City Council Briefing Book
Oakland, CA | January 2, 2025
Jane Yang, Budget Advisory Commission (BAC) Chair
Mike Forbes, BAC Vice Chair
Contents
Who We Are
● Purpose of Budget Advisory Commission
● Current commissioners
Financial Facts
Oakland and Comparison Cities
● Trends in revenue and expenses
● Trends in workforce compensation
● Patterns in Council’s fiscal decisions
Next Steps
● Past work
● Future collaborations
2 Who We Are
City of Oakland Budget Advisory Commissioners
3 Purpose of Budget Advisory Commission (BAC)
Meetings: the BAC generally meets on the second Wednesday of the month Our website: https://www.oaklandca.gov/boards-commissions/budget-advisory-commission 4 advises the City Council
on expenditures,
revenues, and financial
policies
improves transparency
and accountability of City
fiscal information and
decision making
encourages public
participation and input
into fiscal decision
making
Appointer Commissioner
District 1 Councilmember Jane Yang, Chair
District 2 Councilmember Margaret Grimsley
District 3 Councilmember Vacant
District 4 Councilmember Mike Petouhoff
District 5 Councilmember Stephisha Ycoy-Walton
District 6 Councilmember Vacant
District 7 Councilmember Armand Bryan
At Large Councilmember Vacant
City Auditor Mike Forbes, Vice Chair
Economic Development Committee Mandela Bliss
Financial Management Committee (2) Vacant (2)
Mayor Lupe Garcia
Mayor Larisa Casillas, FMC Liaison
Mayor Vacant
BAC Commissioners
5 We have 6 vacant positions.
Your help is needed to fill
vacancies!
Financial Facts
A Long and Wide View
6 Trends in Revenue and Expenses
7 REVENUE OVER TIME
8 REVENUE PER CAPITA OVER TIME
9 EXPENDITURES OVER TIME
10 EXPENDITURES PER CAPITA OVER TIME
11 NET ACTUALS (REVENUE LESS EXPENDITURES) OVER TIME AS PERCENT OF REVENUE 12 NET ACTUALS PER CAPITA OVER TIME
13 Trends in Workforce Compensation
14 15
REGULAR PAY DISTRIBUTION
MEDIAN REGULAR PAY COMPARISON
16 17
OVERTIME PAY DISTRIBUTION
18 MAX EMPLOYEE OVERTIME COMPARISON
19 OVERTIME DRILLDOWN
75+
employees have
received >$100k/year
average overtime pay
$371,348
highest overtime pay to
a single employee in
2023
20 MAYOR REGULAR PAY
Patterns in Council’s Fiscal Decisions
21 Oakland significantly increased ongoing expenses between FY21-22 and FY23-24, exceeding approved budgets as a result.
22 WHERE WE ARE NOW: A STRUCTURAL DEFICIT
Combined with the revenue shortfalls, Oakland now has a structural deficit of over $125M.
Graph source: FY 23-25 Budget Community Forums PPT
General Purpose Fund
FY 19-22 Actuals and FY 23-28 Forecast ($)
As shared in the FY 23-25 Budget Community Forums
presentations held in June 2023, ongoing General
Purpose Fund expenses jumped in FY 22-23 and again in
FY 23-24. A big driver is city leadership’s choice to open the Oakland Police Officers contract well before expiration, granting wage increases to the police.
Since FY21-22, Oakland has also depended on meaningful amounts of assumed fund transfers and carryforwards to balance the budget.
These unrealized assumptions accounted for $85M in FY 23-24, which was 55% of the FY 23-34 General Purpose Fund (GPF) shortfall.
Unrealized assumptions
23 Lower real estate
transfer tax
collections
Overall lower
collections from
other taxes, fees,
grants, etc.
Inability to
transfer from fund
balance
Deferred costs from
project offsets &
carryforwards
Police
department
over-expenditure
Total projected
FY 23-24 GPF
overage
Net
underspending
from other
departments
Projected FY 23-24
General Purpose
Fund (GPF)
over-expenditures
Data source: FY 23-24 Q3 R&E
HOW WE GOT HERE: UNREALIZED ASSUMPTIONS
Data source: R&E reports
Drivers of FY 23-24 General Purpose Fund Deficit
Adopted
Budget
Adhered to Section 1, Part C?
Excess RETT should be used for reserves, retiring debt, and funding unfunded long-term obligations
Adhered to Section 1, Part D?
