Oakland Close to Having A Budget; Now The Hard Work Of Reform Begins

Last Friday afternoon, three budget balancing proposals were posted on the City’s web site and placed on the agenda for tonight’s special City Council meeting. One was offered by City Council members Reid, Brooks, and Brunner; one by Council members Nadel, Kernighan, Kaplan, and Schaaf; and a third by Council member De La Fuente. (A good summary of the three proposals appears at A Better Oakland.) Also posted was the budget office’s proposed “technical adjustments” to scenarios A and B.

Yesterday afternoon, the Mayor announced that the City had reached agreements for concessions with all five unions:  fire fighters, police officers, and the three unions representing miscellaneous employees. Although most of the details have not yet been made public, we have been told that through pay reductions, voluntary furloughs or pension contributions, each union has accepted a 9% compensation reduction. The East Bay Express has reported that the total savings from these concessions is $40 million. We understand that about $28 million of this constitutes General Purpose Fund savings, and the balance is from other funds.

The Mayor, City Council, and unions have all worked very hard to arrive at a balanced budget under extremely difficult circumstances, and MOBN! salutes them. If there truly are $40 million in savings, then that fact and the proposals offered by the council members leave us hopeful that Oakland can now:

  • hire back 44 laid off police officers,
  • lessen the blow to the Public Works department,
  • spend the bulk of the Kaiser Center sale proceeds on negative fund reduction, and
  • make a significant allocation toward a general purpose fund reserve.

We strongly urge the City to take each of these steps. We also urge the City to promptly assess the impact of the State legislature’s pending elimination or revision of redevelopment agencies and incorporating that liklihood into its budget projections.

We have nothing but praise for the efforts of everyone who contributed to this resolution. And now the truly hard work begins. A large structural deficit remains, and this deficit will only grow as the City continues to face increased employment and benefit costs, the likely loss of Redevelopment Agency funds, and the need to repay about $140 million in negative fund balances. We strongly urge the City to begin major budget reform efforts today.

In the short term, the City should present charter amendments to the voters that provide for a Rainy Day Fund, and that extend the amortization period for its Police and Fire Retirement System plan. This would allow the City to pay that obligation over a reasonable period of time without the need to increase its indebtedness with new pension obligation bonds.  The City should also take a hard look at amending its Sunshine Act to increase citizens’ trust in City government.  This trust will be essential in the difficult times ahead.

Between now and the next budget cycle, Oakland should completely revamp its approach to budgeting and budget presentation, taking the steps to implement performance based budgeting and budgeting for outcomes. Make Oakland Better Now! will continue to publicize and advocate for these new ways of budgeting. Both methods, if adopted, can dramatically increase government efficiency and allow Oakland to provide its citizens with the services they need at a price residents are willing to pay.

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