Tag Archives: city council

The State of Oakland’s Finances

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The COVID-19 pandemic is creating financial challenges for all levels of government, and the City of Oakland is no exception. Numerous revenues will decrease, if they haven’t already, as the need for municipal services continues. This downturn occurs at a time when the city was facing very significant financial challenges due to underfunded long-term obligations and the emergence of new challenges such as homelessness.

(Read Berkeleyside’s recent coverage: Looming budget crisis ‘like nothing Oakland has ever before experienced’)

Two important reports outlining the state of Oakland’s finances were recently published. We’ll discuss both reports and what they suggest for our city finances. This post summarizes the two reports and provides more details on the City Auditor’s report. The second post will provide more detail on the Finance Director’s report and the Council reaction at its hearing on April 21st.

These two reports are:

1. City Auditor’s report
City of Oakland Financial Condition For Fiscal Years 2012-13 to 2018-19” was prepared  by the City Auditor before the advent of COVID-19. (Its original objective was “to examine the City’s financial well-being by calculating financial ratios, analyzing trends in the City’s financial data over the past seven-year period, and comparing the results to other cities of similar size.”) But the letter of transmittal does note that the current COVID-19 pandemic will likely dramatically compound the issues raised in this report.  It reaches a series of conclusions about the fraught condition of Oakland city finances and recommends corrective actions.

2. Oakland Finance Director’s report
The Finance Director’s new report “FY 2019-20 Third Quarter Revenue & Expenditure Report (Preliminary)” concludes with this stark projection:

In sum, we project that, absent rapid adjustments by the City Council, the COVID- 19 pandemic will result in a GPF budget shortfall over the next fourteen months of approximately $80 million ($26.17 million + $53.78 million).

The report contains a list of a number of actions already taken by the administration and recommends a number of policy considerations for the Council. It states: ‘The point is that – absent an unexpected State or Federal bailout – this problem will not be easily resolved, and it will not be fixed by tinkering at the margins. It will require significant action by City leaders.”

So first, let’s take a deeper look at the City Auditor’s report. Here are some notable excerpts:

  • “Oakland does not rank favorably in most financial indicators, when compared to similar-sized California cities.” This is illustrated by 9 Charts that compare Oakland to 7 other similar California Cities.
  • “This report does not include information on the condition of the City’s infrastructure, the citywide asset replacement value, or the funding gap for infrastructure needs because the City does not produce an annual citywide capital asset report.”
  • “This report prepared prior to COVID-19, however, illustrates the City needs to do more to address its increasing pension and OPEB liabilities, quantify its unmet infrastructure needs, and prepare for the future in which, according to the City’s five-year forecast issued in March 2019, expenses are expected to outpace revenues.”

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The report concludes with the following recommendations to City Council to address the City’s unfunded pension and OPEB liabilities:

  1. Convene a retirement advisory group to gather, evaluate, and organize information for a comprehensive solution to address Oakland’s unfunded pension and OPEB liabilities. This Advisory Group will be tasked with designing a plan to impact retirement liabilities on three levels:

    • State/Federal — what legislative changes, if any, are needed to be proposed so that the municipalities may be in better control of their financial future as it relates to pensions.

    • CalPERS — does CalPERS serve the needs of all its member agencies and how can Oakland and other municipalities have a greater impact on CalPERS policies.

    • Oakland — what changes may be made now within the restrictions of CalPERS and State Law, and which of these changes can be agreed to by all stakeholders.

    This process should be convened publicly and have clearly defined processes for stakeholder input, including citizens, unions and employees. The Advisory Group should be comprised of a broad cross section of stakeholders, for example, the City should strongly consider including:

    • Academia and pension/OPEB experts.

    • An independent financial consultant with no ties to the City to perform
    analysis on potential reforms as they are recommended by the Advisory Group.

    • An independent law firm with no ties to the City to evaluate the legality of potential reforms as they are recommended by the Advisory Group.

