Oakland’s Proposed Budget: not as simple as A, B, C

De La Fuente addresses the audience at District 2, 4, 5 Oakland Community Budget Forum

This afternoon I was fortunate to attend a budget hearing sponsored by city Councilmembers Pat Kernighan (District 2), Libby Schaaf (District 4), and Ignacio De La Fuente (District 5) and attended by  interim city administrator Lamont Ewell and someone from the budget office named Sabrina. (I didn’t get her last name..sorry). Former candidate for Mayor Joe Tuman was there.  Sanjeev Handa, the Oakland Fire Chief and representatives from Oakland Rising, Make Better Oakland Now, APEN and more.

This meeting was an open forum that allowed members of the public to ask questions and give suggestions on the direction the Councilmembers should take in figuring out a budget by June 30th, the last day to balance the budget.

In case you weren’t aware, Oakland is projected to lose $58 million for the year 2011-12 and another $76 million for 2012-2013. Ewell said that this shortfall is not unique to Oakland. The nation, the state and other local cities are dealing with a shortfall this year.

There are three budget proposals under consideration. Click here to download description of the budget (2.4 MB) by Jean Quan’s office, and a simple one page scenario (45 KB) of possible cuts from each budget scenario.


Budget A, cuts to the budget across the board resulting in reduced services in areas such as Senior Centers, Police, Fire, Libraries (leaving only 4 branches open), Parks and Rec (closing afterschool rec programs, swimming pools) Public Works, and arts. (Shaving $58 million)

Budget B, pending contributions from city employees such as Police, Fire (which command 64% of our General Fund) we will have a small amount of cuts. (Shaving $28 million).  Please note, according to the Councilmembers, all the unions and city reps are at the table ready to negotiate contributions, so this option is plausible.

Budget C, pending the passing of a $80 per year parcel tax (which would require a 2/3 vote via a special public election that would cost $800-900, 000), as well as contributions from city employees, there will be a small amount of cuts. (+ 11 m).

These simple scenarios don’t mention the other liabilities that Oakland has to pay for, including a $138 million debt that we borrowed to cover the salaries of city employees to keep police, fire and libraries open and a $1. 6 million deferred payment of city maintenance (ie street maintenance, park clean-ups etc). Finally, we need to make a huge payment to Police and Fire Pensions ($483 million I believe).

Yet there are limited ideas in how to generate new revenue.  There is  a proposal to sell the Henry J Kaiser Center to the redevelopment agency which will add $29 million in revenues, and a vague proposal to reduce the city attorney office by 15%.

Each Councilmember gave their opinion on the situation:

Schaaf apparently in support of Budget Scenario B, talked about how minimal the cuts would be in this scenario.  The most painful cut in Scenario B is the elimination of 25 workers in Public Works. Libraries would not be closed and we would keep all our fire stations, although some employees would work flexible and part-time positions.

De La Fuente, who mentioned twice that he was pro union, was disappointed that there seems to be no other options. There is no changes in this budget scenario, and no guarantee that anything will get better. De La Fuente wonders why other groups like business associations or the Chamber of Commerce has not submitted budget proposals. (I didn’t know that they could..interesting) De La Fuente also suggested that the city go back to the basics: we need to cut things that are not essential but cost too much to maintain, such as the Montclair and Chabot Golf Courses.

Kernighan didn’t really give much of an opinion on either except to say that she was glad to be able to hear from the city of Oakland and looked forward to answering our questions.

So what did Oakland Residents Say? Some highlights: (each Councilmember had a chance to answer the questions)

  • Q: Why can’t the city workers contribute more? Does the City Council make contributions? Can we force the Police to make contributions, since they have not already (the Fire Department has started contributing) A: City workers already have started making cutbacks with furlough days, and yes the City Council has started making employee contributions. Yes, we can force Police to take furlough days if they do not negotiate.
  • Q: Does the city have to choose one budget scenario over another? Can we plan for B but shoot for C? A: No, they don’t have to choose just one budget scenario, they can mix and match as to what is best for the city.
  • Q: If we shut down city services like the libraries, police and fire department, animal shelters, and Children’s Fairyland will that not make the city less attractive to newcomers? Who would want to live here?A. Kernighan- yes. We are in a Catch 22, and it is something that the board must consider when going forward.

