City Council wants to quickly extend the City Managers Contract by two years

So the City Council, which has been unable to move quickly on an financial issue, is moving rapidly to extend the City Managers contract until December of 2023. Her current contract expires December 2021.

The negotiators Councilperson Quinto and Mayor Lyman have not asked the City Manager to make any real concessions as the city falls into bankruptcy. Her contract is revised to keep her increased contribution of 3% to Cal-Pers which was implemented this year. It continues to not offer the car allowance, which is something that Councilperson Fadelli has stated numerous times he would fight ever returning. It does not give her a COLA UNLESS other non-represented management staff receive a COLA. It does roll back the 3% COLA she got in 2019 when the city was already in financial dire straits.

So the only real concession here is that she has a salary reduction of 3% (the rollback of the 2019 COLA). The council meeting packet (page 114) states that she would be in the bottom quartile of Contra Costa City Manager salaries. Which sounds good until you realize that they use every city to compare rather than equivalentLy sized ones. Her base salary will be 230K a year after the reduction.

If we look at cities close by that are similarly size (20-30K populations) and using 2018 figures you will see the following

Albany-Population 19,696-City Manager salary $160,236

Hercules-Population 26,276-City Manager $220,000

Orinda-Population 19,926-City Manager Salary $210,095

Pinole-population-19,250-City Manager salary $219,910

Lafayette-Population 26,638-City Manager $247,000

San Pablo-Population 30,990-City Manager Salary $244,391

If you take the average salary of those cities you get $216,939.

I question the rapidity of this contract. The City Manager was asked at the last meeting to bring back recommendations for cuts to the Recreation Department with council members stressing the need to act quickly. Are there any recommendations in this packet? No there are not. In fact, there is no financial update on the agenda at all this meeting.

We also have two new council members being sworn in during January. Should they not get an opportunity to vote on this contract since they are going to have to be part of the fiscal management of this city? This contract that was negotiated in part by Mayor Lyman who is not going to be on the council after January.

I would love to see this contract negotiated with the reality of a nearly bankrupt city which means some real concessions. If other employees are going to be hurt by upcoming financial cuts the City Manager should also take a salary hit. She has been in the City Management for many years and has been part of the culture that has created this mess. The Recreation Department cuts that are likely to happen may very well impact the most vulnerable of our city’s residents including our seniors. If we are going to cut senior services should not the City Managers salary also be cut? How many senior meals would be paid for if her salary was cut to the average City Manager salary of $216,000? Instead they are keeping those items separate and renewing her contract quickly while delaying Recreation cuts. There are also no consequences in the contract if the city goes bankrupt. Should that not be reason for dismissal?

I think residents deserve to see the results of the city’s independent audit and the results of the State Audit before we renew the contact of our city manager. The CAFR is due out in January and the state auditor’s report is tentatively coming April/May.

If you would like to make a public comment on this for the December 1, 2020 meeting it is agenda item 7B. Send public comment to If there is no public feedback on this item it will be passed probably 5-0 without questions even asked. Continue to challenge our council to do better. This contract needs more negotiation and needs to be not finalize until at minimum the new council gets sworn in, the cuts to the Recreation Department are decided finalize, and the new independent audit is released. Why not wait until at least February for all of those things?

Do Nothing City Council continues to do nothing even as the State moves El Cerrito to #6 on the state high risk list

Do Something Vs Nothing Two Way Road Signs Take Action 3d Illustration

Today the State Auditor released their annual list of cities at high risk of financial difficulties. This list is based on FY 18/19 figures which was a better year for many municipalities. However, El Cerrito dropped from #7 to #6 largely based on lack of reserves (El Cerrito not only has no reserve but owes an 8.5 million dollar loan due at the end of the fiscal year.

At the meeting on November 17, 2020, the City Council again DID NOTHING!!! Okay, Councilperson Fadelli did say that he hoped the restructuring of the police saved money. City Council did direct the City Manager to come back with more information on what Rec programs are no longer supporting themselves and what cuts are suggested. However, they did not pin the timing of that recommendation down. Both Councilpersons Fadelli and Pardue-Okimoto did say that they believed it should be ASAP and the Mayor stated the cuts should be done before the third quarter as the city manager had suggested in the recommendations with the fiscal report.

