Last year, I said that when we get to passing a budget for the new Fiscal Year — I probably won’t have any friends left. Well, this is that time — when no one is completely happy.
After all that we’ve been through over the past 15 months…the full impact of Covid, city cuts and layoffs, a State Audit and new federal funds from the American Rescue Plan, we have seen El Cerrito survive a lot of challenges.
After all that — we are still not be in the best financial shape. But we are certainly not in the worst shape anymore. And, we are going forward in better shape.
The FY 21-22 budget before us is balanced, has a small surplus, and asks for no new taxes, there are hopeful signs for revenues and new development in our city if the post covid world will accommodate. But there are also long-term concerns over time if we don’t begin to restructure our city’s finances, if we don’t grow our reserves at a faster pace and if we don’t better prepare for our PERS burden.
So, here we are at Council in late June, to determine if this specific FY budget is good enough to be approved…or if more cuts are needed.
Maybe more important to me — after months of Council working to develop a short-term budget, I believe we now have in place a better foundation to begin resolving the critical long-term financial issues in El Cerrito.
Let me mention 5 things I think that helped:
1. WE HAVE A COMMITTED COMMUNITY THAT CARES ABOUT OUR CITY FINANCES.
Our outspoken public may not always be easy to deal with, but they are always there with ideas and energy to help us shape what we should be doing — and where we should be headed financially. Without local press to monitor and deal with the events in our city, many residents have stepped in — and pushed, pushed, pushed Council to provide more scrutiny and take greater action. And we also have the advice and counsel of resident members on our Fiscal Advisory Board (FAB).
2. WE WERE AUDITED
What initially seemed like bad news, the State Audit that occurred in our city was actually a necessary 3rd party review of how we do things in El Cerrito. And as I’ve said, while not perfect, the audit report was financial therapy for this Council and our community and it set us up with a roadmap of obligations and requirements that we must carry out in a public fashion going forward. That’s a good thing for our future.
3. OUR STAFF HUNG IN THERE
City staff hung in there under difficult circumstances – with Covid, budget cuts and jobs eliminated. Make no mistake — staff fully realizes the depth of our problem here and understands the urgent need to change our ways. Amidst it all they continue to produce Council materials with monthly reviews, greater scrutiny of departments, additional public events – and, as I said, I am please the FAB took on more responsibility and relevance with increased communication to Council. The challenge ahead for staff will be to continue to provide critical services with less resources.
4. COUNCIL STEPPED UP AND GAVE DIRECTION
Surprisingly, from what I’ve heard, this Council has maybe given more review and budget direction than most past Councils:
- First of all, a new Council Finance Subcommittee was established to assist in the State AUDIT response plan and to coordinate with our FAB.
And Council passed the following budget motions which will influence future budget development:
- We proclaimed official support for the State Audit and a commitment to respond to its recommendations in good faith;
- We required, if possible, that 80% of any ARPA funds go to reserves;
- We required a plan and direct effort to seek greater PERS payments from all City employees;
- We encouraged City Departments not to exceed specific budget goals;
- We set annual budget surplus goals of $1 million to go to reserves;
- We deleted a police vehicle from city budget;
- We reinstated city supported Library hours;
- We required that a 115 Pension Trust be established so our city can finally begin addressing unfunded mandate costs in a systematic way.
- We even tried cutting our salary again, but were told we couldn’t by motion
These are concrete actions – new rules – setting up a more solid financial foundation for our city going forward.
5. AMERICAN RESCUE PLAN ACT WILL PROVIDE ONE TIME FUNDING
And, yes, there is more than $6 million of ARPA funds coming our way. I view this as good news — and not a test to see how far we can go without using it. Council has already said we should prioritize most of those funds for reserves if possible – so, if necessary, I can’t see a problem with using a small amount of that federal money, if we determine we must meet the $1 million surplus goal this budget year that FAB has recommended. (It is my hope that we do not put city functioning at greater risk with cuts before we see if City assumptions are correct.)
The necessary cuts (more than $5 million) we made to our budget have made a positive impact to our budget bottom line – but, I have also seen how those cuts may have negatively impacted how we do business.
I speak from personal experience as Mayor, that I have seen things fall through the cracks (like permits) and I ‘ve been sorry to see a new (understandable) hesitancy to take on new issues and priorities because of a lack of city/staff & bandwidth. Again, we will have to learn to serve with less.
As Mayor — I am hopeful that with Council’s recent actions and future oversight, we will assist the systematic changes that are needed here—and that we will continue to improve our financial status, improve our bond rating, reach our annual $1 million surplus goals and begin earnestly to pay down our PERS debt. And of course, we need to do these things for the purpose of providing our residents with the important services they deserve.
As Mayor, it has been my responsibility to try to protect our City’s interests and to help it move forward with an open and fair budget process that gets El Cerrito to a better financial place. It has not been easy, but I have worked to do just that. We are a work in progress – but we are headed in the right direction.
And, with what I see as a committed Council to help us get there, I am ready to vote of this FY budget — and seek any additional amendments in the future if necessary. **
** The El Cerrito City Council passed the FY ’21 – ’22 budget by a 3-2 vote.