As election season and campaign spending recede with Lee's win, it's time to get back to Council happenings.
Cop Cars on Hold and Tariff Timelines Loom as Equipment Services Fund Battle Heats Up
The ongoing struggle between the Finance Department, led by Schaaf-appointed Director Erin Roseman, and members of the Council's Finance Committee over the Equipment Services Fund spending continued last week. Committee members had sharp exchanges with Roseman in which even the amount of money left in the fund seemed open to dispute.
Issues about how the ESF is used arose after it became known in recent months that Roseman's Finance Department is throttling the use of the fund to purchase a virtual new fleet of OPD vehicles. Last September, Council voted to make the ESF the primary source of funds to purchase new vehicles to replace the OPD's aging fleet—but in the ensuing months Roseman appears to have prevented the ESF from being used for that purpose. Roseman told the council in an earlier report back in March that the Finance Department turned against using the ESF to purchase vehicles after an internal audit revealed that federal dollars had been mixed in with the funds for equipment purchases, an unpermitted use of those funds. The audit was published in 2021 and it's not clear why the issue came to a head only in 2023.
Struggle to Fund OPD Vehicle Purchase
At issue is the City’s purchase of police cruisers that would replace OPD’s decrepit fleet. Oakland Public Works [OPW], the agency that purchases the City’s vehicles, brought the request to Council in mid-2024. At that time, Council approved the legislation to order over 60 new police cruisers from a local dealership, a total package that was then supposed to cost the General Purpose Fund aroound [GPF] $5 MM. But the effort coincided with what would be the beginning of several budget downgrades starting in mid-year.
In September, with budgetary issues mounting, OPD and the City Administrator’s Office [CAO] shifted more than half of the payment [which had increased by one million] source from the GPF—proposing that the ESF which collects money from other sources and has paid for vehicle purchases in the past, do most of the heavy lifting.
A month later in October, in a move that indicated there was already trouble brewing over the proposed use of the ESF, OPW returned to request the Council amend the funding source to an open-ended designation until the contract with the Ford Store is executed. Though September’s legislation noted that any eligible funding could be used for the purchase, OPW clearly intended the ESF to be used at that time—and the City Administrator's Office would have had to agree because it brought the legislation to Council for approval.
Trouble Brewed Out of Public View
Despite returning to the budget at Council meetings again and again after October, Finance Department staff never publicly discussed this view—that the payment method approved by Council unanimous vote was not a permitted use of the ESF–until Interim D2 CM Rebecca Kaplan agendized the issue starting in late 2024. With the vehicle purchase stalled and dismal GPF forecasts ahead, Kaplan has been seeking to pin the Finance Department down on exactly how much money is in the ESF and what it can be used for.
At the meetings, Roseman has more than once sought to take the conversation offline and into private and closed session meetings. Last Tuesday, Roseman told committee members that there is no money left in the fund in this fiscal year, a claim Kaplan disputed publicly. In a comment to this publication, Kaplan didn’t shy away from publicly naming Roseman’s role in creating what Kaplan calls “impediments to vital public needs”.
“I have been bringing forward the agenda items on the equipment services fund in order to solve impediments to vital public needs - including to resolve the problem of the finance director blocking the use of available funds to purchase urgently needed vehicles which Oakland personnel require for vital infrastructure and safety functions,” Kaplan wrote in an email to this publication last week.
Kaplan, Unger Bring Legislation to Proceed with the Purchase Using EFS
Now, Kaplan and CM Zac Unger are agendizing legislation to return to the original September authorization and use the ESF for the OPD vehicle purchase. The legislation also notes that a pre-approved payment was made from the ESF for two new fire engines at a cost of $3.4 MM, which have not yet been received by the City—and implicates the Finance Department in that hold up as well.
It’s still unclear how much money the ESF has–Roseman says none in this fiscal year, other sources say it may have as much as $30 MM—and it will likely be a contentious issue when the legislation comes before Council at a May 6 meeting. It’s worth noting the legislation would not lock the City into using the ESF if other sources of funding are available, however. The issues are all on the clock as well—a City staffer told the Council last week that the vehicles could become more expensive to purchase after President Donald Trump's tariffs take effect.
