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.

64 thoughts on “Tom Thurston: Mayor proposes using Kaiser Center to Grab ORA’s Cash

  1. Allan

    Under the current circumstances, this is probably the best use of the money. I wish it were not true, but it is better than any realistic alternative to keep the city functioning. Tying up property taxes for future redevelopment while gutting current services is a worst choice.

  2. Jack B Dazzle

    This is just another game for the city to play to keep from fixing the structural problems with the budget. It is going to lead to larger problems next year.

    What is the city going to do next year when the budget deficit is even larger? Sell city hall? (which I would support)

  3. Max Allstadt

    Isn’t there a city ordinance that decrees that one-time revenue, such as that generated from property sales, must be used to pay down negative balances in our accounts?

    How does the Council use the Kaiser Center proceeds to fund city programs if we have an ordinance that says the money has to go elsewhere?

  4. V Smoothe Post author

    Max –

    The ordinance allows for the Council to use one-time revenue in other ways following a majority vote of the Council.

  5. Max Allstadt

    Right. They have to declare a fiscal state of emergency, by majority vote, in order to do that.

    Is there any other maneuver to save or make money that they can do once they’ve declared that fiscal emergency?

  6. Oakie

    Allan said “…but it is better than any realistic alternative to keep the city functioning…”

    You mean this city is functional? I’d make a case this city is the definition of dysfunctional.

    Gosh, you’d think all this “redevelopment” money wasn’t extracted by force from the taxpayers. It is the quintessential Other People’s Money. That’s why it is a real shame Yoda Jerry Brown didn’t get his way and wipe the hell out all “redevelopment” money. And that’s why Mayor Ah Q fought so hard not to get rid of all these slush funds. I have no dog in this fight between one waste of a slush fund and another. Please return to your argument about how many angels will fit on the head of a pin.

  7. BarryK

    1984: Following a $15 million refurbishment, the Oakland Civic Auditorium is reborn as the Henry J. Kaiser Convention Center.

    1988: A report finds:The 1916 Henry J. Kaiser Convention Center (formerly the Oakland Auditorium, California) had become a seismically unsafe, run-down, inefficient, and unattractive structure, owing to inadequate structural design, various transformations, and poor maintenance over the years.

    11/2010: Peralta College District wants to buy the HJKCC. News story has value at $10M + $5M-$8M in repairs are (still) needed.
    http://tinyurl.com/3eh4cko

    Anyone care to research the bonds; especially the “real” cost?

  8. len raphael

    You might think that the S&P staff person assigned to rate Oakland’s bonds would be interested in the difference between Oakland’s wink wink valuation methods and reality. But then again, probably not.

    But what the heck, thanks to Ken O’s link the other week, the S&P person to ask is:

    Newland, Misty [mailto:misty_newland@standardandpoors.com]
    (that really is her name)

    When you look at how her S&P evaluation changed our rating from negative to stable, and read her justification that talks about how the city council has institutionalized financial safeguards, and protected its reserves (ken, where’s that link?), you gotta wonder if Henry Blodgett is channeling thru her. Correct me, but my understanding is that the rating agencies still get most of their fees from underwriters. Underwriters get their money from floating bond issues, not rejecting them.

    After her reign as Mayor, JQ should consider a career as a muni bond analyst.

    -len raphael, temescal

  9. J

    “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.”

    Perhaps the City of Oakland would not need blue smoke and mirrors, shaky and legally susceptible financial deals with the redevelopment agency and putting its hand in the wallet of the middle class if our Mayor was a true leader and actually worked with City Council to define core services and implement priority based budgeting.

    All things to all people–that’s how we got into this mess.

    One time financial gimmicks are not going to resolve our budget crisis. They simply put it off for another year.

  10. livegreen

    Could a correction be made in the first statement of the price tag, from $29 to $29 million? It becomes clear later down that this is a type-o, but until then it’s not. THanks.

  11. Max Allstadt

    Hey Len,

    About bonds, how big a deal is it if Fitch ratings just downgraded $649 million of Oakland’s bonds?

    Here’s a quote from their report:

    “Not solving the structural imbalance would result in a fiscal 2013 projected shortfall of $76 million, growing to over $100 million by fiscal 2015. However, many of the proposed fiscal 2012 budget solutions are one-time, most are difficult, and all indicate how little financial flexibility the city has left.”

