• Thu. Nov 26th, 2020
City of Oakland

Zennie62Media note: that a budget can be structured during a Worldwide Pandemic and not include a calculation for a request for a Federal Government Bailout is totally wild. The Mayor of Oakland needs to think and do out of the box, because we’re not in a situation that allows the same-old, same-old. A dollar figure for economic loss beyond the budget should be calculated, and now. Then push it out with media both traditional and new, and ask President Trump for help. Make it a national cause! Be bold! That’s just good economic planning.” – Zennie Abraham, CEO, Zennie62Media

Oakland City Administration Releases Proposed Midcycle Budget Amendments for Fiscal Year 2020-21

Proposals close a $122 million shortfall by using Rainy Day Fund and new ballot measure revenue to minimize service cuts, increase funding for homelessness and illegal dumping pick-up, and minimize impacts to employees

Oakland, CA – Oakland Mayor Libby Schaaf and City Administrator Ed Reiskin today released the FY 2020-21 Midcycle Budget, an adjustment to the two-year budget to balance revenues and expenditures. The Proposed Midcycle Budget will be presented to the City Council for their consideration on Tuesday, May 26; the City Council will adopt a final balanced budget for FY 2020-21 by July 1.

“Despite facing the most significant and unexpected budget shortfall in the City’s history as a result of the COVID-19 pandemic that is ravaging economies across the globe, this Proposed FY 2020-21 Midcycle Budget closes a $122 million shortfall while maintaining the City’s most critical services,” said Mayor Libby Schaaf. “Although it will not be painless, we have managed to avoid the most severe cuts to services—and perhaps most importantly, we have done our best to minimize severe impacts to City employees. Despite these adjustments, we still have a gap of approximately $10.5 million to close, and we are calling on our labor partners to help resolve that last piece of the puzzle.”

The Proposed Midcycle Budget, along with action taken by the City Council this week, closes a $122 million budget shortfall facing the City over the next 14 months across multiple funds:

· $26 million shortfall in the General Purpose Fund in the current year ending June 30 (City Council this week authorized the use of this year’s Rainy Day Fund to close $16 million of this gap, and about $10 million remains)

· $96 million deficit next fiscal year (FY 2020-21):

o $54 million shortfall in the General Purpose Fund

o $42 million in shortfalls across a series of restricted funds designated for a specific purpose

Key Investments to Critical Services

The Proposed Midcycle Budget makes important equity investments where resources are available, through the recent passage of Measure Q, increased state and federal funding, and new revenue from the Vacant Property Tax. Specifically:

Substantial Investments in Homeless Services

· Total of $47.5 million available next year; more than $6.6 million in new funding from Measure Q

· Funding will support existing shelters, transitional housing, and expanded rapid rehousing support; additional outreach focused on parks and open spaces; an employment program focused on beautification activities; and homeless encampment waste collection services

Affordable Housing

· Additional $12.3 million in support of affordable housing activities

· Appropriation of final $15 million in Measure KK Bond proceeds

· Resources come from estimated Affordable Housing Impact Fees, estimated Jobs/Housing Impact Fees, and boomerang funding from the redevelopment dissolution

Park & Landscape Maintenance

· Significantly expands the City’s parks, tree, and landscape maintenance services due to the passage of Parks Measure Q in March 2020

· Adds or unfreezes of 44.5 FTEs to maintain, protect, and improve parks, open space, and recreation facilities

· Dedicates staff to provide regularly scheduled landscaping and mowing services at City parks

· Funds $1.8 million to purchase heavy equipment such as dump trucks, mini packers, portable compactors, and a mini excavator, and additional supplies to support the landscape maintenance; and

· Adds 6 FTEs to general enhance City parks including regularly scheduled sanitation of restrooms, installation of non-structural improvements and

· Funds $0.8 million to purchase heavy equipment to support the new facilities staff.

