Special City Council June 28, 2024
AGENDA REPORT TO:Jestin D. JohnsonFROM:Erin Roseman City Administrator Director of Finance SUBJECT: FY 2024-25 Proposed MidcycleBudget - SupplementalDATE:June 24, 2024 City Administrator Approval Date: RECOMMENDATION Staff Recommends That The City Council Adopt A Resolution: 1. Adopting The Midcycle Budget For Fiscal Year 2024-25 And Appropriating Funds To Cover Expenditures Approved By Said Budget; 2. Authorizing The City Administrator To Transfer Funds Between Departments, Programs And Funds As Necessary To Support Departmental Reorganization As Set Forth In The Adopted Policy Budget For Fiscal Year 2024-25. 3. Creating The Following Funds: Fund 4510 - Personnel Management Fund, Fund 5338 – Measure KK Infrastructure Series 2024E GOB (Tax Exempt), Fund 5342 Measure U: Infrastructure Series 2024 B-1 GOB (Tax Exempt), Fund 5343 – Measure U: Affordable Housing & Infrastructure Series 2024B-2 GOB (Taxable). 4. Taking All Steps Necessary To Apply For And Receive Additional Funds Required To Advance And Complete The Projects Identified In The Capital Improvement Program And Accept And Appropriate Any Additional Funds Provided That Such Acceptance Is Consistent With And Does Not Otherwise Negatively Impact The City’s Capital Improvement Program 5. Declaring A State Of Extreme Fiscal Necessity And The Existence Of A Severe And Unanticipated Financial Event 6. Suspending For Fiscal Year 2024-2025 The Charter Mandated Minimum Staffing Budget Set Asides For The Office Of The City Auditor; And 7. Suspending The Minimum Budget Set Asides For The Democracy Dollars Fund And For Non-Staff Costs Related To The Public Ethics Commission’s Administration Of The Oakland Fair Elections Act’s Democracy Dollars Program Jestin Johnson (Jun 25, 2024 14:29 PDT)
Jun 25, 2024
Jestin D. Johnson, City AdministratorSubject: FY 2024-25 Proposed Midcycle Budget Date: June 24, 2024 Page 2 Special City Council June 28, 2024
REASON FOR SUPPLEMENTAL The City Administration has been asked by City Council members to provide an alternative approach to the budget which excludes use of the proceeds of the sale of the Coliseum. The FY 2024-25 Proposed Midcycle budget includes significant one-time revenue from this sale, and its absence would necessitate substantial budget adjustments. These adjustments are noted in this supplemental report. This report also contains recommendations for restorations of positions and services should the $63million estimated from the Sale of the Coliseum become realized. BACKGROUND / LEGISLATIVE HISTORYPer Section 801 of the Oakland City Charter, the City Council is required to adopt a budget by June 30 to authorize expenditures for the following fiscal year. If a budget is not adopted by June 30, the appropriations of the previous fiscal year are deemed to be effective until the new budget and appropriation measures are adopted. On May 29, 2024, City Council first heard a reporton the FY 2024-25 Proposed Midcycle Budget. ANALYSIS AND POLICY ALTERNATIVES Presented below are potential balancing actions totaling $63.1 million that the City adopted in lieu of budgeting the Coliseum sale proceeds. These measures involve cuts in the General Purpose Fund (GPF), impacting most departments and key service areas across the City. Based on current analysis these reductions should not necessitate the layoff of any permanent City Staff. They are presented as an option for discussion and consideration. Please see Attachment A City Administrator’s Office Deletes $350,000 for Strategic & Crisis Communications Reduces O&M for Performance Management and Strategic, Structurally Balanced Budget by $750,000 Freezes 3.0 FTE Public Service Representative $362,481 City Clerk Achieves vacancy savings for half a year at $116,000 from Acting KTOP Operations Manager Finance Jestin D. Johnson, City AdministratorSubject: FY 2024-25 Proposed Midcycle Budget Date: June 24, 2024 Page 3 Special City Council June 28, 2024
Reduces O&M for Revenue Collections Improvement Process by $300,000 Freezes 2.0 FTE Senior Budget & Management Analyst - $531,060 Freezes 1.0 FTE Treasury Analyst II - $188,736 Freezes 3.0 FTE Tax Enforcement Officer II - $550,338 Freezes 2.0 FTE Revenue Assistant for 6 months - $142,887 Freezes 1.0 FTE Assistant Finance Director for 6 months - $217,784 Freezes 1.0 FTE Revenue Operations Supervisor for 6 months - $121,186 Freezes 1.0 FTE Revenue & Tax Administrator, Assistant - $338,943 Decreases O&M for Budget Survey by $52,000 Police Freezes 1.0 FTE Police Services Manager - $300,891 Freezes 1.0 FTE Police Records Specialist - $256,307 Freezes 1.0 FTE Administrative Assistant - $130,719 Freezes Two Police Academies (Police Officer Trainees) - $3,480,582 