Grim city budget faces City Council approval tonight
on October 16, 2008
By MAGGIE FAZELI FARD
OCT. 21 — Three months after discovering that Oakland is facing a $42.5 million shortfall, the city council is slated to vote tonight on a budget that could cut a hundred city jobs, close several city parks, and shut down official city business over the holiday season.
Much of the blame for the current crisis has fallen on the head of Deborah Edgerly, Oakland’s former city administrator, who was fired in July amidst allegations of nepotism and interfering with a police investigation. After her termination, reports arose indicating that she had overstated revenue projections for the current fiscal year by $37.5 million and that she had made regular practice of dipping into reserve funds to cover revenue shortfalls and expenses, including police overtime.
In late July, Mayor Ron Dellums initiated a review of city finances, and while it eventually found no criminal wrongdoing, the report made it clear that the city was in a very tight spot.
“Oakland has been living beyond its means,” Dellums told reporters at a Sept. 26 press conference announcing the review’s findings and also unveiling a city budget for council consideration.
Compounding the shortfall was the growing downturn in the housing market. First quarter reports indicated that Oakland had the 10th highest foreclosure rate for urban areas nationwide, which reduced the amount the city can collect in property taxes.
Police department costs, namely overtime charges and new officer hires following Dellums’ promises to make city streets safe, are also big-budget line items. Dellums said that despite the budget crisis, he will make good on his word to meet the quota of 803 officers, as prescribed in 2004 by Measure Y, by year’s end.
Among the solutions set forth in Dellums’ budget plan were $13 million in revenue increases, including a $12 million tax hike as well increased parking meter rates and parking citation fines.
But the mayor said at the Sept. 26 press conference that raising more money would not be enough; the bulk of the shortfall would be compensated for through severe cuts, including layoffs across the city.
Dellums proposed laying off 50 city employees for a savings of $4 million, as well as instituting a hiring freeze and eliminating vacant positions for a savings of $5 million.
To combat a $5 million deficit in Landscaping and Lighting Assessment District funding (LLAD), Dellums proposed cutting 46 positions, closing smaller parks, and reducing park services and street light repairs.
Despite his proposed cuts, Dellums’s budget still left a $10 million shortfall; he suggested that the council consider other options, like laying off 120 additional city workers and shutting down city offices once a month through the end of the fiscal year in June.
“It’s not going to be business as usual,” said Dellums at the press conference. “We’re not just going to raise money on people in the form of fees and fines and such. These tight budget times call for real structural changes. We have to bite the bullet.”
Last Thursday, Oct. 16, council members Ignacio De La Fuente and Jean Quan, who sit on the council’s finance committee, presented a response to Dellums’s budget with a set of their own proposals.
“One of the options that was previously proposed to close the final $10 million budget hole would have involved laying off an additional 120 positions,” De La Fuente wrote in an Oct. 17 e-mail blast to his constituents. “By making the above adjustments, we would be able to limit those additional layoffs to only five.”
Among their amendments were cutting elected officials’ salaries by five percent, for a savings of $55,000, and cutting the council’s discretionary budget in half, for a savings of approximately $1 million.
While Dellums had proposed dropping three positions in his own office, De La Fuente and Quan pressed for further cuts, reducing mayoral spending from $3.2 million to between $2.4 million and $2.7 million, the amount allocated to the previous mayor, Jerry Brown, when he was in office. Dellums’ staff is now nearly twice as large as Brown’s had been, with more than a dozen new positions, including a chauffeur with a $60,000 salary.
Other cuts proposed include eliminating $2.3 million in administrative positions earning $100,000 or more per year; suspending cultural and arts programming to save $800,000; reducing spending on “unnecessary” food, bottled water and flowers to save $200,000; freezing overtime for non-sworn, non-emergency personnel to save $175,000; and eliminating AIDS Prevention and Education funding to save $100,000, despite the fact that the council is considering “the declaration of a local emergency due to the AIDS epidemic” as part of tonight’s consent agenda.
While De La Fuente and Quan supported closing the city one day a month through June, they want to shutter city offices on the days between Christmas and New Year’s Day as well. These closings are projected to lead to $3.8 million in savings.
The council members’ plan would also protect the jobs of three park ranger positions that cost the city $220,000 and one $80,000 Oakland Museum position, which would be cut under Dellums’ plan. Half the the Oakland Public Library’s Bookmobile service would also be retained, for $75,000.
De La Fuente and Quan also propose examining outside contracts to see what city employees can do in-house.
Other items on tonight’s meeting agenda include an anti-nepotism ordinance; a salary ordinance that would prohibit the city administrator from offering salaries or benefits in excess of what has already been negotiated; discussion on developing “green” building ordinances; and the donation of four used fire vehicles – valued at combined total of $1,200 – to the Republic of El Salvador.
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1 Comments
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why do you accept at face our elected officials scapegoating of edgerly for the fiscal disaster that they saw coming and did nothing to stop it.
By early 2006 it didn’t take a financial genius to look at the city’s dependency on huge growth in real estate tax revenue and project the effect that the rapidy cooling real estate market on those revenues. Add in the generous pay and benefit increases to muni employees making them the highest paid muni workforce of any big city in the USA) enthusiastically approved by the council and past Mayors, the recipe for this “crisis” was plain as day.
Council members and a Mayor might say they didn’t know that Edgerly was making inter fund transfers to cover budget shortfalls, but they all knew revenues were dropping so where the heck did they think the money to make payroll was coming from? Which is to say they all knew that Oakland was furiously playing a shell game, akin to moving money via a bunch of credit cards, but were not about to upset the voters with any unpleasant news until after the June 2 2008 council elections. How convenient the officials can blame it all on that evil mastermind Edgerly.