Budget Advisory Commission Action Calendar Wednesday, May 28, 2025 To: Honorable Members of the Oakland City Council From: Budget Advisory Commission Subject: Recommendations on the FY 2025-27 Proposed Policy Budget Statement of Purpose The Consolidated Fiscal Policy (“CFP”) (13279 C.M.S.) requests that the Budget Advisory
Commission
(“BAC”)
or
“Commission”)
submit
a
published,
written
report
on
the
City
of
Oakland’s
biennial
budget
each
year,
prior
to
June
1st.
If
submitted,
the
statement
shall
be
published
as
part
of
the
next
budget
report
to
the
City
Council.
This report is prepared pursuant to the CFP. A preliminary draft was published on May
9th,
2025.
At
its
May
14th,
2025
meeting,
the
BAC
authorized
the
ad-hoc
subcommittee
to
incorporate
feedback
and
updated
budget
information,
and
submit
and
present
to
Council
on
behalf
of
the
entire
BAC.
Recommendation The BAC recommends that prior to adopting the FY 2025-27 Proposed Policy Budget,
Council
request
additional
information
and
make
appropriate
budgetary
adjustments
for
the
following
items:
● Prioritize the use of general purpose funds to comply with mandatory voter-approved
measures,
including
funding
for
public
libraries,
the
City
Auditor,
and
parks
maintenance.
Use
additional
GPF
funding
to
rebuild
depleted
reserves.
● Request additional information on the uses of proposed contracts and grants in
cases
where
details
are
light
or
absent.
Make
deliberate
trade-offs
to
re-allocate
grants
and
contracts
away
from
general
purpose
fund
(GPF)
monies
to
restricted
funds
where
permissible,
in
order
to
free
up
GPF
monies
for
complying
with
mandatory
voter-approved
measures.
● Develop contingency strategies in case of an economic downturn, or if anticipated
revenues
do
not
materialize.
● Review proposed staffing levels and classifications for appropriateness and operational
needs.
Background and Overview Oakland has faced an ongoing budget crisis since 2020. Pandemic-driven reductions in
revenues
(from
business
taxes,
hotel
taxes,
parking
taxes,
etc)
and
increased
Budget Advisory Commission expenses, including unbudgeted police overtime, led to a $30.42 million deficit in the 2019-20
budget
1 .
While
this
amount
was
patched
with
about
$40
million
in
federal
funding,
the
reduction
in
revenue
continued
to
present
persistent
budget
challenges,
with
a
projected
$62.3
million
deficit
in
the
2020-21
budget,
a
projected
$81.3
million
deficit
in
the
2021-22
budget,
and
a
projected
$68.5
million
deficit
in
the
2022-23
budget,
according
to
a
January
2021
staff
report
2 .
Half
of
this
2020-21
budget
shortfall
was
closed
with
$29
million
in
administratively
ordered
cuts
to
public
safety
services,
hiring
freezes,
and
reductions
in
senior
staff
pay
3 .
The
remaining
2020-21,
2021-22,
and
2022-23
budget
gaps
were
subsequently
closed
with
one-time
COVID
relief
funding
from
the
American
Rescue
Plan
Act
(ARPA),
including
$87
million
in
2021-22
4 and
$68
million
in
2022-23
5 .
While
ARPA
funds
could
continue
to
be
used
through
2024,
the
City
used
all
of
its
available
ARPA
funding
before
June
30,
2023
6 .
Despite this ongoing reliance on one-time COVID relief funds to plug persistent and continuous
revenue
shortfalls,
the
City
continued
to
budget
as
though
revenues
would
recover
in
2023-24
to
levels
sufficient
to
offset
the
loss
of
federal
funds.
No
precautions
were
taken
to
keep
expenses
in
check
–
even
as
revenue
continued
to
come
in
under
projections
(by
up
to
16%),
the
City
budgeted
for
new,
ongoing,
increased
expenses;
depleted
reserve
funds
(from
$140
million
in
2022
to
$20
million
in 2024); and continued to violate its CFP (as identified in the BAC’s June 2024 Midcycle Budget Report). Between 2020-21 and 2024-25, the General Purpose Fund (GPF) revenue grew only 10%,
from
$687
million
to
$756
million.