Councilperson Rochelle Pardue-Okimoto brought up the issue of the projections for sales tax and why the estimate was what it was. (see this blog post for issues with projections) She asked to compare the current sales tax with the beginning of the shut down in March. The Finance Director gave another hard to understand answer (2:49 in the video). He did say that El Cerrito gets some sales tax revenue as part of a county pool for taxes paid for online purchases which has mitigated some of the other sales tax revenue decreases. The Finance Director insists his figures are good. He also said that Honda of El Cerrito sales tax is down 49%. That is a huge financial loss of revenue for the city.

Councilperson Pardue-Okimoto also asked about Franchise Taxes. The Finance Director said it is the lowest in 4 years but he still wants to watch it until the end of the year. Because why act now! (okay I added that last part). She also questioned the business tax numbers and reflected on how that might affect sales taxes.

Councilperson Fadelli did ask about when actions would be taken. The City Manager then said any reductions would be staff reductions and thusly service reductions. She said that they have been in negotiations with unions which is necessary for staff layoffs or salary cuts. She also said she wanted to wait until the end of December. Both to have more information on city finances and because she did not want to do layoffs before the holidays. Councilperson Fadelli also asked about staff revenue projections (Thank you!) and brought up the issues raised in our last blog post. The City Manager was very dismissive of those numbers and stated no one knows how people are doing projections. I would like to very clearly state that those numbers were BASED ON ACTUAL NUMBERS for the first 4 months of the year rather than the Finance Director’s fantasies. I hope that next meeting the council members push further and specifically ask “Why are the payroll numbers being projected for the rest of the fiscal year at 200k a month less than what the actual costs have been for the first 4 months of the year.” If you send a comment to the council or a council member please ask that question. If you get an answer forward it to me at

The Finance Director dug in on his projections and the council seems unwilling or unable to really challenge him. Councilperson Pardue-Okimoto did say that his idea that things would be better in 3-6 months may not be realistic due to many reasons. (Remember she is a nurse). The vaccine could take a long time for distribution, many people will not get the vaccine, and many people have made lifestyle changes such as a parent leaving work to take care of children that means they will need recreation services less.

Everyone needs to be warned because of the slowness of staff and council to respond (was I the only one who predicted a Rec financial issue at the beginning of COVID?) the next round of cuts is going to hurt. Popular recreation programs will be cut. Beloved staff will be laid off. This is going to be painful. People are going to suffer from either losing their job or losing a needed services. And also know that if we had run a more economically efficient city and had an actual reserve this would not have been as bad as it is going to be. If staff and council had taken it seriously when the auditor first brought up that the city might not be able to continue as a going concern this would not have been so bad. No one could have predicted a pandemic but we could have had reserves.

The City Council and staff and the community are also going to have to recognize that Public Safety (Fire and Police) are over half the budget and that if we are going to dig out of this some cuts need to happen there. The county grand jury reported on police staffing in the county this year and found that El Cerrito had the second-highest ratio of police officers per 1,000 residents at 1.8 with (San Pablo was #1). The state average is 1.48 and the county average is 1.09.

Our Fire Department had 4 Battalion Chiefs to Albany’s 0 and is known to be top-heavy. (At this meeting one Battalion Chief retired-can we replace that position with an firefighter rather than a manager?) Almost no one wants to cut fire services in our city but surely there is a way to level down management and run more efficiently.

Links to articles are below as are the email addresses of our current council members.

San Francisco Chronicle article on state risk

State Auditor dashboard

El Cerrito Council Meeting November 17, 20202 video

Emails of the City Manager and City Council Members

Karen Pinkos-City Manager

Greg Lyman-Mayor

Paul Fadelli Vice Mayor

Councilperson Pardue-Okimoto

Councilperson Janet Abelson

Councilperson Gabe Quinto

Photo Copyright: iqoncep

El Cerrito is in big trouble and the Finance Director continues to project we are okay

Things you should know about the budget before the next City Council meeting on November 17. 2020. The packet is found here.

1. Charges for Services (mostly Rec Dept) are now estimated to end the FY 600k in the hole. Staff has slightly woken up and decided to maybe do cuts in the third quarter though whether or not the 5 staff positions are all from Recreation has not been stated. Making cuts with half the year completed means the cuts that are made will be more severe than if the Staff and City Council had made them in the first half of the year. I am not a financial analyst but I could have told staff that the Rec Department was going to struggle this year. 

2. The Transfer Tax has been saving El Cerrito. It is currently trending at 325k a month versus a projection of 200k so that is positive and that has been mitigating the damage from the Rec Department losses. We have no idea if this trend will continue into winter. It seems likely not to as most people hold sales off for a few months during this time of the year. 

