A report outlining the grave budget situation that would probably lead to millions of dollars in more service cuts was presented to the Oakland City Council on Tuesday.
The city is facing an estimated $115 million one-year budget gap, which, when combined with the funds needed to rebuild its emergency reserve fund, will take a total of roughly $143 million to eliminate. This loss is mostly caused by its two largest overspending departments, police and fire.
Last week, officials from the city’s finance departments raised the alarm, stressing the necessity of balancing the budget immediately or declaring a fiscal emergency.
“The two largest departments in your general purpose fund are your fire department, which is projected to overspend by $34.5 million or 21 percent of its budget, and your police department, which is expected to overspend by $51.9 million or 16 percent of its budget,” Brad Johnson, the city’s budget administrator, said.
Since payments for Oakland’s $125 million sale of the Coliseum were rescheduled, the city has been functioning on its so-called “contingency budget” of $758 million.
Numerous changes have already been implemented as part of that budget, ranging from stopping business travel to implementing a hiring freeze and putting a halt to “unfinalized” contracts and local grants.
However, it is anticipated that many millions of dollars will be eliminated from services in order to prevent insolvency and possible bankruptcy.
“I want you to hear clearly at this dais that we must take action over the course of the next month-and-a-half to preserve our solvency,” Johnson stated.
Councilmember Nikki Fortunato Bas pointed out that a number of issues, such as decreased federal spending, rising interest rates, the state’s property tax regulations, and the city’s ongoing overspending, are to blame for the current fiscal crisis.
She and other council members also discussed the administration’s efforts to draft “a strategic plan that will improve our organizational structure,” the need for a study focused on police staffing so the council can make better decisions about OPD’s budget, and the possibility of placing a sales tax increase on an upcoming ballot that could raise up to $20 million annually.
“And finally, I also requested an independent audit by the city auditor of our revenue collection,” Bas stated. “We have to make sure, with all of the revenue that is owed to us, that we’re collecting every dollar of it.”
Several city employees, union leaders, and community members urged the council to refrain from cutting essential city services like sidewalk and street repair, youth after-school and summer programs, illegal dump site cleanup, and cultural institutions and activities during the meeting’s public comment period.
“A coalition of municipal unions drafted a plan that they believe will help the city balance the budget while avoiding the most painful cuts,” said Julian Ware, head of the union IFPTE Local 21.
Among other things, it calls for decreasing the growth in senior management’s compensation by up to $8 million, staffing up parking enforcement and other revenue-generating departments, cutting “non-service” spending, and reducing police overtime by $24 million to $52 million.
According to the union’s research, the proposal could generate between $142 million and $204 million in new revenue and savings, which would be sufficient to close the city’s budget deficit.
“We’re here today to share our disdain over dangerous and feckless budget cuts proposed by the city administration, which threaten critical services to our residents,” Ware stated. “Cut waste not services.”
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