Mayor’s new budget proposal now available

You can view it here (PDF). I haven’t had a chance to digest the whole thing yet, so I’m going to hold off on commenting until I do, but here’s the basic plan, as outlined in the letter (PDF) the Mayor sent to city staff:

  • $13 million in additional revenue through actions like raising parking meter, parking citation fees, and street sweeping citation fees.
  • Save $5 million by eliminating or freezing vacant positions.
  • Save $5 million by transferring General Fund costs to non-General Fund sources.
  • Save $4 million in General Fund money by eliminating 50 currently filled positions.
  • Choose your own adventure: save the remaining $10 million needed to balance the General Fund by shutting down the City on Fridays, laying off 120 people, or getting concessions from the union on retirement or medical insurance contributions.
  • Save $5 million from the LLAD fund by eliminating 46 positions, 34 of which are filled.

The more detailed balancing breakdown in the budget document he submitted for Tuesday’s special meeting goes like this:

  • Provide $9.54 million in additional revenue through capital trust transfer.
  • Raise $0.95 million in additional revenue by raising parking meter fees by 25 cents/hour, to a total of $1.50/hour.
  • Raise $0.98 million in additional revenue by increasing rates of parking meter citations.
  • Raise $0.64 million in additional revenue by increasing street sweeping citation fees from $48 to $53.
  • Raise $0.36 million by increasing compliance efforts in Accounts Recievable.
  • Raise $0.31 million by increasing recoveries for services by the Treasury Division.
  • Raise $0.35 million by increasing transfers from the Development Services Fund.
  • Raise $0.10 million through transfer of 50% of Golf Course Concession Revenues.
  • Save $13.10 million by eliminating 133.92 FTE positions, 50.25 of which are filled.
  • Save $0.50 million by freezing non-essential vacant positions.
  • Save $0.04 million by freezing car allowances for department directors.
  • Save $0.18 million by reducing funding from marketing & special events and training & community development.
  • Save $0.50 million by reducing subsidy to the Comprehensive Clean-Up Fund.
  • Save the remaining $10 million needed to balance the General Fund either by shutting down the City on Fridays, laying off 120 people, or getting concessions from the union on retirement and/or medical insurance contributions.

The introduction to the proposed budget (PDF) helpfully explains that the Mayor considered, but rejected, balancing the budget by “artificially inflating revenue estimates,” among other options. I guess we can all breathe a sigh of relief there.

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13 thoughts on “Mayor’s new budget proposal now available

  1. Surfways

    Dellums has the largest mayoral staff (and budget) in recent memory and his administration is the least productive in recent memory as well. It would make sense if the cuts are applied to the top ranks first.

  2. Surfways

    I spoke too soon. I just learned that the mayor said he would cut positions in his staff. I admit I was shocked. Pleased, but shocked.

  3. V Smoothe Post author

    Cuts to Mayor’s staff from the proposed budget submitted today:

    Item: Position reductions due to realignment of the Executive Branch.
    Savings: $0.20 million
    FTEs Eliminated/Transferred: 3.00
    Filled FTEs Eliminated: 3.00
    Implementation difficulties, other comments: Anticipated savings due to additional eliminations of positions (over those in the CAO, presented below) after the Executive Branch realignment – pending PFM’s recommendations.

  4. ebnative

    Hey, didn’t Jerry Brown have a large mayoral staff? I understood that Jerry paid for a lot of his staffers through some of the City’s Agency budgets (CEDA, Life Enrichment, etc.) – therefore the total headcount was close to or the same as Dellums, but the salaries and FTE allocated to the Executive Branch was lower. Can someone verify this?

  5. Carlos Plazola

    Collective bargaining by employees is necessary to ensure that the rights of workers are respected and not abused by the corporate entities that instinctively want to drive down their wages and benefits to maximize profits. This is particularly true and important in the private sector.

    In the public sector, because of the political leverage of unions, and their more effective ability to speak to the populace (voters) than politicians, the collective bargaining units tend to overshoot and go beyond what is in their best interest by negotiating against the best interest of the client–those who receive the services; the Oakland residents and taxpayers. The benefits derived through collective bargaining and playing politics begins to erode the delivery of services.

    In Oakland, this is certainly the case. The pay and the benefits are extremely generous, which would be OK if all of these employees were earning their income and benefits. But unfortunately, the tenure-based, rather than merit-based, system of employee protection invites abuse, and is one of the primary reasons why Oaklander’s receive such poor service from so many employees.

    This budget deficit present some real opportunities, if the political will is found, to restructure and fix Oakland. Here are at least 4 things that could be the silver lining in this cloud:

    1. Push back against the unions so that they are encouraged to find that middle ground where they are being reasonably protected, but not at the expense of the delivery of services to residents.
    2. Invite the business community to become real parts of the solution by increasing Oakland’s revenue in the years to come, rather than the administration and some councilmembers treating the development and investment community as undesired step-children.
    3. Institute effective executive leadership in the city administrator’s office and CEDA.
    4. Institute government reform measures that prevent abuse.

    Unfortunately, I fear that many councilmembers will simply try to find the easy political solutions by passing on costs and fees to residents, and deferring painful decisions to the future, rather than seeing this as a real opportunity to reform the way Oakland does business.

