Dellums on the budget

So, last night, the City Council had its first special budget workshop of this year’s second round of budget adjustments. The first round took place last spring, and culminated in the Council approving a mid-cycle budget with $15 million in cuts.

Of course, it later turned out that the budget deficit was going to be much larger than expected, which brings us to round two. In the revised budget proposal (PDF) Oakland Mayor Ron Dellums released last Friday, we learn than we are now looking at another $42.8 million hole – $37.4 million from the General Fund, and $5.4 million from the LLAD.

The Council offered little in the way of their own suggestions for closing the gap last night – that will happen on October 10th, at a special daytime budget workshop. (Speaking of which, I am very upset that I will not be able to attend this meeting! I am especially upset because I had arranged the dates for a birthday visit from my mother specifically so I could attend on the originally scheduled date, October 9th, and then they moved the meeting! To be fair, they had a good reason for changing it – it was kind of rude to schedule two big, important special meetings on Jewish high holy days – but still, the new time is inconvenient for me. And since it is being held at the Lakeside Park Garden Center, I’m assuming that means it won’t be recorded and available through KTOP. Annoying! If anyone wants to go and take copious notes and maybe write a guest post about it, they would have my eternal gratitude.)

Anyway, between now and then, the Councilmembers will each submit a bunch of written questions about the budget, the proposed cuts, and so on, for which written answers will be provided at the next meeting. Then they’ll make their own suggestions about how to balance things and probably argue a lot. So last night was just for the Mayor to introduce his budget, the Councilmembers to offer some initial comment, and then let a ton of public speakers complain about the proposed cuts.

Dellums spoke for about 30 minutes about the budget, outlining the process he went through to create it, the reasons for the current deficit, anticipated future budget problems, and the balancing measures he’s proposing. Then he spent like seven minutes complaining about the Wall Street bailout.

I found myself, as usual, annoyed by the Mayor’s presentation. Dellums has a couple of habits that irritate the hell out of me, and I don’t know that they’re necessarily bad on their own, but they just make me, at least, cringe every time I listen to him. The first is just the way he frames City issues. He explains everything like the audience is in kindergarten or something. It’s like, he just discovered that we have impending retirement obligations, or that the discretionary portion of the budget is only a fraction of the total $1 billion, and he needs to run out and let everyone know. Mr. Mayor, please. I realize that this might be news to someone who’s lived in Washington since before I was born, but everyone on the City Council is well aware of budgetary restrictions and our looming obligations. And frankly, it’s somewhat disturbing that they appear to be a brand new revelation to you twenty-one months after you took office, twenty-seven months after you were elected, and thirty-five months after you announced you were running for Mayor of Oakland.

So there’s that. Also, his insistence on deflecting blame. Nothing ever has anything to do with him, or his performance. He’s constantly complaining about all the issues he “inherited.” Which brings me back again to my last problem – he should have known he was going to have to deal with these problems when he ran for Mayor. Ignacio De La Fuente knew. Nancy Nadel knew. Ron Oz knew. Hector Reyna – well, maybe he didn’t know. But part of the deal when you run for office is that you have to accept that you’re going to be shouldering responsibility for existing problems. You don’t get a pass because you didn’t do your homework.

I’m certainly not going to deny that there are some scary long-term systemic issues with respect to Oakland’s finances. But the fact is that in 2006, the year before Dellums took office, we had a budget surplus. And the budget that we’re struggling to close the holes in right now was his budget. I’m not saying the current fiscal situation is all Dellums’s fault – that would be absurd. But it’s equally absurd to pretend that he wasn’t complicit in the game of over overestimating revenues and failing to reign in spending or anticipate future obligations. It’s fine to spread fault around, but only if you’re willing to own your share of it.

Finally, and this is the thing that I really, really just can’t stand, is the way Dellums constantly behaves as if he expects a freaking gold star for just doing his damn job. He rambled for minutes about how he looked at all the different City funds when putting together this proposal, and, you know, I’m glad he did. But on the other hand, isn’t that what you’re supposed to do? I mean, all I could think of when he was going on about it was why he didn’t do that when preparing his first two budgets.