3. Revenue predictions continue to be unrealistic especially with the Sales Tax. The actual number received for August was 585K for September it was 556k and for October it was 554K. So what are the predictions for each month the rest of the FY? The projections are 586K a month. At a time when businesses just closed again and the winter is predicted to be horrific as far as COVID. Where is this number coming from?

4. Personnel costs this year are high. These costs are paid out twice a month and then twice a year there are three payments. However, in the projections in this packet, these higher actual costs have not been integrated. They continue to use the same lower projected number that they have not been meeting thus far this year.

At the October meeting, we were told the prediction for personnel costs for October was $2,242,000. However, the current document says the actual costs were $2,462,000. That is a $220,000 differential. 

A smarter person than I set up a spreadsheet and sent it to me. He set it up using the actual numbers we have for the first three months for sales tax and personnel costs. We used 400k a month for Rec services based on the last two months. We have been unable to get historical data as of this date so we are doing projections based on the 4 ACTUAL months of this year’s data. What we found was horrifying. With those numbers, we end the year we would have a surplus between 6-7 million dollars. This sounds great until you realize that the City needs 8.5 million to pay off the TRAN loan. The difference between the 6 and 7 million dollars is whether or not the Transfer Tax stays trending high or not. But based on these actual numbers we project that the city will end up 1-2 million dollars short of what is need to pay off the TRAN. This equals bankruptcy.

Some questions to ask the council and staff are:

1. Why are the projections not based on the actual numbers for the FY thus far?

2. Why do we have a finance director that cannot make projections that accurately reflect current market conditions?

3. Why did no one predict that the Rec Department would end with a deficit sooner given the realities of this year?

4. If there are 5 projected layoffs but not until the third quarter how much will that save the city? What Departments are the cuts going to be in-are they all Rec Department or are other departments involved. If layoffs occur on April 1 and the average total compensation is $200,000 per employee it would be a $1 million savings for an entire fiscal year but only $250,000 for the quarter of the year. This is assuming that these are higher salaried people laid off. The reality is they are probably proposing more cuts to the lowest-paid people. Regardless we need to have a number attached to these possible savings.

5. Is this yet a crisis enough for the council to recommend cuts?

6. Are these small proposed cuts enough to balance this precarious budget?

7. Why are personnel costs more than projected? When are COLA raises given? Because if it is January 1st that needs to be addressed ASAP. When are furloughs going to be extended for the full fiscal year and not just through the end of the calendar year which is quickly ending?  

The next meeting is Tuesday, November. Send in public comment. To send comments send an email to budget is item 7A on the agenda. It is helpful that if you have comments you send it in as public comment because it continues to create a record of citizen concerns that an email to your councilperson does not create. I encourage people to do both. The state auditor is looking at everything. We are creating a paper trail for them. They have currently started the city audit though it may be months before we hear anything from them. We are also still waiting for the City audit to become official in January. 

Here are the other emails if you want to copy council members on your public comment or say something additional to them.

Karen Pinkos-City Manager

Greg Lyman-Mayor

Paul Fadelli Vice Mayor

Councilperson Pardue-Okimoto

Councilperson Janet Abelson

Councilperson Gabe Quinto

Editing comments. Post was edited 11/14/2020 to clarify that the trend for 2020 Transfer tax was 325K a month not $375 a month. I clarified that it was not explicitly stated that the staff positions cuts would be all from Rec Department. We also do not know explicitly if the cuts proposed are for the entire 600K estimated hole in the budget due to Rec Department.

Things to know about the 20/21 budget

After my last post lamenting the lack of information from the city I tried one more time to get information from the Mayor and he too said just look at the budget book. It’s all there.

But it’s not. There is not a clear spelling out of the cuts made as shown here. Check out the budget book for yourselves. It is 250 pages I had to review again to try and flesh out the details of the below cuts. And why the City Clerk and Mayor both think that referring people to a 250-page document is transparent and accessible government is beyond me. But I can only fight city hall so much.

So what else should you know about the budget? (in no particular order)

  1. There were no substantive cuts in the police budget. It says above there is a 595K savings. But if you look at the budget book it says the jobs cut are the two school resource officers cut by the Board of ED (and they paid for one of them) and a vacant admin position. And any further savings is by keeping unfilled positions unfilled. (page 99).