    This seems like it might be a problem, right? Isn’t the Mayor planning on bonding out our PFRS debt? A downgrade would seem to be the sort of thing that might make that more difficult.

    But I am not a CPA. Len, what say you?

    (thanks to Charlie Pine for breaking the bad news: http://www.orpn.org/Fitch1.htm )

  12. Charles Pine

    Max wrote: “(thanks to Charlie Pine for breaking the bad news: http://www.orpn.org/Fitch1.htm )”

    This afternoon a member of ORPN heard from a City Hall person that unspecified City officials met last week to discuss the Fitch downgrade. But no one let the public know about it; so much for informing the public about the budget crisis while selling a parcel tax.

  13. Dax

    Oh Max, what do those financial types know anyway.

    They don’t live in the world that Jean Quan has been familiar with over the past 40 years.
    They might as well be talking in Latin.

    No, Jean knows there is always a fix, a patch, and that the “people of Oakland are strong”..
    Why, with a little patch here and there, some glue over on that side, and 3,500 volunteers, this thing will fly for a couple more years.

    Meanwhile, lets not go public about needing more than a 10% reduction in total compensation for all classes of workers.
    Don’t lay it all out like they did for the residents of San Jose.
    Keep it all hidden and above all never mention the “F” word… (Fitch)

  14. Max Allstadt

    Yeah, it seems like bad news, but I’m not a finance wonk. Can somebody please explain the potential consequences of this downgrade to me in language that a lowly carpenter such as myself might understand?

  15. ralph

    Max,
    Basically, the city is not creditworthy. Fitch has expressed doubt about the city’s ability to repay its financial obligations. If the city were to go to the capital markets for moola it is going to cost more. Instead of $100,000,000 at 3% the city (JQ Taxpayer) might end up paying 6%.

  16. J

    Costs are outstripping revenues and there seems to be no structural solutions to prevent the further accumulation of structural budget deficits–cost containment. Jean Quan continues to want to be all things to all people. One time solutions do not cut it. Taxing the middle class out of Oakland to raise revenues does not cut it. The only long term solution is to grow the tax base. To do that you need to attract development and capital and residents with relatively high income levels. Development and capital are discouraged in areas where the perceved and real costs of locating are high. Oakland has high crime rates. Potential businesses and residents do not want to locate in areas with high crime rates because of the added costs and hassles of product loss, vandalism, infrastructure security, difficulty of obtaining insurance and safety of employees. Invest in tangible crime reduction by hiring more police. Also, implement priority based budgeting that focuses on public safety, economic development and business attraction. I am sure that far more businesses and potential residents opted not to locate in Oakland due the high cost of crime as opposed to the lack of libraries or parks. The downgrading of the City’s bond rating is yet another downward spiral in a budget morass where too little too late is the name of the game.

  17. Max Allstadt

    @ Ralph:

    And this would make the PFRS A-Bomb, set to go off in 2024, into more of an H-Bomb, basically?

    I mean, they’re both going to wipe us out completely, so I wonder if the City financial folks are thinking that going down in a 20000 degree fireball isn’t any worse than going down in 10000 degree fireball…

    _____________________

    @ J,

    I would be absolutely fine with a new tax, but it must come with structural reform, cuts and some rather drastic changes in the way business is done. I don’t really think 80 bucks is going to drive out the middle class, and I also don’t think that the demographics of Oakland show a middle class exodus anywhere near as dramatic as say SF or NYC.

    We have a spending problem and a revenue problem. We need to tackle them together.

    It sure looks like some of the current revenue strategies are hopeless, though.

  18. len raphael

    a client of mine (since deceased) started his long career as a muni bond retail broker during the depression at an Oakland firm that got merged out countless times.

    I asked him once why he only owned stocks and muni bond funds, instead of single malt bonds like the ones discussed in the fitch ratings. His reply was the the muni bond market is rigged by the rating agencies, the underwriters and the municipalities against the buyers. Big bond funds have the clout to do their own research and buy at wholesale.

    The price you paid to buy the same bond varied wildly from broker to broker.