After
accounting
for
inflation,
this
is
a
net
decrease
in
GPF
revenues,
equivalent
to
nearly
a
$100
million
per
year
reduction.
Major
funding
sources,
including
the
Real
Estate
Transfer
Tax
(RETT),
business
license
tax,
transient
occupancy
tax,
and
service
charges
continue
to
come
in
lower
than
their
inflation-adjusted
2019-20
levels,
as
well
as
lower
than
anticipated
in
previous
budget
cycles.
6 https://cao-94612.s3.us-west-2.amazonaws.com/documents/SLFRF-Recovery-Plan-Performan ce-Report-City-of-Oakland-June-14-2024.pdf
5 https://cao-94612.s3.us-west-2.amazonaws.com/documents/City-of-Oakland-ARPA-SLFRF-Re covery-Plan-2023-informational-memo-7-17-23.pdf
4 https://cao-94612.s3.us-west-2.amazonaws.com/documents/City-of-Oakland-ARPA-SLFRF-Re covery-Plan-2022-informational-memo-7-26-22-signed.pdf
3 https://www.oaklandca.gov/news/city-administration-directs-29-million-in-immediate-cuts-to -curb-projected-62-million-deficit
2 https://oaklandside.org/2021/01/26/oaklands-budget-deficits-are-getting-worse/ 1 https://oaklandside.org/2020/12/07/oaklands-current-budget-crisis-called-worse-than-the-gre at-recession/
Budget Advisory Commission At the same time, GPF expenses have grown at twice the rate of revenue, increasing by
21%:
from
$697
million
in
2020-21
to
$843
million
in
2024-25.
This
included
additional
staff
for
general
city
operations,
as
well
as
new
labor
contracts
with
higher
pay
and
benefits.
Some
of
these
contracts
were
approved
outside
of
the
standard
budget
process
and
without
financial
analysis
provided
to
Council,
all
while
the
City’s
revenues
continued
to
come
in
short.
This
expense
growth
far
outpaced
the
growth
in
revenues;
while
the
gaps
were
filled
with
one-time
funds,
emergency
reserves,
and
the
prospect
of
the
Coliseum
sale,
no
significant
efforts
were
made
to
reduce
expenses.
The BAC has previously reported on the sources and causes of this structural deficit, including in BAC’s June 2024 Mid-Cycle Budget Report and January 2025 presentation to Council. Ultimately, Oakland has fewer financial resources available today, after adjusting for inflation, than it had available prior to the COVID-19 pandemic.
One-time
revenue
sources
have
run
out,
financial
reserves
have
run
out,
and
revenues
have
not
recovered.
Council
must
budget
conservatively
to
help
rebuild
the
city’s
financial
health.
Guiding Principles for BAC Recommendations The Budget Advisory Commission has been providing support to City Council since 1999.
In
providing
these
recommendations,
the
BAC
aims
to
follow
consistent
general
guiding
principles
to
inform
fiscal
priorities.
A
full
listing
of
BAC
findings
and
recommendations was presented to Council in June 2024, and BAC previously issued recommendations on the FY 2023-25 budget. This memo restates a selection of these priorities as they apply to the FY 2025-26 Proposed Policy Budget. ● Adherence to the Consolidated Fiscal Policy. The CFP sets forth a number of budgeting
practices,
including:
adopting
a
balanced
budget;
allocating
excess
RETT
stabilization
funds
and
paying
off
debt
obligations;
using
one-time
revenues
solely
for
one-time
expenditures,
including
unassigned
GPF
revenue;
and
maintaining
a
healthy
Vital
Services
Stabilization
Fund
balance
of
at
least
15%
of
GPF
revenues.
The
adopted
budget
should
adhere
to
these
requirements.
● Focus spending on community priorities. The CFP requires a public survey to
inform
community
priorities
in
the
budgeting
process.
This
year,
the
survey
was
completed
by
the
BAC;
2025
priorities
include
safety,
cleanliness,
and
housing.
