision-making processes;
  • Specify conditions and do’s and don’ts for successful participation projects;
  • Identify instruments for increasing social accountability.

We must become more informed and engaged voters if we want a better El Cerrito. Become more informed, and make a plan to vote in 2024. Our democracy depends on local government success.

El Cerrito Election Links

There is still time to vote! Do you need to cram to catch up on the issues? If so, this post is for you! You can find many of the essential links here. Enjoy!

Web pages

Vanessa Warheit’s web page

Vanessa Warheit’s YouTube Channel

Carolyn Wysinger’s web page

 Gabe Quinto’s web page 


El Cerrito Financial Disclosure

City of El Cerrito Campaign Disclosure

Forums and Debates

League of Women Voters Debate Well worth the 30-minute view

El Cerrito City Council Candidates’ Positions on Sustainable Mobility   

State Auditor’s Report

California State Auditor: City of El Cerrito: Excessive Spending and Insufficient Efforts to Address Its Perilous Financial Condition Jeopardize the City’s Ongoing Fiscal Viability

 State Auditor’s response to El Cerrito March 2022

News – El Cerrito finances are a factor in the city council race

East Bay Times – These Bay Area cities are facing the greatest financial risk, state auditor says

East Bay Express – Small City, Big Money Woes

Blog Posts

El Cerrito Committee for Responsible Government (ECCRG)   

Vanessa Warheit answers questions about El Cerrito

Councilperson Gabe Quinto’s record on financial issues

The Mayor has abandoned the Library!

Conflict of Interest

In this town, things are getting worse.  

They have scheduled an event titled “Lunch with El Cerrito’s Mayor and City Manager,” where members of the public join them to have a conversation with Mayor Gabe Quinto and City Manager Karen Pinkos on the latest happenings in the City of El Cerrito, and what’s next for the City coming up in 2023 and beyond.

There’s an ulterior motive for the November 3rd gathering.

  1. Gabriel Quinto’s seat is up for grabs on the November 8 ballot. If he loses, his term expires at the end of the year. Consequently, Gabe should not yet comment on what will happen in 2023.
  2. The City Manager comes dangerously close to violating the Conflicts of Interest and Ethics For Local Government Officials: Political Reform Act & Common Law Conflicts of Interest City of EI Cerrito dated September 2019. It may not be illegal, but it’s inappropriate to conduct a conversation about El Cerrito’s happenings outside of the Council Chambers just five days before the election.

The Political Reform Act states, “An official has a conflict of interest under the Political Reform Act when it is reasonably foreseeable that the decision has a material financial effect on an economic interest of the official or a member of their immediate family. A public official has a disqualifying financial interest if the decision will have a reasonably foreseeable material financial effect, distinguishable from the effect on the public generally, directly on the official or their immediate family, or on any financial interest of the official or his or her immediate family. (2. Cal. Code Regs, § 18700(a)”

The ICMA Code of Ethics with Guidelines for City Managers, tenet 7 “Elections of the Governing Body. clearly states that Members should maintain a reputation for serving equally and impartially all members of the governing body of the local government they serve, regardless of party. To this end, they should not participate in an election campaign on behalf of or in opposition to candidates for the governing body.

The City Manager, Karen Pinkos, has come under fire since the state of California released its first report in 2020 and most recently: Fiscal Health of California Cities. The Mayor has been one of her biggest supporters, publicly praising her hard work while leaving out the mediocre performance.

However, two other candidates have indicated they commit to transparency.   At least one of the candidates has committed to holding the City Manager accountable. Suppose Mayor Gabe Quinto isn’t reelected to the City Council. In that case, the City Manager could face accountability initiatives from the City Council regarding performance goals and objectives on the City’s current financial crisis, the lack of adequate public services from city departments or even her lack of transparency. Therefore, she has a financial interest in Gabe’s re-election.

Three weeks ago, you heard it here. The bottom line is that being in the bottom 3% (13 of 431) cities is not cause for celebration. Even with $20 million in new money ($14 million from Measure V real property transfer tax —  and $6 million from ARPA, round numbers) coupled with significant cuts in services, the City is doing very poorly. 

Gabe has interests too. He built his entire campaign on endorsements from electeds – most notably missing are electeds from neighboring cities. Moreover, his lone accomplishment relates to bringing Los Moles to El Cerrito. Unfortunately for city residents, he’s been on the Council for the last eight years, which happen to be the years of the City’s financial landslide to the crisis.

