Council Affirms Cuts, Approves Funds, & Transfers Mayoral Seat, As Half of Council Body Bid Colleagues and Public Farewell at Last Meeting of 2024

In a rare night of legislative gravitas and personal farewells, Council affirmed a difficult menu of budget choices that could see severe cuts in Oakland Fire [OFD] services and Culture and Arts funding, and an emergency-brake reining in of OPD overspending. The meeting also took an unexpected twist when two legislative items were tied on their second reading vote, necessitating an appearance via zoom by Mayor Sheng Thao to break the tie, her last public act in the role of Mayor in the remaining hours of her tenure. One of those tie-breaking votes approved legislation opposed by the East Bay Rental Housing Association, a body intrinsically linked to the recall and its proponents.

A menu of immediate cuts, consolidations, recalculated revenues and funds transfers was passed by a Council majority at the meeting to head off the City’s projected $129 MM FY24-25 deficit—but the Council’s real legislative role in the process was only the approval of monies not generally allowed to feed the general fund. The Council affirmation of the CAO’s cuts and actions is almost symbolic, although the CMs could legislate budgetary reversals of the actions on their own.

In the process, Council also acknowledged a more painful level of cuts by February is highly likely—with 91 layoffs, the browning out of 6 fire stations, and the cancellation of two OPD academies.

While a $25 MM stoplight on OPD overtime, a cut to special units like the anti-sideshow detail, and OFD brownouts are staggering, some of the smaller value cuts to historically under-capitated departments in both phases are harder to gauge. The Community Police Review Agency would lose an intake and investigator position in Phase 2 layoffs, and the Cultural Affairs Department will immediately lose over half a million dollars of its capacity to make grants to third-party arts organizations. The Department of Workplace and Employment Standards [DWES], which registers as a low value cut, will lose valuable positions in an already small staffing profile that focuses on wage theft, an ever-growing problem for Oakland residents. Oakland Public Works [OPW], the department carrying the highest monetary burden of cuts after OFD and OPD, will take a $3 MM hit in personnel reductions alone. The city-wide reductions themselves are nearly too many to mention, including reductions from the Measure BB funding of SOS Meals on Wheels [whose staff pleaded with Council at the meeting to find a way to restore the funding].

Throughout the meeting, members of the public urged Council members and the City Administrator to find a way to keep Culture/Arts grants funded, senior centers and fire houses open. A group of about a hundred seniors briefly rallied in front of city hall [as another protest against the City’s ramped up homeless evictions began next to it] and the Seniors filed into the Chambers to fill the room to maximum occupancy as well.

But no speaker substantively called for a halt to the police funding decreases, which are less accurately described as cuts than reining in of overspending.

The sudden cuts just before Christmas recall a much less reported set of City Administrator cuts undertaken by former CA Ed Reiskin in December 2020. Reiskin cut over $15 MM from police, including cancelling Ceasefire, and browned out 3 fire stations as the reality of over-spending on police during Covid revenue loss began to emerge. But that process barely became public, while outcomes were never a focus as more money in Coliseum profits was found and ARPA funds for cities across the country came through several months later, obviating the cuts and any lessons that might have been learned.

Amendments Urge City Administrator to Continue Looking for Revenue and Savings to Reverse Cuts

As in 2020 and 2021, the cuts contained in the measures are potentially not the last word on service cuts and layoffs, however. By the beginning of the meeting, City Administrator Jestin Johnson had already announced that the Human Services Department [HSD] had found a way to keep the four city-funded senior centers open, to the relief of attending seniors who applauded the move [though with some level of programmatic cuts still to be determined]. HSD Manager Ana Bagtas announced the restorations before the official agenda began, with caveats, to applause.

CM Rebecca Kaplan also submitted a direction for the City Administrator to either find suspected positive funds tranches or use newly found monies to lessen the more painful cuts to come. Kaplan’s memo lists several new potential funding sources, including $2.5 MM in additional revenue from the Coliseum Arena that would reduce the City’s outlay to keep the site running, freeing funds up for other purposes. Kaplan also suggested requesting a 2% salary give-back from non-union management, something union advocates also urged the City Administrator to consider. Kaplan's amended directions also urge the City Administrator to pursue departmental mergers mentioned as possible improvements in spending efficiency throughout the process by City staff.

Later, during deliberation, Bas also added amendments as direction for the City Administrator to analyze and pursue reforms in police overtime abuse—a report that accompanied the legislation commissioned by IFPTE local 21 notes that a handful of officers are responsible for millions in overtime usage in “extension of shift”, which can be self-initiated without advance notice. Bas amendments also direct renewed focus on BLT recuperation from delinquent and non-filing businesses, and includes a reference to property rental companies. Bas' amendments also contain direction to prepare to start an academy in the first month of the new fiscal year, with direction to funnel all current trainee applicants into the new academy. Bas' budget team included CM Treva Reid, who had complained about being on the outside during the Council President's amendments process during the biennial budget process.

CM Dan Kalb added an amendment as well that would designate $7 MM of the first tranche of AASEG funding to restore firehouses when it's received; another $3 MM would go to restore the Affordable Housing Trust Fund. But in the meantime, the cuts are extensive.

Here’s a line item list of cuts [Senior Center hours have been restored, but programs may be cut]. 