  6. Thomas Cunningham

    I just finished reading the Dellums plan. Pretty grim situation, but it’s nice to see it all laid out. I’m especially concerned about the “negatives” that seem to have accumulated in so many funds. That’s just bad management — there’s almost no excuse for that level of deficit. There’s no clear way out, and this is going to take a while to fix, but I am glad that we’re looking for solutions that include not only the structural operating deficit, but also deficit repayment plans and capital investments. And while it almost seems laughable to boast that one has not resorted to inflating revenue projections, that little bit of honesty and realism is actually quite reassuring. Can’t wait to see what the council has to say about all this.

  7. len raphael

    first sign of intelligent life from our Mayor’s office. and a decent beginning. but like the 700 billion bailout if the council and the prior mayor’s had dealt with this even two or three years ago, this probably would have been much less harmful to quality of life in oakland. Also like the 700 billion mess, Oakland’s deficit by Dellum’s own numbers could easily turn out to be much higher, as in +40Mill higher.

    it is the first official document from the city putting a number, 23Mill per year minimum, to the cost of funding retiree medical benefits and police retention payment obligations (what the heck are those???). that amount is under the “anticipated future issue” section, in addition to the current annual shortfall.

    Then he mentions and additional 19Mil/year “old Police and Fire Retirement System” contribs that have to start in three years. (This one sounds bad. Anyone know the background on this?)

    On the expense side, it appears he barely tickled the 400k? discretionary funding to each city council member that they wisely spend to insure their incumbency, taking credit for expenditures for say local schools that should be funded thru the citywide budget process.

    It appears that we’re being punished for the council’s LLAD fiasco: all street tree maintenance and planting except for emergencies, will be terminated.

    Wasn’t obvious to me that the document factored in likely higher interest costs to the city. Maybe that just eats up the other restricted funds.

    Dellums gives no specifics on how he expects to cut OPD overtime dollars by 42%. Especially when he’s going to make the PSO (local problem solving officers) take on the work of the park rangers, and he has to train the new recruits.

    Overall, it looks likes he’s cutting staff, not management costs. But he does seems to be cutting some of the outside ngo “programs”, which might be a first baby step for Oakland.

    On the revenue increase side, the document makes the incorrect statement about property tax that “Reappraisals are performed only if the buyer applies for reappraisal”. Would have to get detail on his property tax analyis to see how optimistic it is.

    Was encouraged to see that sales tax receipts increased this past year, but then read the explanation that was strictly because of higher gasolene prices. Looks like he didn’t factor in the recent declines in gas prices effect on sales tax.

    In the closing paragraph Dellums showed significant signs of realism by cutting out the bs we so wanted to believe how he could make save our city by using his connections to get more federal and state grants.

    He has the numbers to tell the unions that the gravy train has ended. My hunch is that the unions will yell and scream, maybe strike for a few days, but ultimately sell out their younger members and accept massive layoffs instead of pay cuts. In turn, we the residents and business will get huge cutbacks in services because the remaining employees and ngo’s will have no incentive to work harder or more efficiently unless Dellums and the council make big changes to management and personel policy.

    -len raphael

  8. KentLew

    My questions and comments are related to the CITY OF OAKLAND FUND ANALYSIS (in the attachments of the Dellums pdf) :

    Police salary – $204 million anticipated expenditure / $9 million over budget – This is looking like our U.S. federal military budget in comparison to all other expenditures in the federal government. Is police money really the answer to our problems? See further comments below.
    Non-dept TRAN interest expense – $72 million / $6 million over budget – what is that ?
    Fines and Penalties – $7 million out of $22 million uncollected? Is the city not following up? Why should I pay my fines if about 25% of the people don’t?

    Note: the Real Estate Transfer tax, which was affected by the housing slump was only $4,274,200 less than projected, according to the appendix. That’s less than half the amount by which the police were over budget! So the housing slump should not be used as an excuse, or reason for needing so much new cuts, in my opinion.

    In regards to what should be cut, I would suggest that if the mayor intends to cut anything, he needs to start with the police. At $204 million expenditures they are almost double the size of the next highest item, the firefighters (at $107 million). They were way over budget last year. I think the police need to start policing themselves. They can do an effective job, using less money.

    In terms of specifics: 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.

    Another idea: why can’t the police drive in 2 officers to a single vehicle, and driving vehicles that burn less gas? I have seen this 2 person per vehicle practice in other countries, and it works. Is this some kind of police union thing that we can’t tell them to change the way they do business?

    If we the taxpayers are paying for police, we can also demand they do business differently.

    Yes it’s true, Oakland is a violent town, but it’s not violent because of a lack of police. It’s violent because of a deep, entrenched pool of uneducated, poor, disenfranchised youth who feel they have no outlet and no future. So we need to all work on that. Spending all our money on the police is not going to make that problem go away.

    Note: 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. Would appreciate a check in by somebody more knowledgeable on that.

  9. David Oertel

    Spending massive amounts of money on police is the way to go. Soon nobody else will have anything left to steal and crime will go down.

  10. Tony Koo

    There needs to be strong leadership to do what needs to get done. No one is going to like being forced to do more work, get less money, or get laid off. However, these are the exact things that need to be done in order to whip everyone into shape. You can’t do that without strong leadership.

    I used to work at PG&G (a quasi government entity), and it was SOOOO inefficient. There was really no need to be efficient. Everyone was guaranteed their jobs for life. Besides, who wants to rock the boat? If Oakland government jobs are the same….well, I could just imagine the amount of waste that occurs with them. They couldn’t care less if the whole world was falling apart. They’re still getting paid. There has to be consequences for good and bad behavior.

    Again, you can’t do this without strong leadership. They’ve got to confront and challenge departments that need to be changed, for the good of the people of the city.