The luncheon is at the wrong venue. If the City Manager and the current Mayor wish to discuss the happenings in El Cerrito, the appropriate forum would be today’s November 1, 2022, City Council Meeting. But the agenda is silent on an update from the duo.

Vote by November 8, 2022, and vote wisely.

Press Release Gone Bad

Last week, the Council Members posted on social media.  Then the City of El Cerrito issued a press release claiming victory over the financial crisis.  

Super Premature

Still, the State Auditor and the East Bay Times disagreed. On October 24, 2022, the East Bay Times article here said, “While this is the first year the city of just 26,000 residents has moved from “high-risk” to “moderate” since the dashboard launched, officials still face an uphill battle to fully fund employee benefits.”

Two weeks ago, you heard it here.  The bottom line is that a 1% improvement and being in the bottom 3% (13 of 431) cities is not cause for celebration. Even with $20 million in new money ($14 million from Measure V real property transfer tax —  and $6 million from ARPA, round numbers) coupled with significant cuts in services, the City is doing very poorly. 

There are many reasons for concerns:  

  1. The City did not make any structural changes to the budget. Without the government bailout and booming Measure V Transfer Tax, the City could quickly drop three positions and return to the list of ten worst cities.
  2. If you take away the $6 million ARPA money that was supposed to help the citizens, the surplus would be just $2 million even though they have received over $14 million in new Measure V money.
  3. There were $500,000 in planned expenses the City Manager did not include in the budget.
  4. The City budgeted $4.3 million in Measure V Transfer Tax Revenue, which was ~$900,000 less than FY22. However, the transfer tax revenue during the first quarter is already 26% less than in FY22. As a result, the City could be $1 to $2 million short in the projections.
  5. The City Manager is up to her old tricks again.  The numbers continually change with no explanation. Budget table has 2-8 reserves at $10.8 million versus the press release at $8.09 million. That equates to an almost $3 million unexplained change.
  6. The City cut services:  They shut down the senior center, reduced library hours and barely have city hall open, yet their big spending budgets have gone from $29 million to $45 million – a 55% increase in just eight years.

The current Mayor, Gabriel (Gabe) Quinto, is up for re-election. You should be concerned. He’s been on the City Council since 2014, when the financial landslide began.   You can see his record on financial matters here

The election is two weeks away.   Vote responsibly and wisely.

The Mayor has abandoned the Library!

El Cerrito has three candidates running for two seats on the City Council. Plaza for the People sent six questions to the candidates, whom all took the time to respond to the Plaza for the People questionnaire. The candidate responses provide a window into their ability to address some of the City’s current and future challenges; however, this blog focuses on question #4 – the El Cerrito Library.

The most recent evaluation by the state auditor ranks El Cerrito’s #13 (#1 is worst) and painfully close to earning the title of the worst-run City in California. El Cerrito currently ranks #1 (worst) in future retirement funding. Four of the ten categories on the state auditor’s concerns relate to retirement funding. El Cerrito has not made any meaningful advancements in pension funding in the last two years. El Cerrito also has a BBB- bond rating with Standard and Poors –one level above junk bonds. So, El Cerrito would have difficulty floating a bond to pay for the Library. And none of the other stakeholders has expressed any interest in paying for a library for El Cerrito.

Although each candidate responded, there’s more to see from what the candidates did NOT say in their responses. The link here has their complete answers.

Carolyn Wysinger acknowledged the difficulties in bonding “I do understand that bond rates have increased AND El Cerrito would need to have its bond rating updated and will work hard towards that end on the Council. For inspiration we can look to cities like Berkeley and Oakland who have somewhat analogous affordable housing and infrastructure measures on the ballot. Financing through bonding is among the most equitable ways forward in pursuing a vital development like this project, which, when completed, will benefit the El Cerrito community for years to come.”

Candidate Carolyn Wysinger

Carolyn’s response, while enthusiastic and thoughtful, falls woefully short in describing how she would address funding the Library. Carolyn suggests using Berkeley and Oakland as inspiration. Inquiring minds would like to know how those cities were able to meet the challenge and how those successes translate to an El Cerrito library.

Gabe Quinto, El Cerrito’s current mayor and incumbent, should have the most comprehensive and responsible response based on his eight years on the Council. Gabe said, “El Cerrito passed a transfer tax (Measure V) to help fund the Library at the station, but we need more funding to ensure that we build the Library. I have very strong connections to regional and statewide leaders who can help identify funding to build the Library. ”  Gabe remembers his promises to fund the Library when he lobbied for Measure V.

Gabe has selective memory.  

