Tracking the federal stimulus money: Where did Oakland’s $2 billion go?

When President Barack Obama signed the American Recovery and Reinvestment Act of 2009, he declared that the $831 billion bill—known by its acronym, ARRA, or simply as the stimulus package—would “set our economy on a firmer foundation, paving the way to long-term growth and prosperity.”

Nearly four years later, there are not many readily visible signs of transformation in Oakland. Unlike the New Deal Programs of the 1930s, which helped build the Alameda County Courthouse and the Bay Bridge, ARRA spending has produced few signature projects, in Oakland or elsewhere.

Yet Oakland has seen substantial investment from stimulus funds. Recovery.gov—the website the Obama Administration set up to help citizens track stimulus spending—says the “local amount” of funds received in Oakland has been just over $2 billion. That means Oakland, which is the 46th most populous U.S. city, received the tenth highest allotment of stimulus funds to an individual city.

Figuring out exactly how much federal stimulus money both landed and stayed in Oakland is a difficult task. Several of the biggest recipients of stimulus funding in Oakland spent their money all over the state.  The U.C. Regents’ headquarters, for example, is in downtown Oakland and received $824 million—but that was for research and building projects at the system’s laboratories and ten campuses. Caltrans and BART, which both maintain Oakland offices and received “local amounts” in Oakland of $375 million and $93 million, respectively, funded projects around the Bay Area.

On the other hand, the $2 billion “local amount” for Oakland does not include $2.8 billion in bonds that the stimulus made available to fund construction on the San Francisco-Oakland Bay Bridge.

Stimulus funding didn’t arrive in Oakland without complications. In 2010, the City of Oakland was forced to repay part of about $3 million in grants for which it did not properly account. Then-Mayor Ron Dellums called the incident “much ado about nothing, man” and told the media to “get over it.”

Still, federal stimulus money has brought hundreds of millions in grants, loans and contracts to Oakland, subtly transforming the city and its landscape. The ARRA has left marks all over the city: the $34 million air traffic control tower that rises above Oakland International Airport; an $810,000 loan to an Oakland dentist’s office; $11.2 million in repair work and renovations at Oakland public housing; $50,000 for preserving jobs at a West Oakland arts center.  Here is a closer look at four Oakland projects that have received ARRA funding since 2009.

62 miles of fixed-up roads

In Obama’s ARRA signing speech, he called the stimulus bill the “largest new investment in our nation’s infrastructure since Eisenhower built an interstate highway system in the 1950s.” In Oakland, $6.1 million in infrastructure spending went towards road rehabilitation. The funding was distributed through Caltrans, whose District Four office is in Oakland.

Adeline Street in West Oakland, which was repaved with ARRA funding.

Adeline Street in West Oakland, which was repaved with ARRA funding.

Gus Amirzehni, engineering manager with the city’s Public Works Agency, says that even now Oakland has a $435 million backlog in road reconstruction. “We have so many problems, and so much backlog,” he says. Just to maintain roads at their current imperfect state, Amirzehni estimates, the city would need to spend $28 million per year. 

Still, he calls the $6.1 million in stimulus funding “a good addition,” without which “we would be in worse condition than we are now.” ARRA funding paid for resurfacing and restriping on 20 Oakland streets, from 98th Avenue in East Oakland to Claremont Avenue in Rockridge.

All told, the stimulus funded rehabilitation of 61.94 lane miles (one lane mile is the area of a single lane of road for one mile). Amirzehni says that at each project site, contractors put up signs reading “PROJECT FUNDED BY The American Recovery and Reinvestment Act.”

“It needed to be done,” said Abdullah Albasir, the owner of Nick’s Liquor, on the corner of 24th and Adeline Streets. This stretch of Adeline in West Oakland, eight blocks long, was repaved in 2011.

“There was a bump right here,” Albasir said, pointing out his store window to the street. He points further down the road: “There was a crack.”

He said he’s glad the road was redone. But he hasn’t noticed any difference in the volume of traffic outside his window, and business hasn’t improved for him. “The economy’s not stable. One day you get good business. The next day…” Albasir trailed off, but his meaning was clear: the next day business might be lousy, and a paved road doesn’t do much about that.

Technology Education

At the Stride Center, a technology education nonprofit, ARRA grants provided $1.4 million in program funding, both at Stride’s Oakland central office and at its three other campuses in Northern California.  Stride also benefitted from stimulus funds the nonprofit shared with another statewide technology-training program.

Headquartered in a fourth-floor suite on Broadway’s Oakland Bank Building, Stride’s office is a typically fluorescent-lit, cubicled workplace. Just inside the entrance is a large banner that reads “A better job/Higher pay” in blue and green. Farther back are the classrooms, where students work towards certifications in computer security, networks and servers.

Stride’s program began in 2000 and was funded through donations and proceeds from ReliaTech, a computer repair service the nonprofit runs. Between October 2010 and October 2012, ARRA funding supported parts of nearly every cost in Stride’s classrooms, from the instructor salary to the course materials, the uniforms that students are required to wear, student tuition vouchers and rent on the room itself.