The
adopted
budget
should
reflect
these
community
priorities.
For
the complete survey results, see the February 2025 presentation here.
Budget Advisory Commission ● Adherence to the requirements of voter-approved measures. Oakland’s budget
is
supported,
and
constrained,
by
a
wide
variety
of
voter-approved
measures.
Many
of
these
measures
contain
“maintenance
of
effort”
requirements,
obligating
the
City
to
make
particular
budget
decisions
to
continue
to
receive
the
benefits
of
the
tax.
While
these
measures
can
be
suspended
in
times
of
fiscal
emergency,
consistent
with
the
CFP
requirements
to
focus
spending
on
community
priorities,
the
BAC
believes
that
these
voter-approved
requirements
reflect
core
community
priorities,
and
that
these
legal
mandates
should
be
prioritized
over
other
initiatives
to
the
greatest
extent
feasible.
● Following best practices and lessons learned from other cities . Oakland is not
unique
in
its
service
provided,
community
concerns,
or
its
fiscal
challenges.
While
our
challenges
may
be
of
a
larger
scale,
best
practices
applied
in
other
cities
are
also
relevant
to
Oakland.
● Keep equity considerations at the forefront of decision-making. Oakland is home
to
many
diverse
and
long-underserved
communities.
Equitable
budget
practices
means
that
after
ensuring
the
city’s
long-term
financial
health
and
meeting
legal
obligations,
additional
revenue
should
be
allocated
in
ways
that
ensure
all
members
of
the
community
access
and
benefit
from
City
services
equitably.
Sound
financial
practices
help
ensure
that
lifeline
programs
for
disadvantaged
communities
can
be
continued
even
in
times
of
budget
shortfalls.
Review and Findings in the FY 2025-27 Proposed Policy Budget BAC has conducted a careful review of the FY 2025-27 Proposed Policy Budget, including
reviewing
the
Mayor’s
Message,
Budget
Priorities,
Service
Impacts,
Significant
Budgetary
Changes
reports,
department-level
budgets
and
changes,
and
proposed
contracts
and
grants
spending.
Below
we
present
our
findings
and
short-term
recommendations
for
the
current
proposed
budget.
A
later
section
discusses
long-term
recommendations
for
Council,
staff,
and
BAC
to
explore
further,
with
the
potential
to
improve
the
budget
in
future
cycles.
Positive: The Proposed Budget is a balanced budget that minimizes layoffs, preserves
core
city
services,
and
generally
follows
the
CFP.
The Corrected Proposed Budget projects $2.166 billion in both revenues and expenses
in
FY
2025-26,
and
$2.201
billion
in
2026-27.
This
represents
an
increase
from
the
2023-24
actual
spend
of
$2.023
billion,
of
roughly
$143
million
in
2025-26
and
$178
million
in
2026-27.
The
Corrected
Proposed
Budget
is
revised
upwards
(by
a
few
million
dollars)
compared
to
the
original
budget,
by
increasing
interfund
Budget Advisory Commission transfers, transfers from fund balances, and service charges, but without otherwise increasing
other
revenue
projections.
Relative to 2024-25, the General Purpose Fund is proposed to decrease , from $807 million
to
$788.1
million
in
2025-26,
before
increasing
to
$856.2
million
in
2026-27.
This
increase
of
roughly
$69
million
in
general
fund
expenditures
between
2025-26
and
2026-27
is
dependent
on
an
as-yet-proposed
$40
million
per
year
local
tax.
It
also
depends
upon
significant
increases
in
assessed
property
tax
values
(from
$307
million
in
2024-25
to
$322
million
in
2025-26,
and
$332
million
in
2026-27).
Sales
taxes
are
also
projected
to
increase
significantly,
attributable
to
the
passage
of
Measure
A:
growing
from
$61.7
million
in
2023-24
to
$84.1
million
projected
in
2025-26,
followed
by
$94.5
million
in
2026-27,
consistent
with
revenue
projections
included
in
the
measure
language.
