Bruce Nye is a board member of Make Oakland Better Now!. This guest post is presented on MOBN!’s behalf. The Oakland City Council will be holding a public workshop to discuss the budget, and Mayor Quan’s report, on Monday, April 11 at 9:00 a.m. at Joaquin Miller Community Center, 3594 Sanborn Drive, Oakland.
On January 4, the day after her inauguration, Oakland Mayor Jean Quan promised a budget by the end of March. At her weekly press conference on February 18, she told the media she was still on target, although her budget would present options, not just a budget.
Last Wednesday, Mayor Quan released her “Informational Report on the City’s Fiscal Condition and Framework For A Balancing Plan,” which contained no budget at all. Instead of a budget, the mayor gave us a history of the City’s well-known economic woes and a calculation of the effect of cutting department requests by 15%. In her report, she proposed no priorities, no specific innovations, no specific department consolidations and no new ways of funding city government functions.
Instead, Mayor Quan laid out facts that are well-known to anyone who follows city government and asked City Council members to send her a memo by April 8 outlining what their priorities are. The San Francisco Chronicle summed it up by quoting Council Member Ignacio De La Fuente: “It’s leadership afraid to make real decisions.” Make Oakland Better Now! believes that thoughtful, disciplined, collaborative and innovative thinking in can solve many intractable problems. So we were thinking: Why don’t we give Mayor Quan a do-over? Instead of largely unspecified and hypothetical across-the-board cuts and pleas for help to the City Council, why don’t we give her the chance to take a different approach, something like this:
Dear President Reid and Members of the City Council, Department Heads, Public Employees, Unions and Citizens of Oakland:
If you have been paying any attention to what is happening in Oakland, you know revenue has plummeted in recent years and expenses have skyrocketed. You also know that in trying to deal with those realities, we in City government have subjected city services to death by a thousand cuts. So I really don’t need to spend any more time telling you about those problems. My job as Mayor is to make proposals that will solve them. Since November, I have spent all of my waking hours trying to find new and innovative ways to provide essential services with less money. I appointed a transition committee consisting of some of the smartest people in Oakland, people with deep backgrounds in business, government, economics and public policy. I spent a great deal of time listening to others. The result is the very difficult proposed budget I now present to you.
From the start, it was clear to me that we could not solve our budget problems without a complete understanding of what they were. So, I asked our budget director and her staff to provide a clear analysis of the structural deficits faced by the City over the next five years. The resulting numbers were worse than anything you or I have seen before. Previous city presentations (including this one, at page 13) have never included the unfunded PFRS obligation or the need to repay some $33 million in negative fund balances (PDF) for which there is no repayment plan. If we include these, the five year general purpose fund deficit totals at least $690 million (all numbers below in millions):
It was also clear that neither I nor anyone else had a monopoly on wisdom when it came to solving this very large problem. So in the past three months, my transition team and I have met regularly with representatives of the City Council, department heads, and union leaders to try to work collaboratively on reimagining the City’s budget. All of them were asked to contribute their innovative ideas on how to make City government more efficient, more responsive, and less expensive. And I have listened to them. Finally, I imposed an overarching guideline for the budget process. Whereas past budget deliberations have been marked by increasingly strident discussions among interest groups competing for resources (arts vs. police, parks v. public works, etc.), during my administration decisions are based on a holistic, prioritized view of the City’s needs. As Mayor, it is my primary job to set priorities for consideration and adoption by the City Council.
Not everything can be a priority. Since at least the Roman Empire, civilization has known that governmental “core services” consist of keeping citizens safe, maintaining infrastructure, and upkeep for public property. My budget reflects these few critical priorities. Here are the other steps my administration has taken in the past ninety days:
Mediating salary and benefit issues with all public employees: While nearly all of my public pronouncements about public employee benefit costs have addressed police retirement, a full contribution by our uniformed police officers will only reduce the deficit by around $6 million to $8 million. The benefits expense problem is much greater than this, and Oakland has proved itself completely unable to reach negotiated solutions to date. Therefore, I have offered to enter into a multi-party mediation process with all of the City’s unions and representatives of the retirees to find solutions that are fair, collaborative, and manageable. I have suggested several respected third-party mediators, and have agreed that, particularly as to police and fire, there should be a full airing of issues between the unions and the City. We will be presenting second-tier salary and benefit structures, changes to employee contributions to health and retirement benefits, and “anti-spiking” changes, with estimates of the budget savings to be achieved from each proposal. We realize these are very sensitive subjects for our City’s employees, and welcome their ideas about alternative measures that can achieve similar savings.
Consolidation and Reliance On The Community and Private Sector: This budget contains much consolidation, and requires public/private partnerships. We propose combining departments. We propose combining facilities. We propose an increased reliance on community support organizations for our libraries, parks, and many other parts of government.
Leveraging Technology: Technologically, Oakland is living in the twentieth century. We need to leverage “Government 2.0” and social networking technology in a way that makes City government cheaper and more responsive. I am announcing the formation of an Oakland Technology Advisory Committee, consisting of leaders in the social networking world, to recommend ways to completely re-envision the technological interface between City government and citizens. Among other things, I hope their recommendations will facilitate the implementation of CitiStat, a data collection, data use, and management method I campaigned on.
Non-Profits and Volunteers: We will not be able to provide all the services cities have traditionally provided. We will need to look to our community’s volunteers and non-profits to help us in many operations traditionally provided by City employees. Otherwise, we will not have those services at all. I will be going to the voters with an initiative to amend our City Charter’s “contracting out” prohibition so as to provide that nothing in the Charter will be deemed to prohibit the use of non-profits or volunteers.
Performance Based Budgeting: Oaklanders must know what services they are getting for their tax dollars, and that information must be presented in a quantitative, measurable manner. Accordingly, the budget I am presenting implements performance based budgeting and shows Oaklanders exactly what services they can expect from their city and the unit costs for those services.
Budgeting for Outcomes: Finally, we are starting a year-long process to implement the “Budgeting for Outcomes” model. Our goal is to have an outcomes-based budget in place in time for the 2012-2013 fiscal year.
This proposed budget is very tough, and eliminates many services we all feel strongly about. But it is the Mayor’s responsibility to propose tough decisions, and the City Council’s responsibility to make tough decisions. When, and only when, we have enacted an honest, easily understood balanced budget that prioritizes core services, we should go to the voters with a tax measure that allows the voters to decide if they want to provide more. We are all in this together, and I look forward to working with the City Council at the April 11 budget workshop and as many further workshops and meetings as are necessary to complete the difficult tasks ahead of us.
Mayor of Oakland