On Tuesday, for the first time, residents will get a clearer picture of the city of Oakland’s budget problems thanks to a special council meeting. The presentations showed a budget deficit of about $93 million, even more than expected.
The meeting was intended to explain to council members that they needed to make immediate cuts or the city could go bankrupt.
“Councilmember Gallo, you have repeatedly asked us to let you know when it is critical that we take action. I want you to hear clearly from this stage that we must take action over the next month and a half. To maintain our solvency, I want to make sure that’s very clear,” said Bradley Johnson, the city of Oakland’s budget manager.
Led by the two largest overspending departments, police and fire, the city faces an estimated one-year budget shortfall of $115 million, which, when added to the money needed to restore the emergency reserve fund, totals about $143 million will be needed to eliminate this shortage. .
Officials in the city’s finance department raised the alarm last weekemphasizing the need to balance the equation budget now or declare a fiscal emergency.
“The two largest departments in your general fund are your fire department, which is expected to be over$34.5 million, or 21 percent of the budget, and your police department, which is expected to be over$51.9 million, or 16 percent of the budget will issue. Johnson said.
Oakland is currently operating under its so-called $758 million “contingency budget,” which went into effect after payments for Oakland’s $125 million sale of the Coliseum were rescheduled.
That budget includes dozens of cuts that have already been made, from initiating a hiring freeze to curbing “uncompleted” contracts and city subsidies to halting business travel, among others.
Still, to avoid insolvency and possible bankruptcy, many millions of dollars in additional service cuts are likely needed.
“For me there are really only two choices. The first is either radical downsizing or making substantial concessions to the workforce,” said Dan Lindheim.
He served as Oakland’s city manager from 2008 to 2011 and is now a professor at UC Berkeley. He said there is no way to get out of the city’s current budget crisis without somehow cutting back on public safety.
Council members knew this was coming because they were counting on money from the sale of the Coliseum to balance this year’s budget and next year’s.
They even created a contingency budget to outline which departments would be cut if the Coliseum deal fell apart or was delayed. AASEG, the group buying the property, has already missed its $10 million payment to the city on Nov. 7, but insists the deal is still on track and the full $110 million balance will be paid by the end of the fiscal year will be paid.
Councilwoman Nikki Fortunato Bas noted that the current budget quagmire is the result of several factors, including lower federal spending, high interest rates, the state’s rules for taxing real estate and the city’s continued overspending.
She and other council members also mentioned the possible sales tax increase in an upcoming vote that could raise up to $20 million a year, the administration’s efforts to create “a strategic plan that will improve our organizational structure,” and the need of a study focused on police personnel so that the council can make more informed decisions about OPD’s budget.
“And finally, I have also requested an independent audit by the municipal comptroller of our revenue collection,” said Bas. “We have to make sure that with all the revenue that is owed to us, we collect every dollar of it.”
During the public comment portion of the meeting, several city staff, union leaders and community members urged the council to avoid cuts to vital city services such as street and sidewalk repairs, after-school and summer programs for youth, cleanup of illegal dumps and cultural activities. and institutions.
Julian Ware, president of the union IFPTE Local 21, said a coalition of municipal unions has put together a plan they believe will help the city balance its budget while avoiding the most painful cuts.
It includes reducing police overtime by $24 million to $52 million, staffing parking enforcement and other revenue-generating departments, reducing “non-service” expenses and curbing the growth of the senior management salaries by up to $8 million.
The proposal will result in $142 million to $204 million in potential new revenue and savings, which would be enough to close the city’s budget gap, according to the union report.
“We are here today to share our disdain for the dangerous and reckless cuts proposed by the City Council that are jeopardizing critical services for our residents,” Ware said. “Reduce waste, not services.”
The council took no action at Tuesday’s meeting and will instead discuss what cuts to make at its next meeting on Dec. 3, after the Thanksgiving holiday.
They will also meet again on December 5 for a closed session to discuss union contracts and whether cuts can be made to them.
