Special election parcel tax to be considered again

Do you guys remember back in April when the Council was voting on whether to schedule a special election to put a new parcel tax on the ballot?

They never managed to schedule the special election — Oakland Mayor Jean Quan had failed to adequately notice the item in compliance with Oakland’s Sunshine Laws, and then she tried to schedule another meeting about the special election, but botched the noticing of that meeting as well. Oops!

But the Mayor did not give up on the idea of the parcel tax, and when time to release her proposed budget rolled around, she choose, instead of releasing a real budget for the city, to use the opportunity to continue to press for a new tax.

District 2 Councilmember Pat Kernighan and District 3 Councilmember Nancy Nadel seemed to like that approach, and have been responding to constituent pleas to not shutter the library system by saying that if people want the libraries to stay open, they need to support the new parcel tax. I found that curious, since the Mayor’s Scenario B manages to keep the libraries open without new taxes, but of course, pointing that out probably wouldn’t do much to generate support for the tax.

Anyway, the issue of a special election came up again at Tuesday’s Council meeting. District 2 Councilmember Pat Kernighan, a strong proponent of the parcel tax, proposed scheduling a vote to schedule the special election on June 21st, with a second reading on July 5th, and the Council agreed to do so.

Why wait that long? Explaining her reasoning, Kernighan offered “by June 21st we should have some idea of what the unions have done in their collective bargaining with us” and “by having the second reading on July 5th, it gives us a couple of weeks to do something different if we need to,” although how that impacts whether or not we’re going to have a special election for a parcel tax that she’s already insisted we need under any circumstances in unclear to me.

When the election would actually happen is yet to be determined, although Kernighan noted that she had been thinking of the first week in November.

What else will be on the ballot?

At-large Councilmember Rebecca Kaplan pointed out that a secondary benefit of scheduling the vote a month in the future is that it gives other Councilmembers a couple of weeks to put forward their own proposals of things they’d like to see on the ballot.

District 6 Councilmember Desley Brooks, who has opposed the parcel tax, explained that she would be open to a special election if it included options on the ballot besides the tax, such as a vote on the new City Attorney and charter clean-up measures.

The reason that I have not supported putting a parcel tax only on the ballot is because that is not the only solution. I personally don’t support a parcel tax, but I think that we should not just put on those things that we agree with to the exclusion of those things that we don’t.

And the Mayor has consistently touted the parcel tax as if that’s the only thing we can do. There are charter clean-ups that could be put in that will save us money that have not been considered and not been brought forth for the public to even hear.

And so, we need to have a full conversation, and it needs to be more than just those things we agree with. I support the public’s right to make a decision on items, and have always supported that. But I don’t support us picking and choosing what things we’re going to allow to get on the ballot.

I think that if the City Attorney’s position – I am supporting that rather than appoint somebody for the City Attorney’s position that we do an election for that. And so I don’t want to piecemeal anything.

And I’ve said to the Mayor, I’ve said to her staff, I’ve said to the City Administrator that you bring me a comprehensive package, I will support all of those things — whether or not I support them personally — to go on the ballot. That’s what we should do.

And so for us to pretend like the only thing we can do is a parcel tax, and to tell constituents to write in and say shame on you for not supporting a parcel tax so you can keep my library open is disingenuous. And so, let’s provide the community with all the facts to make an informed decision about how we can move forward.

Mayor Jean Quan responded that she has no problem with people putting their own additional measures on the ballot, but that “I don’t have time to work on charter changes at this point,” and is planning “to appoint a group of people to look at the entire charter” after the budget process is finished.

Now, while the Mayor herself may be busy with the budget, presumably her charter review committee would include persons other than budget staff, so I don’t see any logical reason, if that’s what she wants to do, to not have appointed them to start reviewing things already. Furthermore, the whole notion just seems so labored and unnecessary. Is this charter review group going to come up with anything better than the last charter review committee? After eight years on the City Council, you would think Quan would have a firm grasp of where the charter creates problems for the city’s ability to operate.

What else should go on the ballot?

So while Councilmembers are welcome to, and probably will, submit additional measures to be considered for the special election ballot, the timeline is not long enough to allow for any kind of meaningful public input process about what those measures might be. I find this sad, but not surprising. Brooks is right that we should offer the voters real choices, but a city committed to participatory government would draw on the wealth of knowledge and ideas from its people to help determine what those choices should be.