City Auditor’s Report on OPW Overtime Viewed Skeptically as City/Finance Say More Time and Investigation is Needed
The Oakland City Auditor’s report on OPW and OakDOT overtime made headlines in February, when it revealed that the City had paid more than Federal guideline minimums for OPW overtime staff since 2018 to the tune of $1.3 MM [and around $200K for OakDOT] . But in deliberation during the City Auditor’s report back to the City Council last Tuesday, City Administrator Jestin Johnson revealed that the City Administrator’s Office has not moved forward on any resolution to the claims made in the report—nor most of the Auditor’s recommendations.
The investigatory report was the result of a whistleblower complaint to the Auditor, but the City Auditor does not implicate the City in wrong-doing—payment of overtime above Fair Labor Standards Act [FLSA] minimums is discretionary and the City has the discretion to pay above the minimum. But the Auditor’s investigation could not find a deliberate City direction to do so in the period examined, with the consequent assumption that the payments may have been unintentional and mistaken.
In a question and answer session after the report presentation, Johnson and Finance Director Erin Roseman told Council members the City is waiting on a third party review of the report, and a deeper investigatory process. At issue, according to the City, are questions of the accuracy of the investigation first; and secondly, if what is being described as an overpayment could instead be an intentional action resulting from side agreements or memorandums of understanding with the City’s unions.
Pushback on BACS Homelessness Prevention Program at CED Committee
The CED committee split on moving forward a funding increase and contract extension for the City’s Homelessness Prevention Pilot Program last Tuesday. The program—administered by Bay Area Community Services [BACS] with several partner organizations, including Black Cultural Zone and the Unity Council—is focused on aid to low-income tenants facing displacement.
The issue comes as the Housing and Community Development Department [HCD] asks for an additional $1MM in funding from the Affordable Housing Trust Fund [AHTF] to continue the program for the remainder of FY 2025. The request began its journey at Council on April 8, where a majority of the Committee—Zac Unger, Janani Ramachandran and Chair Rowena Brown, voted to hold the request in committee pending budget deliberations and more information about the program’s efficacy and funds usage. But CM Carroll Fife brought the item back at the April 22nd meeting with a new HCD report that answers many questions posed by council members at the April 8 meeting. Though the new information brought by HCD managed to convince Unger to support moving the request to Council, the item again ended up on the pending list after a tie vote.
Successful but Expensive Homeless Prevention Program Faced Funding Delays from City
The Homelessness Prevention Pilot program was initially funded as part of the FY 21-23 mid-cycle budget amendments in 2022, and after a competitive procurement process, the grant was awarded to BACS and its partner organizations. The program outreaches to households struggling and behind in rent, and offers rent assistance directly to property owners or managers to catch up with rent and avoid eviction—and potential homelessness. The underlying logic of the program is that the expense of maintaining the most vulnerable tenants in housing is cheaper than the alternative of homelessness and rehousing.
Initially the majority of the funds for the program came from $1.6 MM in Community Development Block Grant [CDBG] funds, with about $750K coming from the GPF in 2023. Council passed legislation to continue funding the program for the 24-25 fiscal year in October 2024 for $2.6 MM with CDBG funds and Affordable Housing Trust Fund [AHTF] monies.
According to HCD, BACS and its partners have exhausted their funding for the program for the 24-25 fiscal year owing to the delay between budget approval lastt July and actually receiving the funding months later—its a now seemingly typical chapter in the City’s authorizing of funding for third party organizations. BACS initiated the program from July 2024 to late in the year with its own funds while it waited for the disbursement of the City funding.
HCD also argues that the need was greater this year than anticipated, with an additional 150 households in the queue of aid requests—the funding request is for an additional $1MM from the AHTF to finish the year’s programs. According to HCD’s Deputy Director, Hugo Ramirez, the delays in contracting are one reason why HCD is seeking the grant extension to 2027 ahead of passing the budget to allow time for expected delays.