So, despite my annoyance, Dellums’s presentation was actually a pretty solid overview of the budget problem, and I highly recommend that people, when they have the time, watch his speech.



So anyway, that brings us to where we are today. We have a $42.8 million shortfall and $10 million in reserve. First, the reserves. They were drawn down from $75 million last year to practically nothing today due to a combination of overspending and less than anticipated revenue. But mostly overspending.

Now, the actual budget. We have a $5.4 million shortfall in the LLAD fund. The LLAD’s had shortfalls for years, and we’ve been using General Fund money to cover them. Obviously, we can’t do that anymore because there’s no money in the General Fund.

The General Fund, as it turns out, is short $37.4 million. Where does that hole come from? Well, first, the two-year budget we approved in 2007, the Mayor’s first budget, approved General Fund expenditures in excess of expected revenues by $6.4 million. That was supposed to be covered by our reserves. Obviously, that’s no longer an option. Then we’re getting $18 million less in revenue than we expected. On top of that, we’re spending $13 million more than we budgeted, almost all on the police.

So, what are we going to do about it? Well, the Mayor proposed to:

  • Save $13.6 million by using one-time revenues for fund transfers and a variety of other fund or cost transfers, like shifting General Purpose Fund costs to other funds
  • Raise $2.57 million by raising parking meter and ticket fees.
  • Cut $1.9 million in non-personnel expenses
  • Save $5 million by eliminating vacant positions
  • Save $4.4 million by laying off 84 people

If we did all that, we would still have a $10 million hole to fill. The Mayor proposed a number of options for making up those funds in the budget he submitted – more layoffs, shutdown of City services every other week, and increased health cost sharing and retirement contributions from City employees.

So…I think this is really weak. I understand the Mayor wants to have a “collaborative” style of government, but the fact is that government works best when everybody has a clear job to do and does it. The Mayor’s job is to submit a budget. Now, if the Council like doesn’t the cuts he proposes, they’re free to make their own changes and suggest their own balancing measures. But for the City’s executive to just submit to the Council a budget with a significant deficit and basically tell them to work out the rest, well, that’s just a total abdication of responsibility. Part of exercising leadership is being willing to make tough decisions and stand behind them, even if that makes you unpopular. Instead, the Mayor has simply shifted the burden to the Council.

Unsurprisingly, the public comment period of the meeting was quite long, and full of people who don’t like the proposed budget cuts. I don’t really like them much either, and I think the City can do a lot better. Obviously, everyone needs to make sacrifices, but the sacrifices could (and should) be spread out in a way that would be less painful to the citizens. Anyway, I’ll get into that tomorrow.

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39 thoughts on “Dellums on the budget

  1. Kent

    V, Thank you for again bringing up this important topic. I would like to go back to the police spending subject. To me it’s a distraction to make the politically less difficult slashes to Landscape and Lighting Assessment District (LLAD) when at the same time we have this unsolved problem of uncontrolled police overtime costs.

    I just re-read the mayor’s budget report to council (http://www.mayorrondellums.org/storage/pdf/092608_report_sept30_council.pdf) and the “post audit” (September) figure (page 18 of 74) is $10.8 million shorfall for the Real Estate Transfer Tax. That is virtually the same amount as the city is paying over budget for police overtime and higher than estimated police compensation – $11 million.

    My point is , we should not be putting the whole blame for the city deficit on the housing market. Those RETT shortfalls are only one of the problems. And we can’t really control the housing market very well, at this particular point, at least. We can, however, control how much we spend on police. So I think we’ve got to talk more about that.

    For instance, I have never understood why the police get to rack up all the overtime hours they want and the taxpayer simply has to pony up at double their hourly rate, or whatever. Why do the police get overtime at all? A starting salary of $90K per year (which is what I understand is the current level for police recruits) is called “executive compensation” in the private sector and is awarded NO overtime at all. So why do the police get overtime when people in the private sector don’t? Just because their job is dangerous? I thought that’s why the salary is high. Besides, awarding overtime without limits induces the police to work while fatigued and make bad decisions as a result.