Here is the current expenditures (page 10) Notice the police at 24.3% of the budget

Here is the prior year break down of expenditures with the police at 24.7% of the total budget. Not much difference.

2. The Finance Department considers getting a pay-day loan to keep the city afloat as one of their top achievements. (page 86)

3. The residents of El Cerrito were greatly deceived about the revenue for Measure D. At the time this was coming up I was telling anyone who would listen (and it was not many and before this blog) that Measure D was promising a lot of wonderful things but the measure did not include the same language as the tax it extended and allows a great deal of money to go to maintenance. And below we see half a million dollars going from construction to maintenance. So we can look at it as half full-at least the parks will be maintained or half empty as we were promised so many things and will get none of them from this tax. (page 56). I need to investigate more but it seems like everything from Measure H is going to maintenance now.

4. The revenue projections for the year seem really broken. Here is what was adopted. (page 27)

Here is the July-September Revenue report given at an October meeting. (page 45). So we would expect to be at about 25% of revenue expectations thru the first quarter of the year. Except for property taxes because of the timing of the receipt of those. You will notice in this chart below that the 20/21 budget has a projected INCREASE in sales taxes from 19/20. Did someone not tell the Finance Director we are in a recession and still mostly sheltering in place?

This one is revenue projections for the year. They have not made realistic projections at all. Especially in regards to sales tax which is one of our top revenue sources after property taxes. And you can see all the red at the bottom as far as what our cash flow looks like during the year even with these unrealistic expectations.

I am sure there is much more wrong in there but these are the things that came to me immediately when reviewing the budget book. Feel free to email me at if you have other things you think I should take a look at.

City Council and Staff refuse to give basic information

I follow the budget pretty closely. I read the materials put online and try to translate them for the average resident who is interested but not able to dig through all the documents. I have been trying for months to get a detailed answer as to the budget cuts that have been made thus far. Not the chart below which has been repeatedly put into the packets but an exact description of what positions were cut and when and what that savings was. I know in the last packet there were many letters trying to save the job of a swim center staff person. I want to know what his job was and when it was cut and how much it saved the city. Same with the Assistant to the City Manager because I believe that job is not cut until January 1, 2021.

What restructuring was done at the Fire Department? Same with the police because we are not seeing any real drop in the police budget. It appears it might be unfilled positions cut. If the position was never filled is it really a budget cut? The funding for the landscape services-what was cut and what was moved to Measure H. This should be readily available information. I have requested it numerous times both through some council members and more recently through the city clerk. The city clerk referred me to the budget book with no citations of pages and I was unable to find anything with any more specificity than the below chart.

Mayor Lyman recently responded to a resident question by saying there were still cuts proposed in June on the table. Cuts on the table that haven’t been made?? I requested more information on that and was directed to this presentation by Management Partners. This presentation had many cuts in it but as far as I could tell they were never discussed in depth. One of the cuts was the elimination of Fire Station 72 and I know if that was ever discussed there would have been a big public outcry.

I went back and reviewed these strategies. Some of them have happened like the elimination of passport services and the library hours were decided not to be cut. Most of them are unclear as to whether they have happened or not. What was very interesting is this nice slide on the assumptions used for their forecast. This is something we have been begging the council to ask for from the Finance Director for his projections. These forecast assumptions seem reasonable given circumstances (and they were made several months ago). There was also an additional slide talking about the need to take action NOW!

What was the point of hiring these consultants and getting their recommendations and projections and then ignoring them?

I also requested records to see what cuts were being put into the future budget projections. I was told that there were no records in regards to that. So we continue to not know things like if the furloughs were carried over into future budget years?

The city’s refusal to be transparent has been an issue since long before this crisis. The only way they will be transparent is if we the residents push them to do so. These questions are not brain surgery. The information is readily available from the City Manager. So why are they refusing to give that information out?

Again, please write your council members and tell them to get this information out there. Please remember that the longer it takes for an action to happen the more severe the actions are taken will be.

