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While much of Make Oakland Better Now!’s recent advocacy has involved public safety and budget issues, two of our key values are transparency and accountability.  To us, these mean keeping City Hall’s inner workings open and honest. Now that City Council is in its August recess, we want to wrap up our discussion of the recent mid-cycle budget process, which ended in a dispiriting and opaque action by the Council.

As those who follow City Government know, Oakland operates on a two-year budget cycle.  When things are going smoothly, the City makes “mid-cycle adjustments” once, after the first year.  Other times, as in the 2009-11 cycle, it may seem as if the City is making adjustments every month.

This January, the City made significant adjustments in its budget to reflect the loss of redevelopment money after the California Supreme Court upheld legislation eliminating redevelopment agencies.  Then, in May of this year, the Mayor and City Administrator  proposed further adjustments that focused heavily on public safety and economic development, anticipated a general purpose fund revenue increase of $3.93M, and an increase in GPF spending of $3.86M, resulting in a slight net increase in the surplus.

While we noted some flaws in and questions raised by the proposal, we were generally supportive.  The administration acknowledged that the proposal did not fix all of the City’s long-term deferred expenses (e.g., pensions, retiree health care, deferred maintenance on the City’s assets), but it was operationally balanced and its emphasis on public safety and economic development made sense.  The proposals went to Council at three public hearings.  In advance of each hearing, the administration provided written reports to the public and the Council addressing questions raised by both.

What happened next?  Read about it after the jump.

The last hearing was June 28.  Sadly, it was clear at this meeting that several City Council members saw fit to take the budget process out of the public eye and to privately meet together to compose major alternatives to many of the publicly discussed proposals.  While we have no evidence that City Council Members violated the Brown Act (which would only occur if at least five members had communicated on the alternative budget proposal) the Council Members who acted did so without any regard for open government.  And the result was a series of budget adjustments that probably don’t add up.

Councilmember De La Fuente presented a proposal which, unlike the administration’s proposal, had not been disclosed to the public in advance.  It clearly had been reviewed andapproved in advance by Councilmembers Brooks and Brunner.  De La Fuente went line-by-line altering  the City Administrator’s proposal. The three councilmembers’ proposal therefore consisted of removing, maintaining, or instituting an alternatives to the Administrator’s previous plans. Sometimes the councilmembers allocated half (or other percentages, like 60% in one case) of what the Administrator had requested.  In a number of instances, they reduced General Purpose Fund spending proposals by telling the City Administrator to go find the money somewhere else.

Clearly, one of the primary goals of the alternative proposal was to give back to the civilian employees one of the furlough days they had agreed to in negotiations last year.   The De La Fuente / Brooks / Brunner proposal reported the cost of this give-back in a way that was misleading, and this deserves some explanation.

First, it should be understood that the furlough days apply only to non-public safety personnel.  However, when all of the city’s unions agreed to concessions in 2011, each memorandum of understanding contained a reciprocity agreement, requiring that equal concessions be obtained from all other unions.  An example is the OPOA Memorandum of Understanding here.  So while furloughs do not apply to police officers or fire fighters, if the other employees have their concession reduced, the City is contractually required to give police and fire an equivalent concession reduction.

The De La Fuente / Brooks /Brunner proposal acknowledged this reciprocity requirement, and reported the savings as follows:

But this is not really the cost.  As Oakland’s Budget Director reported on June 6, the estimated lost savings for giving back one furlough day to civilian employees, and making the public safety officer match, would be as follows:

So what happened?  As City Council Members have historically done, De La Fuente, Brooks, and Brunner acted as if the only fund they had to worry about was Fund 1010, Oakland’s General Purpose Fund.  Their proposal says nothing about where the remaining $635,000 was to come from.

More smoke and mirrors appeared in the addition for a third police academy.  Most City Council Members seemed to support adding a third academy, and according to Chief Jordan, the earliest such an academy could be held would be July, 2013.  But the appropriation actually covers only 1/3 the cost of the additional academy, and apparently assumes the City Council will budget the remaining 2/3 in the 2013-2014 fiscal year.  Moreover, the addition was actually conditional:

Trigger for the third Police Academy will be the presentation of a crime reduction plan by the Chief of Police, by 1st council meeting in September 2012. Final approval will be given by City Council after the ramifications of the state claw back on redevelopment are known.

In other words, the City Council members can now tell their constituents that they supported a third academy when what they actually supported was an agreement to consider a third academy after they re-evaluate how much redevelopment money the City has left.

Furthermore, the De La Fuente/Brooks/Brunner proposal partially funded several positions under the guise of saving city money – in actuality, this partial funding creates a structural deficit. The trio’s plan contained several “alternative” partially funded measures, one of which was to indeed fund the Economic Development director position, but to do so at 60%. Partially funding this position brings future budgetary problems, for the Economic Development job will need to be funded for the entire year in future years. That is, in passing the plan, the City Council fails to account for the position as an ongoing, recurring cost.

De La Fuente/Brooks/Brunner’s financial oversight with regard to partial funding, ongoing expenses, and a furlough day was noticed by some of their peers, Councilmembers Schaaf and Kernighan.

Schaaf remarked on partial funding: “I think it’s odd for us, just on the fly, to say we can only do half of that function. I’m very concerned without understanding more, the ramifications.” Schaaf noted the Council would be unable to repeat the furlough day offer in the future. And, referencing the plan in general: “it’s one time savings, but it’s going to create an ongoing cost.”

Councilmember Kernighan stated, “It looks like all of the programs are ongoing costs. Shot-spotter’s an annual thing, furlough day is, presumably, going to be ongoing. Though…these…are lovely things, I don’t feel that it’s reflecting the fiscal restraint we need.”

The three councilmembers’ alternative proposal alleged a reduction in spending of $3.5 million followed by an increase in spending of $2.75 million.  To their, credit, Councilmembers Kernighan and Nadel pointed out that the numbers did not add up. Said Kernighan:

You need to show savings with actual numbers… It’s really not clear, I’m a little worried. . . Our long-term picture is pretty serious…as much as I would like to restore all of the things in the budget proposed by Mr. De La Fuente, I don’t see the savings in this piece of paper that covers those things…You’re asking us to take quite a leap of faith when this is not like an accounting-type document.

Nadel followed suit, taking out her calculator and attempting to crunch the numbers. She couldn’t make the math work either, remarking “I don’t want to pass something that’s not real.”

Although Councilmembers Kaplan and Nadel had proposed a different plan, Kaplan joined the trio’s side during voting. Reid joined as well, and the proposal passed 5-3 with Councilmembers Kernighan, Nadel, and Schaaf in the opposition.

We question the wisdom of spending $1.6 million to restore a furlough day the City’s employees had already agreed to before the City has released its five year budget.  We also think it is cynical and misleading to make a $1 million police academy appropriation that really isn’t an appropriation at all, to act as if non-General Purpose Fund expenses don’t count, and to essentially direct the City Administrator to “find the money someplace else.”

But most significantly, we object to Council’s action in hijacking what had been a transparent budget process and sneaking in a new plan with no notice to the public at all.

MOBN! will shortly be circulating its questionnaires to City Council candidates, and questions addressing transparency and the budget process will certainly be included.