    I will also note (so you don’t feel obligated to point it out) that the mayor does mention in the report (on page 28 of the pdf) that “no blank check will be given to the police department.” That’s fine and good but does not answer the question of why we need to spend that much on police in the first place. And no, I don’t believe that high crime in Oakland necessarily warrents uncontrolled spending on police.

    So the police overtime issue is my first question. I would like to hear some responses on the topic.

    Another question: I have heard from credible sources that the state prisons tend to dump ex-convicts into Oakland in greater than deserved numbers. That could be another reason for high crime here. Does anyone have information about that?

  2. Jennifer

    If we are having a multiple choice test for budget cutting options, I’d like the option of cutting the mayor and his entire staff — they are extraneous right now anyway.

  3. Max Allstadt

    Tony, that has indeed been suggested, but I believe only as a way of justifying the cost neutrality of hiring more cops, not cost cutting.

  4. Thomas Cunningham

    Tony, the whole state is having difficulty hiring enough cops — pretty much any agency you talk to is in the same boat. There have been a lot of retirements in recent years, and the academies aren’t cranking out replacements fast enough to match or to meet new demand. Certainly that was the point of Measure Y, and also why Dellums has insisted on not cutting funding for the academy in the budget. You are right, but at the moment, it is easier said than done.

  5. TonyWKoo

    Should start creating a volunteer group of Oaklanders who want to protect individuals and neighborhoods.

  6. VivekB

    The mega-rich CalPERS pension system where you get 3% of your annual pay for every year of service makes hiring new police very expensive. After 30 years, you retire at 90% of pay for (life? can’t remember).

  7. ConcernedOakFF

    VivekB – You are partially correct. You can retire after 30 years of service for 90% pay for life, but that is absolutely not paid for by the city. It is paid by CalPERS. We contribute a large percentage of our salary to PERS, and the city contributes some as well, but only when we are actually working. CalPERS is a PRIVATE pension fund.

    It does not make hiring any more expensive.

    Also, the average age of death for Firefighters and Police Officers is about 10 years after retirement, so this is the reason they can offer a relatively high retirement rate, as actuarially, they are making money.

  8. mark

    If we are working on the budget, then we have to look at our retirement obligations. Oakland pays more than most other cities. Many police officers come to Oakland in their last years before they retire so that they can max out their pension benefits. They usually bump up their benefits by working overtime so that in retirement, they actually make more than they would working.

    While this is paid by Calpers nows, it is likely that the bills for retirement will come back to Oakland now that Calpers is no longer getting easy fat returns in wall street. I understand that they have lost a ton in Real Estate too.

    This is very scary.

  9. TonyWKoo

    I’m not exactly sure why we’re complaining about how much police officers are getting paid. Would they be considered “essential” in an environment like Oakland?

    I’m sure that there are a lot of other areas that could either be reduced, or made more efficient. But reducing the number or the pay of police officers? Isn’t that a little counter productive?

    But then again, Berkeley and Oakland have traditionally been known to have strong feelings against the police in general. If you’re so concernend about the actions of the Oakland police, create a special task force that monitors them to try to make sure that they’re in line.

  10. RDC

    Sounds like the discussion is getting closer to “the cops get too many retirement perks” or “it’s too expensive”. I would be very careful to ever slash any pay from the people who put their life on the line for our safety. I hope we continue to pay them what they are worth as invaluable community asset. They don’t get paid enough to deal with the people they encounter daily and then have to go home and try to live normal lives on the outside. It’s no coincidence that the divorce rate among cops is high.

    Off topic yes but their retirement should be preserved and whatever costs incurred for our police should be kept at current levels. Get rid of the waste everywhere else before you start after our fire/police/vital services. It is very easy to debate the police and all that has to do with them. Much harder to go after our city leaders and their cronies who are stealing our money with their worthlessness.