This budget maintains conservative estimates for volatile tax revenue: RETT is projected
at
just
$68.3
and
$70.3
million
for
2025-26
and
2026-27,
respectively,
in
line
with
2023-24
actuals
of
$57.5
million.
In
contrast,
the
adopted
2023-25
budget
had
originally
anticipated
over
$110
million
in
RETT
in
2023-24,
a
major
contributor
to
the
unanticipated
shortfalls
these
past
two
years.
This
re-leveling
of
expected
RETT
revenues
Because of the anticipated new revenue source, the budget is able to maintain alignment
with
community-wide
priorities
around
public
safety,
cleanliness,
and
housing.
Staff
layoffs
are
almost
nonexistent:
instead,
vacant
positions
are
frozen
or
eliminated,
reducing
the
need
to
budget
for
those
vacancies.
Lastly,
the
budget
also
avoids
the
use
of
one-time
funds
for
ongoing
expenses,
breaking
with
troubling
past
practice
and
better
aligning
with
the
CFP.
However, the proposed budget has structural risks in the event of an economic downturn.
Recommendation: Budget cautiously, and consider ways to further reduce spending
should
revenue
projections
be
missed.
The Proposed Budget makes assumptions about future revenues that depend upon significant
growth
in
assessed
property
taxes,
a
new
voter-approved
parcel
tax,
and
sustained
strength
in
sales
tax
revenue.
Notably,
the
Proposed
Budget
projects
5.1%
growth
in
assessed
property
taxes
for
the
GPF
in
FY
2025-26,
while
these
revenues
grew
by
just
2.5%
from
FY
2023-24
to
2024-25.
The
draft
Five-Year
Financial
Forecast
states
that
“In
FY
2025-26,
the
growth
is
projected
to
be
3.0%
over
the
estimated
FY
Budget Advisory Commission 2024-25 amount.” In FY 2026-27, it assumes a more conservative 3.1% growth. The draft
Five-Year
Financial
Forecast
assumes
that
this
growth
will
occur
as
a
result
of
“New
construction…
at
the
estimated
annual
construction
average
from
2017
to
2024
excluding
outlying
years.”
However,
new
construction
has
virtually
halted
in
Oakland
due
to
elevated
interest
rates
and
a
soft
real
estate
market.
In
addition,
the
Proposed
Budget
and
Five-Year
Financial
Forecast
project
weak
RETT
revenues,
at
roughly
$70
million.
Due
to
Prop
13,
property
tax
appreciation
is
restricted
to
2%
per
year
unless
the
property
is
sold;
as
a
result,
RETT
revenues
should
correlate
with
the
growth
in
assessed
property
values.
It
is
unclear
what,
if
any,
indicators
suggest
that
a
5.1%
growth
in
property
tax
revenues
is
realistic
for
FY
2025-26.
If
realized
assessment
growth
is
instead
2.5%,
comparable
to
FY
2024-25,
it
would
result
in
an
immediate
revenue
shortfall
of
at
least
$7
million
and
put
the
city
behind
on
revenue
projections
for
FY
2026-27.
In addition, changes to federal trade policy or other unpredictable events could result in
an
economic
downturn
later
in
2025
or
2026,
potentially
causing
other
revenue
projections
to
be
missed
and
resulting
in
a
greater
budget
deficit.
City
Council
should
prepare
a
list
of
priority
budget
changes
should
anticipated
revenue
fail
to
materialize.
Issue: The Proposed Budget fails to meet the requirements of Measure NN. The proposed budget only funds 678 sworn officers, rather than the minimum of 700 required
in
Measure
NN.
While
the
un-freezing
of
78 sworn
positions
and
restoration
of
3 full
police
academies
is
an
improvement
over
previous
budgets,
ongoing
attrition
will
mean
that
the
city
is
likely
to
maintain,
rather
than
increase,
existing
staffing
numbers.
Additional
funding
and
more
police
academies
are
necessary
to
see
staffing
growth
over
time.
Recommendation: Improve compliance with other voter-approved measures While many voter-approved measures are being complied with, Measure NN and others
have
fallen
by
the
wayside
and
compliance
is
not
being
met.