  2. Form a coalition of cities to find common ground to support comprehensive solutions at the State level and CalPERS.
  3. The City’s Finance Department should provide the City Council with an annual analysis of how the City’s long-term financial position could be strengthened.
  4. The City should develop a reserve policy that is consistent with the GFOA recommendations to maintain unrestricted budgetary general fund balance of no less than two months of general fund operating expenditures.
  5. The City should have a centralized report of fixed assets to be able to monitor changes in the condition of the assets and evaluate cost associated with maintaining and repairing them.

 

We welcome your thoughts. What do you think the City should do to respond to the immediate and long-term challenges facing Oakland City finances?

Oakland City Council’s Parcel Tax to Improve Funding for City Parks, Litter Reduction, and Homelessness Support

(image source: Oakland Homeless Response)

On November 14, Oakland’s City Council passed a resolution to submit a parcel tax to voters on the March 3, 2020 primary ballot.  The amount of the tax will vary depending on forms and usage of real property, but residential property would be taxed at rates of $148 per single-family residential parcel and $101.08 per residential unit for multiple residential parcels with a 50% reduction for affordable housing projects, and for non-residential units, a rate based on frontage, square footage and building area. (Read the Chronicle’s recent article on the parcel tax here, and East Bay Express’ coverage here.) Continue reading

What’s in the New “Oakland Together” Budget?


(This is a post in our Budget Bits series, following Oakland’s mid-cycle budget policy and process. Read our previous updates: post one, two, three, and four.)

On June 24th, the City Council unanimously adopted its two-year, $3.29 billion budget. (The full budget document can be read here.) The final adoption reflected a combination of the Mayor’s Proposed Budget and augmented by $44.4 million in amendments proposed in the “Oakland Together Proposal,” which was a combination of amendments by numerous council Members. The Mayor’s Proposed Budget included the funding needed to continue many necessary city services and required funding for continuing obligations such as bond payments, retirement and healthcare. The Council amendments added increased services in a number of critical areas. 

Make Oakland Better Now! believes that many of the service issues presented in both the Mayor’s proposed budget and in the adopted budget are critical. However, in the Adopted Budget, the Council took little action to significantly pay down our City’s long-term unfunded liabilities of $2.7 billion nor did it significantly increase the protections in the Rainy-Day Fund. Oakland also has unfunded Capital projects of $2 billion.

We are now in longest positive economic surge since WWII. However, there have been numerous indications that economic conditions may change during the period of this two-year budget. How will Oakland respond? Continue reading

Council President Kaplan’s Budget: Our Response

Oakland Budget
Tonight, at a special meeting of the City Council, the Council will receive the recommended amendments to the Mayor’s proposed budget from City Council President Rebecca Kaplan (you can read the budget here).  Oakland’s Finance Department issued its review of President Kaplan’s budget, urging Council to reject the budget calling it “unbalanced” and “illegal with respect to provisions of the City Charter, City ordinances, ballot measures, and State law. ”

(Read recent coverage on the two budgets from The San Francisco Chronicle and the East Bay Times.)

Debate over budget priorities and changes will continue. Make Oakland Better Now! sent a letter to City Council (available here) and urged them to consider the following issues concerning President Kaplan’s proposed budget changes: Continue reading

Is Oakland Prepared for the Next Fire?

Oakland faces many challenges. Violent crime, homelessness, and an affordable housing crisis are all major issues commanding frequent media and political coverage. Fire danger does not regularly demand as much of our attention as these constant threats to livability and quality of life. But we have seen fires  destroy lives and neighborhoods. The wildfires in Northern and Southern California made it clear: fire season is now 365 days a year.

It’s not acceptable to ignore and postpone fire prevention – and Make Oakland Better Now! believes it needs to be a priority and part of the City’s overall holistic community safety plan.

The Oakland Fire Department’s (OFD) official mission is to “provide the highest quality and highest level of courteous and responsive services to the citizens of Oakland.” These services include responding to emergencies, Fire Prevention, and training. OFD has over 500 employees to prevent and respond to emergencies.

The Ghost Ship warehouse fire on December 2, 2016 caused the deaths of 36 young people. The fire in a West Oakland San Pablo Avenue apartment building left four people dead. These incidents make us more aware of the terrible dangers of unsafe building structures – as well as the need for regular inspections and follow-up.