  11. TonyWKoo

    I once knew a guy who used to work in Oakland’s gang division. He was studying to be a Therapist. His focus was to work with Police officers. From what he told us, police officers can get pretty traumatized from what they encounter. Shootings, dead or mained bodies, assault, victims of rape, robberies…pretty stressful lifestyle IMHO.

  12. V Smoothe Post author

    The suggestion that there’s no waste to be eliminated in the police department is preposterous. Providing a vital service does not entitle OPD to a blank check.

  13. ConcernedOakFF

    Let me explain the retirement situation to everyone since people don’t really understand apparently.

    You cannot “fatten” your retirement by coming to Oakland for you last few years unless Oakland is a far higher salary than your last department. Oakland is not exactly known for being a “retirement” department. It is WAYYYYYYY to busy to start out as an older rookie. NO ONE does this. People go to Pleasanton or something like that for their last few years where they can relax and hadle dog barking complaints.

    The City of Oakland pays LESS than most cities into the retirement programs. The Firefighters and Police Officers themselves pay far HIGHER percentages into their retirement systems than ANYONE else in the bay area. it is getting worse every year as a result of heath care increases.

    Overtime DOES NOT COUNT in your retirement pension. Only the base salary of your last full year.

    When you see the “high” salaries of the Police Officers and high levels of overtime, you need to ask why…

    A few reasons:

    1) The salaries do not show anywhere NEAR the actual “take home” salary. Take at least 13 percent off the top just for retirement. There are other things that come off too, but since I am Fire not PD I don’t know all of the percentages.

    2) Overtime is often mandatory and the Officers have no choice but to stay at work, sometime working 18 hours straight. That goes over REAL well at home.

    3) Overtime is rampant because they are understaffed!

    4) People do not realize that Overtime is MUCH cheaper to pay than more officers. There is not any payment made for health care, retirement, or other benefits. Attacking overtime is a purely political move.

  14. TonyWKoo

    Of all the things to cut…the Police Department??? Are we honestly saying that if we cut police wages that it’s going to reduce or keep same the current crime rate???

    But the truth is, in the long run, Oakland needs to increase business. More business=more tax revenue. More tax revenue=less budget cuts. Also, less crime since people won’t be so poor.

    But cutting the police department would be a step back. Safety should be the top priority of any city.

  15. Kent

    Since comments seem to be tacking towards the “are the police worth their money” question, I would like to point out that my original comment wasn’t about whether or not police are important (of course, they are), but rather is it necessary for Oakland to be paying 5% over budget for the police, when the poilce budget is already the largest single expenditure by the city (at $203 million). I then went on to point out that we (the taxpayers) are footing a bill for too much OPD overtime, and that the mayor and council should look at reducing that expense, as long as we’re in a budget “crisis” situation.

    ConcernedOakFF said in response that the overtime is because the OPD is understaffed. Well, I would challenge is the OPD streamlining its procedures and paperwork / IT systems enough so that officers don’t get bogged down and then need to work overtime to make their monthly performance targets? Does the OPD get the message from the City that yes, safety is a top priority, but don’t assume we have limitless resources to pay for it?

    ConcernedOakFF also said that “that Overtime is MUCH cheaper to pay than more officers.” I question this. Isn’t overtime pay like double the normal amount? So if health and retirement are (for example) 50% of the regular salary, then hiring MORE OFFICERS to work the same hours = 1 x 1.5 = 150% of the regular base salary. Paying OVERTIME is 1 x (overtime rate?) = ? % of the regular salary. If the overtime rate is double the normal rate, that equals 200% of regular base salary, so it’s not cheaper, in this example at least. If overtime rate is 150% or less, however, then yes, in the short term, paying overtime is cheaper than hiring new officers. But then you also have factors like does an OPD officer working overtime make as good decisions as a well-rested officer? And, to be fair, how much does the training / recruitement of new officers cost? (if hiring more officers is the answer) That would also have to be factored in. So it’s a complex question that neither I nor most of us on this blog can answer.