    Don’t know if the muni bond markets have gotten any more transparent or rational, but judging by the disparity of the cya verbiage of Fitch vs S&P even though both seem to rating our bonds about the same, seems like b/s still rules.

    bond ratings are meant to gauge liklihood of late payment and default, not the ability of the city to deliver quality services at an affordable cost to the residents.

    i dont know the muni finance market enough to know how much this downgrade will add to our interest costs when we rollover existing debt or issue new debt. Glancing at wsj bond yield listing, looks like debt of 10 to 20 years is running in the 4.5 to 6% neigborhood.

    Which is a reflection of a general agreement that all muni bonds are much higher risk than say T bills.

    At a recent council meeting didn’t Kaplan or ? ask staff what rate we’d have to pay when we go back to borrow, and staff said 8 or 9% ?
    (there is second hand)

    -len

  19. J

    According to this article in the LA Times http://www.latimes.com/business/realestate/la-fi-econ-forecast-20110615,0,3144669.story the state’s population is skewing younger resulting in a greater demand for urban rental units by the coast. People want to live closer to job markets and Gen Xers want to live in lively urban communities–this could be Oakland. Building permits won’t start ticking up until 2013.

    So if Oakland is to address its structural budget deficits and expand its tax base, what is it pro-actively doing to capture these housing units and create incentives for attracting new rental units, and goods/services purchasing residents to Oakland?

    How does the current budget proposal mesh with a future vision of Oakland? Are the budget cuts targeted in ways that retain appropriate staff and City functions to allow and support the efficient and quick approval of new development proposals?

    The shotgun approach wherein everyone must suffer the pain equally appears to lack vision of what we need in the future to grow our tax base and appears to be only intended to avoid really pissing off any one interest group so they don’t come back to bite Jean Quan during future elections.

  20. Re-Open The Henry J.

    @Barry,

    The Center is worth more than ten million. Period. They did a major retrofit in the early 90′s, and it is not “run-down” at all.

    Edification on this is needed to dispel the myth that this building is worth more than some houses in Oakland. It’s also worth way more than a piece of collateral.

    As for its aesthetic worth, it’s arguably the most visible (and handsomest) building on Lake Merritt, making it the lake’s crown jewel.

    Unlike before, when they decided it wasn’t making enough money, –all the while neglecting it (not lifting a finger to give it a budget, not marketing it, etc), the city (any entity) could dust it off, and make some real money off of this property.

    My chihuahua in this fight comes in the form of an injection of touchy-feelyness to the financial talk. I really don’t care who “owns” it, I just want to see it open, and available for use by the people of Oakland. Immediately.

    http://www.facebook.com/pages/Re-open-The-Henry-J-Kaiser-Events-Center/136021236015

  21. len raphael

    reothj, join the long angry line of residents, employees, ngos, and vendors that is queing up in front of city hall to beg and scream for their priorities.

    The only good thing that might come out of that is they’ll cancel out each other’s sound waves so that the CC might find the courage to ignore all of them, and start an honest and open discussion around the city about priorities.

    Meanwhile they can do another one of their smoke and mirror balancing the budget acts.

    -len raphael, temescal

  22. Tom Thurston

    The Center is currently locked and before the public can enter it for any purpose whatsoever, it needs repairs and upgrades costing between $6 and $9 million. This includes bringing the entire building up to code. It does not include specific upgrades to accommodate the needs of specific tenants. Selling it to Redevelopment doesn’t address the structural deficit. The $29 million price tag is unjustified. The future taxes that will pay down the bond money used to buy the Center come from the some of the City’s poorest residents. It’s a wealth transfer from the flatlands to the hills.

    Oakland bonds are still investment grade, even according to Fitch. One firm’s downgrade puts pressure on others. Current investment grade taxable long-term muni bonds are returning somewhere between 5.5% and 8%. They vary depending on rating and source of repayment. Any bond’s rate depends on the market. Perception matters. A shift of 0.5% means $5,000 per year per $1 million borrowed.

  23. len raphael

    Tom, please elaborate on “future taxes that will pay down the bond money used to buy the Center come from the some of the City’s poorest residents”

    -len raphael

  24. len raphael

    i wouldn’t look to the bond rating outfits to blow the whistle on our muni finances.

    even in Chapter 9, i doubt if the bond holders are at much more risk here than at most other cities. for sure, interest rates on munis have risen overall because that risk is no longer seen as inignificant.