We are alarmed but refuse to take action-City Council meeting 10/20/2020

But they refuse to take action! Councilperson Pardue-Okimoto was once again the lone voice saying make cuts now. As you can see from the below statement included in the packet we are at 11% of revenues with 25% of the year completed. Now there is an issue with the city getting our Transfer Tax money from the county due to logistical issues so that will make up some of this deficit. However, what we are seeing month after month is overly optimistic revenue projections that have no basis in reality. During the meeting, the Finance Director said we had 9 months to make up 4 million in revenue from the Recreation Department. Does anyone think we will be able to make up some of the lost revenue losses in this fiscal year? He also stated he would amend if he heard from the Recreation Department that their revenue was down. Is that not a number that should be being passed on to the Finance Director monthly? The Recreation Department was formerly referred to by Councilperson Fadelli as El Cerrito’s cash cow. And this cow is no longer producing. We need massive adjustments to be made.

Apparently an over $844,000 revenue shortfall in one quarter is not enough to inspire the council to act. Mayor Lyman was alarmed. Councilperson Quinto was alarmed but both said lets keep on watching for another month or two. Because not acting on bad budget news is exactly how we got to this crisis in the first place.

I am at a loss here. Except for a few dogged individuals the public comment is quiet unless they try to cut something people love like the library or a swim center staff person. While the council has at least improved to the point that they are looking at monthly statements their refusal to act is a stunning betrayal of public trust.

I get the public numbing out. We want to live our lives and not be constantly worried about government on all of its levels. However, if the city goes bankrupt it will be a disaster. Every service that people love will be decimated. Services that are needed like Fire will also be cut. Look at what happened to Vallejo. They paid over 20 million in legal and other fees on their bankruptcy. They are struggling to this day, 8 years after emerging from bankruptcy, because of their pension debt which was not resolved in the bankruptcy. At the time they cut the library and senior services and 40% of the police budget. This is what El Cerrito faces without better fiscal management. The consultants hired by the city already have proposed closing Station 72 of the Fire Department something that is widely not supported. But at the end of the day we need both more revenue and expenditure cuts. We need a City Manager and Council willing to make substantive changes. All the changes thus far have not even touched the pension debt issue which is rarely even discussed.

If the City declares bankrupcty (which will happen if we cannot pay back our 8.6 million dollar loan in June 2021 we can anticipate all services to be cut or eliminated. We can perhaps even predict falling housing values like what happened in Vallejo.

What I can say is if you are concerned please write to your council memebers and also submit public comments at the meetings. Council members need to hear from residents. Every voice does matter. If it had not been for a bunch of people sending emails and pushing I doubt we would have seen much action at all. And if you have not voted for council yet please vote for the people you think will best be able to address this budget crisis.

Karen Pinkos-City Manager

Greg Lyman-Mayor

Paul Fadelli Vice Mayor

Councilperson Pardue-Okimoto

Councilperson Janet Abelson

Councilperson Gabe Quinto

Election News Updates

The Election News page has been updated with the 2nd campaign filings for the candidates. The candidates will be meeting with Daniel Borenstein of the East Bay Times and I will post that when it comes out. It is a shame since many of us have voted already.

Most significant findings form the campaign finance reports.

Matt Burnham is heavily support by the police union for $3,000. He also has a large donation from a person called Paul Ought a software developer. No information was found on this person with a superficial google search.

Tessa Rudnick, Paul Fadelli, and Lisa Motoyama each have some substantial union donations many of them overlapping especially with Fadelli and Motoyama.

Tessa Rudnick got heavy support from two different firefighter unions the Berkeley Union and the Local 1230 Union.

Isis continues to self fund. William Ktanses and Art Yee do not have campaign committees so thus they do not have to file reports.

Jennifer Greel has a small amount of donations that are all small.

The City Staff continues to “monitor the deficit” as our revenue projections are way off.

The packet is out for the meeting on October 20, 2020. It is a shorter agenda with the financial reporting agenda item 7-A. The information for this item in the packet starts at page 42.

A quote from the section on Revenues. Bold is mine.

“The expectations for Charges for Services is  based on historical first quarter collections during 2017-2019 that have ranged from $1.3to $1.5million. The expectation for the current period was tied to the lower end of that scale due to the Covid-19 pandemic. Even with this lowered expectation it appears that revenues are $624,000 under budget at this point in time.”

Remember two posts ago when I said that the end of the year projection was a surplus of just $663,032. So no action here and we end with zero surplus. And surplus is a misleading word since we have an 8.5 million loan that any “surplus” would be used to pay off. The initial reports from the un-audited budget from 19/20 are that we ended that year with a 2.3 million deficit.

