Category Archives: guest post

Greg McConnell: Is Oakland Worth It?

This guest post was written by Gregory McConnell, President and CEO of the Jobs and Housing Coalition, which represents major businesses in Oakland.

Many Oakland business people are asking whether Oakland is still a good place to invest. As I talk to small and big business people all around the city, I hear the constant question. Is it time to pack up and leave?

Phil Tagami told me that several tenants have talked to him about leaving the Rotunda and taking hundreds of jobs out of the city. The small shops in Frank Ogawa Plaza report that business is off 30 to 50%. The Tribune Tower managers say they can no longer tolerate the fact that their building is frequently forced to close because Broadway between 13th and 14th Streets is usually the epicenter of unrest.

On Wednesday, a client attending a conference at the Marriott called and asked if it was safe to eat at Jack London Square, I told her no, it had been shut down. Another business group that has invested in Oakland brought its national board of directors to the Bay Area. They too had plans to stay at the Marriott and visit potential sites in Oakland for new investment. Instead, they went to San Francisco fearful of riots and unruly mobs.

City officials are assessing the impact of the occupancy on our fragile economy. They will be looking at reduced sales at restaurants, lost revenues at retail outlets, lost leases, and lost jobs. We will have empirical evidence soon, but for people who lost a lot in broken windows and shattered confidence, and workers who have been told to go home, or have been laid off, the impacts are already known.

All of this begs the question. Is Oakland worth it?

No, if our leaders allow long-term unlawful occupancy of our public spaces. No, if the police are forced to hide away in the City Center parking lot under a “minimal presence” order, thereby forcing property owners to arm themselves and risk their lives. No, if graffiti and broken windows are acceptable. No, if the city does not protect the people that employ the 99% and serve the residents.

On the other hand, there are many reasons to say yes. Oakland is still one of the most beautiful places on the planet. It is rich with caring, intelligent people who work hard and engage in community affairs. We have young entrepreneurs who are opening small businesses. We have new innovative companies like Pandora, Sungevity and BrightSource Energy that are bring thousands of jobs to the city. Large corporations have established foundations that give back, Kaiser foundation and the Rogers Family Foundation are just a couple of examples.

Most Oaklanders share the outrage at the failure of our economic system. It rewards a small segment and seems to ignore the plight of every day working people who are losing jobs, homes, investments, and worse, the optimism that has always allowed us to think that our lives will get better. The Occupy Movement has brought this to our nation’s attention. For this, we are grateful.

Nevertheless, we have to distinguish between our shared anger at Wall Street and the occupancy of Frank Ogawa Plaza and lawlessness in our streets. Oakland’s business people are not Wall Street profiteers. They are people like you and me who wake up in the morning and work to feed their families.

The owner of Café Teatro hires four people to sell coffee and sandwiches. She is not rich and she is not exploiting anyone. The owner of Rising Loafer is in the same boat. Well before the occupancy, she frequently talked to me about her outrage at corporate America. Tully’s supported the occupancy with donations of food and cleaning supplies, before their windows were smashed. Each of these businesses will be forced to shut down, and the people they employ will be jobless, if the unlawful occupancy of Ogawa Plaza and violence in the streets continues.

I believe that this too shall pass. It needs to happen soon. If it does, YES, OAKLAND IS WORTH IT. But, if we don’t do something soon to change our downward spiral, we may lose the city.

On Thursday night, I took visiting business people to Pican Restaurant. My mission was to help a local business, which has seen a 40% decline in sales over the last few weeks, while trying to give potential Oakland businesses confidence that the city is still functioning. I hope others will do something similar to support Oakland businesses that create jobs and revenues for this struggling city.

We all honor Oakland’s long history of promoting peace and justice. Nevertheless, we need to acknowledge that there is a big difference between supporting efforts to change Wall Street and the unlawful encampment that is destroying the city, our local business people, and their employees.

I urge the residents of Oakland to tell our leaders that support for changing Wall Street and ending unconscionable corporate greed, does not equate to support for an on-going unlawful occupancy. Please write the Mayor, the Council, and the City Administrator. Tell them to end the occupancy and lawlessness in our streets. Let them know that this caring community also cares about working people and businessmen and women who bring jobs to the city.

When we make that clear, I trust that our leaders will find a way to end the unlawful occupancy. If they do not, perhaps we will need to end the occupancy outside and inside city hall.

Ralph Cooke: Oakland City Attorney should remain an elected position

“The City Attorney is to be elected by the people. This is a guarantee that the legal head of government will be able to fearlessly protect interests of all San Diego and not merely be an attorney appointed to carry out wishes of council or mayor.”

-  Excerpt from a 1931 election brochure, which asked voters to change the San Diego City Charter and elect an independent City Attorney.