These
include:
● $2.8 million annual shortfall in library funding . Under Measures C & D, the City is
required
to
budget
for
$14.5
million
in
general
purpose
funds
for
the
Library
Department.
Under
the
FY
2025-26
Proposed
Policy
Budget,
GPF
allocations
to
the
Library
Department
are
$11.7
million
in
each
fiscal
year,
resulting
in
a
$2.8
million
annual
shortfall
in
the
required
appropriations.
● 2-5 FTE shortfall in the City Auditor’s office (estimated $0.4-1 million) . Under Measure
X,
the
City
Charter
requires
the
budget
for
the
City
Auditor
to
be
sufficient
to
hire
at
least
fourteen
(14)
full-time
equivalent
(“FTE”)
employees
of
Budget Advisory Commission relevant classifications. The FY 2025-27 Proposed Policy Budget funds 9 or 10 FTE
in
2025-26
(errata
proposes
adding
one
FTE,
but
this
is
not
reflected
in
the
table)
and
12 FTE
in
2026-27,
falling
short
of
the
required
14 FTE
in
each
year.
● $4 million annual shortfall in Democracy Dollars Fund . Under Measure W, the City
is
required
to
allocate
$4
million
annually
to
the
Democracy
Dollars
Fund
to
support
public
financing
of
elections,
increasing
with
inflation.
This
initiative
aims
to
reduce
the
influence
of,
and
dependence
on,
outsized
independent
expenditures
on
elections.
The
FY
2025-27
Proposed
Policy
Budget
allocates
$0
to
this
fund.
● $2.2 million shortfall in parks maintenance required by Measure Q funds .
Measure
Q’s
maintenance
of
effort
provisions
places
a
limitation
on
the
maximum
amount
of
measure
funding
that
can
be
spent
maintaining
services
at
their
FY
2019-20
levels.
For
FY
2025-26,
this
amount
is
roughly
$12.09
million.
Instead,
the
Proposed
Budget
includes
$14.29
million
for
maintaining
existing
parks
services,
by
cutting
spending
for
the
new
services
intended
in
the
measure.
Issue: At least $62 million in proposed contracts and grants lack details, require oversight
The FY 2025-27 Proposed Policy Budget includes roughly $230 million budgeted for contracts
and
grants
each
fiscal
year,
with
nearly
900
independent
contracts
or
grants
proposed.
Most
of
these
contracts
are
well-defined,
with
a
clear
purpose,
and
assigned
to
an
appropriate
fund.
While
many
have
“TBD”
or
undefined
as
the
vendor,
this
is
to
be
expected
for
contracts
and
grants
that
go
through
a
competitive
bidding
process,
where
no
vendor
can
be
identified
prior
to
issuing
the
request
for
proposals.
However, some 77 grants and contracts were submitted without descriptions provided
(either
blank
or
“TBD”),
ranging
from
just
a
few
thousand
dollars
to
as
much
as
$5
million
each.
These
amount
to
a
total
of
$27
million
in
FY
2025-26
and
$35
million
in
FY
2026-27,
overwhelmingly
from
the
Human
Services
Department
($26
million
and
$33.9
million
for
each
fiscal
year,
respectively).
An
uncounted
number
of
other
grants
and
contracts
are
proposed
with
minimal
descriptions
-
due
to
time
constraints,
all
line
items
have
not
yet
been
reviewed.
As
a
matter
of
best
practice,
Council
should
not
approve
millions
of
dollars
for
unspecified
purposes,
and
should
receive
descriptions
for
each
line
item
from
Human
Services
and
other
departments
prior
to
approving
these
fund
allocations.
Budget Advisory Commission Recommendation: Review proposed contracts and grants to identify funding opportunities
to
meet
voter-approved
measures
A total of $33.6 million in contracts and grants spending in FY 2025-26 is proposed to be
met
with
general
purpose
funds
(fund
1010).
While
much
of
this
is
for
GPF-funded
departments
like
police,
fire,
and
general
government
departments,
some
of
these
proposed
expenditures
would
likely
be
suitable
candidates
for
restricted
funds.