The summary quote states-bold is mine

“The Amended Budget anticipates a General Fund surplus of $662,000. The expenditure side of the budget is relatively certain, but there is uncertainty surrounding revenues, especially Charges for Services which is predominantly Recreation Department Revenues. The projected $2.3 million General Fund deficit from the last fiscal year will be partially mitigated by the projected surplus. It must be noted that one time revenues, government grants, or unforeseen increases in revenues will help reduce the deficit further. Staff will continue to monitor the deficit and report to City Council through the monthly reports.”

So even with a reports saying projections are off the city staff are insisting that all is well. We may still see some “unforeseen increase in revenue.”

How about we recognize we are

  1. Almost bankrupt
  2. In a recession
  3. Making projections based on years that are not 2020 with all of its complications.

If you look at the budget figures provided in the packet it seems that the projections for revenue are higher than 19/20. I would like to know why that is? How is the Finance Director making these projections and can we trust them given the history of El Cerrito financial projections?

So actions-please again write the council and send it an email for comment to the City Clerk for public comment at the meeting budget is item 7A on the agenda

Karen Pinkos-City Manager

Greg Lyman-Mayor

Paul Fadelli Vice Mayor

Councilperson Pardue-Okimoto

Councilperson Janet Abelson

Councilperson Gabe Quinto

Suggested comments

  1. When will the council take action and make cuts commensurate with the seriousness of the situation?
  2. Please require the Finance Director to report on how he is making revenue assumptions with all the assumptions he is using listed.
  3. When does the council intend to deal with rising Cal-Pers costs and how?
  4. Please require that the Finance Director follow up on the questions the Mayor asked last time about financing charges being down so substantially.
  5. Please have council members state on the record why they are refusing to ask for more cuts (exception is Councilperson Pardue-Okimoto who has been asking)
  6. Please state clearly any revenue that is expected but has not been reported on. It seems that we keep hearing about one-time revenue sources but have not seen any specifics.

More of the same inaction from El Cerrito City Council on the budget-When is enough enough?

The El Cerrito City Council continues to refuse to take real action on the budget.

I will start this post by stating that Councilperson Rochelle Pardue-Okimoto was a superstar during the meeting and she would have taken action. I will also be honest and say that I did not watch the entire meeting. I did watch every section where I share quotes here. I tried to make quotes as close to verbatim as possible but that was not always possible and some statements were not included. I do not believe that changes the context but encourage you to go to the the video link and verify for yourselves. I have indicated the time of the quotes so that people can watch for themselves. 

I am going to outline several big issues.

  1. Minimization of the bond rating drop.

At 3:22 Karen minimized the bond drop because S&P stated the outlook was stable from negative. She stated that the TRAN rating is different and acted as if this rating would not affect our interest costs for the next TRAN. This is our credit rating. Karen said that S&P had been monitoring council meetings and she stated because the council made cuts we got a stable outlook. Then Karen said if the city borrowed more money it would cost the city more money. So, it is confusing that she says the TRAN rating is different because this does mean we will pay more interest. It was stated that it will impact any financing for any capital improvements.

2. Why is the city ignoring the massively rising costs of Cal-Pers?

You will see in the above chart Cal-Pers costs are broken out into normal cost which is the current costs and the unfunded liability, which is what is unfunded from years the city did not pay into the system (that is a long story and something many cities chose to do)

In the meeting at 2:33, Karen says that the projected amount of the unfunded liabilities is 4.8 million. 

At 2:45 in the video Councilperson, Pardue-Okimoto brought up that the city’s liability increased from $61.8 million to $88.2 million per year. That represents approximately $2 million per year in additional costs. She reminded people that it is something that we should be preparing for now.

Karen responded with a statement about advocating with the state and monitoring costs but nothing about how this giant increase in costs would be paid for.  Remember it has taken us almost a year to get to the current 4 million in cuts done during this process.

3. Mark Rasiah’s incompetence. 

At 3:28 Mayor Lyman started questioning the Finance Director about financing costs. The Mayor was pointing out that the documents showed a savings of almost a million dollars in that line item and asked the Finance Director several times in several different ways if it was a real savings. Mark insisted that there was a real savings but that some of it was a cut in professional services costs. It is a very painful piece to listen to. The Mayor pointed out that if there was a 1 million dollar savings it should have been heralded and it should have also shown up in the bottom line neither of which happened. 

4. Councilperson Rochelle Pardue-Okimoto was a superstar

3:48 Councilperson Rochelle Pardue-Okimoto starts talking-this is not her complete statement but most highlights.