Program is Independently Evaluated as Effective by Stanford and Pennsylvania University Study
Since its inception, the Homelessness Prevention pilot has served 523 households and around 1200 individuals who are several months behind in rent and facing homelessness, with an amount averaging about $6.2K per household, according to HCD’s reports. The payments are made directly to the property owner or management company. 76% of the neediest households served during the period were Black Oakland residents. The program was independently evaluated by Stanford and Pennsylvania Universities. In a survey of program clients, the study found that:
“the vast majority of prioritized survey respondents (85%) agreed or strongly agreed that they would have lost their housing without the assistance provided by the program.”
Concerns About Affordable Housing Trust Fund and Possible Use in GPF
The committee disagreement on the legislation proceeded along two main fault lines: how the BACS-administered program spends the money; and whether or not the funds used now have an impact on General Purpose Fund [GPF] budgeting. CMs Janani Ramachandran and CED Chair Rowena Brown have led the arguments to hold the item in committee while issues about budgeting and efficacy are answered months down the line. Fife reintroduced the item on April 22 out of concern about the impact of holding it over for an additional 2-3 months until the budget is passed.
Normally, the GPF would not be a factor in an AHTF conversation, but in a budgetary action in December, Council voted to tap about $5 MM from the AHTF to help balance the FY 24-25 budget. Amendments to the legislation put limits on appropriation to no more than 50% of the total funds in the AHTF and AHTF can only be used for GPF after a separate declaration of fiscal necessity. The repurposing, and the potential for the AHTF to again be tapped to help balance this year's and the FY 25-27 budget, adds another dimension to the discussion.
Ramachandran States Concerns About Overhead
At the April 8 CED meeting, Janani Ramachandran asked for more details about the way BACS uses the funding—Ramachandran specifically noted she was concerned about what she said was “quite a bit of overhead” in BACS program spending model.
Ramirez, who fielded questions about the program for HCD, told council members that rental assistance programs are staff intensive and time intensive to prevent fraud and abuse; to outreach to tenants through the partner organizations and to work with landlords and often unconventional tenant situations.
“Is it a sub tenancy? Is someone in a non lease holding situation…so there's a lot of hand holding, frankly, that needs to happen. And because this program targets those who are at highest risk of homelessness, it requires that hand holding, in addition to the back staff that administer the program,” Ramirez said.
Ramachandran said her calculations showed that 50% of the grant was used on overhead costs; Ramirez disputed the characterization at the meeting. HCD’s later report on April 22 states that overhead for the program is about 41%.
At the April 22nd meeting’s public comment period, Mira Joseph, a researcher from the Stanford group, emphasized the importance of the outreach efforts—which the HCD report notes is one factor in the high overhead for the program.
“One applicant, a 66 year old Black woman, shared that the program staff helped her complete the application online, despite her unfamiliarity with computers. Beyond applications, staff assist with job searches, landlord negotiations, benefits, enrollment and budgeting. 80% of interviewed applicants reported that their case coordinators helped them stay housed,” Joseph told the council members.
HCD also argues that overhead for the year has already been covered, so the additional $1 MM would go directly to financial assistance.
Brown's Concern Over Budget Deliberations
Brown for her part wanted the item to come back after the budget is approved out of concern that the budget may be relying on the AHTF, a view she still held at the April 22nd meeting, now joined by Ramachandran, who paired it with her concerns about the overhead costs.
Fife has argued at both meetings that the funding is crucial enough to move forward despite the issues and crafted a friendly amendment to the legislation that would decouple the use of the AHTF and proceed with the authorization for the program. Fife's proposal would have directed that HCD find the additional funding if it becomes available in appropriate funds. Fife also noted that an ongoing complaint from third party service providers is that the City is months late in providing grant funds and that forward approving the grant would speed the process.
At the previous meeting, CM Zac Unger joined Ramachandran and Brown in holding the item over in committee. But on April 22nd, Unger voted to forward it to Council along with Fife—Ramachandran and Brown voted against. A committee vote that ties, automatically fails. The subsequent vote to keep the item in committee with no date certain for reintroduction also failed along the same lines, but that is the de facto fate of the legislation for the time being regardless.
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