Oakland Mayor Ron Dellums proposed $14.4 million in cuts to the City of Oakland budget this week to offset a projected $15 million deficit in the next fiscal year, including calling for the closing down of non-essential city services for 12 days each year.
Savings from the 12-day city holiday increase, in which most city offices would be closed and city staff would not be paid, is expected to be more than $4 million.
The projected deficit is being fueled in large part by a $25.7 million drop in Oakland’s real estate transfer tax caused by the slowdown in the national, regional, and local housing market. The real estate transfer tax drop overwhelmed increases in some city revenues, including a $7.5 million increase in property tax proceeds and a $4.62 million increase in business license tax proceeds.
The Oakland City Council, which has authority over the passage of the budget and any modifications, took the mayor’s proposal under advisement, asking detailed questions at a Thursday evening budget session but reserving final comment on the mayor’s reduction proposals themselves.
The largest actual proposed budget reductions are in the Oakland Police Department, with a $3.7 million reduction, and the Oakland Fire Department, with a $3.2 million reduction, the proposed cuts being absorbed by the two largest line items in the city’s budget. But in line with city concerns over public safety, the mayor has proposed that the reductions in the two public safety departments come largely from accounting gimmicks and not from actual personnel reductions. City Administrator Deborah Edgerly said Thursday night that Head Start services would not be affected by the proposed 12-day city shutdown as well.
The council is scheduled to take up the mid-year budget discussions again on Wednesday, June 11 at 5 p.m. in the council chambers, with a final deliberation and decision scheduled for Tuesday, June 17 at 6 p.m.
The City of Berkeley currently operates five “reduced service days” as a budget-cutting measure, during which time services at the Martin Luther King, Jr., Civic Center Building, Finance Customer Service Center (1947 Center), and the Permit Service Center are not be available. Other city services in Berkeley, including police and fire services, main and branch libraries, and the animal shelter remain in operation during Berkeley’s “reduced service days.”
Oakland put in place a similar 12 day reduced schedule in 2003 during the administration of former Mayor Jerry Brown in order to close a similar budget gap. Members of Service Employee International Union Local 790 filed an arbitration grievance over the mandatory work furloughs, but an arbitrator sided with the city, saying that the mandatory days without pay were legal.
Vice President Jeffrey Levin of Local 21 of the Professional & Technical Engineers union (IFPTE), which cooperated in voluntary budget cuts during the 2003 budget shortfall, told councilmembers on Thursday that his union may have problems with this round of proposed mandatory layoffs.
“Our members voluntarily helped out in ’02-03 with the promise that all employee groups would be treated equally,” Levin said. “Instead, we found that money that was saved from cutbacks to some union members went into the budget to finance police overruns.”
Levin said that instead of looking at cutbacks on unionized city employees, “before we cut services and force employees to what is close to a 5 percent paycut,” the city should be looking at cuts in contracts with outside employees, as well as at reducing the city’s reserves.
Levin did not give any indication what action his union might take if the suggestions were not followed.
Meanwhile, in a prepared press release this week, Mayor Dellums called the mid-cycle budget cuts, including the proposed targeted city service shutdown, “a very difficult process,” but that faced with the $15 million deficit “it was our responsibility to make specific personnel adjustments to help ease the fiscal burden and to avoid widespread layoffs. At the end of the day we had to strike a balance between fiscal responsibility and sustaining Oakland jobs. Working with city staff, we concluded that shutting down non-essential services for one day a month around holidays when employees would welcome an extra day off was the most responsible way to proceed.”
Departments proposed to be hit with the largest percentage cuts of their budget are the City Attorney’s Office ($8.47 percent of a $9.5 million budget), the Information and Technology Department (7.63 percent of an $11.5 million budget), and Library Services (7.33 percent of a $13.2 million budget).
Breakdown of the Mayor’s Budget Cut Proposals
Mayor’s Office: Current budget $3.2 million. $102,000 in cuts (3.19 percent reduction), including $97,000 saved in the proposed 12 day shutdown.
City Council: Current budget $3.8 million. $108,000 in cuts (2.84 percent reduction). $126,000 saved in the proposed 12 day shutdown is offset by increases in the retirement rate and council salary increases.
City Administrator’s Office: Current budget $9.4 million. $510,000 in cuts (5.43 percent reduction), including $271,000 saved in the proposed 12 day shutdown as well as position eliminations, reclassifications, and transfers.
City Attorney’s Office: Current budget $9.5 million (8.47 percent reduction). $805,000 in cuts, including $346,000 saved in the proposed 12 day shutdown as well as the small staff cutbacks and program eliminations.
City Auditor’s Office: Current budget $1.4 million (2.64 percent reduction). $37,000 in cuts, including $41,000 saved in the proposed 12 day shutdown, offset by retirement rate increases.
City Clerk: $2.5 million current budget. $104,000 in cuts (4.16 percent reduction), including $48,000 in the proposed 12 day shutdown as well as position downgrades.
Finance & Management Agency: $32.1 million current budget. $1.4 million in cuts, (4.36 percent reduction) including $1.2 million saved in the proposed 12 day shutdown as well as reductions in operations and maintenance and personnel reclassifications and transfers.
Contracting & Purchasing: $2.4 million current budget. $22,000 in cuts (0.92 percent reduction), including $86,000 saved in the proposed 12 day shutdown, offset by the addition of two new positions mandated by the city’s new Prompt Payment Policy
Information Technology: $11.5 million current budget. $877,000 in cuts (7.63 percent reduction), including $561,000 saved in the proposed 12 day shutdown and personnel transfers and position eliminations
Police Services: $196 million current budget. $3.7 million in cuts (2.8 percent reduction), including $1.6 million saved in the proposed 12 day shutdown as well as transfer of 14 positions to be paid out of Oakland Redevelopment Funds and other assorted savings
Fire Services: $111.4 million current budget. $3.2 million in cuts (2.8 percent reduction), including $350,000 saved in the proposed 12 day shutdown as well as personnel reductions.
Museum: $6.8 million current budget. $437,000 in cuts (6.43 percent reduction), including $269,000 saved in the proposed 12 day shutdown as well as small personnel reductions.
Library Services: $13.2 million current budget. $968,000 in cuts (7.33 percent reduction), including $618,000 saved in the proposed 12 day shutdown as well as the reduction of 4 positions and reductions in website budget.
Parks & Recreation: $15.2 million current budget. $433,000 in cuts (2.85 percent reduction), including $40,000 saved in the proposed 12 day shutdown offset by increases due to personnel additions.
Department of Human Services: $7 million current budget. $295,000 in cuts (4.21 percent reduction), including $185,000 saved in the proposed 12 day shutdown as well as outside contract reductions.
Public Works Agency: $2.4 million current budget. $135,000 in cuts (5.63 percent reduction), including $103,000 saved in the proposed 12 day shutdown as well as positions eliminations.
Ccommunity & Economic Development Agency: $2.4 million current budget. $142,000 in increases (5.92 percent increase), including $74,000 saved in the proposed 12 day shutdown and $140,000 in the reduction of operations and maintenance, offset by rent arbitration program increases.
Non-Departmental: $59.9 million current budget. $1.4 million in cuts (2.34 percent reduction), the bulk coming from $1 million savings in the elmination of the seismic retrofit program and $500,000 in the reduction of the city’s contingency reserve.