Unrestricted one-time revenues should be used for
one-time expenses
FY 17-18 ✅
Replenished reserves, paid down liabilities ✅
Funded one-time expenses, paid down liabilities
FY 18-19 ✅
Replenished reserves, paid down liabilities ✅
Funded one-time expenses, paid down liabilities
FY 19-20 ✅
Replenished reserves, paid down liabilities ❌
Waived for parks and paramedics
FY 20-21 🟡
N/A - no excess RETT ❌
Waived for parks and paramedics
FY 21-22 ❌
Used for ongoing expenses ❌
Waived for libraries, parks, fire, youth, other funds
FY 22-23 ❌
Used for ongoing expenses ❌
Waived for libraries, parks, fire, youth, other funds
FY 23-24 🟡
N/A - no excess RETT ❌
Waived for libraries, parks, fire, youth, other funds
FY 24-25 🟡
N/A - no excess RETT ❌
Waived
Since FY19-20, Oakland has overridden Consolidated Fiscal Policy (CFP) limits on use of one-time revenue or excess RETT for ongoing expenses.
The City has used excess Real Estate Transfer Tax (RETT), Coronavirus Aid, Relief, and Economic Security Act (CARES), and American Rescue Plan Act (ARPA) one-time funds to maintain services post-COVID. CARES funds ended in 2020 and ARPA funds ran out Dec 31, 2024.
HOW WE GOT HERE: CFP WAIVERS
post-COVID
24 If Oakland continues to consistently
spend more than it earns, all residents
will pay the price
BOTTOM LINE
25 This remains true even if budget choices are done with the best of intentions to provide useful services.
Irresponsible fiscal decisions cause harm to Oakland’s residents, employees, and businesses, and community organizations.
What We’ve Done and What We’re Doing
Past Recommendations and Future Collaborations
26 Presented to City Council June 2024 | Read the full recommendation
1. The City and Council should spend the next year identifying evidence base adjustments to structurally balance the budget by 1) examining both revenue AND expenses and 2) learning from the experiences of other similar cities in California
2. Structural budget adjustments should come with clear communication of estimated effect on public priorities: reducing homelessness and improving public safety
3. Oakland should break its habit of waving limits in the Consolidated Fiscal Policy, establish more discipline in replenishing emergency funds, and be more transparent on the budget’s effect on the City’s fiscal health
BAC FY24-25 Midcycle Budget Recommendations
RECENT RECOMMENDATIONS
27 Presented to City Council December 2024 | Read the full recommendation
1. Design taxes to raise revenue from those who can afford it
2. Allocate potential revenue from the one-off Coliseum sale to pay down liabilities and shoring up reserves
3. Prioritize essential service delivery, performance measures, and equity in discussions with the City’s workforce
4. Work closely with the Police Department to identify more realistic budget adjustments, especially focusing on reducing overtime spending and re-examining compensation BAC Budget Rebalancing Recommendations
RECENT RECOMMENDATIONS
28 The BAC seeks a partnership with the City Council
We implore the City Council to recognize that to achieve the fiscal resiliency that a healthy city needs, we must significantly change from the status quo approach to more responsible budgeting and management of expenditures based on actual certified revenue.
BAC will be focusing on delivering evidence based, thoroughly analyzed recommendations to solve our fiscal crisis. Key activities and timeline:
● January: field resident survey to get input on city priorities for budget (please share the survey!) ○ Objectives: understand resident satisfaction with city services, priorities, and willingness to accept specific budget cut options
○ Implementation: the City’s survey vendor budget was cut but BAC will field and analyze using free tools ○ Accessibility: attempting to translate into Spanish and Chinese (not yet available); will attempt to augment with live listening sessions
● February: resident survey results
● March / April: review of council member spending priority statements ● March through May: concrete expense reduction and revenue increase proposals 2025 NEAR-TERM WORK
29 ● BAC memo on FY23-25 budget process
● City Auditor report on City of Oakland’s Financial Condition between FY 2012-13 and 2021-2022
Note: this report uses Oakland’s annual audited financial reports as the data source. The data sources for this briefing book are from the State of California’s Comptroller, who has compiled data reported by cities. There are differences in the absolute numbers between the two sources but relative trends are consistent. ● Reimagining Public Safety Task Force recommendations and final report Other Helpful Resources
30