Excerpt from Jean Quans 6/12/10

Newsletter: How To Balance the City

[[ Budget:

The continuing recession, the downward

reassessment of property taxes (25% of
Alameda County homes), and the large
number of foreclosed homes still held by
the banks means that the City must make
some tough choices and changes in the
short term but also address some long term
reorganization choices, renegotiate
unsustainable public safety contracts, and
develop new revenues.

Budget Vote: Last month the Council approved $11 million

more in cuts, but with declining revenues we still must come
up with $32 million to close the gap. The Council will
attempt to balance the budget at the June 24th and June 29th
Meetings. On the 24th the Council could make decisions that
would include layoffs across the board including public
safety staff, who have so far been spared layoffs.

This week a team of Council members held a

second meeting with Police and Fire Fighters
Unions to expedite a discussion of reopening
their contracts. Many speakers at this week's
specifically addressed the cost of the public
safety pension funds. While Police, Fire, and
Safety may be our first priority, it cannot be
our only priority. Police & Fire now make up
72% of the general fund.

We could cut all Parks & Rec programs

($12M), senior programs ($2 M) and the
entire general fund cost of the Mayor and
Council (about $2.5 M) that would only
equal less than 15M. Despite the rhetoric by
some, only some combination of more cuts
across the board including police and fire
costs and some new revenues can balance the budget. Otherwise, we have no alternative
but to layoff many more workers including police and fire. Police costs are particularly
central. The gap in funding is now $18M/year. It will grow because of the mounting
pension costs. The police are the only union not now contributing their share to their
pension; the employee share of the police pension is almost $8 million.

* All of the these charts will be part of the new Budget Facts publication which we
should complete in time for next week's budget hearings (see intro & item#1)
Any cut police officer layoffs will trigger the loss of Measure Y funds -- this means the
layoff of the 63 Measure Y officers and loss of over $6 million in violence prevention
programs. This is why I am working on a Measure that would give the City an emergency
suspension of the 739 budget requirement to protect the 63 Measure Y officers. We will
also look at what residual funds are left to continue at least some of the Measure Y
programs until the fall election.

What are the Solutions Under Consideration?

Across the Board Program Cuts & Layoffs: In the last two years we have
eliminated from the general fund about 238 full time equivalents. To close this
year's deficit we need about the equivalent of a 15% cut; the actual cuts will vary
somewhat because some positions are required by law and others generate
revenue and it does not make sense to cut them.
Employee Give Backs:
o Last year employees gave back the equivalent of 10% of their pay. This
includes mandatory leave days that will continue into this year.
o The Council is now bargaining with Public Safety Unions.
o Council members have agreed to reject the charter established cost-of-
living increase for this year.

Selling Buildings, Parking Lots, Etc: My colleagues have suggested a wide range
of facility sales -- parking lots, golf courses, Kaiser Convention Center, the
Animal Shelter, etc. The general problem is that many of these properties have
complicated restrictions and would not likely be able to sold in time for the
budget year. We also might not be able to get a good value in the current
economy and these are just one time fixes that reduce the city's assets and
possibly the ability to bond.
o I am proposing to sell some of the city's miscellaneous lots, they would
generate about $.5 million and put them on the tax rolls.
o I do not think selling the Golf Courses are viable right now, we do not
clearly own the land of any of them or would have to offer them back to
the State, Port, or EBMUD. Selling them to developers as some propose
would violate our open space ordinance.
o Selling the parking lots do not make sense because they bring the city on-
going revenue. If necessary we could bond against them to raise money
for investment (not operating expenses) and preserve the assets.

Reorganizations: There are some proposals to reorganize and merge some

services. I am generally in support of exploring these and wish that the
administration would have worked on proposals for this over the last year. I also
think we need to expand the concept of combining programs and sharing facilities
with other government agencies such as the new 81st Avenue library.
 Eliminating Programs: The most controversial proposals would eliminate funding
completely for some city programs like the Animal Shelter, Peralta Hacienda,
Jack Long Aquatic Center and Asian Cultural Center. I would alternatively cut
them 25%, about the same level as other citywide cuts over the year. I do not
support eliminating the high school academy programs & Cypress Mandela Job
Training program funding because they are a key investment in recruiting and
training future employees from Oakland.

Kids First and Youth Programs: The required Kids First grants and baseline city
programs make up about 4% of the city general fund budget. Youth are about a
third of our population; youth and organizations serving them worked with us on
a compromise in last year's budget to ensure a fair proportion of the budget. I
would not support trying to change the rules at this time.

Generating New Funds:

o Billboard Royalties: We have been working on increasing the number of
billboard along the major freeways on a radically different basis than
before, generating on-going royalties. It is estimated that depending on
the number (2-4), size and location these could bring in several million a
year.
o Expanded Cannibus Dispensaries and Licensing Plants for Producing
Medical Marijuana: The process of selection and legal technicalities
would probably delay any revenues for most of the fiscal year, again
several million.
o Business Incentives: Better marketing and expansion of the business tax
and other opportunities in Oakland. Considering the use of "local
currency" --paying in "currency" that must be spent in the local Oakland
economy.

Fall Ballot Measures & Federal Bills:

o It is likely we will have at least one ballot measure attempting to preserve
Measure Y officers and violence prevention programs (no additional
taxes) and one measure to maintain or expand police officers (additional
taxes, probably less than proposed by the Mayor.)
o Passage of the Local Taxpayer Measure (see #6) would return the $41M
taken by the state in redevelopment funds and prevent further taking of our
gas and vehicle license fees.
o If Congressman George Miller's Local Jobs for America Act (H.R. 4812)
were to pass Oakland would receive $66M for teachers, police, fire and
other city workers facing layoffs.