This
includes
$190k
from
the
Department
of
Violence
Prevention
(DVP)
for
“Third
Party:
Grant
Contracts”,
$500k
from
Economic
&
Workforce
Development
Department
(EWDD)
for
the
Corridor
Ambassador
program,
and
$2.9
million
from
Human
Services
for
“(blank)”
(most
of
these
grants
appear
earmarked
for
nonprofits
providing
homeless
and
children’s
services).
The
DVP
and
EWDD
funding
are
suitable
candidates
for
Measure
NN
funds,
while
the
Human
Services
programs
are
likely
eligible
for
a
range
of
other
restricted
funds
(some
of
the
same
grantees
are
listed
under
multiple
different
funding
sources).
This is not free money: moving these GPF allocations to restricted funds requires equal
reductions
in
those
restricted
funds,
which
are
already
proposed
to
be
fully
allocated.
For
example,
Council
adopted
a
resolution
on
May
20th
fully
allocating
the
Measure
NN
grant
funds
for
FY
2025-26.
Moving
the
EWDD
Corridor
Ambassador
program
to
Measure
NN
for
FY
2026-27
would
require
reducing
other
DVP
grant
awards
by
the
same
amount.
Evaluating
performance
metrics
for
grants
across
both
GPF
and
restricted
funds
may
help
identify
suitable
opportunities
for
re-allocation.
Other
sources
of
funding
may
also
come
available,
e.g.
for
homeless
services
from
the
countywide
Measure
W,
newly
unlocked
after
resolving
legal
challenges.
Ultimately, Council must evaluate trade-offs and decide whether to meet the legal requirements
of
voter-approved
measures,
or
to
fund
other
essential
and
nonessential
services.
As
outlined
previously,
one
of
BAC’s
guiding
principles
is
that
these
legal
mandates
should
be
prioritized
over
other
initiatives
to
the
greatest
extent
feasible;
this
is
likely
to
help
build
voter
trust
and
ensure
support
for
future
revenue
measures
to
bolster
funding
for
other
services.
Issue: Review proposed FTE allocations to ensure appropriate staff classifications and
levels
In many areas of the budget, vacant positions are frozen or deleted to keep staffing costs
down,
and
opportunities
for
promotions
are
limited.
However,
the
FY
2025-27
Proposed
Policy
Budget
breaks
with
this
trend
for
the
Office
of
the
Mayor:
instead
of
freezing
or
reducing
vacant
positions,
all
twelve
(12)
FTE
staff
positions
reporting
directly to the Mayor are promoted to Special Assistant to the Mayor III, a class
Budget Advisory Commission specification that pays between roughly $150k - $250k annually. Most of these positions
are
currently
vacant.
In
the
2024-25
budget,
the
11.5 FTE
for
the
Mayor’s
office
were
divided
across
a
combination
of
Special
Assistant
I
(3.5
FTE,
pay
of
$91,137
to
$157,822),
Special
Assistant
II
(3.0
FTE,
pay
of
$111,558
-
$181,756),
and
Special
Assistant
III
(5.0
FTE).
No
justification
is
offered
for
this
increase
in
classification
level.
The
GPF
allocation
to
the
Office
of
the
Mayor
is
increasing
from
$4.0
million
in
FY
2023-24
to
$5.7
million
in
FY
2025-26.
At the same time, the Police budget proposes to freeze 41 FTE non-sworn positions across
crucial
divisions
including
Patrol,
Records,
Crime
Lab,
Criminal
Investigation,
Property
and
Evidence,
Human
Resources,
and
Crime
Analysis.
As
noted
in
the
proposed
policy
budget,
“
These
cuts
are
expected
to
decrease
efficiency
and
affect
service
delivery”
(emphasis
added),
“…including
responsiveness
to
emergency
and
non-emergency
calls
for
service.”
The
cuts
would
reduce
staff
availability
and
are
likely
to
“…lead
to
delays
in
investigations
and
court
cases…
a
backlog
of
cases…
longer
wait
times
for
trials
and
impacting
the
rights
of
the
accused
to
a
timely
trial.”
