Oakland’s Budget Crisis Is Forcing Police, Fire Cuts. More Will Be Needed

Updated 4:18 p.m. Monday 

As Oakland faces significant cuts to police and fire services and dozens of potential layoffs, the City Council is considering budget amendments to alleviate a growing deficit and avoid a fiscal emergency.

At a council meeting on Monday, City Administrator Jestin Johnson shared cuts that are already being initiated, including fire station brownouts and potential layoffs of more than 90 employees, and requested that council members reallocate additional city funds to patch a $130 million budget deficit.

The city’s shortfall has ballooned thanks to overspending by public safety departments and a delay of funds from the sale of Oakland’s Coliseum ownership stake. The shortfall also includes almost $30 million in funds pulled from emergency reserves to cover last year’s costs, which it must replace by July or be forced to declare a fiscal emergency.

Johnson shared a two-phase plan to re-balance the budget, which includes the first cuts to public safety departments since Oakland started paring down its budget in September. The fire chief is preparing for brownouts, or rotating closures, of two fire stations immediately, according to a report from Johnson last week. That will make three fire stations out of commission since one is currently closed for repairs.

“I want to look back three people from me in this line,” said Seth Olyer, the vice president of the firefighters’ union, standing in a long line of public commenters at Monday’s meeting. “At the end of my [one minute] time and [their time], that’s when the first fire engine would show up, without any cuts while besides the cut we already have. When you call the next batch of speakers — after your six or seven proposed closures — that’s when the fire engine will show up. I want all of you to hold your breath for that time.”

The Police Department — one of the biggest spenders of city money — must now get written approval from the mayor’s office and city administrator for foreseeable overtime, Johnson said. Two police academies planned for the remainder of the fiscal year will also be canceled, and the agency will pause some specialized departments, like recruiting, and reallocate their resources to patrol and other necessities.

These cuts will save the city an estimated $37.6 million, but Johnson said the council will need to make additional funding reallocations to bring the budget into balance.

The council will decide next week whether to move more than $22 million in restricted funds to the city’s general purpose fund, which pays for essential services like public safety, public works, and administration.

They will also vote on transferring an excess of about $10 million in the emergency reserve to the general purpose fund. City policy requires it to maintain its emergency reserve at least 7.5% — last year’s failure to do so added almost $30 million to the deficit, and will require declaring a fiscal emergency if it isn’t replaced by July.

The council voted 6-1 to preliminarily approve one part of the reallocation plan which transfers $5.7 million set aside for affordable housing to the general purpose fund on Monday. That ordinance requires two readings, and will come before the council again for final approval next Tuesday.

While multiple council members worried about cutting housing funds in the face of the city’s homelessness crisis, all but Councilmember Noel Gallo voted in favor. Councilmember Dan Kalb amended the ordinance to ensure at least half of the money continues to go toward affordable housing in future years.

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.

Four more fire stations could face brownouts, and about 92 full-time equivalent employees will be laid off across most city departments, the majority of whom are 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.

Along with the staff reductions, January’s planned cuts include defunding the city’s cultural arts grant program. That’s after the city reduced funding to a new film rebate program — meant to encourage more local production of successful films like Fruitvale Station in Oakland — in recent weeks.

About 100 people lined the City Hall chambers to urge council members to come up with the money another way. Many expressed concern that taking from the city’s notable arts community would only further deplete revenue and make fewer people interested in visiting or moving to Oakland.

“Culture and arts aren’t just hobbies, they’re an economic driver,” said Miguel Lopez, the executive director of Peralta Hacienda Historical Park. “Last year, Oakland saw 3.4 million visitors. They spent over $600 million, generating a total economic impact of over $800 million. They supported over 505,500 jobs and generated $90 million in state and local taxes. These budgets are small compared to other departments, but their impact are enormous by visitors.”

While the second phase of cuts doesn’t require council approval, council members can avoid them by renegotiating contracts with labor partners, like the police and fire unions, or declaring a fiscal emergency.

The council will vote on reallocating restricted funds next Tuesday. Council President Nikki Fortunato Bas, who will leave the council in January after her recent election to the Alameda County Board of Supervisors, said she and her fellow council members are committed to leaving new leadership, which will be sworn in next month, in a healthy fiscal position.

“We are planning to make sure that we take action by the end of the calendar year and set up our new city leadership for success,” she said. “I look forward to continuing to work with the administration, the mayor’s office and the City Council to ensure that we have the leadership necessary to make these hard choices.”

If the council does not come up with an alternative to the second phase of proposed cuts, though, they will take effect in the new year.