Oakland is on the verge of financial disaster

Drastic cuts to public safety almost certain; Adena Ishii is headed for historic win in Berkeley mayoral race; Bas passes Bauters in Supe D5 race; Two San Leandro officials face censure tonight

CITY NEWS

OAKLAND

—IS THE END NEAR?—Oakland’s city administration sanitized an alarming finance report set for discussion at Tuesday’s morning’s special city council meeting, removing references to a declaration of fiscal emergency and the possibility of Chapter 9 bankruptcy.

—The report from Oakland Finance Director Erin Roseman to City Administrator Jestin Johnson was included in the agenda packed last week, but quickly removed, and replaced with an edited version.

—“The results of this First Quarter show that immediate action is necessary to maintain the solvency of the General Purpose Fund and avoid the Chapter 9 process” the original report ominously states. The reference to Chapter 9 bankruptcy was deleted from the new version.

Redlined Oakalnd Finance Report

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—The original report states the city has “already tapped into emergency reserves,” adding, “Given there is no possibility of replenishing the reserve this Fiscal year… the City Council will be required to declare a Fiscal Emergency, per the Consolidated Fiscal Policy (CFP.) Failure to take dramatic and immediate steps to reduce expenditures will almost certainly result in insolvency.”

—Oakland officials have bristled at any public references to bankruptcy. In July, Councilmember Noel Gallo was admonished by Councilmember Dan Kalb for raising concerns about bankruptcy.

Don't say the b-word in Oakland

—Councilmember Carroll Fife added at the same meeting, “It gives me great concern when we use the b-word.”

—What remains clear is a that fiscal Armageddon is closer to reality in Oakland than previously acknowledged by city leaders.

—Oakland is facing a projected $93 million budget shortfall for Fiscal Year 2025, according to the report.

—“Overall, the financial state for Oakland indicates a need for dramatic adjustments to manage expenditures to prevent insolvency and to stabilize the city's finances,” according to the report’s conclusion.

—In light of the slow-moving or potentially failed Coliseum deal meant to shore up the city’s finances in the short-term, drastic cuts to public safety appears imminent. They include:

FUELING THE DEFICIT

• Real Estate Transfer Tax is projected to be down 10 percent, or $7.69 million below the year-end projection.

• Unrealized $63 million expected from the proposed Coliseum half-interest to AASEG. City has received just $5 million from the deal.

• Sales tax receipts are nearly level with adjusted budget projections.

• Hotel tax is $2.23 million under budget.

• Parking tax is $1.20 million under budget

• Police and fire account for 90 percent of projected city department overspending

—The impending cuts could further increase pressure on an understaffed police department struggling to quell violent crime, and stress on a fire department perennially preparing for wildfires in the Oakland Hills.

POTENTIAL CUTS

• Freezing of five fire engine companies, including 60 firefighters.

• Freezing of two police academies, including 78 police officers, in addition to four non-sworn positions.

• Reduction of $2.3 million in funding for public safety vehicle replacements

—Avoiding these cuts would require the city to excise a staggering 83 percent of expenses not related to public safety, a strategy that the city administrator believes may not be legal.

—The Finance Department’s sobering report was released three days after the Nov. 5 election that recalled the mayor, and is set to elect three new councilmembers.

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