At City Hall, on Wednesday, January 25, at 5:30 p.m., Mayor Quan and City Administrator Santana will present their plan to adjust the budget for lost Redevelopment Agency revenue. While there are still unanswered questions, we don’t see any smoke, mirrors, accounting tricks or use of one-time revenue sources (if anyone else does see tricks, please let everyone know in the comments). The plan seems to propose some genuine structural changes, and to mostly avoid wishful thinking. Furthermore, after addressing the immediate balancing needs, the Mayor and City Administrator raise a number of the major, difficult and politically volatile issues the City will have to grapple with to accomplish real budget reform. The major elements of the plan are as follows:
- The plan eliminates 105 positions. Twenty-three of these are in the Department of Public Works and 6.7 in Parks and Recreation; a reduction of recreation center hours would take place also. The narrative description says the plan eliminates the head of Information Technology (a vacant position) and the head of the Department of Human Services, although whether this latter elimination will actually take place is not clear from the accompanying spread sheets.
- Reductions of sworn police or fire personnel are not possible under the contracts between the City and the public safety unions, so there are no police or fire layoffs in the proposal. Parking enforcement apparently gets moved from Finance to the Police Department. There are some consolidations between the two departments, and—as happens in nearly every budget discussion—a proposal to eliminate Neighborhood Safety Coordinators (this time 4 out of 9).
- There are no reductions to Human Services or Library programs.
- The one area of the plan that is largely undefined involves significant reductions to the Mayor’s office, City Council and City Attorney. In each case, the proposal reduces each of these departments by “40% of Department’s Redevelopment Budget,” but offers no guidance on what the reductions might actually involve. Unlike recent budget adjustment proposals, this one does not suggest a reduction to the City Auditor’s office. The City Auditor has, by far, the lowest budget of any elected official.
- KTOP, the City’s television station, faces very significant cuts. It is not clear how this will affect the station’s ability to broadcast and archive public meetings, an important issue for government transparency.
- The proposal substantially reduces City subsidies in 2012-13 for Children’s Fairyland (a reduction of $54,600) Hacienda Peralta (a reduction of $18,360) and the Oakland Zoo (a reduction of $216,000).
- The Community & Economic Development Agency (CEDA) is dissolved.
- The plan establishes an “Administrative Services Agency” to assume consolidated administrative functions related to the Finance & Management Agency, Department of Human Resources Management, Department of Information Technology, and the City Administrator’s Office.
- The plan establishes a new “Community Services Department,” entirely focused on direct service to residents, which assumes responsibilities of the existing Office of Parks & Recreation and Department of Human Services, along with other services.
To their credit, the Mayor and City Administrator also highlight some very difficult and politically volatile issues the City will have to face to accomplish long-term budget reform. Some examples:
On the impact of voter mandates:
Ballot Measures—The City’s ballot measures that support the library system and youth programs (Kids First) should be evaluated by the City Council to determine if there is a more modem structure that allows for the City to continue to fund library and youth services, but not at the levels envisioned when the City experienced better fiscal conditions. The past budget cycles have been particularly burdened by the requirements to fund the libraries at a certain level ($9M) in order to be eligible for voter approved funds ($14M). Additionally, the youth services funded by the Kids First measure requires that a certain percent be taken from the General Purpose Fund, but the base year is set at a time when revenues were higher; the The Measure does not allow the baseline or the set-aside percent to fluctuate based on current economic conditions experienced by the City.
On restrictions on contracting out services:
Contracting In and Out—The City Charter, Title 2-Administration and Personnel, Chapter 2.04.020 (E) (Authority of the City Administrator) has the following provision:
(3) Loss of Employment or Salary. Contracts for professional services or service-only shall not result in the loss of employment or salary by any person having permanent status in the competitive service.
This provision does not allow the City to contract out for services offered by the City, yet available in the local market; however, it should be acknowledged that some services are already obtained through this model. Many local govemments have begun the process of outsourcing services traditionally offered through civil service and procuring such services from local and regional markets. The City could look at the whole issue of both contracting in-and out services for the purpose of identifying cost savings and stabilizing services.
Convene Labor Management Committee on Healthcare—Staff can convene the Labor Management Committee to explore strategies related to healthcare benefits provided to the workforce. Possible options for evaluation could include: increased cost sharing, reduced benefit level, increased co-payments, reduced health and dental in-lieu payments, and/or eliminate dual coverage. Estimated cost savings could not be determined until analysis has been completed and direction is set by the City Council.
Employee Benefits—Similar to the above effort, cost containment strategies related to the level of employee benefits could be further explored. Possible options for consideration could include:
retirement (e.g., pension and retiree healthcare); sick leave payout structure; premium pays or pay associated with certificates, education levels, etc; and, compensation structure (e.g., step increases, overtime eligibility, salary ranges, etc.). Estimated cost savings could not be determined until analysis has been completed and direction is set by the City Council.
Council member De La Fuente is hosting a program on the budget cuts for constituents Tonight at 6:00 p.m. at St. Jarlath’s Church/School Campus, 2634 Pleasant Street in the school auditorium (at Fruitvale Ave just below I 580) . Council member Brunner is hosting a similar program, also Tonight, at 7:00 p.m. at North Oakland Senior Center, 5714 Martin Luther King.