Current Council Member and Mayor of El Cerrito

Not one penny of the $11 Million collected under measure V has been allocated to fund the Library. 

Remember our last blog post, which pointed out that On June 1, 2021, Councilperson Quinto said he would vote to direct staff to cut the additional library hours (over the County Funded Level). The amount was just $58,000. He said the City should raise funds for the Library because the City would not allocate money. After a massive public outcry, Gabe voted to reinstate the funding.   Later Gabe voted to remove the funds for a second time.

Even though Gabe has been in office for eight years and boasts endorsements and deep connections with important leaders and electeds, he has done nothing to support the Library. He does not even have a funding plan for the Library. His votes on the Council contradict his commitment to funding the Library because actions have all opposed funding the Library or senior center.

Candidate Vanessa Warheit

Vanessa Warheit had a considerably longer and arguably more complete response. “And, I am very concerned about our City’s current fiscal crisis, and what effect our current BBB- bond rating will have on our ability to finance a new library. I believe the first step is to create and make public an audited financial cost/benefit assessment of the cost to build the Library at Plaza, as compared with building it in another location in El Cerrito. The original library bond measure failed because El Cerrito voters didn’t have confidence in what the bond would be paying for – or an adequate understanding of how much a new library might even cost. If, as seems likely, building at the Plaza location proves to be significantly cheaper than at other locations, I am in favor of a bond measure, assuming that we can raise our bond rating and that the cost of doing it soon at BART, at a higher rate of interest, is still less expensive than doing it later somewhere else. In any event, it will be essential for the public to understand what they are voting on, and this assessment needs to be done ASAP to meet the time window of the BART development.”

Candidate Warheit acknowledges the last bond measure failure and the fiscal crisis, which the other candidates seem to gloss over. Vanessa’s response also indicates an answer to the Library lies on the other end of some significant evaluations on costs and location.

Please look closely at each candidate and decide which two are best for you and your family. None of us can afford to be on the sidelines this November. Vote wisely.

 Deep Denial by Council People

The State Auditor released its latest report earlier this week (Link to post) and scroll to the article.  El Cerrito has improved seven spots from the 6th worst-run city to the 13th worst-run city. That means 417 California cities are better managed than El Cerrito.

Yet some council members are patting themselves on the back. Councilmember Tessa seems ready to bring out the champagne.

Tessa said,”…I’m not naïve enough to think that any City could move between High Risk and Low Risk from one fiscal year to the other. Moving into the Moderate Risk category is an important milestone and achievement….” Don’t be fooled. El Cerrito is a mere three positions from the bottom 10 – and back on the watch list.

These pictures are meant to deceive you. The 13th designation IS NOT a good number because #1 is the WORST performing city.

Councilmember Motoyama was considerably more reserved in her post but also claimed success.

The truth is that only the bottom 10, or 2.3% of the state, is on the watch list. Technically, the City is off the watch list, but the city is far from danger. El Cerrito is the 13th worst-run city in California.

Although these council members pat each other on the back, the City continues to have a fiscal crisis.

First, the city balanced the budget on the backs of the residents. The ARPA funding of $6 million was intended to help small businesses, help residents impacted by COVID with assistance such as subsidizing rent or otherwise utilized for the community.  For example, Berkeley set aside $1.5 million for electrifying low-income homes using prevailing wage labor, funds for tenant rent relief, and grants to small businesses and arts organizations. But El Cerrito residents GOT NOTHING.

City Staff and Council Members refuse to admit that the ARPA funding fully funded any financial improvement (and all the reserves).  To compound the issue, the City produced overly optimistic projections for the Transfer Tax (Measure V). According to more recent calculations, the City overestimated the revenue by at least a MILLION dollars – maybe more.

The City has $500,000 of planned expenses not included in the “official” budget, but the City Manager intends to bring those items back to the board mid-year. Also, the City has not made any structural changes to the budget, so it could easily tap into the meager reserves.

Each of these tactics was intended to deceive you. The Council hoped you would not notice until after the election, but the finances remain in crisis.

The council members are claiming success, but the number is 417– the number of California cities better managed than El Cerrito. While the council members drink champagne, 97% of California cities are better managed than El Cerrito.

The election is just around the corner.  Vote as an educated person in November.

El Cerrito Finances Continue to Be Poorly Ranked by the CA State Auditor

El Cerrito continues to claim they have solved their financial issues. Every time something around finances comes up they are the first to pat themselves on the back and say the problem is solved. Guess what? The CA State Auditor does not agree. The new Dashboard ranking is out and while El Cerrito has improved the city is still #13 on the list of 431 cities in the state of CA. Not an auspicious performance. My guess is without the bailout monies we would still be at #6 but hey take the reserve and move us to #13.

