The Oakland City Council was presented with a report Tuesday detailing a dire budget predicament that will likely result in millions of dollars in additional cuts to services.
Led by its two biggest overspending departments, police and fire, the city is facing an estimated $115 million one-year budget shortfall that, when added to the money required to restore its emergency reserve fund, will require a total of about $143 million to erase.
"The two largest departments in your general purpose fund are your fire department, which is projected to overspend by $34.5 million or 21% of its budget, and your police department, which is expected to overspend by $51.9 million or 16% of its budget," said city budget administrator Brad Johnson.
Oakland is currently operating on its so-called "contingency budget" of $758 million, which went into effect after payments for Oakland's $125 million sale of the Coliseum were rescheduled.
That budget includes dozens of cuts that have already been enacted, from initiating a hiring freeze to putting the brakes on "unfinalized" contracts and city grants to halting business travel, among other things.
Still, in order to avoid insolvency and potential bankruptcy, many millions of dollars in additional cuts to services are likely.
"I want you to hear clearly at this dais that we must take action over the course of the next month-and-a-half to preserve our solvency," Johnson said.
Local
Councilmember Nikki Fortunato Bas noted that the current budget quagmire is the result of several factors, including reduced federal spending, high interest rates, the state's rules on taxing property and the city's persistent overspending.
She and other council members also mentioned possibly putting a sales tax increase on an upcoming ballot that could raise up to $20 million a year, the administration's efforts to draft "a strategic plan that will improve our organizational structure," and the need for a study focused on police staffing so the council can make more informed decisions about OPD's budget.
Get a weekly recap of the latest San Francisco Bay Area housing news. Sign up for NBC Bay Area’s Housing Deconstructed newsletter.
"And finally, I also requested an independent audit by the city auditor of our revenue collection," Bas said. "We have to make sure, with all of the revenue that is owed to us, that we're collecting every dollar of it."
During the public comment portion of the meeting, several city staffers, union leaders and community members urged the council to avoid cuts to vital city services like street and sidewalk repair, after-school and summer programs for youth, illegal dump site cleanup and cultural activities and institutions.
Julian Ware, president of the union IFPTE Local 21, said a coalition of municipal unions drafted a plan they believe will help the city balance the budget while avoiding the most painful cuts.
It includes reducing police overtime by $24 million to $52 million, staffing up parking enforcement and other revenue-generating departments, reducing "non-service" spending and cutting the growth in senior management's pay by up to $8 million, among other things.
The proposal will result in $142 million to $204 million in potential new revenue and savings, which would be enough to close the city's budget gap, according to the union's report.
"We're here today to share our disdain over dangerous and feckless budget cuts proposed by the city administration, which threaten critical services to our residents," Ware said. "Cut waste not services."
