1) Jenkins Appears to Leverage $5 MM Bond Deadline for Interim CAO Appointment
In a surprise dispute in the regular scheduling calendar last Thursday, CM Janani Ramachandran and Rules Chair Kevin Jenkins sought to prevent the scheduling of the Mayor’s interim City Administrator appointment of Elizabeth "Betsy" Lake. The hold was initiated by Rules-Member Janani Ramachandran, who asked that the item be “held for one more week before scheduling” after it was read into the record by the City Clerk’s office. Rules Chair Kevin Jenkins then queried other Rules members if there were any objections to the appointment being held in committee, before leading a disjointed argument for keeping the item at Rules.
Bond Document Deadline
Just below the surface of the tension over the appointment lay a key issue—a series of bond process executions by a duly appointed City Administrator or Interim must take place beginning July 8 or the City could lose up to $5 MM in revenue this fiscal year. And at several points in the discussion that followed, Jenkins appeared to be leveraging the looming deadline for a change in the Mayor’s proposed interim candidate.
On questioning from CM Fife, Finance Director Bradley Johnson told Rules committee members that a duly appointed interim would have to be in place by July 8 to meet deadlines for executing the documents*. Failure to meet the deadline could cost the City up to $5 MM in bond savings, according to Johnson.
After hearing from both City Attorney Ryan Richardson and Johnson about the need for a Council-confirmed Interim for the documents, Fife wondered aloud about the rationales of Ramachandran and Jenkins.
“I need to understand what is the problem? Because this sounds very straightforward. And from what I’m understanding from our City Attorney and our Finance Director is that this is absolutely critical…we’re in a situation where we need to move this item forward,” Fife said.
Jenkins’ seemed to blur charter-mandated processes in his response, and appeared to be implying that retaining the item in committee could force a change in who Lee suggests as Interim City Administrator.
“By charter, we have the ability to confirm a City Administrator…but we do not have to confirm the individual that is presented to us,” Jenkins responded.
Jenkins said the bond timeline should not be an issue for Council’s consideration of the item, but it’s unclear in what context he made the claim—the Rules committee is not charged with considering such appointments nor vetting them ahead of a Council decision. Jenkins’ vague comments appeared to offer the issue of the bonds as leverage to replace Lake.
“So we’re talking about bonds, you can put another name on there…you can put another name for City Administrator there…so we don’t have to say yes because we’re going to the bond market…there are other options,” Jenkins told Fife.
When Fife asked what such other options would be, Jenkins responded, “there’s other people.”
Rules Member Rowena Brown then called into question the boundaries of Rules jurisdiction.
“I kind of had the same question of what is the purpose of holding it in committee for one week versus presenting it to the entire body, because this is a scheduling item…” Brown said.
Jenkins again appeared to argue for “other options” for the role.
“More time to do research to see what other options are available,” Jenkins responded.
Council's Rules of Procedure do Not Appear to Allow Rules Committee to Hold CAO Appointment on Merits
As Brown suggested, there are questions about the nebulous process Jenkins appeared to be following. According to Council’s Rules of procedure, items placed on the regular scheduling calendar can be scheduled at discretion of the body, but there is no explicit allowance to weigh them on any other merits than scheduling capacity and legal structure. The Interim City Administrator appointment item was not submitted as a subject matter Rules issue, but in the regular scheduling agenda along with dozens of other items for scheduling for upcoming committee and council meetings.
Council’s Rules of Procedure provide scant basis for such an item to be held up on substantive, rather than strictly scheduling, concerns. Council Rules give very general “oversight” duties over several agencies to the Rules Committee, including the City Administrator's Office, the Office of the City Attorney and the Clerk’s Office, but appointments are not mentioned. The Charter very clearly gives the role of confirming the City Administrator or Interim City Administrator to the Council, not any committee. With 4 examples since 2015 in the legislative record, the interim City Administrator appointment has not to date been scheduled to the Rules committee for subject matter discussion and has never been weighed on the merits of the appointee.
Both Fife and Brown restated their preference to move the item, which prompted Ramachandran to restate her position against doing so without further explanation. The obvious deadlock meant the item was withdrawn without a vote. The legislative record reads only that the item “failed”. The resolution naming an Interim City Administrator will return to Rules this Thursday in some form, and the question obviously now is who?
