Wednesday, August 15 was the deadline for all candidates for Oakland city office to file with the City Clerk's office, so we now have a full list of candidates. As…
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 MOBN! board is proud to endorse City Attorney Barbara Parker. We strongly encourage Oaklanders to vote for her in November. The factors that contribute to our endorsement include her record both as City Attorney and Chief Deputy City Attorney, her broad range of experience in the practice of law and in law office management, and her strong performance in the past year in reducing outside counsel costs by millions of dollars. We were also strongly influenced by the candidate’s responses to the MOBN! questionnaire, which we reviewed and compared to some of our own observations of the two candidates.
In her approximately ten years as Chief Deputy City Attorney during John Russo’s years as City Attorney, and in her first year as City Attorney after her appointment to complete Russo’s term, Barbara Parker has demonstrated unwavering professionalism, integrity and competence. While she was Chief Deputy, she was the most frequent representative of the City Attorney’s office at City Council meetings, where we often had cause to observe her even-handedness and professionalism in advising Council on both procedural and substantive matters.
Barbara Parker is a Harvard Law School graduate and a lawyer with experience in a broad range of public and private sector practices for more than thirty years. She has the depth of experience it takes to lead the City’s representation in these challenging times. The City Attorney’s office provides a broad range of legal representation to a municipal corporation with nearly a one billion dollar budget. The City Attorney is essentially the managing attorney of this mid-sized law office. Someone with Barbara Parker’s experience can best serve in this role.
In her first year in office, City Attorney Parker’s fiscal management of her department has been impressive. In the previous nine years, the City Attorney’s Office lost more than a third of its staff (19 attorneys and 14 support staff) to City budget cuts. As the need for legal services increased and the number of in-house lawyers declined, the cost of outside law firms had increased every year because of the loss of in-house resources.
But that pattern reversed when Barbara Parker became City Attorney. In the fiscal year that just ended (FY11/12), the cost of outside counsel is down almost 40 percent from the prior year, from about $6.4 million to about $4 million. This may be the most significant recent cost reduction by any still-operating department in City government.
We carefully reviewed the questionnaire responses we received from both candidates, and appreciate the time and effort they devoted to these. Some of the key responses and our reactions to them appear after the jump.
City attorney candidates Barbara Parker and Jane Brunner have responded to MOBN!’s questionnaire, answering critical questions for our city involving the Negotiated Settlement Agreement, functioning and funding of the city…
For the past two years one of the most nettlesome budget issues faced by Oakland has been its unfunded and underfunded benefit liabilities. As recently reported by the City Administrator, Oakland presently faces an underfunded CalPERS liability (Oakland’s current pension plan) in an undetermined amount, a completely unfunded health benefit liability for retirees of $520 million (sometime referred to as “Other Post-Employment Benefits,” or “OPEB”) and an unfunded $494 million liability for the PFRS retirement plan. The latter is a police and fire retirement plan that closed in 1976, that supports about 1000 retirees and their widows, and that only has one member presently employed by the City of Oakland. In short, Oakland has an unfunded liability of more than one billion dollars for benefits earned by, and owed to, people who no longer work here.
The PFRS obligation should be the less troublesome of these obligations, because it has dedicated funding sources – an annuity that pays about $6 million per year and a significant tax override (i.e., property tax) enacted in 1980 that generates about $60 million per year. The annuity was purchased in 1985 and the tax was passed by the city council using a loophole in Proposition 13 that likely no longer exists. But PFRS became more problematic in 1997, when Council voted to issue pension obligation bonds (“POBs”) and buy the city a pension holiday for 15 years. Of course, the market failed to perform as hoped, and as reported in an actuarial report obtained by City Auditor Courtney Ruby the City fell behind projections by about a quarter of a billion dollars. Much more information is available here, here, here, here and here.
More than a year ago, as the pension holiday neared the end and Oakland faced a potential annual obligation of more than $45 million, staff returned to Council with a proposal to “double down,” issuing still more POBs and buying another holiday. One argument in favor, which we heard from more than one insider, was this: “Where in the world is Oakland going to find another $45+ million?”.
With a highly unfavorable City Auditor’s report, a lambasting in the press and charges that the plan constituted “intergenerational theft,” the proposal went into hiding for a year, then returned to Finance & Management in May and back to City Council in June and July. Much of the debate took place on June 19 after midnight. So for those who weren’t at City Hall or watching KTOP in the early morning hours, MOBN’s communications intern Catherine B. provides a blow-by-blow after the jump. Short version: Oakland will issue another $210 million in POBs that must be paid off by 2026 (when the charter requires PFRS to be fully funded); complete pension holiday for four years; CM Schaaf’s (admittedly non-binding) resolution to impose at least some safeguards to monitor fund performance and establish reserve, which deadlocked 4-4 (CMs Brunner, De La Fuente, Brooks and Reid voting “no”) passed on Mayor Quan’s “yes” vote.