Here are a few ideas I’ve heard tossed around related to potential charter amendments:

  • Outsourcing clause: The City Charter currently prohibits the City from contracting out services currently performed by City employees (Section 902e). Complaints about this provision are nothing new, although the idea of changing it seems to have gained some popularity in recent years.

    Oakland City Attorney John Russo, back in Feburary at the Overhauling Oakland’s Budget event sponsored by Make Oakland Better Now! and the East Bay Young Democrats suggested that the problem could be addressed by adding a line to the Charter that says “notwithstanding any other language in this document, the City of Oakland shall not be prevented from coordinating with or contracting with volunteers, non-profit agencies, and business improvement districts for the provision of municipal services” (skip to 4:45 for the part specifically about contracting out). That seems like a good solution to me, although I would add to his list “other public agencies”, which would give the City the option of contracting certain services to the County.

  • Pension reform: Another idea for a Charter amendment that people talk about a lot would create some sort of restrictions on employee pensions, likely in the form of prohibiting the City from signing a contract with employee unions that contains a pension plan in excess of some specific formula or amount.

    One variation of this, suggested again by City Attorney John Russo at the Overhauling Oakland’s Budget event would be something commonly referred to as 50/50 pension contributions. Russo suggested the phrasing “The City of Oakland shall enter into no new contract whereby the City of Oakland is responsible for a pension premium cost that exceeds that paid by the employee.”

  • PFRS: Make Oakland Better Now! has offered some ideas about how the City Charter could be amended to lessen the burden the obligations of the old Police and Fire Retirement System places on the budget. This post at their blog, Oaktalk explains the specifics.

  • Rainy Day Fund: Make Oakland Better Now has also proposed a Charter amendment mandating the establishment of rainy day fund to help the City through hard times. Read more about that on this post on Oaktalk or watch this video presentation.

I would add for consideration:

  • Repeal of Kids First: I don’t see how we can have a serious conversation about all possible ways to address the City’s budget without at least considering the elimination of the Oakland Fund for Children and Youth.

    This section of the charter, added by voters in 1996, then amended in 2008 and 2009, requires the City to set aside 3% of unrestricted General Fund money to go to youth programs (PDF). That’s roughly the same amount of the General Fund that goes to Parks and Recreation, and more than goes to fund the Oakland Public Library. While I don’t dispute that the special programs funded by Kids First provide a valuable service, it’s a legitimate question whether those services, which are available only to a relatively small number of children, are more important that citywide education and recreation services that are available to everyone.

    Since the repeal of Kids First is a charter amendment, it takes only a 50% vote to pass, a significantly lower threshold than the 2/3rds vote needed to pass a new parcel tax.

Would the Council be willing to place any of these options on a ballot? I don’t know. Probably not. But if we’re going to have an election anyway and since we’re talking about other things besides the tax that might get placed on the ballot, I don’t see any harm in suggesting that these options be placed before the voters. The worst thing that could happen is the Council won’t place them on the ballot, which is the same result as we’d get if nobody brought them up.

So if there’s something you’d like to see put before the voters, e-mail your Councilmember and ask them to consider it. And if you have other ideas for Charter amendments or other ballot measures you think could help the City, please share them in the comments.

Video of the whole special election discussion from Tuesday’s Council meeting is available below:

29 thoughts on “Special election parcel tax to be considered again

  1. MarleenLee

    Since this is a fantasy wish list, how about a revision of Measure Y to undo most of Measure BB, except that the re-inserted language would require actual minimum staffing of OPD at 739 officers as a prerequisite for collecting Measure Y taxes.

  2. ralph

    Madame Vice-Mayor should get props. The parcel tax alone puts all eggs in one basket and a fair number of us are against it. It should not be all cuts or new taxes.

  3. MarleenLee

    Keep in mind that the parcel tax is completely irrelevant for purposes of balancing the budget by the end of July. Even in the unlikely event it would pass, this would not be until November, and the tax would not be able to be collected until November, 2012! The tax proponents are either completely ignorant of this most obvious fact, or want you to ignore it.

  4. Matthai Kuruvila

    @marleen Quan says people would be laid off for four months if the parcel tax is put on the ballot and passes. I imagine they’d likely handbill or do some sort of loan on a future double-billing to get the revenue faster.

  5. MarleenLee

    No doubt the plan is to borrow money. Oakland is very good at borrowing money. That’s why the City has a $250 million balloon payment due next year, no money to pay for it, and doesn’t want to talk about that either. I would imagine interest on $11 million would be around $700,000. Has there been any discussion about that? No. So the cost of an election itself is $800,000; then another $700,000 in interest to borrow the money. All for a proposal that is unlikely to pass, and even if it did, would not make a dent in our massive deficit and does nothing to address the structural changes that need to be made.