I do not think we are building our reserves as quickly as possible. It is up to the city council to make the hard decisions.

She brought up police department positions-bringing up the two positions were eliminated by the school board but not the council and the other position was already vacant

We stated we should show our values by our funding. She wants to protect the library and suggested putting it under the police department budget. She asked what will be the trigger for change? What if retirements do not happen? 

Another thing I brought up but did not get much support for is looking at our salaries…. Clearly shooting for the median is not working for us. I couldn’t help but think who hires and pays our consultants? Of course, the consultants are not going to say to the people who hire us and pay us, we think you should cut your own salaries. I personally do not like how we are comparing our salaries to big cities. I think we should compare our salaries to small cities. If we do not cut salaries, then we need to extend the furloughs in order to stay afloat. We need to do something now, and I do not think this budget does that.

We need to budget for disaster. We need to prepare for that now. We need to prepare today for the disaster that can happen tomorrow. 

The weight of the Financial Advisory Board does not carry the weight with me anymore because they approved the previous budget that helped us land in this position. I was listening in at FAB and someone asked the city manager why the city is waiting until January to do these layoffs and the city manager replied because the city council thought that would be best. I remember thinking I don’t remember being asked about that. It is all semantics. They present us with something and we vote YES and then it comes back that it was our decision. Where does it really come from? 

3:55 If I had to make these cuts, I would have made them a lot sooner. At the end of the day, the residents are looking to the city council to make these cuts. I depended on the advice of the FAB in the past at the end of the day it is us that the residents expect to make these decisions. I don’t want to look back on this and have more regrets. I will be voting NO on this budget.

#5 More of the same from other council members

Councilperson Quinto keeps saying he was deceived and that big austerity cuts need to happen but says he will vote yes on the budget. Councilperson Paul Fadelli says let’s pass this to show we are doing something (4:03). Let’s pass the buck to the state auditor. 

Councilperson Quinto at 3:57

 I am going to support this budget. It changes every day and will continue to do so. We need to look at it monthly and we will have to make more cuts and it is all about austerity. The independent auditor was telling the truth. We need checks and balances. We have not been getting this for the last 15 years, we have had the same progressive council that agrees on everything. We cannot do that anymore. We have a city manager now that tells it like it is and doesn’t give a rosy picture. We’ve done three taxes since I’ve been an elected official in six years. We are still spending, spending, spending, and we need more cuts. I look forward to the new council that will help me make these cuts. This is going to be a painful next three years. We just did the wrong thing, and it is nobody’s fault. What I learned is to not listen to your colleagues. They have their own agendas and are lying.

Councilperson Quinto attacks his colleagues for lying to him and stated that the newspapers were right years ago when they said the city was not prepared but he chose not to believe them.

It is very confusing to this writer that he talks about the need to not have unanimous votes and how he wants a NEW council to help him make cuts since this council won’t do it. But he is going to vote for the terrible budget anyway instead of showing the courage of Councilperson Pardue-Okimoto

Councilperson Abelson moved at 4:16 to pass the budget and Councilperson Quinto seconded it and it was passed 4-1 with Councilperson Pardue-Okimoto being the one no vote. 

The numbers don’t work-El Cerrito Proposed Budget 20/21

I just reviewed the 419-page packet for the City Council meeting on October 6, 2020.
I have many questions because the numbers are just not matching. The document starts on page 140 of the packet. In her memo (page 141), Karen Pinkos says the following-(Bold is added by me)

“With these adjustments staff is proposing a General Fund Budget of $39.3 million in revenues and $38.7 million in expenses for FY 2020-21. This represents a $3.4 million (or 8%) reduction in revenues and $3.9 million (or 9%) reduction in expenditures over the baseline budget.”

She later says (page 142)

“With all funds combined, the proposed FY 2020-21 budget recommends total expenditures of $53,078,141 and provides funding for all City services, including Police, Fire, Recreation, Community Development, Public Works, and City Management. At this time, total revenues are projected to be $52,837,251; these funds will continue to be monitored and updated as the COVID-19 is expected to have impacts on several funds including Gas Tax, Measure J Return to Source, SB-1, Street Improvement Fund, and Measure J Paratransit. For FY 2020-21, staff is proposing a General Fund budget with revenues of $39,377,869 and expenditures amounting to $38,714,837, resulting in a surplus of $663,032.”