If you go to this page you can download the raw data used. Here you can see El Cerrito’s biggest issue is its pension liability. The same liability they have refused to address these past few years. They finally had a consultant come in and say that they can start a Section 115 trust but they need to fund it with a starting minimum of 1 million dollars. Where would they get this money to fund it? There is no line item in the current budget dedicated to unfunded pension liabilities. In the multiple years, I have been following this issue the only accomplishment they have (and accomplishment is a stretch) is that they had the consultant come in and talk to them about the 115 Trust. Nothing has been done. The raw data supports this. El Cerrito is #1 (which is the WORST) for future pension liability costs. Our pension risk designation is high.

The election is coming up. There are 3 candidates for 2 positions. One of those candidates is an incumbent who has been on the council during this financial decline. Including serving as Mayor during the year we had our worst performance. Current Mayor Quinto has been part of the problem. He has refused to engage with us on these issues.

Of the two other candidates, Carolyn Wysinger appears to be running on endorsements alone. She also did not respond to our questionnaire.

Vanessa Warheit has responded to our questionnaire and appears to understand the depth of this issue.

The electorate has a chance to make a change and elect council members that address the financial issues. Any changes that have been made in the last few years have been led by Councilpersons Rudnick and Motoyama who were both new to the council last election. I wish more has been done but getting a third person who understands finance on the council can only improve the situation. Electing people that have been part of the problem continues the problem. Make an informed choice!

Councilperson Gabe Quinto’s record on financial issues

An Analysis of the record of El Cerrito Councilmember Gabe Quinto

With the election just around the corner, it is time to discuss candidates. As you may have read, we have sent a list of questions to each candidate. We only have one incumbent. For Gabe Quinto, we can analyze his past statements and votes to give us an idea of how he might act as a future councilperson. Here I will present an analysis of the record of Councilperson Quinto. I hope readers will evaluate this information and let it inform their decision in November.

A casual observer of El Cerrito council meetings is likely to hear Councilperson Gabe Quinto talk about how El Cerrito has spent too much and that there is a need for austerity. This report investigates the extent to which Councilmember Quinto’s voting record and his time in leadership match his public statements.

Councilperson Quinto was elected in November 2014 and took office in December 2014, which, was the middle of the Fiscal Year 2015, so his first full fiscal year was the Fiscal Year 2016. Councilmember Quinto was Mayor Pro-Tem in Calendar Year 2017 and Mayor in Calendar Year 2018.

During Councilperson Quinto’s time in office, there has been an explosive growth in spending and multiple credit downgrades by the S&P credit rating agency as well as negative reports from the independent auditor and the state auditor. The state auditor singled out the time that Councilmember Quinto was mayor for being a time of particularly reckless spending.

“For example, the city’s fiscal year 2018–19 budget included an 8 percent increase in planned expenditures over the prior year without providing an appropriate rationale for the increased amounts.” (CA State Auditor Report page 7 of 64 all pages refer to pdf page numbers)

During this time of enormous spending growth, Councilmember Quinto voted for every budget presented by the City Manager. From 2016-17 through the 2019-20 budget, El Cerrito had negative reserves, according to the state auditor report table 1, page 12/64. From the fiscal year 2015 through FY 2019, so from Gabe’s start to the last budget not impacted by Covid, general fund expenditures increased from $29,144,613 to $40,202,753, an increase of over $11 million which comes to a 38% increase. During that same period, the Bay Area CPI increased by just 14%. Moreover, the expense growth far exceeded revenue growth, causing yearly financial shortfalls. At the same time the city’s net pension liability grew by 67 percent from the end of fiscal year 2014–15 through the end of fiscal year 2019–20.3 As of June 2020, the city had a net pension liability of $65.8 million. (CA State Auditor Report page 6 of 64 all pages refer to pdf page numbers)

For further reference, I would like to share a few of Mayor Quinto’s quotes during City Council meetings.

On October 6, 2020, then Councilperson Quinto makes comments that appear to say where he was not aware of the financial problems. By this time El Cerrito had no reserves and had been taking loans to manage their budget.(State Auditor report page 3; Figure 3, page 5 of the state auditor report and Table 1, page 6 ) He brings up austerity but he also says he is going to vote for the budget (as he always has) even when Councilperson Pardue-Okimoto has just stated that she will not vote for a budget that she feels did not make enough cuts. I have clipped the video here but below is the link to the original video so you can see the source. Councilperson Quinto also mentions that since he took office there were three tax increases passed. He again blames his colleagues for the City’s financial woes.