On July 19th, Council Members Nadel and Kernighan plan to submit for Council approval, a resolution to present to the voters, a charter amendment entitled, “Returning the Elected City Attorney Position to an Appointed Position.” They acknowledge that the City Attorney serves as legal counsel to the City Council, the Mayor and each department of the City of Oakland (City). They cite that a City Attorney who gains the position through election by the public is subject to all political pressures experienced by any other politician. In addition, in the measure to be submitted to the public, they further cite as reasons for this change the following (PDF): the uniqueness of an elected City Attorney in California (2.5% elected) and the city attorney chooses his or her own boundaries ranging from legal to policy to politics.

For the reasons enumerated below, I respectfully ask that the residents of Oakland reject this blatant attempt to usurp power from other departments and people and eliminate this integral check and balance on the power of our elected officials.

Legal Counsel to City Council, Mayor and Each Department of the City

A City Attorney appointed by City Council and the Mayor cannot effectively serve each department of the City. When the City Council and Mayor appoint the City Attorney, the City Attorney works for and serves at the pleasure of the City Council and the Mayor. Thus, appointing a City Attorney does not eliminate the political pressures that our Council Members worry about with an elected City Attorney. If anything, these pressures are more pronounced and exacerbated when the Council and Mayor appoint a City Attorney, who serves at their will.

The City Attorney must feel free to offer independent advice, free of the pressure exerted by the City Council and Mayor, to the department heads he or she represents. When City Council and the Mayor have the ability to hire and fire the City Attorney, will the City Attorney provide counsel that is best for the department and the City or will it represent the interest of City Council and the Mayor, even if the position has no legal merit? An appointed City Attorney is subject to the political pressures of the individuals who appoint him. When the City Attorney is appointed there is a conflict of interest and invites the potential for abuse and retribution from the Council and Mayor.

The following is part of the discourse that occurred in the early 20th century when the City of San Diego debated these same issues.

“Ray Mathewson, the San Diego labor union representative on the Freeholder Board, described the role of the independent city attorney in a proposal he submitted to the Freeholder Board in which he recommended a “Strong Mayor –Council” form of government:

The duty of the city attorney is to give legal advice to every department and official of the city government on municipal matters. He also must act as the representative of the various departments before the courts. He should occupy an independent position so that his opinions would not be influenced by any appointive power. For this reason, he should be elected by the people. If elected, the city attorney is in a position of complete independance (sic) and may exercise such check upon the actions of the legislative and executive branches of the local government as the law and his conscience dictate.”

Only 2.5% of California cities elect their City Attorney

This is true but misleading. Five of the ten largest cities in California, including Oakland, elect their City Attorney. These five cities represent over 18% of California residents. In total, elected City Attorneys represent over 20% of California residents. To understand what can go wrong when the City Council and Mayor appoint the City Attorney, one need not look any further than the City of Bell. As the former administrator and other officials paid themselves high salaries, former City Attorney Edward Lee did little to restrain allegedly lawless behavior.  That 97.5% of the cities have an appointed City Attorney does not mean that it is a better structure.

Legal Advice versus Policy Making

According to the Ethical Principles for City Attorneys adopted by the League of California Cities, “The city attorney should be willing to give unpopular legal advice that meets the law’s purpose and intent even when the advice is not sought but the legal problem is evident to the attorney.

An elected City Attorney is the people’s last check to ensure that our elected executive and legislative branches do not embark on an action that is either legally incorrect or ill-advised. This will not happen when the City Attorney serves at the will of City Council and the Mayor. When the City Attorney is appointed, the electorate does not know if it is the best legal advice or the advice that will ensure that the appointed individual is retained by City Council and the Mayor. The public trust is critical to a functioning and thriving democracy; this trust is eroded when City Council and the mayor seek to wrest the power from the people.

Conclusion

The proposed ballot measure seeking a return to an appointed City Attorney is designed for one purpose and one purpose only — to wrest power from the people and consolidate power in the hands of the few. We deserve a City government that works for all residents of Oakland. We do not have this when City Council and the mayor collude to appoint a City Attorney who primarily serves their needs.  I urge you to contact your council member to voice your displeasure with this ballot measure and join me at the July 19 city council meeting to speak against the proposed ballot measure to return to an appointed City Attorney.

This guest post was written by Ralph Cooke, an Oakland resident and advocate for transparent government.

Zac Unger: Details on the firefighter union concessions

Last night, zac left a very helpful comment in the Open Thread detailing the agreement reached between the firefighters union and the City. To make it easier for people to find, and also to avoid overburdening the Open Thread with conversation on one topic, I’m putting up the comment as its own post here, and moving the comments that were already left in response over here as well. Thanks again for filling us in, zac! – V

OK folks–here it is. It’s time to let you all in on the contract that Local 55 (fire) has negotiated with the city. Ready? Go!