Deletes 195th and 196th Academy O&M - $3,465,324 Freezes 68.0 FTE Sworn Officers and Sworn Overtime. Specific configuration of reductions to be determined by the Chief of Police - $23,266,320 Fire Freezes 1.0 FTE Fire Communications Dispatcher - $210,775 Freezes 1.0 FTE Fire Marshall, Assistant - $355,123 Freezes 1.0 FTE Accountant III - $212,052 Freeze 4 Engine Companies (48.0 FTE) for 11 months or equivalent reductions equal to 44 months of brown outs. Specific companies and timing to be determined by the Chief of Fire - $18,761,187 Transportation Freezes 2.0 FTE Public Service Representatives - $339,642 Transfers 1.0 FTE Senior Public Service Representative in Vehicle Enforcement from Fund 1010 to Fund 2218 for a GPF savings of $194,106 Violence Prevention Freezes 1.0 FTE Violence Prevention Services Supervisor - $79,022 Freezes 5.0 FTE Case Manager I - $308,497 Information Technology Reduces O&M for Cyber Security - $500,000 Jestin D. Johnson, City AdministratorSubject: FY 2024-25 Proposed Midcycle Budget Date: June 24, 2024 Page 4 Special City Council June 28, 2024
Reduces O&M for CAD/RMS post go-live support - $125,000 Oakland, Parks, Recreation & Youth Development Freezes 1.0 FTE Administrative Services Manager II - $225,668 Library Transfers $1,000,000 of General Purpose Fund costs to Measures C & D Animal Services Freezes 2.0 FTE Animal Care Attendant - $232,314 Freezes 0.5 FTE Public Service Representative, PPT - $67,125 Freezes 1.0 FTE for Administrative Assistant I - $157,318 Department of Workplace Employment Standards Freezes 1.0 FTE Contract Compliance Officer - $214,316 Freezes 0.50 FTE Administrative Services Manager I - $132,778 Human Services Freezes 1.0 FTE Administrative Assistant I - $190,259 Freezes 1.0 FTE Data Analyst III - $194,927 Freezes 1.0 FTE Program Analyst II - $138,540 Freezes 1.0 FTE Senior Center Director - $119,608 Freezes 1.0 FTE Custodian - $31,275 Economic and Workforce Development Reduces Plaza Activation funding by $100,000 Reduces O&M for Film Attraction Initiative by $300,000 Reduces O&M for Workforce development grants by $150,000 Reduces O&M for capacity building to support minority contractors and skilled trade development by $150,000 Reduces O&M for Scotlan Convention Center deficit by $400,000 Reduces Cultural Grant Funding by $296,606 Freezes 1.0 FTE Special Activity Permit Technician - $139,640 Non-Departmental Jestin D. Johnson, City AdministratorSubject: FY 2024-25 Proposed Midcycle Budget Date: June 24, 2024 Page 5 Special City Council June 28, 2024
Deletes O&M for Public Safety Vehicle Replacement Funding - $2,319,768 Reduces Expense Transfer from Fund 1750 - $375,000 Restoration of Services Plan If the approximately $63 million from the Coliseum Sale is Realized staff recommend the following plan for restoration of services. If a first $15M is made available to the City by September 1st then by October First staff recommends: The restoration of 15 Sworn Police Positions for the Remainder of the Fiscal Year, at an estimated cost of $3.32 million; The Restoration of 1 Fire Engine for the remainder of the Fiscal Year (9months of restored service), at an estimated cost of $3.84 million; and Hold the balance of $7.84 million in the City’s Vital Services Stabilization Fund to buffer against unanticipated circumstances. If a second $15M is made available to the City by November 1st then by December 1st staff recommends in addition the: The restoration of 5 Sworn Police Positions for the Remainder of the Fiscal Year, at an estimated cost of $0.86 million; The Restoration of 1 Sworn Police Academy, at an estimated cost of $3.48 million; the Restoration of 1 Fire Engine for the remainder of the Fiscal Year (7months of restored service), at an estimated cost of $2.99 million; and Hold the balance of $7.67 million in the City’s Vital Services Stabilization Fund to buffer against unanticipated circumstances. If a the remaining $33M is made available to the City by January 15ththen by February 1st staff recommends in addition the: The restoration of 48 Sworn Police Positions for the Remainder of the Fiscal Year, at an estimated cost of $5.89 million; the Restoration of 2 Fire Engines for the remainder of the Fiscal Year (10months of restored service), at an estimated cost of $4.27 million; Reserving $5million for the replacement of City vehicles (primarily police cars and fire engines); and Hold the balance of $17.84 million in the City’s Vital Services Stabilization Fund to buffer against unanticipated circumstances and to balance the coming fiscal year. Any Coliseum proceeds received in excess of $63million should be held in the City’s Vital Services Stabilization Fund to balance the coming fiscal year.