    The last thing I’ll say is that I think answers like “cutting the police department would be a step back” (TonyWKoo) is not helpful. I hear Republicans say that about our U.S. military, too. ALL options should be on the table. That includes the OPD, as much as I respect what they do. And I never said they needed to be “cut”, I just said, look, we’re paying 5% over budget on this item that is already the City’s single biggest expense, so shouldn’t we ask our elected officials to try to make the police come up with a budget they can live within? and to hold them accountable if they overspend their budget?

  16. V Smoothe Post author

    The issue is not one of more police versus more overtime. The issue is inept management in the department. Compared to last year, we have more police AND more overtime expenses.

  17. TonyWKoo

    Why not try increasing efficiency in other areas? I get the feeling that OPD is getting targetted here due to personal biases here rather than due to practicality. Again, if you want to improve efficiency, get a task force to go inside and try to get them to do things better. But then again, should you do the same for all departments? Waste is everywhere. Just why are you focusing on OPD? Hm….makes me wonder.

    Perhaps you think that the world would be a better place without police or the military??? I only wish the criminals, terrorists, and agressors of the world would agree.

  18. V Smoothe Post author

    Actually, we did hire a group of expert consultants to study the Oakland Police Department and make recommendations as to how to improve efficiency and reduce crime. Their report was released in January 2007. OPD choose to completely ignore those recommendations. As OPD costs spiral more and more out of control, violent crime in Oakland has risen at unprecedented rates. The department is mismanaged and inefficient, period.

  19. ConcernedOakFF

    Overtime pay is 1.5 times the normal amount.

    It is cheaper when you take into account 6 months of the academy at the average cost of more than 150,000 per recruit (pay+pay for trainers+equipment etc..), FTO pay (field training pay for at least 6 months, meaning paying for two officers doing the work of 1)

    From friends that are with the OPD these are just some of the issues:

    1) Lack of Police Technicians

    2) Transporting to Santa Rita and the 4-5 hour turn around

    3) The Chief has no clue about police work, as he was always in the jails when he was with ALCO Sheriff

    4) Incredible lack of detectives

    5) No Narcotic Division

    6) No Incentive to make arrests

    7) Lack of K9 Units for searches. Often there are no K9′s in the entire city

    8 ) TOTAL and COMPLETE lack of support by most city administrators. Hopefully better now that Edgerly is gone.

  20. TonyWKoo

    Hm….cutting police pay to a city with high crime….I still don’t know about that…

    In the long run, I think that various social programs will work. In the short run, we need to stop the murders, robberies, etc, and I don’t know if you could do that without a strong police and a strong legal departments.

  21. Mike Spencer

    I have always been very suspicious of the Police Union. I would venture to say that police union upper echelon has profited handsomely during this officer shortage the last decade. I have contempt for Council who did not appear to recognize this situation until about 2 years ago when it was as plain as the nose on your face that many Vietnam era officers would be retiring. Okay, so lets say in this budget process that police and fire can’t be touched. Why do we need the other 3,500 City employees? I would love to see a chart tracking the growth in City employees say the last 15 years. We sure don’t see the services for what we pay in taxes. (Wow, if I am this cranky now it does not bode well for me in 20 years……)

  22. Max Allstadt

    Actually, Mike, if there’s one thing I’ve learned about this blog, it’s about the best place you can go to plaintively request statistics. Mention a poorly reported statistic, and sometimes it just magically falls out of the ether into your lap. Isn’t that right, V?

  23. J-Man'sDad

    Concerned Oak FF is not quite correct. Standard PERS employee contributions for safety employees ( Police & Fire) is 9%. The cops pay 0. That’s “ZERO”. the city pays their contribution. The Firefighters pay an additional 4%. That’s 13% all together. These rates are the results of previously negotiated contracts with their respective bargaining units. All other employee groups in the city pay 9% or less.

    For Fire, overtime cost 1.5 times an employees pay. To pay for a regular time employee, the city pays between 1.64 and 1.8 times, due to benefit packages, training, seniority, etc. From a strictly monetary point of view, it’s less expensive to pay O.T.

    Currently, with the exception of the rank of firefighter, all other ranks (medic, engineer,lieutenant, captain, & battalion chief) have mandatory overtime on a regular basis. I’m unsure how much mandatory overtime is currently impacting police officers.