As you know (hopefully) Local 55 is already paying 13% of our salary towards PERS. This is far over and above any other bargaining unit in the city. And we’ve been doing it for years, saving the city lots of money. We also reduced the amount the city paid for our medical coverage two years ago. Next, two years ago we agreed to work four hours per week for free. We’re still doing that. This was effectively a 7% cut in pay. I’ve heard a lot of people say that that isn’t a cut to work four hours per week for free. But imagine if you are a 40-hour per week employee and your boss told you that you had to come to work every other Saturday, all day long. For free. It would probably feel like a cut.

Anyhow, that’s what we did before. Here’s what we’re proposing now:

  • Three year contract
  • 8.85% pay cut
  • Give up 2 Vacation days per year
  • Freeze the city’s contribution to our dental plan
  • New hires go to 3% at 55 for pension

An 8.85% cut plus a loss of two vacation days is equivalent to 10% of our total compensation, or 9.57 million dollars. Two vacation days might not seem like a lot, but we work 24-hour days. Most folks in the dept get either 7 or 9 days, so a loss of two days is a significant chunk.

So there you have it (for the first part at least; there’s more). Ten percent. Boom. In the form of a 9-ish percent cut and two vacation days. This is on top of the 13% contribution to PERS and all that other stuff. It saves the city 30 million over the life of the contract, and the change in retirement calculation saves millions more down the road.

But wait, there’s more…In the second year of the contract we give the city the option of browning out two companies. The city is quite eager to close/brownout firehouses. We insisted that each neighborhood share the pain. So to that end the brownouts will roll through the entire city. We have 32 rigs and 2 will brown out each day, beginning July 2012. Essentially, each company will be closed one sixteenth of the time. This saves the city 4.4 million dollars per year.

So there you have it. A 10% cut directly out of the firefighter’s pocket. Ten million bucks a year. And two years of brownouts. It’s not anybody’s dream, but it’s a solid concession and we’re proud to do our part to help the city through this rough patch. I also feel compelled to point out that this concession far exceeds what any of the council members asked us for in their budgets. Going off of V Smoothe’s analysis, IDLF wanted 3.7 million from us; the Kaplan team wanted 12 million from ALL UNIONS COMBINED; and the Reid group didn’t really seem to be asking for any concessions at all. At any rate, we tripled the concessions that IDLF asked us for, and his seemed to be the most concessions-based budget.

Bottom line is that it’s a solid deal in a shaky time. We hope all of the other bargaining units will make similar concessions so that we can get this city moving again. It’s a pleasure working for/with all you fellow Oaklanders and I hope you feel OK about this deal.

And now: fire away! I’ll take your questions.

Tom Thurston: Mayor proposes using Kaiser Center to Grab ORA’s Cash

This guest post is written by Tom Thurston, an East Oakland resident and member of the Central City East Redevelopment Area PAC.

On Monday night, June 6 (PDF), Oakland Redevelopment Agency (ORA) staff presented to the Central City East Redevelopment District Project Area Committee (CCE PAC) a proposal for ORA to buy the Henry J. Kaiser Convention Center from the City for $29 million [6/14/11: Added the word "million" for clarity, thanks livegreen -V]. The reason for the deal is obvious: Redevelopment has money; the City needs money. CEDA Deputy Director Gregory Hunter made an eloquent case for ORA taking charge of this landmark building and turning it into a productive cultural resource for the City, like the Fox Theater. The proposed deal was for the Central District to pay $13 million and CCE to pay $16 million. The Kaiser Center lies in the Central District. Laney College, just south of the Center, is in CCE.

CCE PAC members were unreceptive to the idea. Some PAC members have been working for decades to improve their neighborhoods, and were distressed that, now that we had money to accomplish some of their goals, that money was being snatched by the City. They did not see how the proposed purchase would benefit CCE. The claim that any development that draws positive attention to Oakland helps all of Oakland did not comfort. The PAC rejected the proposal 13-1.

But the PAC is only advisory to the City Council. The Council was reviewing the proposal as part of the ORA budget the next night. PAC Chairperson Gloria Jeffrey, heading up a delegation from the PAC, spoke passionately against the proposal. Others spoke individually, including myself. I questioned the price.

The $29 million tab is based on the replacement value of the Center (PDF). When the City buys or sells a property it is required by law to pay or receive fair value for the property. Fair value is the value that a willing buyer would pay a willing seller in an arms-length transaction. This is not an arms-length transaction, since the City Council decides both for the buyer and the seller. Therefore the valuation price demands special scrutiny.

When an oil tanker explodes and destroys a section of an overpass, the fair value of the overpass is the replacement value. The overpass must be replaced. There is no choice. In the current economy, would the City feel absolutely compelled to replace the Kaiser Center with a similar building if the building were lost? Clearly not. The building has sat vacant and locked for years, and the City has not sought money to bring it up to code. Replacement value is arguably not fair value.

There are two other ways of valuing a commercial building: comparable sales and cash flow. This is a unique building; there are no comparable sales. The alternative cash flow method asks what the building is worth in terms of the stream of income it could generate. Gregory Hunter told the PAC that the appraised cash flow value of the Kaiser Center was $14 million. It could be used by the East Bay Symphony, Oakland Ballet, Laney College and others. I told the Council that I might be persuaded to support a deal, but not at $29 million.