Many Oaklanders, whether they experienced it or not, will also recall the Oakland Hills firestorm of October 20, 1991. This conflagration – considered the most destructive wildfire in California (until the recent Tubbs Fire in Northern California this past October) killed 25 people, injured about 150 others, and destroyed over 3,000 single family homes and apartment buildings. An Oakland newcomer would no longer notice the terrible damage that occurred 27 years ago in Hiller Highlands, Forest Park and Upper Rockridge. The recent Santa Rosa Tubbs Fire, which now appears to have killed at least 43 people, and the Ventura wildfire, which burned 1,063 structures and led to the death of a firefighter, are all fresh in our memory.

We are left to ask – are OFD and the City doing enough to prevent future structural fires and wildfires here in Oakland?

One reality is that almost 80% of the 96,000 emergency calls OFD receives each year relate to medical emergencies. OFD’s 420 sworn firefighters are certified Emergency Medical Technicians and each of OFD’s 25 stations are staffed with paramedics. However, the risk of structural fires and wildfires requires prevention – not just response.

The courts are still deciding who is legally responsible for the Ghost Ship fire deaths, but enough is known to say that the City should have already have in place a more robust inspection system. Buildings like the Ghost Ship warehouse, with very clearly dangerous violations of building codes, should not be allowed to go uninspected year after year. Likewise, the threat wildfire poses to people and property in parts of Oakland merits a constant focus on prevention.

OFD’s Fire Prevention Bureau is responsible for fire safety education, fire-cause determination, inspection of high-hazard occupancies, code enforcement, and vegetation management. The Fire Prevention Bureau is officially budgeted for 11 building inspectors and 4 vegetation inspectors plus one supervising vegetation management inspector. This staff is almost certainly insufficient to properly ensure that Oakland buildings are fire safe and that public and private property is prepared for the next inevitable fire. An April 27 letter from former acting Fire Chief Darin White stated that several fire inspectors lack the required certification requirements for their positions.

We also know many buildings in Oakland are not being regularly inspected. Just recently on Friday, February 23, a large fire erupted at the vacant city-owned Carnegie library building in East Oakland, which has suffered fire in the past.

OFD’s absence of a fireboat is another cause for alarm. Oakland’s Port plays a vital role in the city’s economy, yet there is no water-based protection system. OFD needs a fireboat not just for fighting shipboard fires and doing rescues on the water, but as a line of defense against regional disasters. (A fireboat can be used as a needed supply of water all the way up to the Oakland Hills.)

This Spring, Oakland’s Mayor, administration and City Council will make mid-cycle adjustments to the 2017-2019 budget.  We’ll be watching this process closely and providing our input on a range of issues and responsibilities. But we will push for greater efforts to reduce fire risk and protect Oakland.

This is part one of a three-part series on fire safety in Oakland. (Read part two and part three.) In our next post, we will take a more in-depth look at wildfire danger.

Budget Bits Returns: Shaping Oakland’s 2017-2019 Budget

Oakland Budget

Oakland 2017-2019 Budget Preparation Begins

For many years and several budget cycles, Make Oakland Better Now! has provided Oakland residents with tools to help understand the city budget. We’re proud to dive into the numbers again this year, as Oakland’s Mayor, City Administrator, and City Council move toward adoption of the 2017-2019 budget. Continue reading

Police Commission Measure: Exactly What Did the Council Just Do?

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Last month, the City Council passed a resolution putting a police commission measure on this November’s ballot. (Read recent coverage in the San Francisco Chronicle, East Bay Express, and East Bay Times.)

The new commission will differ in a number of important ways from the existing Citizens’ Police Review Board. It will possess subpoena power. The charter provides for mandatory staffing of one investigator for every 100 officers. By a 5-2 vote, it can fire the Police Chief for cause (with “cause” to be defined by enabling legislation). It nominates future chiefs, and the Mayor chooses from the nominated candidates. And it has policy-setting powers to “accept or reject” OPD policies related to use of force, profiling, and First Amendment assemblies. It’s already been called one of the strongest police commissions in the nation.

Like most individuals and organizations involved in this debate, we believe this measure is a terrific step forward, and we will support it. But there’s still much work to be done.

Continue reading