Stride’s largest grant, of just over $1 million, accounted for just over half the costs of its technology training. Stride’s grant came with strict requirements. The nonprofit was required to supplement the grant with its own fundraising, and raised nearly $950,000. Stride opened a checking account to keep ARRA funds separate from the rest of its operations. Stride’s Executive Director Barrie Hathaway said his organization kept “very crisp accounting.”

Students at the Stride Center, where stimulus funding paid for instructors, job coaches, classroom rent, course materials and student uniforms.

Students at the Stride Center, where stimulus funding paid for instructors, job coaches, classroom rent, course materials and student uniforms.

The training program will teach nearly 400 students this year. Hathaway says Stride’s goal is to launch its graduates into careers in technology, which isn’t quick. “We have to take quite a bit of time to get people through that runway,” Hathaway says. Stride’s shortest program lasts six months, and many students take several courses, earning certifications in each. According to Stride’s figures, the stimulus funding has allowed it to train 770 students at its campuses, exceeding its target.

Stride also provides monthly one-on-one job coaching for its students. Miguelle Lee, who now manages the Stride Center’s professional development program, was hired by Stride with ARRA grant money. She says that without her, “there wouldn’t be enough manpower to help these people get launched into real jobs.”

Lee describes her job as working directly with students to reinforce what they learn in the classroom, and helping them develop skills for the workplace. Many of Stride’s students have minimal workplace experience.

Lee also develops relationships with employers, encouraging them to hire Stride Center graduates. Lee estimates that Stride has contacts at more than 400 companies. About a quarter of these contacts are active at any given time.

For its ARRA funding, the Stride Center’s target was to place 361 of its graduates in jobs—the exact number that Stride reported placing in the two years between October 2010 to October 2012. Lee says that companies and governments around the Bay Area hire Stride graduates; Contra Costa County’s Health Services IT division has hired at least seven.

According to Hathaway, there will be enough funding to keep Miguelle Lee working at the Stride Center; the ARRA funding that allowed Stride to hire Lee ran out three months ago, he says, but has been made up by new funding sources. Lee says the professional development program could use two or three “more bodies” anyway.

The White House has stated that one of the goals of the ARRA was to get money into the hands of consumers. (“When people who are not working get jobs, they have money to spend,” is how Barrie Hathaway puts it.)  Miguelle Lee, asked about the local businesses she patronizes, mentioned City Center stores near Stride’s office and the Lakeshore Trader Joe’s, where she buys groceries.

Her biggest purchase since beginning at Stride, she says, was a used car she bought in Martinez, a 2005 Pontiac Sunfire. The GM-owned Pontiac line was a victim of the recession; in 2009, the year the ARRA was signed, General Motors announced it was killing the brand.

A New Air Traffic Control Tower

Oakland International Airport's new, $3X million air traffic control tower.

Oakland International Airport’s new, $34 million air traffic control tower.

At Oakland International Airport, stimulus funding paid for a $33.9 million new air traffic control tower. The tower construction was part of nearly $80 million in grants and contracts that flowed to the Port of Oakland, which manages Oakland’s airport and seaport, as well as commercial real estate in the city. Projects included truck retrofits ($2 million), repaving airport runways ($15 million), and dredging the Bay to make space for the ships that pass through ($11.8 million).

“The overarching goal here is jobs,” said Roberto Bernardo, a spokesman for the Port of Oakland. Bernardo said projects at the Port—some managed by the Port, others by partners including the Army Corps of Engineers and the Bay Area Air Quality Management District—created or preserved more than 2,100 jobs. More than 1,500 of the jobs were preserved by the retrofit effort, according to the Port’s statistics. Retrofitting brought older trucks up to environmental standards, allowing truckers to remain on the roads.

The Port’s biggest grant went toward the air traffic control tower. The $33.9 million project is the single largest ARRA grant awarded through the Federal Aviation Administration anywhere in the country. The construction contract for the tower was awarded to Devcon Construction, a Milpitas-based firm.

The air traffic control tower—much of it has already been built—stands 236 feet tall, and has a 13,000 square foot base building. The LEED gold certified structure will replace the two towers currently in use at Oakland International Airport, beginning in July 2013. Port officials says that the infrastructure project will have created  300 jobs by the time its complete, putting the spending per job created at about $113,000.

Additional Police Officers

ARRA funding preserved 41 police officer jobs.

ARRA funding preserved 41 police officer jobs.

At the Oakland Police Department, on the verge of federal oversight and coping with reduced numbers of officers, a 2009 ARRA grant preserved 41 police officer jobs. The OPD received the grant through the Department of Justice, totalling nearly $20 million, to employ 41 officers for three years. The award was the largest grant received by any police department in California. The OPD’s Chief of Staff, Sergeant Chris Bolton, said those 41 officers represent “a significant percentage of our force.” Bolton said  the OPD has 230 fewer officers than “a few years” ago.

