At the City Council Meeting on August 15, 2023, the El Cerrito City Council took action to ensure the City’s long-term fiscal sustainability by investing $10 million of the City’s General Fund reserve balance to secure funds in case of an emergency and to provide funding for the City’s pension costs.
The City Council voted unanimously to place $9 million of the City’s General Fund reserve balance in the City’s Emergency Disaster Relief Fund (EDRF) to be used in the event of severe economic downturns or disasters. The EDRF was recommended by the City’s Financial Advisory Board and adopted by the City Council in 2019 as a part of its Comprehensive Financial Policies. The $9 million, located in a restricted portion of the City’s General Fund, fully funds the EDRF with an amount equivalent to three months of payroll costs. With this action, the City now has General Fund Reserves of more than 28% of Citywide expenditures, including the fully funded EDRF.
At the same meeting, the City Council unanimously approved a motion to create, and provide $1 million to fund, a Section 115 Pension Funding Trust dedicated to meeting the City’s pension obligations. A Section 115 Trust is an irrevocable trust under Section 115 of the Internal Revenue Code that can only be used to either pay pension costs or pay down unfunded pension liabilities, while serving as an asset in the City’s Financial Statements. It is the goal of the City Council to place additional funds in the Section 115 Trust each year.
Together, these actions further cement the City’s positive financial trajectory over the last three years, dramatically increasing the City’s General Fund reserve balance and taking actions to ensure financial health and stability into the future.
“We have put ourselves on very sound financial footing,” said City of El Cerrito Mayor Lisa Motoyama. “We must remain diligent to continue to be fiscally responsible and build on this historic accomplishment.”
City Manager Karen Pinkos also acknowledged the significance of the action, “The City is investing in our future and taking steps to ensure fiscal sustainability for years to come. We’re excited about the positive outlook for El Cerrito, and proud to serve our community from a stable financial position.”
More information about the City’s budget and finances can be found in the City’s Fiscal Year 2023-24 Budget, adopted by the El Cerrito City Council on June 20, 2023. The City’s new Digital Budget Book can be found online at http://www.el-cerrito.org/FY2024Budget.
About the City of El Cerrito
Located near the east shore of the San Francisco Bay, the City of El Cerrito is an ethnically diverse community offering a high quality of life within one of the nation’s most sophisticated and beautiful living areas. With a population of approximately 25,000 residents, El Cerrito has the advantage of being centrally located in a major metropolitan area. El Cerrito is an established community with a strong self-identity and a commitment to enhancing the quality of life for its citizens.