  25. len raphael

    What is it about libraries that gets its supporters more motivated to public protest than say failing schools or homicides?

    The absolute conviction of so many people about how the city will crumble if libraries are cut severely is endearing but quixotic to me.

    Bummer that most of them are running off half cocked on inadequate financial info. Not knowing that in two or three years these threatened cuts will look kind and gentle.

    -len raphael

  26. Matt C

    len, I say let people follow their passions. Trying to engage the library supporters might be very fruitful. You’re talking about people who actually showed up at city hall. Did you read how the residents of Alameda handled the unsustainable police and fire pay in their city? They showed up in the hundreds and the unions caved. We really suck.

  27. Dax

    Matt, not sure the Alameda unions caved.
    Rather it seems the Alameda City council gave in to a far greater degree than the citizens wanted.

    No pay cut for Alameda firefighters.
    Some increased contribution to their pensions and for their health care, but no pay cut.

    I’m afraid the Oakland city negotiators will also give only the most mild adjustment to city union compensation packages.
    You watch. It will be filled with this and that. Cuts that aren’t really cuts.
    Then the public will be told Oakland has cut to the bone and now the residents need to do their share by passing a 5 year, $80 parcel tax… so libraries can stay open.

    (forgetting of course, we’ve passed two prior library parcel taxes where we were promised they would completely insure funding for the sacred libraries… That money…drained away or used to supplant normal city funding. All lies, all the time, with the city leaders treating the citizens as though they had Alzheimers and could remember nothing past 12 months)

  28. len raphael

    Naomi and Annalee, would you concede any of Dax’s point that the library supporters also get, how should i say it, “handled” by city leaders and didn’t do the followup to make sure the spirit of Measure Q was followed?

  29. len raphael

    Matt C, a link to the Alameda info. btw, any links to Alameda blogs. Regardless of whether they got hoodwinked, curious how residents were organized to turn out.

    Much smaller, and yes less diverse = higher civic participation. Also had recent practice on opposing the big development. Hmm

    -len

  30. librarylover

    what do you mean about the spirit of measure q not being followed? i don’t follow.

  31. annalee allen

    I refuse to super over analyze this. I want the libraries to stay open period. If we don’t stand up and say so, how will councilmembers, who depend on us to keep voting for them, know what we want them to do?

  32. David

    Thanks, Barry. The audits are helpful. Based on comments here, I was starting to wonder of voting for Measure Q had been a mistake. Its reasurring to see the money was spent as intended.

  33. ralph

    To be fair Mayor Quan was never going to close 14 libraries. Dollars to donuts, she would have cut off her left foot before closing 14 libraries. And even as a huge fan of the library, I just saw no need to get myself worked up into a lather. I refuse to be blackmailed into doing something.

  34. Naomi Schiff

    Ralph, I think you are correct that Quan doesn’t want to close libraries. She put it forward as her worst-case scenario, not as her favorite option. After all, people who voted for Measure Q may well remember that she associated herself with that effort. But, working up a lather can be important sometimes, even when you see that you are just part of a larger and partly unseen dance (the labor negotiations). I’ve worried that the parks folks aren’t sticking their heads up high enough. I’m not sure what we’ll do about our street trees and parks, but for sure p&r is understaffed. To repeat myself, I do think that some of these departments are somewhat top-heavy, an inherent problem of having the top admins draw up the budgets.

    By the way, about the audit: Filling boards and commissions was a very weak point with Dellums and even worse with Brown. It seems that the Quan administration is trying to fill vacancies more promptly.

  35. J

    Ralph,

    I agree. Quan’s strategy regarding the libraries, parks and senior citizen centers was to threaten to shut them down as a worse case scenarior to get people lathered up. She then hopes to parlay this into votes for the parcel tax. Interestingly, it appears only the library interest group has been able to get enough supporters to show up in any great numbers and create the noise. Those supporting parks and seniors have been relatively silent. In all this lather I seem to hear a lot of reasons why it is important to save the libraries from the cutting block. What I don’t hear is what library supporters propose Quan cut instead of libraries to address the deficit.

  36. ralph

    Naomi,
    Yeah, I get that there is a dance. What I really want to know is why is Oakland the only city with this dance? Every city has this problem but only Oakland needs to manipulate the residents. Government should be clean and transparent.