In
addition,
“The
impact
on
employee
health
and
wellness
and
the
negative
effect
on
morale
could
lead
to
employees
seeking
jobs
outside
of
the
City
of
Oakland,
further
burdening
the
remaining
staff.”
Instead
of
having
non-sworn
positions
providing
support,
these
cuts
will
increase
the
burden
on
the
remaining
sworn
officers,
decreasing
our
police
departments’
efficiency
and
reducing
our
officers’
effectiveness.
Lastly, the Human Services Department is currently without a director and the vacant
position
is
reportedly
frozen.
As
evidenced
by
the
missing
information
for
the
departments’
proposed
contracts
and
grants,
this
lack
of
leadership
presents
challenges
for
operational
efficiency
and
effectiveness.
While
the
proposed
budget
restores
a
deputy
director
position
to
the
department,
no
justification
is
provided
as
to
why
the
director-level
role
remains
frozen
and
unfilled
over
other
positions.
These and other proposed staffing levels should be reviewed for appropriateness in classifications
based
on
the
work
and
responsibilities
of
the
position,
and
needs
of
the
department.
Adjusting
staffing
levels
is
best
achieved
when
roles
are
vacated
due
to
ordinary
turnover
and
requires
a
long-term
strategy.
Suggested Long-Term Improvements While our short-term recommendations focus on cost savings and reallocations, the BAC
believes
that
long-term
financial
sustainability
will
come
from
a
combination
of
new
and
expanded
revenue
streams
and
fiscal
prudence
and
efficiency
over
the
next
Budget Advisory Commission few years. Our commission has identified the following areas for potential exploration,
and
looks
forward
to
partnering
with
the
Mayor,
Council,
and
staff
to
evaluate
the
feasibility
and
impact
of
these
strategies:
● Implement the strategic plan in alignment with the 5-year financial forecast .
Oakland’s
strategic
plan
calls
for
alignment
between
city
priorities
and
fiscal
policy.
Currently,
the
lack
of
a
strategic
plan
has
meant
that
budget
allocations
were
made
without
identifying
long-term
goals.
The
current
strategic
plan
recommends
Council
identify
and
determine
priorities,
and
prepare
the
budget
accordingly.
● Fully implement the City Auditor’s recommendations in the police overtime audit
.
While
significant
improvements
have
been
made,
there
remain
outstanding
and
unresolved
issues
with
police
overtime
budgeting
and
practices.
Thirteen
of
the
City
Auditor’s
21 recommendations
remain
open,
and
police
overtime
has
exceeded
its
budget
for
16 of
the
last
18 years,
forcing
mid-cycle
adjustments
to
other
departments.
Though
some
improvements
have
been
made,
better
cost
controls
and
more
efficient
police
operations
are
needed
to
both
support
public
safety
and
provide
a
more
consistent
and
predictable
budget.
● Explore new revenue opportunities, like the proposed parcel tax . The FY 2025-27
Proposed
Policy
Budget
includes
a
new
$40
million
new
parcel
tax
supporting
the
GPF.
BAC
can
help
engage
with
the
community
to
gauge
support
and
buy-in
for
new
tax
measures.
In
the
meantime,
we
urge
Council
to
prioritize
funding
for
existing
voter-approved
requirements
in
order
to
build
trust
and
support
with
the
public
prior
to
proposing
any
new
measures.
● Evaluate and benchmark pension and benefit costs, and explore cost-savings opportunities
.
With
contract
negotiations
coming
up,
BAC
can
help
evaluate
employee
benefits
in
comparable
and
neighboring
jurisdictions.
In
addition,
while
the
City
has
large
unfunded
liabilities
in
these
areas,
there
may
be
opportunities
to
help
meet
or
reduce
these
liabilities
through
proposals
such
as
refinancing
the
CalPERS
debt,
adjustment
of
post-employment
benefits,
new
cost-neutral
taxes
to
replace
the
expiring
PFRS
Override
Tax,
or
other
strategies
to
ensure
sustainable
progress
in
reducing
the
unfunded
liabilities.