In short, Oakland has taken on as much as $100 million in future interest costs without a long-term financial plan, and, accordingly, without a good handle on its future income or future expenses.
A complete rundown after the jump…
Make Oakland Better Now! is preparing questionnaires for City Council candidates, and we want your help. In 2010, MOBN! submitted questionnaires to all mayoral candidates. The responses were posted publicly…
MOBN! is beginning the early endorsement process for the 2012 City Attorney’s race. To view our official announcement, click here to be directed to our website. To read about MOBN!’s…
Today's post is by Catherine B., a lifelong Oaklander, a second year political science student at Wellesley College and MOBN!'s summer intern. On June 18th, the Oakland City Council held…
Like most cities, Oakland operates on a two-year budget cycle, adopted to cover two fiscal years running from July 1 through June 30 two years later. The current cycle runs through June of 2013, which means we are half way through it.
As is typical, the city is about to start looking at its fiscal performance to date and changes in its projections in order to determine what changes should be made in the second year of the budget. Council will begin considering mid-cycle adjustments on Monday, June 4 at 6:30 p.m. The agenda is here.
The reports containing the City Administrator’s and Mayor’s recommendations are here and here. For the first time in recent memory, there are no recommended layoffs, closures or reductions of city services. While there are budget overruns (the largest is in the OPD — either $8.6 million or $9.6 million), there are also some positive revenue developments.
The Administration’s proposal addresses a number of important issues MOBN! has been stressing for quite some time: increased civilianization of police department functions, increased police academies, and possibly a new approach to NSA compliance. The Administration also indicates it has looked seriously at the Los Angeles Police Department (as MOBN! did here) and hopes to bring in a civilian inspector general, which LAPD has had for more than ten years.
The administration is also recommending implementation of an “unanticipated expenditures fund,” which looks like the first, small step toward a rainy day fund, a practice MOBN! and the City’s Budget Advisory Committee have long advocated.
We have a number of questions about some issues, including the City’s use of one-time sources of income to counter unexpected expenses, the potential shrinkage of its reserve and the reasons for a number of the budget overruns. We have raised these in our letter to Mayor Quan, City Administrator Santana and the City Council, which is available here (full text also available after the jump). We will also plan to present those questions at the meeting Monday night and future meetings considering these changes.
To read the full text of our letter, click “Continue Reading,” below.
Local newspaper coverage of the Monitor’s Ninth Report on Oakland’s ongoing efforts to comply with the Negotiated Settlement Agreement contain multiple reports that compliance “has stagnated,” that the Oakland Police Department is that much closer to receivership, and that compliance efforts are moving backward. Indeed, some of the Monitor’s language supports this reporting.
But not surprisingly, things are not all that simple. In some ways they are much worse than reported, in others they aren’t nearly as bad. Part of the problem results directly from ongoing City and OPD malfunctions. Part of it is caused by overreach by the monitor and problems unrelated to the NSA.
But when all is said and done, it looks as though we are getting close either to receivership or to some other level of Federal Court supervision that is unprecedented in modern American history. The Court has set a hearing on the receivership question for this December. Oakland and its citizens may be facing the biggest challenge ever: figuring out how to operate in a new, more costly and tougher environment while getting themselves past the NSA and making the City a safer place.
We’ve looked carefully at the latest report, and undertaken a detailed analysis (see tables after the jump). But, put simply, there seems to be a combination of the following factors: (1) a major problem with OPD’s Personnel Assessment System, barely touched on in the report but posing serious, long-term compliance problems; (2) a collapse of the City’s review of complaints arising out of Occupy Oakland police actions; (3) multiple violations of Oakland’s crowd control policy, which are cause for serious concern but are not violations of the NSA; (4) at least two instances where the monitor declared the OPD to be out of compliance in the fourth quarter of 2011 while admitting there was no supporting evidence; and (5) continued mission creep, in cases where OPD follows the letter of the NSA, but the monitors find non-compliance because they disagree with judgment calls made by the department in individual cases.
The citizens of Oakland are entitled to Constitutional policing. They are entitled to a reformed police department and an end to the millions of dollars paid out in police misconduct suits. City leadership needs to ensure that the promises made more than nine years ago are kept, that the City brings itself into compliance, and that Oakland moves beyond the NSA. But the citizens of Oakland are also entitled to live in a safe community. And so far, no party in the Allen case (the Federal case in which the NSA was issued) is representing the citizens of Oakland and speaking for their right to be safe.
For those who would like more details, we have a task-by-task discussion, and a chart comparing the 8th and 9th reports, after the jump.