  37. Naomi Schiff

    We are not the only ones dancing. These are national phenomena, in places like New York and Michigan and Texas. From Ben Franklin territory:
    http://libwww.freelibrary.org/donate/thankyou.cfm

    Some library advocates I’ve talked to have in mind that Oakland public safety pension contributions ought to be renegotiated. Some ask about top-heavy administration (with multiple large salaries) in various departments. Many mention that the library and parks and rec represent a very small percentage of the gen fund. Civilianizing desk jobs in the police dept. comes up. Cost of city attorney’s office and of all kinds of outside consultants. It depends upon what corner of city activities the person sees. Few of us have the entire picture. But library supporters worked hard to pass Measure Q to forestall just this scenario. In allowing gen fund library allocation to fall under the baseline, the city loses Q funds as so well explained by V. In order to save 6 million, they give up 14 million in Meas Q! And have shutdown costs, unoccupied buildings subject to damage and blight, security costs, potential vandalism, fire danger, in addition to the loss of services.

  38. J

    When you look at all of the City expenses/outlays that are on the chopping block and request that something be taken off the chopping block, you have to put something new on the block or come up with a new revunue to fund it to prevent it from being chopped. Pension reform, reduction of top heavy management, civilianizing segments of the police, reduction of costs within Ciity departments are all important and are all already contemplated by necessity in the various budget alternatives. What you are left with is either more significant cuts in the remaining progams or asking the community to pay for the parcel tax. Let’s be honest and let’s be transparent that saviing libraries comes either at a cost to other city functions and staff or it comes at a cost to the taxpayer. What we don’t hear from any front is that in order to address this budget problem we need to grow the tax base and we need to restructure the budget so that we eliminate mandatory set asides (Measure Y, Kids First and Measure Q) to allow greater flexibility in prioritizing and matching revenues to service when revenues are down.

  39. len raphael

    David, i just read those three Measure Q audits and only came away with Ruby’s assurance that the Library satisfied the letter of the law by maintaining hours/days, and various targeted programs.

    What she did not evaluate was the efficiency and effectiveness of how the Library spent those funds.

    in particular Ruby was not evaluating how much of the money was spent on raises for existing employees instead of on expansion of services.

    I believe that was the crux of the criticism here about Measure Q. No where in Measure Q as described by Ruby, was there a stated goal to enhance the compensation of existing employees.

    My impression from posts here is that no one disputes that is how much of the money was used. The arguments are whether residents would have voted for Q if they knew that beforehand.

  40. PJ

    Where are you getting that information about raises? I don’t see that anywhere in the audits. I am a weekly library user and have been extremely satisfied with the service. Measure q seems like one of the few things the city has gotten right.

  41. Justine

    J, library supporters have been organizing en masse to directly pressure the OPOA to open their contract and contribute to their pensions in order for libraries to be preserved. So when the police decide to contribute, you can thank all the volunteers and advocates from save oakland libraries for making it happen.

  42. BarryK

    Justine- It was recently disclosed that Oakland’s elected officials recently started to contribute to their pensions; from Sanjiv Handa.

  43. Naomi Schiff

    I don’t know, Len. The current salaries chart on the OPL website seems to indicate same salaries since 2007. Not sure if that is correct, but no doubt some librarian who reads this can tell us when they last received raises. It’s doubtful to me that would have been recent, because library advocates already had to accept some cutbacks last year, during mid-cycle budget reductions. The library uses a great number of modestly compensated part-timers, with great productivity for the amount spent.

  44. Naomi Schiff

    Plus, of course library system participated in the mandated furlough days under the Dellums admin., which amounted to a pay rollback, if I’m not wrong. 12 days yearly, wasn’t it? Unfortunately leading to several stretches of multi-day librarilessness just when students in particular needed to be able to use the facilities.

  45. len raphael

    I didn’t state one way or another whether Measure Q monies were used for raised because i never claimed knowledge on that. (But i recall others here did?)

    My point was only that one couldn’t conclude from Ruby’s “performance” audit reports whether the MQ money was spent efficiently as defined by greatest increase in volume and quality of service for least cost.

    She concluded no more and no less than the goals of MQ were met ie. letter of the law re hours, days, and providing certain services were met.