Mayor Quan was present at the meeting, and caught up with a group of the PAC members on our way out. She explained that if the Council did not come up $29 million here, they would have to find it in additional cuts to libraries, senior and youth programs, arts programs and such. She foresaw that the Council would avoid such cuts by pushing through this deal.

I asked the Mayor why $29 million, when the next day the Center would only be worth $14 million to ORA. The issue, she explained, is in the hands of the City’s bond underwriters. She told us that the Kaiser Center is collateral for some of the City’s outstanding bonds. If the City treated the fair value of the Center as $14 million, they would violate the bond covenants. The Mayor hinted that an alternative would be to transfer the collateral to City Hall, but she didn’t want to put City Hall in hock.

So there it is. In order to avoid a lien on City Hall, ORA is compelled to go along with the legal fiction that the Kaiser Convention Center is worth $29 million. While the Center might generate a stream of income worth $14 million, the remaining $15 million is simply an overpayment and is irrecoverable to the two redevelopment districts. It is an unwilling gift from the people of the Central and East Oakland flatlands so that the City can balance its budget this year.

Bruce Nye: Oakland’s City Budget: We have questions. Does Oakland have answers?

Tonight at 5:30 at City Hall, again on May 26, and at additional meetings in June, Oakland’s City Council will be considering one or more of the three budget proposals submitted on April 29 by Mayor Jean Quan. Mayor Quan has named the three budget proposals Scenario A (the “All Cuts Budget”) Scenario B (“Cuts & Employee Contributions”) and Scenario C (Cuts, Employee Contributions& New Revenue”).

Make Oakland Better Now! (MOBN!) has combed through these documents, and still has many unanswered questions. The answers may be available, but as far as we can tell, they don’t appear in the budget documents. In the coming days, MOBN! will raise some of these questions and try to explain why the answers matter. Future posts will appear at MOBN!’s blog, Oaktalk.

How Did The Mayor Set Priorities in the Three Scenarios?

Part One

Whether written in a strong economy or in hard economic times, all budgets show priorities. MOBN! strongly favors the Budgeting for Outcomes means of budgeting described in David Osborne’s The Price of Government. Under this model, a city determines the most cost-effective and efficient way to provide desired levels of each potential service, prioritizes those services and allocates sufficient funding to each of the services in order of priority until all resources are exhausted.

This is the complete opposite of how Oakland and most other cities budget. Instead, the usual process is to take last year’s numbers, determine how they should be adjusted for changed circumstances (e.g., contractually required cost of living adjustments, known price changes, losses of funding sources, etc.) and then make cuts until expenses match revenues. The result is often a budget that waters down all city services and trains citizens to continually lower their expectations about city government.

Unfortunately, the Budgeting for Outcomes approach takes approximately a year to execute and we are far too close to the start of the 2011-12 fiscal year to consider it. So, if we must have the Death by a Thousand Cuts method of budgeting, those cuts must be made in a way that consistently and coherently tracks city priorities.

The mayor’s budget documents and transmittal letters send decidedly mixed messages about the City’s priorities. The Mayor/Council Priorities at the beginning of each scenario (which is identical to the list submitted with the 2009-11 budget) tells us that everything is a priority: public safety, sustainable and healthy environment, economic development, community involvement and empowerment, public-private partnerships and government solvency and transparency.

Some of the detail shows us that this is more of a wish list than a realistic set of priorities. For example, the detail for public safety–in a city that has seen its sworn police staffing drop by about 150 officers in the past two years–urges “an adequate and uncompromised level of public safety services to Oakland residents and businesses. . . .” And one of the sustainable and healthy environment bullet points is “Infrastructure: Provide clean, well-maintained and accessible streets, sidewalks, facilities, amenities, parks, recreational facilities and trees.” This language precedes a budget that eliminates tree trimmers, and anticipates very little street repair. Acting City Administrator Lamont Ewell estimates a capital improvement need of $1.6 billion.

Mr. Ewell identifies seven Budget Balancing Principles, two of which reflect at least some prioritization:

  • Principle 2: Give highest priority to protecting the most essential City services. (Although he does not commit to what the most essential city services are); and
  • Principle 4: Minimize the negative impact on Oakland residents, businesses and employees.

Mayor Quan identifies her overall approach to budgeting as “an attempt to be fair to all groups while trying to reduce the impact on our most vulnerable citizens, especially low income seniors and youth”. This begs another question: Is being fair to all groups a budgeting priority for Oaklanders?

Perhaps a better way to identify the city’s priorities is to look at how it actually spends its money and where it makes its cuts. Interpreting the three scenarios for this purpose; however, presents several challenges. MOBN! will dig deeper, and look at those challenges, in our next post, at www.Oaktalk.com.

