The answer to the budget delay reported here days ago arrived yesterday: the City Administrator’s office has spent the last week or so since the amendments were pulled from the agenda preparing a back-up contingency plan. The contingency comes after requests by members of City Council and the public over the past few weeks for a budgetary "plan b" that would contemplate the absence of the Coliseum sale funds.
The Coliseum sale has represented relief for the City and Council as they looked down the barrel of a gigantic cut to services. At a recent budget discussion, OPD chief Floyd Mitchell, OFD Chief Damon Covington and Budget Director Bradley Johnson laid out the devastating impact of the cuts that were being contemplated before the arrival of the sale—at that time, over $40 MM in cuts to OFD and over $80 MM in cuts to OPD, the City departments that account for 60% of expenditures, were being weighed as budget balancing strategies. Every City department was asked to come up with a plan to cut 20% from its baseline budget in anticipation of the imbalance 24-25 budget. The legislation greenlighting the negotiated sale of the Coliseum to African American Sports and Entertainment Group passed in a mid-June meeting unanimously balanced the scales and obviated that outcome.
Nevertheless, over the deliberation, several Council people expressed concern that even though the sale could still fall through, the City had no plan B. Among them were Treva Reid, Janani Ramachandran and Noel Gallo, who nevertheless are still proposing ancillary budget amendments to the current mid-cycle amendments proposed by Thao—these amendments envision increases to the police and fire budget and additional monies for safety ambassadors along with the sale of the Coliseum.
The October Contingency, if it were to be enacted in the event of a failed Coliseum sale, would slash the police force for the first time in years, freezing 78 officers and deleting the two latter police academies of the year. And it would, ironically, represent the "defund" scenario that many right wing critics have erroneously argued has been the case for years at the City of Oakland. No police would be laid off in the contingency scenario, but attrition would be allowed to continue without any recharge of the police force in the latter half of the year. Even with deletion of the two academies, the police force would likely remain above the 610 envisioned in the contingency for much of the remainder of the year, given its current attrition rate. The contingency contemplates four fire station brownouts that would last beyond the fiscal year. A late arrival of Coliseum sale proceeds beyond September 1 is also factored into the contingency plan, with service levels restored as the funds become available.
With all of the delays, the mid-cycle process is very behind schedule. Today's special meeting was envisioned as the main deliberative budgetary session, with Friday scheduled in case work remained to be done by the June 30 deadline. But Friday, June 28th, will be the first day the Council contends with a trifecta of new scenarios—the contingency budget; the Bas Budget Team Amendments; and the budget amendments offered by Reid, Ramachandran and Noel Gallo. Reid contemplates millions in restored funding for things like surveillance cameras, restored police civilian roles and even the Bulky Block Party in her memo to the Council.
It seems unlikely the Council will vote on the budget Friday, and will more realistically miss the ostensible deadline, June 30 and return next week on July 2nd. Missing the deadline only means that the current budget baseline continues until the new budget is passed. A delay of a few days in implementing new budget parameters will not likely matter over a year long expenditure plan, but nothing is a given in this unusual budget deliberation.
Update and Clarification, 6/27/2024 4:00 pm
Tomorrow's budget legislative package also contains an "alternate budget" amendment option provided by the City Administrator that excludes the sale of the Coliseum completely and budgets from a position lacking the anticipated Coliseum proceeds of $63 MM for the entire year—what this publication will call the Austerity Alternative amendments, in contrast to the October Contingency amendments. The October Contingency is the set of budget amendments being officially put forward by the Mayor.
The main difference in the two sets of budget amendments is that the October Contingency would largely maintain the Mayor's amendments as they were most recently published—unless the Coliseum sale falls through, then cuts would begin in October, and would likely be severe. The expenditure reductions in the Austerity Alternative are structured to begin immediately. *Overtime for 68 police officers is cut right from the beginning of the year, for example, then staffing would continue to fall with the latter two academies cancelled in the same way as the worst case scenario contemplated in the October Contingency. Likewise, other department expenditure cuts are spread out throughout the year, instead of being concentrated at the latter half of the year, like the October contingency. No layoffs are proposed in either set of amendments.
The Austerity Alternative amendments assume that the Coliseum funds won't be available and sets in for a bleak fiscal year. Budget direction would restore services and positions in phases should some, or all, of the Coliseum sale funds come in by October. The more austere budget would be felt right from the beginning of the year; but when [and if] the Coliseum funds are received services would begin to be restored.
It goes without saying that the amendments restoring ambassadors and OPD and OFD positions that are presented in the Ramachandran/Reid/Gallo amendments would not be tenable in the Austerity Alternative. Bas' amendments, according to her newsletter, are based on the October Contingency and she will be supporting that one over the more austere one.
The Finance Department, at the request of Council has also added a third spreadsheet showing alternative cuts and their projected savings, should Council want to swap certain proposed cuts—some of those options would be a departure from the City's usual philosophy of maintaining community benefits even during down cycles. Changes offered: closing 10 [half] of the City's Rec centers for six months; closing senior centers for 9 months; and shutting down Animal Services starting in October.
Council and Finance Department had both wanted to prepare the Austerity Alternative to contemplate a much more fiscally rigorous approach to the deficit. The October Contingency budget amendments seem to have the majority of support compared to the Austerity Alternative amendments—both will likely be discussed during deliberation tomorrow.
*its not clear whether this would be an immediate cut to overtime, or the reduction envisioned by cancelling the academies. Its worth noting, however, that the cancellation of at least one academy might have to continue in the Austerity Budget even if the first Coliseum payment was as late as September, since there's significant recruitment required that would not be justified in the budget as the academies are cancelled and do not exist.
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