    -len

  46. BarryK

    Here’s a re-post from a neighborhood group by Libby Schaaf on her vote to increase the Measure Q parcel tax, and, my reply; which she refuses to answer.

    Re: [MDisc] Increase in Measure Q Library Tax Being Considered Next Week

    On Sat, Jun 18, 2011 at 12:40 PM, Libby Schaaf wrote:

    This is merely the standard adjustment that happens every year. Voter approved Measure Q has a Consumer Price Index (CPI) increase provision. The Council implements this provision annually. The second reading of the ordinance, which already passed unanimously at the last Council meeting is on the consent calendar for this coming meeting. Since the CPI increase was mandated by voters, I believe the Council must implement it. All budgets already assume the CPI increase, so this action has no effect on budget proposals.
    Best, Libby Schaaf

    Dear Ms. Schaaf:

    * “This is merely the standard adjustment that happens every year.” This “adjustment” happens every year because the Oakland City Councils votes to increase this parcel tax on homeowners, residential until owners and businesses.
    * “The Council implements this provision annually.” By using the choice word “implements” that is nothing more than voting to increase a tax.
    * “Since the CPI increase was mandated by voters, I believe the Council must implement it.” You had the choice to vote “NO” on this ordinance and not continue the pattern of increasing taxes on home owners and business because you can. However, you voted “Aye” to support this tax increase. Jean Quan promised us the mandate of Measure Y would be used to expand the police department to 802 officers with the Measure Y tax.
    * “All budgets already assume the CPI increase, so this action has no effect on budget proposals.” What about the effect raising taxes has on homeowners and businesses in Oakland? Is this ever factored in the tax-and-over-spend nature of the City Council?

    From the City Administrator: ” The Measure Q legislation also authorizes the City Council to increase the tax annually, consistent with the San Francisco Bay Area CPI changes.”
    You and your fellow elected council members have the authority not to increase the tax.

    Ms Schaaf, I have repeatedly asked you if you are also taking your City Council car allowance; the annual benefit is $6600 per council member! You have not answered this question and it was presented to you again by Steve Sterns (below). The total cost for the City Council car allowance is $52,800; that’s about 660 homeowners taxed at a rate of $80 in parcel tax dollars. What became of former Mayor Dellums $65,000 annual car allowance and what is Ms. Quan using for her allotted benefit? Have these and the the generous car allowances and free parking to other elected officials and management been stopped?

    Ms. Schaaf, thank you for going on record indicating your “Aye” to increase the Measure Q tax Oakland homeowners and business owners must pay. Thank you also for going on record stating your support for Jean Quan’s $80 “fix-all” parcel tax; on the condition that it’s placed on a general election ballot.
    **********

    Measure Q:
    Impartial Analysis from Oakland’s City Attorney-
    http://www.smartvoter.org/2004/03/02/ca/alm/meas/Q/#financial

    Unit Type Proposed
    Existing

    Tax Rate in
    Tax Rate in
    Proposed

    Fiscal Year
    Fiscal Year
    Increase

    2004-2005
    2003-2004
    in Rate
    Single Family $75.00
    $36.06
    $38.94
    Residential
    Multiple Unit 51.24
    24.63
    26.61
    Residential
    Non-Residential 38.41
    18.47
    19.94

    Each year since 2005, the Oakland City Council has voted “Aye” to increase this tax!

    June 8, 2006: 2.0%

    June 19, 2007: 3.2%

    June 17, 2008: 3.3%

    June 16, 2009: 3.1%

    June 01. 2010: 0.7%

    The proposal for the FY 2011-2012 is 1.4%. (This tax increase will generate an increase of $177,520.)
    Unit Type Existing
    Proposed

    Tax Rate in
    Tax Rate in

    Fiscal Year
    Fiscal Year

    2010-2011
    2011-2112

    Single Family $85.69
    $86.87

    Residential
    Multiple Unit $58.53
    $59.54

    Residential
    Non-Residential $43.89
    $44.49

    ********
    Len- Regarding the Measure Q funds, the tax rate has nearly tripled in seven years! I think an audit of these monies would be ideal.

  47. livegreen

    BarryK, sorry but I’m msg something: how does $75 to $85.69 (for Single Family) = tax rate has tripled? (It’s hard to read when the lines don’t match up).

  48. BarryK

    Len, sorry about that. Formatting didn’t stick.