Link to original meeting His comments start at 3:57

On June 1, 2021, Councilperson Quinto said that he would vote to direct staff to cut the additional library hours (over the County Funded Level). This was an amount of $58,000. He said that the money needed to be raised by fundraising and that they would never again get that money. The following council meeting, after a massive public outcry, he voted to reinstate the money. This money has not been subsequently removed again.

Link to original meeting His comments start at 2:56

On August 17, 2021, Councilperson Quinto praised the current City Manager and says that everyone who criticized her and the council was liars, mean-spirited and partisan. He specifically stated that City Staff was not overpaid.

The State Auditor did not agree. She said

Although El Cerrito’s financial condition has improved, the city still needs to take specific action to control the growth of its salary and benefit costs. In response to our recommendations to reduce costs, El Cerrito issued a request for proposals for a salary and compensation study. However, it has not committed to when it would actually perform the study and noted that such a study would likely result in increases in its management employees’ compensation. Nevertheless, most city employees who are not at the management level may have salaries above average for the region. Because El Cerrito notes in its response that it will soon enter negotiations with two of its employee unions, it would benefit the city to have updated information with which to base those negotiations.” (CA State Auditor Response to March 2022 submission)

Link to original meeting His comments start at 3:56

The concerns we have repeatedly raised about El Cerrito finances are the following

  1. Lack of transparency in the budget process
  2. Lack of structural changes when the budget was finally cut
  3. Lack of reserves
  4. Lack of City Council closely monitoring the budget

While the reserve issue is currently stable, due to the Federal Government bailout, structural budget problems remain unaddressed. Councilperson Quinto has been on the Council when spending erupted. In the 10/6/20 video he blames his fellow councilpersons for their spending and he speaks a lot of the lies. He voted YES on every budget presented. He may have made multiple speeches on austerity but he also (video 8/17/21) says that city staff were not overpaid.

In Mayor Quinto’s candidate statement he talks about building a new library, keeping senior services, and increasing revenue. He doesn’t mention that the El Cerrito Plaza project does not fund the library and that El Cerrito currently has a BBB- bonding rating. When he was elected to the City Council the city had an A+ bond rating, but the rating was lowered three times during his years in office. The BBB- credit rating came on September 24, 2020, just before this speech.

This means that El Cerrito might not be able to get funding for a bond measure to support this library or would have to pay a high interest rate. He also doesn’t mention that on 2/4/20 he said that the City should stop funding senior services because the city can’t afford it. (3:13 in the video) He also claims that San Francisco has all their senior services run by non-profits and we should do the same. San Francisco does have a city budget for senior services. Many of the non-profits that fund those services get some or all of their money from the city.

We sent Councilperson Quinto the same list of questions we sent all of the candidates and he never responded.

Vanessa Warheit answers our questions

Two weeks ago we sent questions to each of the three candidates running for the two open El Cerrito City Council seats. As of today, only one has responded. The deadline is today so perhaps others will respond. For me, the response or non-response is an indicator of how they will respond to constituent concerns.

We very much appreciate Vanessa Warheit taking the time to respond.

What do you see as the most pressing financial issue for EC?  If elected, what are your plans to address this issue?

El Cerrito is currently #6 out of 423 cities on the State Auditor’s High Risk Dashboard, and our bond rating is BBB- – one step above junk bond status. The most pressing financial issue for our city is lifting our bond rating and moving our way down the State Auditor’s list. If elected, I plan to follow the State Auditor’s roadmap, which includes setting up a Section 115 Trust (like a 401k for cities) and establishing a plan to start funding it. 

 What do you think needs to be done to address the city’s pension crisis?

We need to prioritize funding our pension liabilities, and that requires fundamentally reshaping our budget. Much like responsible adults need to save regularly for their retirement, our city needs to fund our pension liabilities annually as a keystone of our city budget. 

 What would you want to see as far as financial reports to the Council? How often? What level of detail?

Despite the lack of an integrated system, our finance department should be able to provide to the Council, at a minimum, monthly line item variance data (year-over-year, and planned vs. actual expenditures). On a quarterly basis, Council should receive an analysis of this data, which includes detailed explanations for any variances above established thresholds. 

What is your stance on accepting campaign contributions from Police and Fire Employees or their unions?