Jestin D. Johnson, City AdministratorSubject: FY 2024-25 Proposed Midcycle Budget Date: June 24, 2024 Page 6 Special City Council June 28, 2024
Other Reduction Options Staff were also requested to provide a menu of other reduction for consideration. These other options are presented in Attachment B. PUBLIC OUTREACH / INTEREST There has been public outreach including several City Council meetings and community townhalls during the FY 2024-25 Midcycle Budget Process. See the City’s Budget website for additional information: www.oaklandca.gov/budget.COORDINATION The Finance Department worked with all City departments in preparing the FY 2024-25 Proposed Midcycle Budget. SUSTAINABLE OPPORTUNITIES Economic: The presented balancing options would impact revenue and expenditure in the General Purpose Fund. The economic impact will depend on the decisions made by the Mayor and Council and on which specific measures are implemented. In aggregate, these budget adjustments would result in substantial cuts to departments and key service areas, which could have significant effects on the local economy. Environmental: The impact of the City’s appropriations can have a considerable effect on the local environment impacts depending on the decisions made by the Mayor and Council. Race and Equity: The Midcycle Budget is a significant tool for improving race and equity. Budgetary decisions made with equity as a focus can help to mitigate the inequitable circumstances of Oakland residents. The Midcycle Budget specifically addresses areas of affordable housing and homelessness, jobs and economy, public safety and violence prevention, and clean, healthy, and sustainable neighborhoods, all of which have equity considerations.
Jestin D. Johnson, City AdministratorSubject: FY 2024-25 Proposed Midcycle Budget Date: June 24, 2024 Page 7 Special City Council June 28, 2024
ACTION REQUESTED OF THE CITY COUNCIL Staff Recommends That The City Council Adopt A Resolution: 1. Adopting The Midcycle Budget For Fiscal Year 2024-25 And Appropriating Funds To Cover Expenditures Approved By Said Budget; 2. Authorizing The City Administrator To Transfer Funds Between Departments, Programs And Funds As Necessary To Support Departmental Reorganization As Set Forth In The Adopted Policy Budget For Fiscal Year 2024-25. 3. Creating The Following Funds: Fund 4510 - Personnel Management Fund, Fund 5338 – Measure KK Infrastructure Series 2024E GOB (Tax Exempt), Fund 5342 Measure U: Infrastructure Series 2024 B-1 GOB (Tax Exempt), Fund 5343 – Measure U: Affordable Housing & Infrastructure Series 2024B-2 GOB (Taxable). 4. Taking All Steps Necessary To Apply For And Receive Additional Funds Required To Advance And Complete The Projects Identified In The Capital Improvement Program And Accept And Appropriate Any Additional Funds Provided That Such Acceptance Is Consistent With And Does Not Otherwise Negatively Impact The City’s Capital Improvement Program 5. Declaring A State Of Extreme Fiscal Necessity And The Existence Of A Severe And Unanticipated Financial Event 6. Suspending For Fiscal Year 2024-2025 The Charter Mandated Minimum Staffing Budget Set Asides For The Office Of The City Auditor; And 7. Suspending The Minimum Budget Set Asides For The Democracy Dollars Fund And For Non-Staff Costs Related To The Public Ethics Commission’s Administration Of The Oakland Fair Elections Act’s Democracy Dollars Program 8. Adopting A Contingency Budget And Associated Fiscal Measures That Shall Come Into Effect No Later Than October 1st 2024 Should Anticipated Revenue From Land Sales Not Occur By September 1st 2024. For questions regarding this report, please contact Bradley Johnson, Budget Administrator at 510-238-6119. Respectfully submitted, Erin Roseman Director of Finance Jestin D. Johnson, City AdministratorSubject: FY 2024-25 Proposed Midcycle Budget Date: June 24, 2024 Page 8 Special City Council June 28, 2024
Attachments (1): - Attachment A: Possible Exhibit 1: GPF Balancing Measures - Attachment B: Other Balancing Options.