Council sounded somber notes as they voted to affirm the budgetary amendments and fund transfers. Kalb, Bas and Reid expressed “concerns” with the scale of reductions in their comments. CM Noel Gallo, who did not submit amendments or an alternative to the budget actions and often appeared bewildered about the process before Council, voted no on the legislation, which passed with 5 aye votes.

Low Attendance Level Doesn't Impede 'Emergency' Vote for Sales Tax, But Creates Tie Vote Breaker for Mayor Thao

The Council had an unusually low attendance level throughout the meeting. CM Janani Ramachandran is on parental leave, and CM Carroll Fife is out sick—both zoomed in only for a declaration of “emergency” necessitated by state law if a tax item is to be placed on a non-general election ballot. The sales tax ballot measure would add a half cent to the local sales tax, increasing it to 10.75%, a level several neighboring cities currently have. Such a sales tax ballot measure is normally not allowed on a special election ballot like April’s, but the California constitution allows it if a very generically described “emergency” declaration is made with a unanimous vote of all council members. The sales tax legislation has currently passed its first vote, but the crucial second vote will be in the hands of the Council members who return and assume office next January. 

Council also voted affirmatively on the certifications of votes and vacancies that would make official the departure of Mayor Sheng Thao and the assumption to the office for the next several weeks by CM Bas. The legislation also set the election on April 15th to fill both roles. In both cases, the votes were ministerial, as Council is bound by law to affirm all of the actions. Those actions were moved to the end of the evening's substantive actions, as they potentially legally seated Bas in the role of interim Mayor and removed her from Council. 

Mayor's Last Official Act on Tenant Protections

The low council attendance led to the unexpected tie breaking vote on the second reading of two legislative items. Months ago, CM Kalb introduced legislation, spurred by recent controversies around the collection of Business License Tax and open questions of how aggressive the Finance Department has been in collecting it. Based on the data that rental property businesses are the biggest BLT scofflaw group, Kalb's legislation, among other things, bars landlords from raising rent or following through on no-fault evictions if they're delinquent on BLT and have no repayment plan in place.

The legislation acknowledges that 96.7% of Business Tax delinquents subject to lien have historically been landlords.

As importantly, the legislation also limits the number of years that landlords can save up allowed CPI rent increases—landlords currently have ten years to save up and levy the increases. Thus a new landlord that’s just purchased a property can currently use banked CPI raises as a way to legally increase rent to a degree that amounts to an eviction. The legislation, which had already overcome hurdles in committee, passed on first reading several weeks ago and was on Tuesday’s consent calendar, which is usually passed with a bulk vote. But on the second reading Tuesday, as a handful of self-described landlords and EBRHA representatives protested, CM Kevin Jenkins singled out the legislation with a no vote; Reid abstained from the vote for that item. Both CMs are aligned with EBRHA and usually back the organization’s viewpoints during discussions on tenant protections.  

Because of recent charter-mandated voter-approved changes in the charter, absences and abstentions count as no votes for the purposes of determining whether a tie vote has occurred. With Ramachandran and Fife absences recorded as nays, Jenkins no and Reid’s abstention in the second reading of the legislation led to a tie vote. Ironically, on the same night of the vote to certify the recall and the vacancy in her office, Mayor Sheng Thao was called in to break the tie on legislation opposed by the EBRHA, whose controversial Board member Chris Moore was intrinsically involved in the recalls of both Thao and Price and regularly hurled insults and accusations against Thao for over a year. Thao zoomed in and broke the tie, clearly pleased with the outcome.

“I’m excited to be taking my last vote and voting yes and standing strong with tenants,” Thao said, as she cast the tie breaking vote. 

Despite the air of inevitably for the tough budget balancing decisions, the tone of the meeting often took on a festive and at times elegiac air, as it was likely the last meeting for four council member, Reid, Kalb, Council President Bas and CM Kaplan. Reid had agendized a ceremonial item to thank her staff and also lauded Senior center volunteers that took on the air of a graduation commencement. Even City Clerk Asha Reed lauded the council members and thanked them for their support for her appointment and professional development in the Clerk’s office. City Administrator Jestin Johnson also thanked the outgoing Council members in comments.

CM Bas took a point of privilege after stepping away from the Council role following the vacancy votes to discuss her time on Council, her staff and, more importantly, her recommendation for the appointment to fill her vacant seat until April while she fills in for mayor, before departing for the Board of Supervisors seat. Bas recommended Kaplan. 

“I strongly want to urge the council to appoint council member Rebecca Kaplan, a district two resident and a seasoned council member in January, to serve in that interim [D2] role. And as you know, Council Member Kaplan is retiring, she is willing to serve in this interim capacity. She is a resident of District Two, and...will not run for the seat in the special election. And I believe that she is uniquely qualified to jump in and immediately help to serve our District Two residents, as well as keep projects moving forward and, of course, help lead the city's biennial budget process,” Bas said. 

What's Next?

Bas will serve as Interim Mayor until early January, when the new Council is seated and she assumes her role as D5 BOS at County. At a January 6 meeting, the new Council will choose a Council President and Pro Tempore President, the President will immediately become the new interim Mayor. That interim mayor will serve until a new Mayor is elected on April 15, 2025. The elected mayor will officially fill the vacancy, and will then serve out the 20 month remainder of Thao's term with new election in November 2026. Council will have an immediate decision about placing the sales tax ballot measure on April's ballot.