The Oakland City Council on Tuesday approved a budget that avoided layoffs but also failed to address the city’s ongoing financial problems.
The 5-3 vote confirms a proposal by Mayor Shang Thao, with some amendments from council members, to use $63 million of the expected $105 million sale of the city’s ownership stake in the Oakland Coliseum to help close an estimated $117 million deficit.
The vote postpones painful cuts to services and programs for at least another year.
If the sale falls through or if the city does not receive the first payment from the buyers, the African American Sports and Entertainment Group, by Sept. 1, an emergency budget will go into effect with $63 million in cuts to city services.
Councilman Dan Kalb said the council was faced with a number of “unpleasant options” and that “no budget has zero risk” before voting in favor of the proposal.
“I believe this budget is the best we can do,” Kalb said. “I believe the sale of the Coliseum will go through.”
In addition to the one-time windfall from the Coliseum, the budget uses about $20 million in new corporate tax revenue — as authorized by last year’s Measure T corporate tax increase — and an estimated $20.5 million increase in property taxes to balance the books.
It also leaves about 300 jobs open in the city, saving about $133 million over the next two years.
The spending plan includes funding for 678 police officers (currently 712), three police academies, $36.5 million in overtime for police and no cuts to fire services.
The workforce reductions would take place without any layoffs as employees retire or resign.
Thao praised the vote, saying it is a financially responsible budget that preserves essential city services.
“We must remain disciplined and address our deficit responsibly, while continuing to focus on the issues that matter most to Oakland residents: public safety and clean streets,” Thao said. “This budget achieves that goal.”
Kalb, along with council members Rebecca Kaplan, Kevin Jenkins, Carroll Fife and council president Nikki Fortunato Bas, voted in favor of the plan.
Councillors Treva Reid, Noel Gallo and Janani Ramachandran voted against.
The council on Tuesday chose between two budget plans, one of which included money from the sale of the Coliseum and the other that did not.
The round of cuts that didn’t happen included $63 million in immediate cuts, which could be reversed if the sale goes through. They include the temporary closure of four fire stations, the elimination of two police academies and the defunding of 610 police officers.
Ramachandran said she and her colleagues did not have enough time to file amendments and answer questions from the city’s finance department. She called the budget process an insult to Oakland residents.
“I am not only deeply disappointed, but downright shocked by the wildly irresponsible choice the Oakland City Council made today to plug this budget deficit with money we do not yet have,” Ramachandran said. “With the sale of the Coliseum nowhere near finalized, including $63 million in this year’s budget for a future sale of the Coliseum is an ill-considered risk.”
The union representing 4,000 city professionals, the International Federation of Professional and Technical Engineers Local 21, praised the outcome but acknowledged the council had no good options.
“This has gone a long way toward securing everything we need to do now. It is a critical step that we had to take, as there were no easy options to put in place a solid approach to public safety,” said Julian Ware, President of IFPTE Local 21.
Another union in the city, the Oakland Police Officers’ Association, denounced the plan, calling it dangerous.
“The city’s budget is based on the controversial and questionable sale of the Oakland Coliseum,” said OPOA President and Vice President Tim Dolan. “Yet there has been no RFP for the sale of public property, no good faith money, and no indication that the buyers can close the deal. The city has simply bought a pig in a poke.”
The approved plan is technically a mid-cycle adjustment to the city’s current $4.2 billion budget for 2023-2025, which still has a $100 million “structural deficit.”
That deficit, which must be closed during budget negotiations next year, was built up over several years, in part by relying on overly optimistic economic forecasts and diverting one-time funds, such as federal COVID-19 pandemic aid, to ongoing spending.
Before Tuesday’s vote, city budget manager Bradley Johnson told the council that it would likely be impossible to close the spending gap without cutting Oakland’s two largest departments: police and fire.