Later in the budget (page 182) they say

“While the City’s General Fund revenue sources are fairly diverse, there is a reliance on elastic revenue sources to provide fiscal sustainability for the City. Before the pandemic, the largest revenue source, Property Tax, comprised about 26% of total General Fund revenues. There is the potential for Proposition 8 assessment appeals under a prolonged recession scenario that may impact property tax revenues by 2% in FY 2021-22. Sales tax revenues totaled 18% of General Fund revenues before the recession. The City experienced about a 10% decline in sales tax in FY 2019-20 and is expecting an additional decline of approximately 13% in FY 2020-21. It is expected that sales tax revenues will not recover fully until FY 2023-24.”

The city took out an 8.5 million dollar loan this year to stay afloat. They desire to have a 17% reserve. They are saying sales tax revenue will be lower as will the gas tax and potentially property taxes but they are planning on ending with only a $663,032 surplus. Which if it occurred would get next year’s loan down to 8 million dollars. In City Council meetings they keep saying they will have it paid down in 3 years. At 500k a year it will take 17 years to get the loan paid off. You can’t build a reserve until you pay off the loan. So maybe 25 years to get us on track? This 600+k gives us very little wiggle room in a time of economic crisis. The idea of an 8% reduction when we are on the verge of bankruptcy is shocking. A 20% reduction seems more in line with the level of crisis we are in.

On page 183 they paint a where the numbers do not work.

“Budget Strategies To address the fiscal gap in this recessionary environment and to restore General Fund reserves to the minimum recommended reserve goal of two months (17%) of annual operating expenditures, the City is implementing budget strategies of $1.5 million in annual budget savings. These reductions are beyond the actions the City included within the preliminary FY 2020-21 budget. This action will restore General Fund reserves above zero by FY 2022-23 and to the minimum recommended reserve goal of 17% by FY 2025-26, as shown in Charts 2-5 and 2-6.”

Remember before we can build a reserve we have to totally pay off the TRAN loans. The reason we get these loans is because we have no reserves.

The information on the Fire Department was also confusing. They have said they will fill three open positions on page 233.

“For the first time in over a decade, the Fire Department will be fully staffed operationally beginning in January 2021. The Department will not rely on overtime from the three unfilled authorized “coverage” positions as in years past, resulting in approximately $400,000 savings in overtime costs. Fire Department overtime (non-OES), which has exceeded a million dollars in each of the past three years, is budgeted at $500,000 and will be contained at this level once the three vacant positions are filled.”

However, if you look at the following chart overall personnel costs are up 500k. So where is the savings? Where was the line item for OT if it was not in personnel? Are we saving money in the FD or spending more?

Regarding the police department, the only positions cut were an administrative position and the two school resource positions. Those were cut by the school district which had paid for one of them. It seems that any future cuts (based also on what the Chief said at the last meeting) are aspirational. They are waiting for retirements and then will cut positions. They are not making cuts now.

Page 242 states

“Position Listing-The total authorized positions for the Police Department includes 55 full-time positions, including 43 sworn officers. The decrease in this fiscal year reflects the elimination of the (2) School Resource Officer (SRO) positions and one (1) Management Analyst position. The department intends to hold a number of positions vacant in FY 2020-21 to achieve expenditure targets: the full-time positions are four (4) Police Officers and one (1) Senior Records Specialist, and two (2) Part-Time Community Services Officers (CSO). If other vacancies develop, these may also remain unfilled to achieve a staffing goal of 37 sworn officers.”

Once again the staff and council are not taking aggressive enough actions. Last meeting Council members Pardue-Okimoto and Quinto both pushed for more cuts but NO ACTION was taken. I beg those council members to push harder next meeting and hopefully, a third council member will have the guts to agree. This budget should not be approved without an additional 10% in cuts. The police department seems to have some low hanging fruit. The administrative staff is only committed to furloughs through the end of the calendar year so that would save 300k more if extended through the FY. We should be aiming for a surplus more in the 2 million range so we have room for emergencies and we can take a big piece out of the TRAN for next year. Because remember our bond rating dropped and that loan (if we get it) will cost the city even more than the 100+K it cost this year.

I urge readers to email in public comment and/or write the council members about this crisis.

City Clerk for public comment at the meeting budget is item 7A on the agenda

Karen Pinkos-City Manager

Greg Lyman-Mayor

Paul Fadelli Vice Mayor

Councilperson Pardue-Okimoto

Councilperson Janet Abelson

Councilperson Gabe Quinto