Illegal Dumping

· Adds an Illegal Dumping crew of 5 FTEs to remove illegal dumping, clean up homeless encampments, and enhance the cleanliness, health, and appearance of City neighborhoods and streets.

Budget-Balancing Measures

Due to the extreme and unprecedented nature of this economic crisis, the Proposed Midcycle Budget aims to preserve the most critical services and closes the deficit through a combination of actions:

· Makes one-time reductions in non-essential expenses,

· Uses the entire Rainy Day reserve of $14.6 million,

· Temporarily suspends several financial policies and contributions to our long-term liabilities,

· Transfers eligible expenses to other funds, and

· Temporarily freezes about 47 vacant positions (Full-Time Equivalents or FTEs), most notably staff who provide administrative functions (finance, human resources, IT) across all departments

About 93 vacant civilian FTEs in the GPF are not proposed to be frozen, out of consideration for service impacts to the public, equity considerations, legal mandates, public health and safety considerations, and unbalanced workloads on remaining employees.

Despite the revenue and expenditure adjustments, a gap of approximately $10.5 million (about 8% of the total deficit) remains in the General Purpose Fund, which is proposed to be closed through labor concessions currently being negotiated.

“Our decisions about how to close this unprecedented $122 million budget gap were guided by the principles of equity, transparency, and fiscal responsibility. Our goal was to achieve a balanced budget with the least impact to critical services, ensuring that our most vulnerable residents did not shoulder the burden of cuts during the pandemic when needs are highest, and minimizing adverse impacts to City employees, who are delivering those critical services,” said City Administrator Ed Reiskin.

Uncertain Financial Outlook

Locally and globally, the COVID-19 pandemic has become a financial crisis as well as a health crisis. The impacts of the shelter-in-place (SIP) order have resulted in significant revenue loss across many of the City’s key tax categories, including sales taxes, transient occupancy taxes, business license taxes, and parking taxes.

The Administration’s Proposed FY 2020-21 Midcycle Budget reflects the somber reality that state and local governments are facing throughout the nation – a drastic reduction in tax revenues coupled with growing demand for services. Sound financial policies and careful management have positioned the City well to deal with the current economic contraction, but much uncertainty remains.

The Proposed Midcycle Budget assumes that economic recovery slowly begins in FY 2020-21 and continues through the end of the fourth quarter. To the extent that economic recovery is delayed, or a subsequent outbreak requires the re-imposition of the SIP order, tax revenues will decline further than what is projected in this report.

The possibility of a more pessimistic revenue scenario for the upcoming fiscal year, the need to preserve funds for extraordinary events—like earthquakes or wildfires—and the likelihood of continued economic challenges in the next fiscal cycle all underscore the need to preserve the City’s limited Emergency Reserve.

We look forward to working collaboratively with the City Council to adopt a final balanced budget.

Key Dates in the Budget Process

Tuesday, May 26 Special Council Meeting to present the Administration’s Proposed Amendments

Tuesday, June 2 City Council meeting to deliberate on budget

Tuesday, June 16 (if needed) City Council meeting to deliberate on budget

Tuesday, June 30 Deadline to adopt balanced FY 2020/21 budget

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Roger Robarts

I am that rare breed: an Oakland blogger, and I don't mean micro.  Roger Robarts is Government News Blogger on OaklandNewsNow.com, Oakland News Now, Oakland-News-Now.com, OaklandNewsToday.com, @OaklandNewsNow oaklandnewsblog.com is by Zennie62Media, Inc. with CEO Zenophon Abraham AKA Zennie62 YouTube Oakland News Now Commentary Vlog YouTube Partner Channel, Oakland California blogger / vlogger Zennie Abraham, Zenophon Abraham, @ZennieAbraham . Hire @Zennie62Media, Inc to tell your story. We do for Insight Terminal Solutions, Oakland Bulk and Oversized Terminal, Maria Ayerdi Kaplan and her role in developing Salesforce Transit Center, and more clients.

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