In September 2011, the OPD received a second grant through the same Department of Justice Program program, according to Sean Maher, communications director for Mayor Jean Quan. This time the funding for the DOJ program didn’t come from stimulus money, and the 41 officers whose jobs had been preserved through the previous grant were absorbed back into the general fund. The second, $10.7 million grant pays for 25 police officer positions, which the city is committed to retaining once the funding runs out, Maher said.

Bolton said he was unaware of any mechanism to track the work records or arrest rates of the officers funded by the ARRA specifically. It is also difficult to ascertain how many of the affected officers live in Oakland, rather than surrounding cities. The OPD’s Media Relations Office did not respond to requests for details, and there’s much that invites further examination, in federally-assisted police funding as well as in other recipients of stimulus funds. Among the organizations, for example, that did not respond to Oakland North requests in recent weeks for interviews about their stimulus grants, contracts or loans:

Clinica de la Raza, which received more that $5 million for its network of East Bay clinics.  West Oakland-based art center The Crucible, which received a $50,000 grant.  The Oakland Housing Authority, which manages public housing in the city.  Oakland Dental Care, which received a $810,000 loan as part of an effort to “aid small businesses which are unable to obtain financing in the private credit marketplace.” Manson Construction, the Seattle company which received two contracts totaling $11.8 million to dredge at the Port of Oakland.  (Manson officials referred Oakland North to the Sausalito office of the Army Corps of Engineers, where calls seeking comment were not returned.)

ARRA funding paid for $11.2 in projects at public housing in Oakland, including rebuilding 12 playgrounds at Campbell Village and Peralta Villas in West Oakland.

ARRA funding paid for $11.2 million in projects at public housing in Oakland, including rebuilding 12 playgrounds at Campbell Village and Peralta Villas in West Oakland.

***

Nearly four years after the stimulus was passed, there has been no systematic government effort at the local, state, or federal level to assess the fiscal repercussions of the ARRA in Oakland. And the impact of the stimulus is waning—the Congressional Budget Office has estimated that more than 90 percent of the stimulus’ “budgetary impact” had taken effect by the end of 2011.

Oakland’s unemployment rate was at 13.1 percent in October 2012, the most recent month for which information is available. That’s down from a high of 17.5 percent in July and August of 2010. But Oakland’s unemployment rate remains stubbornly high, more than 5 percent higher than the national rate of 7.5 percent.

Oakland’s police force and its streets both remain underfunded—the OPD is nearly 200 officers short of where Measure Y requires it to be, and the city has a roadwork backlog of more than $400 million. But without the stimulus, officials from the OPD and city say, those officers would probably have been laid off, and the city’s streets would almost certainly have a larger backlog of work.

Without a marquee, high visibility project in Oakland, stimulus money nevertheless transformed the city’s infrastructure, and the lives of residents who found employment as a result of stimulus spending, or its ripple effect.

Barrie Hathaway, the Stride Center’s director, said his organization’s ARRA grants “really did stimulate. Where we would have had to pull back significantly, this grant allowed us to stay level and grow a little bit.”

4 Comments

  1. Ron

    Thanks for this article. I like that you followed down a lot of the money trails. There are two things I’d like to point out.

    1. We’re paying cops too much. $20M for 3 years is $162,000 per officer per year. We’ll never have the police force we need at those rates.

    2. A lot of the “smaller” amounts have gone to questionable places. What did Clinica de la Raza spend the $5M on? How has the dentist’s office used $800K? While these numbers may seem smaller compared to the $2B total Oakland received, they add up across the nation. We need full accountability for these programs.

    • Sam

      Hey Ron,

      I agree with you that there needs to be more oversight on these programs, however the money for the dentist office is a loan and has to be returned.

  2. Scott Law

    Aaron, (Ron ?)

    Excellent article. Oakland North should have more analyses similar to this, with spending broken down to the levels below just “2 billion sent to the city of Oakland”. And thanks for dividing the money spent into jobs “created” – ie 113,000 per job on the control tower – obviously does not include the salaries and benefits of the jobs going forward

    Note the flow going to government entities, the “non profit” world, a dentist (??)… good illustration of the good and questionable aspects with government stimulus.

    Example, if the 2 billion was just divided among Oaklands population below the poverty level of approx 92,000, that would be 22,000 per person, or 88,000 per family of four. Not sure that there would be more positive stimulative impact by just sending poor working families the money..

  3. Konrad

    It’s very heartening to see the worthwhile endeavors the 2009 ARRA money supported and is actually working in Oakland.

    But, the question I have is this: Did Oakland get any of the 2010 ARRA money, or the 2011 ARRA money, or the 2012 ARRA money, or DID the Federal Government keep all of this automatic spending increase wound into the non-budget program of year to year spending??? Pretty nice program to just pass a big stimulus spending at $860 billion your first year in Office and get to have that amount added every year automatically to the following year’s budget.

    Oh my! That sounds like the Lion’s share of the over a trillion in deficit spending each of the last four years.

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