I am a clean money candidate – I am the only candidate in this race to refuse money from all corporations and from police and fire unions. I am also the only candidate to sign the No Fossil Fuel Money pledge. 

What are your plans for small business development?

Small businesses are the lifeblood of our city, and we should treat them better. I would like to streamline the permitting process for local businesses; to establish better lines of communication between the city and existing and prospective small businesses; and to implement a commercial vacancy tax to encourage landlords to lease out their properties and send a market signal that it is not acceptable to leave blighted properties in our city. I want to work with Richmond on their Green-Blue New Deal to create local green job development opportunities. I want to work with our planning commission to ensure that new development along San Pablo Avenue includes small, flexible ground floor commercial spaces appropriate for small-scale local businesses. I will also work to ensure El Cerrito local businesses are able to access funds coming from the federal government as part of the Bipartisan Infrastructure Law and the Inflation Reduction Act.

Are you satisfied with the budget process? If not, what changes would you suggest? Should FAB do an analysis of the budget’s assumptions or just make general recommendations such as “try to save $1 million”

I am not satisfied with the budget process as it currently exists. Our city is in a financial crisis, and much-needed federal COVID relief funds were spent balancing our city’s budget instead of helping needy members of our community. We owe it to El Cerrito tax-payers to be more transparent about how their money is being spent. I think we need to expand the FAB to include at least 7 members; we need to be prepared to fundamentally reshape our budget rather than simply rolling over from previous years, and to hold multiple open, inclusive, participatory budgeting sessions with members of the public. Council should ask FAB to do a more thorough analysis of the budget’s assumptions, and should heed and respect their input.

How will you evaluate the city manager’s performance?

I believe that Council should create performance criteria for the City Manager and her direct reports. Using a systematic and structured approach, Council should align the City Manager’s performance goals with the City’s goals and objectives. As an elected city council member, I would hold the City Manager accountable in reaching these goals and objectives through periodic conversations as well as a more formal annual review.

Describe what you understand to be the working relationship between the City Manager and the City Council. Are there any changes you would like to see, and if so, how would you go about it?

El Cerrito is governed under what is commonly referred to as a “weak mayor” model, in which day-to-day decision making is made by the City Manager under the oversight of the City Council. The key is for the City Manager to implement policies as established and directed by the City Council. It is essential that the Council be engaged and provide oversight. The Council is the voice of the City’s residents and, unlike the City Manager, directly reports to them. As a Council Member, I will work collaboratively with the City Manager, provide input and oversight, advocate for clear performance metrics, and ultimately hold the City Manager accountable to these agreed-upon goals and standards. 

What would you like the city to do that will restore residents’ confidence in the competence, accountability, and responsiveness of the city?

El Cerrito needs a formal commitment to transparency. The city needs a fundamental culture change regarding public information; currently many El Cerrito residents feel like the city does not listen to them or care about what they think. Public funds support City Services, and residents should receive basic information as a matter of practice. The City should provide residents with more opportunities – at hours accessible to working families – to learn about city activities and provide meaningful input. This includes:

* easy access to relevant information on the website, in multiple languages; 

* access to departments providing services and prompt replies to public requests; 

* increased and/or more flexible hours for public access to city hall; 

* improved information dissemination via social media and a public activity calendar; and

* a more open and formal process for listening to and acknowledging the needs and desires of El Cerritans across city services.

The city should also implement performance standards and accountability. The performance plans for each department head should align with the overall City needs, including service level agreements with the public. This can effectively be implemented when the City aligns the funding (budget) with required public services.

Do you support a bond measure for the library? Are you concerned that El Cerrito’s BBB- credit rating will impact the ability to sell bonds at a reasonable interest rate?

I support efforts to build a 21st century library for El Cerrito; our current library is much too small, lacks appropriate HVAC, and does not adequately serve our community’s needs. A new library will improve our city in countless important ways. However, I am very concerned that such a project will be financially infeasible until we improve our city’s bond rating. Before we go to voters and ask them again to support a bond measure to fund a new library, the City needs to demonstrate that it has its financial house in order. Once the City’s fiscal management improves, its bond rating will improve, too, making a bond measure for a new library more feasible. I am also concerned that this improvement in our bond rating may not happen on a timeline that aligns with the ongoing construction planned for Plaza BART. Since siting the library at Plaza could potentially save the city millions in construction costs, I believe the city also needs to pursue other forms of possible financing for the library; this research and planning needs to begin immediately.

Vanessa’s website with more information about her campaign can be found here.