    Joe Tuman listens as the Council responds to his questions.
  • Joe Tuman: Q: Of the FTE’s to be cut, how many are going to be transferred, or just plain lost? How did the Mayor reach the $80 flat tax rate? Is the selling of the Kaiser Center legal? A: Yes some of them are transfers, but don’t know how many yet. Apparently there was a poll by Quan, (Joe mentioned that no one has seen this poll even the city administrator– interesting), but apparently this was an amount acceptable to poll respondents. Yes, the City Attorney did say that selling of the Kaiser Center is legal.

Oakland Rising Suggestions:
– instead of a flat parcel tax, adjust tax rate in accordance with personal income
– allocate future resources fairly
– come up with long-term and sustainable ideas, instead of making cuts in order to balance the budget
– Maintain the city attorney staff
– come up with alternative revenue ideas
– enforce existing laws and collect full taxes owed to the city- such as business taxes on renters and foreclosure fees.

Schaaf mentioned that:  some other alternative sustainable revenue sources would be to open up labor contracts for renegotiation. Also to change our commitment to paying Police and Fire pensions. Finally to create a rainy day fund for Oakland, similar to the one San Francisco has.

Pamela Drake representing the Wellstone Democratic Renewal Club mentioned that the group is for the parcel taxes because 1. It is better to spread the pain around instead of cutting key city jobs, 2. Better than increasing parking fees, 3. It’s cheaper than a month’s worth of Netflix.

What do you think?

[polldaddy poll=5078317]

Participate in the budget process!

Attend more City Council Budget Meetings:

  • Thursday, May 26th, 5:30 pm
  • Tuesday, May 31, 5:30 pm (tentative)
  • Thursday, June 2, 5:30 pm (General City Council Meeting)
  • Tuesday, June 21, 5:30 pm (General City Council Meeting- anticipated final passage of budget)

5 responses to “Oakland’s Proposed Budget: not as simple as A, B, C”

  1. In Scenario A the description of the cuts to libraries is put in an oddly positive way “leaving only 4 branches open”: a better way to describe the cuts in A is “Closing 13 branches”. That really punches kids, seniors and job hunters in the guts and, to my eyes, puts up a whole mess of “Oakland out of business” signs all over town.

  2. Actually, what Ignacio meant was that he would like to see the Chamber offer a charter change for the ballot, probably to eliminate the need to use city workers and unionized workers for other city-contracted work. The MOBN people seemed to suggest that they are going to propose just that.
    Also note that Budget Scenario C still includes cuts and givebacks from city workers. It’s the one most likely to keep our police staffing level with no library reductions.
    Love your blog!

  3. 1. To share the pain, propose to those affected by Pension costs, that an equal amount of the new funds that they will provide will be matched by mandatory days-off without pay by ALL City employees, other than those that meet the Proposed Pension Cost funding requests. In effect, the city will double the impact of their sacrifice.
    The day offs to be allocated as deemed feasible, but all must “share the pain”. The days-off planned to allow minimal impact on city services. Some may want to shut a complete Department one or two days per month, other may want to distribute the absentees in ways that let others fill-in where practical but, no doubt, a reduction on speed of service.
    2. Begin contingency plans for a mandatory savings account equal to 4 Percent of gross pay, for all City employees with no exceptions. The savings accounts to be maintained by a trusted financial agency outside City control. All savings will receive a 4 Percent yearly interest rate. Anyone that leaves the city payroll will automatically receive all their savings and accumulated interest after they meet normal departure procedures. These funds will be solely dedicated to the City payroll, only -no capital purchases, rentals, etc. The City will continue to cover other payroll obligations. Every year, the need to continue, and the amount, of savings will be reviewed for reductions -if appropriate. The mandatory savings plan to be in use for two years and renewed for two-year periods to facilitate planning.
    1 and 2 The public must be informed of these measures and the expected delays in some city services, other than Police and Security.
    3. Make an 8-year budget plan and borrow whatever funds may be required. A line of credit at a “good” interest rate might be available. Banks have Billions in cash since few are buying new homes. Now may be a good time to borrow, long term – eight years? Better minds will decide the actual numbers used here. Consider this a First Draft.

  4. Let’s triple the property taxes. We’ll get a double benefit. First, all the extra money can be used to turn Oakland into a California showcase city for business and the residents that can afford to stay. Secondly, the high cost will drive out at least some of the ne’er-do-wells that drive up the cost of city government in the first place.

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