2) Third Time Not a Charm for Wang Foreclosure Transfer Tax Ballot Measure
For the third time since its introduction at Rules, CM Charlene Wang’s Real Estate Transfer Tax ballot measure failed to emerge from Rules for full council deliberation. As the clock has run out to get the measure to Council for two required readings before it can be reviewed and prepared by City Attorney and Clerk’s Office for the ballot, CMs have maintained skepticism about both the value of projected revenues, the assumptions and structure of the proposal and the amendments meant to satisfy those concerns. At the June 18 Rules meeting, Wang withdrew the measure herself, apparently to continue modifying it to respond to the reluctance of the body.
Changes Fail to Satisfy CM Critics
Wang's RETT proposal started out as a two part ballot measure, designed, according to Wang, to close a loophole in the city’s foreclosure tax collection that attracts corporate property investors like Blackrock to take control of the City’s distressed housing stock. Wang’s original hook suggested the revenue would be fed into a vaguely sketched siloed fund for homelessness shelter and mitigation.
But signs that the proposal was not yet ready for the ballot appeared in deliberation at Rules, the subject matter committee for ballot measures. Because City tax revenue must go directly to the general fund, the proposed special revenue use required an additional ballot measure at an additional cost of $600K each for ballot placement. But that second ballot measure also would not guarantee that the funding would go to fund homelessness solutions, because any such ballot outcome would only be advisory opinion on how to spend the funds, not a mandatory requirement to do so. Presumably, an equivalent of the funds collected from the ballot measure changes each year would be allocated through will of the Council into homeless funding each budget year, but even this process was not described in the legislation.
Another challenge for the Rules committee members then came from the Finance Department’s revenue projections for the RETT foreclosures, a middling figure that could be far less than $1 MM per year according to an accompanying report from early June. And still another barrier for the legislation came from the foreclosure-addicted landlord and property investor lobbies, represented by East Bay Rental Housing Association [EBRHA] and Bridge Association of Realtors during public comment. Though Wang’s stated intent is to deprive companies like Blackrock the profit incentive to manipulate Oakland’s distressed properties and rental market, EBRHA represents smaller local corporations that follow Blackrock’s model and would equally be deprived the benefit of profiting off foreclosures. Amid the many problems with the proposal, the very problematic associations with neighborhood collapse and homelessness that came with Oakland’s foreclosure crisis permeated the discussion, embodied most notably in exchanges with CM Fife, who rose to national prominence by highlighting the impact of foreclosures and the market created by them in the takeover of a foreclosed home before she became a council member.
In the third time out, Wang returned with pared down legislation. Wang removed the second ballot measure and added new amendments on the floor, exempting “community banks” from the payments, for example. Wang also challenged the Finance Department’s revenue projections, arguing that the department had not included a specific kind of foreclosure into the revenues. Wang suggested that the Finance Department had signed off on her new projections, which are orders of magnitude greater, in the tens of millions. But no representative of Finance confirmed the projections during the meeting. Questions still remained, and this time CM Ramachandran led with skepticism, specifically about the definition of a community bank, which she argued would still allow very large financial institutions an exemption in new loopholes created by Wang's legislation.
CM Janani Ramachandran moved to keep the proposal in committee for at least one more Rules deliberation next week, which would be the last conventional stop for the legislation to be approved at Council and make it to the ballot. Jenkins, a notable ally of EBRHA on Council, said he would vote against the item if it did get to Council. Fife voted against keeping the item in committee, a move that also aligned with her skepticism around the rapid pace of the still forming ballot measure. Even if the measure passes out of Rules, it could arrive at Council with three no-votes already locked in.
*Johnson's Comments:
"in order to interact with the bond market, we are in the market for a transaction for temporary revenue anticipation notes to prefund our CalPERS liability and provide ongoing continuity with the CalPERS item looking for gross savings about five and a half million dollars over the course of the coming fiscal year. We do need to have an interim or permanent city administrator appointed to sign documents, including your preliminary official statement on the eighth of July, your official statement documents on the 15th and 16th, and your closing documents roughly around the 28th of July. So all those documents will require a interim or permanent administrator confirmed by this body in order for us to sign off on those, otherwise we cannot access the market in that process."
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