Andy Katz: Expand Lifeline Water Rates for Low-Income Families

This guest post was written by East Bay MUD Director Andy Katz. Director Katz represents EBMUD’s Ward No. 4 which is comprised of the cities of Albany, Berkeley, Emeryville, El Cerrito and Kensington, as well as a portion of Oakland.

Perhaps you’ve read about the painful cuts that will be hitting California’s low-income families hard in the next fiscal year. These are tough economic times, and our social safety net provided by state government is falling through. But we can make a small, but important difference in the East Bay Municipal Utility District (EBMUD), which serves Oakland and most of the East Bay.

The East Bay Municipal Utility District (EBMUD) Board of Directors will decide on key budget matters at its meeting on April 12. One proposal includes closing critical gaps in the Customer Assistance Program (CAP). The CAP provides a 50% discount off the water bill for basic water use to households earning up to 165% of the federal poverty level: Households earning less than $24,000 for a household of 1-2, or $34,000 for a household of 4 are eligible.

This threshold is lower than California’s electricity rate relief program, CARE, which covers households earning up to 214% of the federal poverty line, about 60% of the median income. The Customer Assistance Program also does not cover EBMUD’s wastewater bill, which can be up to a third of charges that customers face.

Closing both of these gaps would only cost EBMUD an additional $450,000, a very small cost out of an annual operating budget of $450 million. Yet this would make a big difference for families earning a low income but are just out of range of our program – about 1% of a family’s annual income.

Please click here to write a personal message to the EBMUD Board of Directors urging the Board to close important gaps in the Customer Assistance Program to protect low-income households.

Andy Katz
Director, East Bay Municipal Utility District
Representing north Oakland, Albany, Berkeley, El Cerrito, Emeryville, and Kensington

Bruce Nye: Mayor Quan’s Budget Framework: May We Try This Again Please?

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):

Oakland Deficit

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.

Respectfully,
Jean Quan
Mayor of Oakland

Bruce Nye: What does budget reform look like? Part 2

Bruce Nye is a board member of Make Oakland Better Now!. Budget reform will be on the agenda at the joint Make Oakland Better Now! and East Bay Young Democrats meeting on Sunday, February 20, 2011, 2:00 p.m. at Lakeshore Avenue Baptist Church, 3534 Lakeshore Avenue (directions). All are welcome.

Part II

At Make Oakland Better Now!’s February 20 meeting, we will be looking at ways our city could reform its budget process to make city government more responsive and more cost-effective. Thanks to our host V Smoothe at A Better Oakland for giving us the platform to discuss two possible reforms. Yesterday we talked about Performance Based Budgeting. Today we consider “Budgeting for Outcomes.”

What Does The Budget Process Look Like Now?

In recent years, Oakland’s budget process has worked this way: The Budget Director asks department heads to submit their budget requests. Departments submit information — usually not very detailed — about what they think they need for personnel and other resources (often adding a margin because they know their requests will be cut). The Budget office prices out the requests, estimates the year’s revenues, and makes proposed cuts to the requests until the budget is, theoretically, balanced.
The proposed budget goes to City Council for public hearings, during which members of the public, public employee unions and other stakeholders mobilize to plead their cases against what they perceive — often correctly — as devastating cuts. Council makes some political compromises, and eventually agrees on a budget that is, on paper, balanced.

We understand that the new Mayor is taking a much more active role in the process than did her predecessor, and the new Budget Director has been moved to the Mayor’s office. The budgeting process has been fairly quiet since the first of the year, but we also understand that staff are trying to close a $40+ million gap (not including the $46 million PFRS bombshell). So it sounds as though the process is the same as before. And, as before, there is much likelihood that once it is adopted, the budget will be the subject of repeated mid-year corrections as revenue assumptions turn out to be too high and expense assumptions too low.

We doubt many Oaklanders think this process is getting us the government we want. Is it time for Oakland to try something new?

The Price of Government: Budgeting for Outcomes

Last November, Ventura City Manager Rick Cole spoke to a gathering of concerned citizens in Vallejo about how to make city government work in tough financial times. Obviously, if there is any California city in urgent need of finding new ways of doing business, it is the recently bankrupt Vallejo.

The core theme of Coles’ presentation was this: cities can go on cutting and trimming and slicing all their city services until no city function is performed well — the proverbial death by a thousand cuts. Or they can turn the process on its head. Specifically, they can prioritize their desired municipal outcomes, determine how much money they have to spend, allocate sufficient funding to the highest priority functions to ensure cost-effective outcomes, and when the available funding is exhausted, stop. In other words, they can take on less, but do the most important things well.