  6. Bruce Nye

    @marleen and @matthai Actually, City looked at handbilling for Measure Y after BB passed, but concluded it was too expensive and wouldn’t accelerate receipt of revenue by all that much. City will be buying capacity for $125M in tax revenue anticipation note capacity this summer, so if parcel tax passed in November, I would think they’d likely use combination of that and internal fund borrowing, which I think is what they are doing to anticipate the Measure Y payments next year.

  7. MarleenLee

    Bruce: What does “capacity for $125 million in tax revenue anticipation note capacity” and “internal fund borrowing” mean in English? Surely there is a cost associated with any type of borrowing. I mean, I know that people don’t like to acknowledge that, which is what got Americans so addicted to credit that it caused the financial crisis, but doesn’t credit cost money? Isn’t that the reason Oakland property owners are paying at least $1500 more in ad valorem taxes than neighboring cities?

  8. LoveOakland

    Why not just buck up and make the tough cuts now?

    Get rid of all staff not connect to core services (meaning Police and Fire). That would leave a surplus of about $15-20 million – enough to cover the cost of a city manager, a few city clerks, a couple of payroll people and a few folks to keep the technology running and we could start rebuilding our reserves.

  9. Bruce Nye

    @marleenlee Just what it looks like: borrowing money from banks and borrowing money from other city funds. Borrowing money from banks costs money, even though the loans are short-term. http://tiny.cc/r7cs4 Borrowing it from other funds results in having $138 million in negative fund balances when the loans don’t get paid back, something I hope to be posting about next week.

  10. MarleenLee

    Thanks Bruce. That memo from the City Manager sure is enlightening. It says that “The borrowing of funds through the TRAN issuance will have a positive impact on the City’s finances.” It then goes on to say that the interest rate will be up to 8%. So I was right. It could cost up to $900,000 to borrow $11 million. How exactly is spending $900,000 in interest a “positive impact” on the City’s finances? That’s like saying borrowing money off a credit card at 40% interest to pay off a loan shark will have “positive impact” because you avoid having your kneecaps broken. But you still have to pay the 40% interest. Of course, this plan is being spearheaded by somebody who is unable to pay her garbage bill or parking tickets on time.

  11. Bruce Nye

    @MarleenLee, My understanding is Oakland has used TRANs for quite some time to manage its cash flow because it only gets most of its revenue twice a year. Since the revenue collection is pretty much of a sure thing — at least up to more than the $125M — I’d be really surprised if the actual interest rate charged is 8%. But I also suspect you could look at the city’s budget documents and CAFRA for a really long time and not be able to figure out what Oakland was actually paying.

    Of course, in a perfect city — say, one with a reserve and a rainy day fund — we’d have the ability to manage cash flow internally.

  12. livegreen

    The challenge with Reserve Funds and Cashflow is as soon as the money starts coming in again (whenever that happens) the Unions are going to want increases again. & Since they’re possibly sacrificing now they’ll oppose reform now.

    All they have to do is start getting bodies out their in large #’s, like Siegel & the Mayor did against the Gang Injunctions, and it will make Council meetings soooooo looooooong that the Councilmembers either has to put up with weeks of meetings until 1am, or they give in and implement something between no reform to half a reform (max).

    Or put little exceptions throughout, that might even gut anything positive – like eliminating the J.Does from the Fr. Gang Injunction.

  13. Dax

    Speaking of “since they’re possibly sacrificing now”…

    Does any member of the public, (you know, the actual residents), have any indication of any details of any specific reductions in pay or benefits that the various public employees have agreed to during this negotiation phase?

    Or, are well all out here, just flying blind, until the council once again comes back with some limp compromise?

    Again, we seem to read more details about San Jose than we every do about Oakland.
    Perhaps we could hire Chuck Reed as a adviser?

    Are we doomed to only get Quan-tified details prior to everything being set in stone? Grumble, grumble.

    BTW, what is Jean Quan’s financial background?
    Any of the others? Are any prior business owners? (did the business survive?)

  14. Max Allstadt

    I think another charter measure to consider is a ban on creating any new unfunded liabilities of any kind.

  15. Oakie

    Is anyone organizing to fight the new taxes once they figure out how to put it to a vote? I’d contribute time to this cause.