  24. TonyWKoo

    OK, here’s an easy way to settle this problem. If you really think that OPD is getting over paid, just cut all of their wages by 20%, and then see what happens.

    (btw, there are other cities in the country that are probably a lot less dangerous and stressful to be a cop in, and still make a decent living)

    Maybe the question isn’t so much about cutting jobs as much as it should be about getting more from each government employee from what they get paid.

  25. Andy

    Tony,

    How many times are you going to state that people are suggesting cutting salaries and benefits for OPD? V certainly is not saying that, nor can I find anyone else saying that either. Drop it please.

    Police management is the issue.

    I would think that well managed OT could be cheaper than hiring more staff. It certainly is true where I work, and we are not unique.

  26. TonyWKoo

    Back off Andy.

    It seems strange that for a city with some of the worst crime in this country, people are actually questioning whether or not police officers deserve what they’re getting paid. And call it what you want, but this is the real issue. Some people here have something against police officers, simple enough for you Andy?

    Again, why are people picking on the police? Why aren’t your efforts directed at improving efficiency of other parts of the Oakland government? Why all this negative attention on Oakland cops???

    Think about it before you go on blabbing about how “you don’t have anything against Oakland cops”. It’s obvious that you do.

  27. V Smoothe Post author

    Tony, I’m not sure how to say this nicely, but…it really seems like you don’t know anything at all about the Oakland police department, Oakland’s budget, management issues, crime rates, police funding, the department’s strategies, realities and practices in other cities, or, well…anything related to this discussion. I suggest that instead of robotically repeating the same uninformed talking points and putting words in people’s mouths, you take a little break and do some homework. If you took some actual information into account before forming your opinions, they would probably look quite a bit different.

  28. Tony Koo

    Smoothie, if you really think you can do a better job, I suggest you pick up a weapon and start patrolling the streets yourself.

    I’m tired of your ignorant one sided statements. Guess what Smoothie, ain’t the sixties anymore. You really hate them? Then get up and tell them that you don’t need them and get them out of Oakland. Form your own police department since obviously, you can do a much better job.

    Ignorant motherfucker.

  29. Max Allstadt

    DNFTT.

    But V, his suggestion that you pick up a weapon and hit the streets is giving me all sorts of halloween costume ideas. You can be Starsky…

  30. len raphael

    besides the retirement benefits/funding mentioned in dellum’s document, what are some of the overestimated revenue projections?

    sales tax on gasolene if prices drop.

    other sales tax doesnt drop

    property taxes. doc assumes relatively few downward reassessesments. assumes that non paying foreclosures won’t be large reduction in taxes.

    business taxes won’t drop

    raising parking tolls would actually increase revenue. don’t know how RT affects that.

    anyone else look at the revenue projections?

  31. SF2OAK

    The mayor may do well to hit the streets with an anti crime message, after all the reason we need all these cops is b/c we have so many criminals running around. If Oaklanders became absolutely intolerant of thugs, that the police had the support of the people and the DA would actually win some cases, it would be a different landscape. I don’t blame OPD it has been underfunded, understaffed, unsupported. Do we have a crime lab? We don’t have a k-9 unit? OPD should absolutely use more civilian contractors for non police work. We actually need to get serious about this- will we?

    I wasn’t shocked but when the Mayor said we’ve got to find $10M and that is 120 people that will be laid off- that’s over $83K, (so a starting police salary of $90K for being shot at…)

    I was also quite annoyed at Mayor Fuzzy’s startling revelation about the budget and that he worked hard for 6 weeks- it was as if he had just awoke from a long slumber- uh what has he been doing for 35 mos.? Great now Mr. Mayor you are awake. Wasn’t the LLAD scandal on his watch- and how can any proud Democrat not give 1 person, 1 vote principal, so really wasn’t it you, Mr. mayor, who was caught? And finally, I thought it was a little galling when he spoke of such hard times when wasn’t it a priority for our own mayor to increase his own salary to over $200K per yr.