This coming Tuesday afternoon, Oakland’s City Council will begin making some of its most important decisions of the year.  The actions Council takes or does not take will have an enormous impact on Oakland’s short, medium and long-term ability to provide core services to its citizens.  Without courage and leadership, the city may soon be unable to provide even marginally adequate police or fire services, maintain its streets, parks and libraries, or fulfill many of the other tasks that are critical to everyone who lives here.
 The city faces unprecedented budget deficits in its $420 million general purpose fund, from which it pays police, fire, park, library and other essential services.  Between now and June 30, the city must fill a budget hole of more than $15 million.  In the fiscal year starting July 1, the gap is $32.7 million, although this will undoubtedly climb higher.  And starting in mid-2011, the city will face a multi-year annual obligation of $60 million or more in unfunded pension contributions. 

    This budget crisis stems in part from a combination of unwise spending decisions and bookkeeping tricks in recent years, as well as very generous wage and benefit packages for city employees. A Federal census study of seventy-five American cities shows that as of 2006, the average Oakland city employee was paid more per month than an employee of all but six of the cities studied nationwide; a study commissioned by the city itself shows that Oakland wages and benefits averaged 12.2% more than those of employees in other Bay Area municipalities. 

    In many cases, the city has made unrealistic income and expense assumptions which neither staff nor council may have really believed (e.g., non-specific reductions in police department expenses, a wished for but unrealistic tax on Coliseum tickets).  Whether they believed them or not, these assumptions resulted in “best case scenario” budgeting when the times called for conservative, worst case analyses.  Next, the city experienced dramatically reduced city revenues, as sales taxes and real estate related taxes have dramatically declined in the sour economy.  In other words, the worst case scenario came to pass.

    The Mayor and Administration have presented a proposal that shows neither courage nor leadership;  instead, Council is asked to bridge the gap with bookkeeping maneuvers, a small number of employee reductions, and one-time income sources, once again postponing the inevitable day when the city, like every family, every business and every municipal government, must match its expenses to its revenues.  Specifically, the Mayor and adminsitration propose to muddle through the fiscal year with the following measures:

·    Raise $12.3 million by selling or leasing City assets
          o Lease Scotlan Convention Center (located in the downtown Marriott) to the Redevelopment Agency
          o Sell Alta Bates Garage to Redevelopment Agency
          o Sell other City properties to the Redevelopment Agency

·    Cover $1.9 million with the use of one-time funds
·    Save $0.64 million through twenty staff reductions and $0.08 million through transfers. The proposed reductions include nine civilians from the police department, a department that needs more, not fewer civilians to allow maximum deployment of sworn police officers on the street.           
·    Use $0.5 million in one-time revenue from the new parking citation contract.

    This means that the City proposes to meet $14.2 million of its operating expenses between now and June 30 by selling off assets (actually transferring them to the Redevelopment Agency, which the Council also controls) or spending one-time funds, both of which staff acknowledges are poor policy decisions.  What is the City going to do when it runs out of things to sell?

    The City has a built-in deficit that it cannot fix unless it seriously confronts its out-of-control personnel costs, and takes measures to reduce those costs in all non-public safety functions in all departments.  Every time Council avoids this confrontation and delays the inevitable, it leaves itself with fewer options in the future.  The City of Oakland must act now to take the difficult and painful steps necessary to balance its budget, and not continue the avoidance and wishful thinking that have characterized its actions for the past two years.

    The citizens of Oakland are entitled to police, fire, library, parks, street repair, lighting and other basic services.  If the City Council does not act responsibly now, it will soon lose its ability to provide some or all of these services.  Make Oakland Better Now! strongly urges all Oaklanders to e-mail or telephone their city council members and urge them to adopt genuine expense reduction measures.  We also urge all Oaklanders to attend the special budget meeting on Tuesday, February 16 at 5:00 p.m. to tell the City Council that the city needs real budget solutions now.