New proposed city budget would cut city positions, merge departments

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Since California Governor Jerry Brown announced in early January that he would end redevelopment programs to help the state deal with its budget deficit, Oakland officials have been scrambling to find ways to salvage city positions that were paid for with redevelopment dollars. The elimination of the redevelopment agency, which will take effect by Feb. 1, blew a $28 million hole in a budget that city leaders had spent months balancing – one that was already constrained by other cuts in the state budget.

On Monday, Oakland Mayor Jean Quan and City Administrator Deanna Santana revealed their new proposal for the city budget, announcing that they were cutting city positions and services and merging departments to deal with the loss of revenue.

“We have not just made redevelopment cuts, but we’ve also reorganized the city so we could save public services and the staff that supports them to as large an extent as possible,” Quan said. “There were no cuts to libraries, no cuts to human services, minimal cuts to police and fire. But it’s still going to be tough.”

The redevelopment agency had been created in Oakland to finance lower-cost housing and infrastructure in blight-stricken areas. As mayor of Oakland in the early 2000s, Brown himself used the funds for revitalization efforts in downtown Oakland. Since then, though, the funds have been increasingly used for issues not related to redevelopment. Mayor Ron Dellums used redevelopment money to pay for an additional 17 police officers during his term, and today the money funds several full-time and part-time city positions. A complete breakdown of how Oakland used the funds can be seen here.

Santana said that the city faced a $12.4 million deficit in fiscal year 2011-12, and a $28 million dollar deficit in fiscal year 2012-13. The budget proposes to eliminate costs of $8.2 million in FY 2011-12, and approximately $20.3 million in FY 2012-13 to bridge this gap.

Brown originally introduced his state budget in October, saying it was time to end decades of “tricks and gimmicks” that had left the state deeply in debt. The budget proposes substantial cuts to health and education programs, including $544 million from Proposition 98 funding, an act which mandates a minimum level of spending on education in California and finances K-12 education. A total of $1.3 billion will be cut from the education sector as a whole, which includes reductions in grants given to students attending private institutions and cuts in child care programs. Meanwhile, health and human services will see cuts of around $2 billion. The CalWORKS welfare-to-work program would now take away benefits from people who cannot find adequate work after two years, instead of four. Families with children would see a 20 percent reduction in monthly benefits, and low-income families would see a 40 percent reduction in child care subsidies. An additional $842 million would be cut from the Medi-Cal program, and all recipients of the program would be moved to managed care.

All those will have effects in Oakland, but the highest concern for city leaders was clearly the loss of redevelopment funding.

Santana and Quan said the city was considering eliminating 105 full-time equivalent positions, and that the actual number of layoffs would not be known until the end of the business day Monday.  By Tuesday afternoon, though, neither office had confirmed the number.

Other structural changes include an overhaul of the City Administrator’s Office, which would now serve as the successor to the redevelopment agency, and dissolution of the Community and Development Agency and distribution of its functions to one of four new offices. These include some old consolidated departments, and the newly established Office of Economic Development and Office of Neighborhood Investment, which would help the city come up with viable economic alternatives to redevelopment. Merging the departments saved $1.2 million, Santana said.

Key administrative functions in Finance, Human Resources, Information Technology and the City Administrator’s Office would also be merged into one Administrative Services Department. The Mayor’s, City Council’s and City Attorney’s offices would face a reduction equal to 40 percent of the funding that they received from the redevelopment agency.

Santana also indicated that over time, the city would wind down subsidies to non-profit organizations, and ask community programs to remain closed on Mondays. Some community centers would be allowed to expand hours of operation on the remaining working days to compensate for this loss.

Assistant City Administrator Fred Blackwell said that the West Oakland Army base development project would remain unaffected despite the dissolution of the redevelopment agency.

“The Army base falls into the category of enforceable obligations, which will go on with the city as the city is now the successor entity to the redevelopment agency,” he said.

Blackwell said that redevelopment was a tool targeted towards low-income areas and blighted communities, which was where the cuts would be felt most. “We’re talking about East Oakland, West Oakland,” he said. “The frustrating part about this exercise is that it impacts the folks who can least afford to be impacted in this way.”

Quan agreed with Blackwell, saying that city services like affordable housing projects, efforts to make Oakland green, and small business centers would be cut. “We need a mechanism to implement these programs,” she said, before adding that the California State Legislature would have to give something back in exchange for the redevelopment losses. “Something will have to come back – we don’t know what it will be, but right now we’re trying to save those programs until the legislature makes up its mind,” she said.

The new budget proposal will be discussed by the City Council in a special meeting on Wednesday, and voted upon on January 31. If approved, the new budget will take effect on February 6.

Text by Amna Hassan, infographic by John C. Osborn.