The “budgeting for outcomes” approach, which Ventura has used for several years, is based on a book by David Osborne and Peter Hutchinson, The Price Of Government: Getting the Results We Need in an Age of Permanent Fiscal Crisis. As the authors describe it at their web site, there are four key elements:

  • Set the price of government: Establish up front how much citizens are willing to spend. Get agreement on a revenue forecast and any tax or fee changes. Set the priorities of government: Define the outcomes or results that matter most to citizens, along with indicators to measure progress. Set the price of each priority: Divide the price or revenue among the priority outcomes on the basis of their relative value to citizens.
  • Develop a purchasing plan for each priority: Create “results teams” to act as purchasing agents for the citizens. Ask each one to decide which strategies have the most impact on their desired outcome.
  • Solicit offers to deliver the desired results: Have the results teams issue “requests for results” to all comers including their own government’s agencies or department, other governmental jurisdictions, unions, non-profits and businesses. Invite them to propose how they would deliver the result and at what price. Then choose those proposals that will provide the best results for the money.
  • Negotiate performance agreements with the chosen providers: These should spell out the expected outputs and outcomes, how they will be measured, the consequences for performance, and the flexibilities granted to help the provider maximize performance.

Budgeting for outcomes is not a privatization or outsourcing initiative, nor a bludgeon against public employees. Indeed, Coles reported that the transparency and buy-in processes that are part of budgeting for outcomes have resulted in collaborative and even cordial relations between the city and its unions. This is despite Ventura’s ongoing and worsening financial problems.

Budgeting for outcomes is a mechanism for inviting more innovative, more cost-effective ways to deliver the most critical services. The underlying theory is that competition makes service delivery more innovative and efficient. And Osborne and Harrison find that when city departments compete for the right to provide those services, most become more efficient and win the competition.

In a post-tax rebellion world, most cities are in a permanent state of fiscal crisis. Tax increases are unlikely, revenue growth from business growth is years away, and government will never have what it feels it needs to do everything. Indeed, in Oakland, the permanent fiscal crisis threatens to worsen dramatically (PDF) if some or all of Governor Brown’s budget proposals are adopted.

The usual way to address this permanent crisis is to make cuts every year. Certainly when Osborne and Hutchinson describe the usual budget process, it sounds awfully familiar:

The usual, political way to handle a projected deficit is to take last year’s budget and cut. It is like taking last year’s family car and reducing its weight with a blowtorch and shears. But cutting $2 billion from this vehicle does not make it a compact; it makes it a wreck. What is wanted is a budget designed from the ground up.

In the budgeting for outcomes approach, the community, and responsible leaders, jointly determine what outcomes they value most. They determine what it will cost to achieve those outcomes. And they provide sufficient funding to achieve the highest-priority results.

This process cannot be part of the routine, annual budget process. The initial organization and implementation will be complicated, contentious and time-consuming. So making budgeting for outcomes a reality will have to be a separate process from the usual, disheartening biennial budget dance.

It is too late to change the process for the 2011-13 budget. But wouldn’t it be refreshing to see a revolution in time for 2013-15 and beyond?

Should Oakland do this? We will discuss on Sunday, February 20.

Greg McConnell: Keep Chief Batts

This guest post was written by Gregory McConnell, President and CEO of the Jobs and Housing Coalition, which represents major businesses in Oakland.

Police Chief Anthony Batts came to Oakland with the promise that he would have the resources to do the job. Instead of beefing up the department, it has been cannibalized. We have gone from 803 cops to 656 with more losses predicted because of attrition. The city has no plans to recruit new cops. Now it looks like Batts may want to leave.

The community is saddened by this news. The Mayor expresses disappointment, but also says this may be a blessing because she could then appoint her own person. This issue, no matter whom you support, is very divisive, so I want to look at it with less vitriol and greater emphasis on what is really at stake.

The Chief applied for the SJ position in October. It could have been that the Chief was merely throwing his hat into the ring to gauge his professional appeal. Once the newly elected Mayor named Dan Siegel, a major cop critic, as a Chief Adviser, Batts may have looked at the decision and the resource problems and decided that he would consider leaving if offered the job. That is when he made it known that he is considering greener pastures.

Or, could it be that he really does not want to leave. His sudden announcement may be a ploy to register his great displeasure with a variety of decisions including layoffs, inadequate community support, and primarily to focus attention on understaffing. If this is his intention, he has played this masterfully.

The stakes for Oakland are very high. We lost 500 Clorox employees to Pleasanton and while the company publicly talks about better resource deployment, we all know that the crime problems at 13th and Broadway and throughout the city had to play a role in the decision. ABAG and MTC are threatening to leave the city and take thousands of employees to other locales. A crime dilemma won’t help those of us trying to persuade them to stay. Ten thousand residents were attracted to the city with the 10K plan, spawning new restaurants, entertainment venues, and jobs. These people thought Oakland would get better. What happens if they start believing otherwise?

Much of the current attention is focused on Batts because he has been seen as a man with a real commitment to solving Oakland’s problems. His possible loss is a real blow to our collective hopes for improvement of the city. Nevertheless, we must face reality, whether he stays or leaves, without major changes, we will have the ongoing problems of unrelenting crime, an understaffed police department, low moral, and a city that has no real plans to make things better.

