Contra Costa County Grand Jury • 2026-2027

Pinole's Financial Future: It's a Rough Road

Published: May 10, 2026 20 pages Consolidated Report
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Findings 26 findings

F1
The City of Pinole’s Fiscal Year 2025/26 Operating Budget is characterized as structurally balanced in its budget documents.
F2
Pinole’s Fiscal Year 2025/26 Operating Budget achieves structural balance by relying on a general fund reduction to pay for what are termed “one-time initiatives.”
F3
Within the Fiscal Year 2025/26 Operating Budget, deficits are projected in the Recreation Department ($1.8 million), the Building and Planning Department ($900,000), and the city- sponsored cable TV station ($400,000).
F4
Pinole’s finance staff project that annual operating budget deficits will increase, growing to a $5.6 million deficit for Fiscal Year 2029/30.
F5
Pinole generated operating deficits due to expenditures exceeding revenues in four of the five years prior to Fiscal Year 2025/26.
F6
By relying on reserves to pay for “one-time expenditures” for the most recent three budget cycles (2023/24 through 2025/26), Pinole has not complied with its financial policies.
F7
Pinole has a total sales tax rate, at 10.25%, among the highest of any city in Contra Costa County.
F8
In Council meetings and workshops, Pinole officials have acknowledged the difficulty of obtaining voter approval for additional tax measures.
F9
Pinole’s long-term financial forecast projects 10 years of operating deficits beginning in Fiscal Year 2026/27.
F10
The April 2024 “Baker Tilly Strategic Financial Planning Report” projects 20 years of operating deficits through Fiscal Year 2044/45.
F11
The Baker Tilly Report emphasized a need for urgency in addressing ongoing deficit spending.
F12
Pinole’s CalPERS unfunded pension liabilities have increased from $18 million in 2014 to $45 million in 2024, an increase of 150%.
F13
Pinole’s most recently reported CalPERS annual obligation from 2024 was $6.5 million.
F14
The CalPERS obligation is projected to increase by more than 10% in Fiscal Year 2026/27.
F15
Pinole’s Section 115 Trust was funded in 2018 from proceeds from a one-time asset sale for $16.3 million to help offset the unfunded pension liability.
F16
Pinole staff projects its Section 115 Trust funds will be exhausted by Fiscal Year 2030/31.
F17
Pinole has an unfunded retiree healthcare liability (Other Post-Employment Benefits, or OPEB) of approximately $35 million.
F18
The OPEB obligations have been funded on a “pay as you go” basis with annual contributions from the General Fund.
F19
Pinole’s public roads are graded at “55” in the 2024 Metropolitan Transportation Commission Pavement Condition Index survey, indicating the roads are “At Risk” and require extensive rehabilitation.
F20
Pinole staff has estimated $60 million will be needed for public road capital improvements over the next 10 years.
F21
Pinole staff has identified an additional $60 million funding gap for infrastructure capital improvements other than public roads over the next 10 years.
F22
The Pinole finance staff told Council in 2025 that the City does not have the necessary funding for these infrastructure capital improvements.
F23
Pinole’s deferral of capital improvements will translate into higher costs (replacement versus repair) in the future.
F24
Through the Fiscal Year 2025/2026 budget cycle, the Council had not publicly developed or discussed a comprehensive strategy for expenditure reduction or service adjustments to address projected structural budget deficits.
F25
An assessment of Pinole’s overall fiscal health, based on a dashboard developed by the California Policy Center using standardized financial measures, rated Pinole among the lowest of all reported California cities from 2022 to 2024.
F26
The Baker Tilly Report concluded that Pinole faces ongoing severe operating budget issues, including the threat of bankruptcy, if it does not balance annual expenditures and revenues.

Recommendations 6