Oakland to Make Broad Cuts to Public Safety and City Agencies Amid Massive Deficit

In an eleventh-hour effort to balance Oakland’s ballooning budget deficit, the City Council on Tuesday night affirmed broad cuts to public safety, likely layoffs of city staff and reductions in services across city departments.

After the series of resolutions was approved in the council’s final meeting, Oakland will initiate a two-phase plan to reduce expenditures by nearly $130 million during the rest of the fiscal year. The city’s massive shortfall has been brought on in large part by overspending in public safety departments and the stalled sale of its stake in the Oakland Coliseum.

“There are no easy answers here, and what’s before us is really hard to swallow, but we are here because, as a council, we are committed to make sure the city is on solid financial ground,” Council President Nikki Fortunato Bas, who became interim mayor later in the night after Mayor Sheng Thao’s recall was certified, said before requesting a vote.

Tuesday’s 5–1 vote approves a robust budget-balancing plan that includes cuts across most city departments and the first public safety reductions so far. Councilmember Noel Gallo cast the sole dissenting vote, while Councilmembers Carol Fife and Janani Ramachandran were excused.

The move comes after Oakland had been delaying mass budget cuts for months. The original budget put forth by Thao and passed by the council in July used revenue from the Coliseum sale to patch the shortfall. When those funds were delayed, though, the city had to implement a contingency plan that’s been compared to pulling the “emergency brake” on spending.

Since September, it’s been implementing some of the budget reductions called for in the contingency, though they were far more limited.

The cuts from the plan approved Tuesday night will come in two phases.

In the immediate term, city officials have instructed the fire chief to initiate brownouts, or rotating closures, of two fire stations, in addition to a third currently closed for repairs. Despite consternation over the brownouts, the council voted to affirm these cuts, which city officials were already emboldened to initiate under the contingency budget.

The Police Department’s foreseeable overtime — one of the biggest drivers of overspending — is also being slashed. It must now be approved by the mayor’s office and city administrator in writing beforehand, according to Budget Administrator Jestin Johnson.

Two police academies planned for the remainder of the fiscal year have been canceled, and the agency will pause some specialized departments, like recruiting, and reallocate their resources to patrol and other necessities.

Together, these cuts will save an estimated $37.6 million.

The council also declared a state of “extreme fiscal necessity,” which allowed it to transfer $22 million in restricted revenue sources, like the sugary beverage tax revenue and affordable housing trust, into the general fund, which pays for essential services like public safety, public works and administration.

The ordinance ensures that at least half of the $5.7 million pulled from the affordable housing trust continues to go toward affordable housing in future years, and the council earmarked $3 million of the first $10 million in Coliseum sale revenue to “reimburse” part of that money.

The council also voted in favor of transferring an excess of $10 million currently in the emergency reserve to the general purpose fund. City policy requires it to maintain its emergency reserve at least 7.5% of the general purpose fund. Last year, it failed to do so — adding almost $30 million to the deficit that will require declaring a fiscal emergency if it isn’t replaced by July.

Together, these actions will recover $104 million for the general purpose fund, but the remaining $16 million will require a second phase of cuts by the city administrator’s office in January.

These include four more fire station brownouts and layoffs of 92 full-time equivalent employees, many of whom work in the Public Works, Police and Human Services departments. Public Works will lose around 30 positions, the Police Department will cut 18 non-sworn employees and Human Services will reduce 10.

The council urged city administrators to look for alternative revenue sources to reduce fire station brownouts and layoffs if at all possible. Councilmember Rebecca Kaplan said that her team had already identified some funds — including $2.5 million in increased revenue from events at the Oakland Coliseum and Arena — to offset the additional reductions.

Earlier in the night, the council separately passed a unanimous resolution, which both Fife and Ramachandran appeared to vote on, declaring a separate emergency that allows them to place a general sales tax measure on the special election ballot in April if they so choose.

The council has previously discussed a half-cent sales tax, which aims to generate up to $20 million a year in “additional revenue needed to mitigate the severity of service and program reductions caused by the ongoing budget deficit.” It will come before the new council, who will decide whether to place it on the ballot, in January.