I admire and respect Chief Batts. I hope the city finds a way to keep him here. With the proper tools and resources, he is capable of leading us out of this nightmare of unrelenting crime. On the other hand, even if we are successful at getting him to stay, if we don’t get him resources and clear community support, we will continue to be mired in the problems that have afflicted this city for decades.

Mayor Quan may see the opportunity to appoint her own chief as a blessing. But I predict that anyone who tries to police Oakland with 656 cops will fail. The problem is too big for one person. The community must rally behind a strong leader. We already have one, let’s support him and do our best to keep him here.

Gregory McConnell: Something Good is Happening at Westlake Middle School

With all the bad news in Oakland, sometimes it’s nice to have a reminder of all the good things that go on here as well. In that spirit, today I am pleased to share this guest post from Gregory McConnell, President and CEO of the Jobs and Housing Coalition about his experience of the Principal for a Day program, a joint project of the Oakland Unified School District and the Marcus Foster Education Fund.

A recent experience transformed my view of Oakland schools. I participated in the Principal for a Day program at the Westlake Middle School. I met an outstanding young principal, Misha Karigaca, and shadowed him throughout the morning.

I arrived at 8:00 and Mr. K, as the students affectionately refer to him, greeted me at my car with a big smile. As we walked around the school, students ran up to him, some had problems, but most just wanted to connect with him. He greeted them with warm welcomes, encouragement and when appropriate, firm words: “pull up your pants young man, handle your business young lady, get to class.”

I could sense a special relationship between these kids and Mr. K. Many of these young people live in broken homes and rank poverty. Mr. K is their father figure, the rock in their otherwise dysfunctional lives.

Westlake has two security guards. They, the principal, and the assistant principals strategically station themselves at key intersections throughout the school when classes change. All of the teachers greet the students at their classroom doors.

For five minutes or so when periods change, the school is in frenzied, yet controlled chaos. Then suddenly all is quiet. The students are seated in their classrooms doing their schoolwork. This transition is remarkable and achieved by a simple yet brilliant strategy.

When the period begins the students have an assignment that is clearly posted on the board. Each student sits at his/her desk and quietly performs the task for the day. The assignment tells them the problem to be solved and the point they are supposed to learn from it. This transitional period quiets the class, gets the students into a learning mode, and lets the teacher get control so the students are ready to learn.

Teachers and educators who know this process may not think this is such a big deal, but to me it was amazing. I convene board meetings where it takes 15 to 20 minutes to get everyone ready to hold a productive meeting and I am dealing with extreme achievers who know the value of time.

The day also had its incident. One student came to school with a BB gun that he “found at the bus stop.” Mr. K told me it is amazing how much stuff students find at the bus stop.

I now better understand the challenges that the schools and students face. Oakland students have needs that go far beyond learning to read and write. Many have traumatic lives at home, and on Oakland streets they experience violence that we only read about. To get them into a learning state of mind, Mr. K and his band of warriors have to address their physical, emotional, nutritional and spiritual needs before they can bother them with mundane issues like how to add and subtract.

Mr. K told me that some get to middle school and don’t know how to read, some don’t even know when a book is upside down. He told me about a brilliant young student who tested at the highest levels, but who had such a history of violence and crime — his mother forced him and his brothers to burglarize houses — that he had to hold special sessions to try to reach him. But how can he do that every day when he has charge of 650 kids?

At Westlake, every adult that I met was genuinely committed to the children. The security guards, teachers, administrators, and the career counselor who came from off-site to teach the principal and teachers how to improve their performance all seemed to have one goal in mind — help these kids.

I don’t know what happens everyday in other schools. I am quite sure that there is much room for improvement. But on that day, I saw something true and good happening at Westlake, and it made me hopeful that if we encourage and support the Mr. K’s of Westlake and other schools, these kids have a chance.

As Mr. K said, “a school is only as good as its community and a community is only as good as its schools.” This community is well served by Westlake and Mr. K and we need to support their efforts.

Rebecca Kaplan: My solution to police pension stalemate

There is a win-win solution to Oakland’s stalemate over police layoffs. There is an alternative to layoffs and to the impasse over pensions that is financially responsible. We must act to preserve the time, money and effort that has gone into recruiting and training our new officers, avoid layoffs, and get them back on the beat. As Chief Batts has recently pointed out, crime tends to peak in August and September, we need to act now to break this impasse.

The stalemate centers around the police officers’ union (OPOA) request for a three year no layoff pledge in exchange for the Officers paying their “employee share” pension contribution of 9%. This pension contribution would be an important part of helping to build a long-term financially sustainable system.

I think we should accept and I have a proposal that allows us to do so. My proposal avoids the need for police layoffs, gets the 9% pension contribution from the OPOA and does not require our residents to pay a new $360 parcel tax.

We were asked to refrain from publicly discussing our proposals, until negotiations ended, but given the lack of a resolution and the urgency for Oakland to resolve this logjam I am putting it forward now.