  16. Nicolas Heidorn

    Unless the Council puts reform measures on the ballot along with the parcel tax, I do not believe the parcel tax will itself pass. The voters need a reason to believe that *this* time the City will be responsible with their money — reform measures that would lock in better budgeting practices are one way to demonstrate that responsibility.

    I would add another reform to the list: Oakland’s campaign finance records need to be put online, and disclosures need to be more frequent. ABC security was a recent high profile mess where there was at least the appearance that a big-time campaign donor was getting undue consideration for a contract. How many other fiscally irresponsible contracts fly under the radar because it is too cumbersome to track the money/favors connections in this City?

  17. len raphael

    add to the charter revision wish list:

    1. delete binding arbitration for police/fire contracts

    2. change oakland’s outsourcing language to conform to Walnut Creek and San Jose’s (which is probably no prohibition on outsourcing any function.)

    btw, is there an exception allowed for outsourcing security at City Hall? is that in the charter, some kind of grandfather clause?

    3. require same bidding process and subsequent performance evaluations for non-profit grants as for any other service contract.

    4. require disclosure of all campaign volunteer services provided by City employees, for profit and non-profit contractors and their employees and owners. giving hours and names, nature of services.

    I’m not wasting any more energy on this because too many interest groups would all oppose the above list.

    -len raphael, temescal

  18. livegreen

    –Employee contracts should last 1 year, not 3, to be inline with the City budget.

    –Are City Unions considered lobbyists? Because that’s their entire purpose.

  19. needaneffectivegovt

    Contracting out is long overdue. Ask any Oakland City manager what is getting in the way of delivering better services. They will tell you contracting out, local state and federal regulations, and union agreements. Why don’t we give managers tools to be effective, the tools to maintain services in times of decreasing revenue?
    I would never vote for a parcel tax under Mayor Quan, she has done nothing to build my trust that she cares about actually improving government, she never has. She’s a hopeless panderer to the unions.
    Thank you for this post. We can’t buy our way to effective government, its not all about money. We have to actually make our government effective. Why am I getting less and less services for more and more money?

  20. V Smoothe

    I was surprised that nobody commented on my suggestion of considering a repeal of Kids First in this post. I was serious when I said it should be on the table (if not a repeal, at least some modification or perhaps temporary suspension or redirection of at least part of the set-aside). Anyway, I thought I would point out that Chip Johnson made the same point in his column today. If we are going to have a special election for a new tax, then we should also seriously consider placing a charter amendment related to Kids First on that same ballot. Otherwise, we are not really offering voters a choice.

  21. J

    Thats because i think its a great idea. Kids First are the only programs that can survive without proving their effectiveness. It needs to be repealed and the grants should be given out annually based on measured results. I don’t think the programs are all bad, but without over site and without a clear set of guidelines and results needed to earn their next check these programs simply have no reason to improve or be accountable.

  22. MarleenLee

    V, I think part of the problem is that most people have no idea what Kids First is and how much it is costing us. If it were phrased as, “would you rather devote an extra $11.5 million per year toward additional police, or fingerpainting classes for four-year-olds?” maybe they’d get the picture.

  23. V Smoothe Post author

    That’s one way to put it. I think of it differently, though. I wouldn’t support giving up Kids First just so we can give more money to the Police Department while decimating other services. But I don’t think it is right for so much City money (more than the parcel tax would generate) to be going to a limited number of programs that are available to only some of Oakland’s youth while at the same time cutting (or in the libraries case, basically eliminating) services like libraries and parks and rec that are available to every young person in Oakland.

  24. Naomi Schiff

    This last way of putting also has the virtue of being viable and coolheaded, while intemperate attacks and belittling screeds will only serve to further polarize the combatants. Thank you, V.

  25. livegreen

    Points re OFCY funding:
    –Some of the groups take 20%+ for overhead (above the cost of personnel/operations at each school site);
    –Some overhead is necessary to support the programs & get matching state funds. So there is a service, however since that is formulaic after set-up it does not account for such a high overhead;
    –At one of the non-profits managing OFCY sites, some administrators got raises while site coordinators (who actually run the programs) had their salaries cut.

    There is room to trim fat without trimming programs. However if the budgets were reduced we have no guarantees the Administrators wouldn’t keep their benefits the same while reducing the programs and the salaries of the site coordinators.

    This is the type of detailed information that both the OFCY Public Oversight Committee (POC) and City Council need to drill into, but typically don’t.

    I’ll check out the Evaluation when I get a chance, but last time I checked a good part of that was actually done by students in the program. Don’t know if it’s the same still or if it’s now more academic focussed (as it should be), or not…