    The FY 2003-2004 tax was $36.06 per home.
    Measure Q increased it to $75 for FY 2004-2005.

    Each year, the City Council has voted to implement a yearly increase.
    The Council just voted on increasing Q by 1.5% so the tax will be FY 2011-2012 $86.87

    Similar increases passed through for multi-unit buildings and for businesses.

    Non-residential used to pay $18.47, now they will be taxed $44.89.

  49. livegreen

    So how does an increase of about 3% or less/yr = a doubling of the tax? It adds up far closer to 10% than 100%. Obviously I’m not an accountant…

  50. BarryK

    Livegreen- the Library tax use to be $36.06 per home before it was set to expire.
    Measure Q, more than doubled the tax for FY 2004-2005 from $36.06 per home to $75.

    Each year, the Council votes to pass through an increase based on the CPI.
    The Council has now approved the increase and the current household tax of Measure Q is $86.87.

    The tax was $36.06 and is now $86.87; and the Council can vote to increase it each year for the next 15 years!

  51. Naomi Schiff

    Livegreen, I think you see the situation clearly. BarryK is including the pre-measure-Q history which is skewing his figures. Makes no sense to assess Measure Q by what came before it. Measure Q was approved by a healthy margin. The reason a CPI escalation was written in is that the previous library measure did not have one, and in real dollars, the funding that the measure provided to the library shrank drastically over the years with no way to allow for inflation.

    BarryK also asked about Quan’s car allowance: I asked too. She is not drawing automobile expense. She also does not have a “personal” driver.

  52. The Boss

    Obviously, the thing Barry is upset about is the fact that we pay all these taxes and Oakland is still sort of a pit. It would be a lot more palatable to pay them if people felt like they were getting more out of the city.

    Things like car allowances are just the final insult.

    Course, my believe remains that gentrification will solve most of this, magically improving the schools, etc. Then the politicians will tell us how their policies made the difference.

    Actually, in some ways that’s true! Their policies of running a third-world police state while paying themselves and their union buddies ridiculous salaries will probably help speed gentrification by encouraging the poor to get out.

  53. len raphael

    TB, the way this place is governed, encourages the striving poor to get out, leaving behind those stuck in the cycle, resigned, sick, elderly poor, and successful criminals. I don’t see that leading anywhere good for anyone.

  54. Livegreen

    TBoss, The 2 paragraphs in your post are mutually exclusive. Len is right. What’s promoting gentrification is crime. Minority middle classes have been lvg, fed up by the violence, for years now. It’s ongoing.

    The gang apologists are increasing this by promoting black on black and Latino on Latino violence, and in between. The gangs are targeting each other and the hard working innocents who exemplify success through a law abiding, non criminal life.

    And who does Dan Siegel defend? The gangs.

  55. Naomi Schiff

    Being a defense attorney does not mean that you approve of crime. Anyone admitted to practice is perforce an officer of the court. It is part of our system of justice that defense attorneys defend defendants, prosecutors prosecute. One of the more upright community-spirited people I know has long defended death penalty cases. That doesn’t at all mean she thinks murder is alright. She is as vigilant an Oakland neighborhood person as anyone who posts here.

  56. len raphael

    yeah, i tend to view the effect of how the city is run as encouraging a dumbell populace: well to do and extreme poor, buffered geographically by a combo of twenty somethings who are underemployed, short timer couples with young kids most of whom will move out during the k-5 years to berkeley’ albany, etc; elderly retired middle class blacks (a vanishing group), and a relatively few single and couples who will stay no matter what because they like it here or can’t afford to move.

    -len

  57. livegreen

    Naomi, I was not talking about all defense attorneys, nor about moral reasons to defend death penalty cases. I was talking about Siegel’s choice to defend Gangs, in opposition to those who support their victims, and the net effect of that choice.

    That speaks to his choices alone, not to all defense attorneys.

  58. Used to work there

    The residents in the Central City East area are just being taken for a ride on this sale. They are effectively paying for the reelection of the council because the council does not have the guts to fix the budget over-spending problem. They are using one-time cash to fix an ongoing problem That is like selling your car because you can’t make the rent payments. What happens when the money runs out? I know Tom and he is perfectly correct in his analysis. The city is ripping off the community. It is shameful.