My proposal is during the next three years (the duration of the OPOA’s current contract) as long as the City honors its no lay off guarantee the police continue to pay the 9% toward their pension. We can avoid layoffs both by agreeing to a retirement program and by taking other steps to improve our financial situation. In order to protect all parties to the agreement, I would propose a provision that if layoffs took place during the contract, the pension contribution would be reduced to 4%.

A combination of normal attrition and the savings from the 9% would allow us to avoid police layoffs, while also giving us the opportunity and time to reach agreement on other cost-saving/non-layoff solutions for our police force. This would meet the police union’s demands of no layoffs and take a much-needed step toward necessary structural change.

Many of the recently laid off officers are some of our youngest and most diverse. They also cost less than older officers. Taxpayers have made a significant investment in their recruitment and training. This is an investment that cannot be wasted. We save much more money by allowing more senior officers to leave the force through a retirement program like the one requested by OPOA, rather than laying-off the most junior officers.

We must include other ways to reduce costs while assuring public safety. These include achieving full compliance with the Riders settlement so that we can move sworn officers from Internal Affairs to community policing, and civilianizing certain tasks, such as intake of civilian complaints and clerical tasks, to lower costs and increase efficiencies.

Other cities are using civilians to do routine clerical tasks previously done by police officers. The civilians cost about half what a police officer costs. This frees up more cops for patrol and community policing efforts.  Here in Oakland we need to work together in a way that everybody contributes and shares in providing for the public safety and the fiscal sustainability of our city.

Rebecca Kaplan is Oakland’s City Councilmember at-Large and a candidate for Mayor. Follow her on Facebook, Twitter, and at KaplanForMayor.org.

Ignacio De La Fuente: No More Delays!

As those who have been following the budget process are aware, I have been extremely vocal about the fact that the longer we put off balancing the budget the larger the deficit is going to grow; unfortunately, that is exactly what has happened. The Mayor is responsible for submitting a balanced budget proposal to the council, and the council must pass a balanced budget by June 30th of each calendar year. As of today, the two year 09-11 budget is not yet balanced. In November of 2009, the projected deficit for the 10-11 budget was $25.4 million (PDF), today that figure is $42.6 million (PDF).

Since last June I have very publicly urged my colleagues on the City Council and my constituents in District 5 to put a priority on maintaining core City services while we pursue long-term options to address this economic crisis. Public Safety is a core function that ought to be a priority of local governments but in order to avoid laying off police officers, very difficult decisions need to be made and everyone needs to share the pain, including police and it doesn’t necessarily need to mean laying off 200 officers.

I have already presented a series of recommendations which would help the City avoid laying off 200 police officers. Among the recommendations I have urged my colleagues take action on include:

  • Sworn employees (police) must contribute to a portion of their pensions. Today their contribution is zero; a 9% contribution from police sworn personnel would save the City approximately $7.3 million per year. This figure is equivalent to the annual cost of 36 fully loaded (salary & benefits) police officers.
  • Cuts to non-sworn personnel in the police department would also be necessary in order to avoid cutting sworn staff. Unpopular as it may be, this means Neighborhood Service Coordinators (NSC). I prefer this option as an alternative to cutting sworn police officers because NSC’s currently cost taxpayers $1.8 million annually.
  • Creating a 2-Tier Pension system for new hires. Implementation of a two tiered retirement system, one benefit plan for exiting police (3% at 50) and a less expensive plan for new police hires (2% at 50). In the case of non-sworn employees, a plan of (2.7% at 55) for current employees and for new non-sworn employees (2% at 55) would all reduce the City’s costs.

The City should NOT be in the business of operating golf courses or convention centers, as we find ourselves today. As a means to generate revenue to address the current fiscal crisis, I have recommended that we:

  • Sell our golf courses. The sale of just half of the 235 acres entitled for residential where Chabot Golf course currently sits would generate approximately $30 million in revenue. Additionally, the sale of the 10 acres entitled for residential at Montclair Golf Course would generate upwards of $5 million.
  • Sell the Henry J Kaiser Convention Center. The revenue generated from the sale of this property is projected at approximately $11 million. We simply do not have the luxury of sitting on some of our real estate assets when we are facing financial consequences such as laying off police officers.

We are in a fiscal crisis and many unpopular decisions need to be made and it all comes down to determining what our core priorities are. If we want to save in one place, we need to cut in others, it’s that simple. If sworn personnel do not contribute to their pensions, we’ll be forced to cut officers. 265 non-sworn full-time positions have already been eliminated from the City’s budget; urge the police and fire unions to give back so that we can save as many sworn personnel positions as possible.

Thank you and, as always, I look forward to your feedback and support.

Sincerely,
Ignacio

This guest blog is cross posted from District 5 Councilmember Ignacio De La Fuente’s e-mail newsletter. To receive these updates regularly, you can sign up for the newsletter here.