● Explore the allocation of services between the City and the County . Oakland has
significant
expenditures
associated
with
homeless
services
and
affordable
housing,
which
may
fall
under
the
County’s
jurisdiction.
In
addition,
there
may
Budget Advisory Commission be opportunities for cost savings through integrating ambulance services with the
Oakland
Fire
Department
like
Berkeley.
Exploring
potential
reallocation
of
responsibilities
could
free
up
budgets,
overhead,
or
other
resources
for
core
City
services.
● Establish metrics and evaluate performance of grant programs . The FY 2025-27
Proposed
Policy
Budget
includes
$159
million
in
grants
over
the
two-year
period.
However,
the
criteria
for
awarding
these
grants,
and
the
performance
metrics
for
the
service
providers,
are
not
always
well-specified
and
tracked,
even
though
the
intention
of
grant
programs
is
to
generally
achieve
specific
and
measurable
outcomes.
Fully
staffing
the
City
Auditor’s
office,
as
required
in
the
City
Charter,
could
help
provide
additional
oversight
and
evaluation
to
ensure
grant
monies
are
being
spent
appropriately.
Identifying
citywide
priorities,
as
recommended
in
the
strategic
plan,
can
help
outline
goals
and
expectations
for
this
grant
money
to
enable
this
evaluation
process.
● Improve investments in Oakland’s operational infrastructure, including IT and HR
.
Oakland’s
dedicated
civil
servants
are
the
backbone
of
the
city’s
operations,
and
they
all
rely
on
modern
IT
solutions
to
do
their
jobs
effectively
and
efficiently.
Unfortunately,
the
FY
2025-27
Proposed
Policy
Budget
includes
slight
reductions
in
both
HR
and
IT
staffing,
resulting
in
less
capacity
to
recruit
talented
staff
and
fill
vacancies,
and
equip
them
with
the
necessary
technology
to
achieve
exceptional
performance.
A
preliminary
review
of
other
similarly
sized
California
cities
(Long
Beach
and
Sacramento)
suggests
Oakland
may
be
comparatively
under-staffed
in
IT;
additional
research
is
needed
to
fully
understand
how
Oakland’s
staffing
levels
benchmark
against
other
cities.
Effective
use
of
modern
technology
is
critical
to
improving
performance
and
outcomes
across
City
service
delivery.
● Support the Economic & Workforce Development Department (EWDD) and the
updated
Economic
Development
Action
Plan
(EDAP).
A
long-term,
consistent
economic
development
strategy
is
key
to
growing
Oakland’s
tax
base
and
ensuring
sustainable
long-term
revenue.
However,
the
FY
2025-27
budget
for
EWDD
is
reduced
from
$35.2
million
in
2024-5
to
$24.9
million
in
2025-26,
and
further
reduced
to
$24.2
million
in
FY
2026-27.
EWDD
is
preparing
an
updated
EDAP,
which
will
help
to
attract,
retain,
and
grow
Oakland
businesses;
create
a
positive
environment
and
image
for
Oakland
business;
and
promote
workforce
development
to
create
jobs
for
Oaklanders
Budget Advisory Commission and help Oaklanders find employment. Supporting these efforts, maintaining a
robust
and
effective
EWDD,
and
other
Council
actions
to
help
small
and
large
businesses
thrive
in
Oakland,
will
help
bolster
long-term
revenue
growth
and
better
enable
the
city
to
provide
services
to
residents.
● Update the CFP to more accurately reflect the variability in real estate transfer tax
(RETT)
revenues
.
As
evidenced
over
the
past
15-20
years
of
economic
cycles,
the
RETT
is
a
highly
volatile
and
unreliable
source
of
funds.
The
current
CFP
establishes
a
clear
requirement
that
no
more
than
15%
of
the
GFP
should
be
budgeted
for
from
RETT
revenue,
but
that
level
has
not
been
updated
to
reflect
the
changing
structure
of
the
GFP
over
time
and
real-world
data
on
RETT
variability.
Updating
the
CFP
to
set
a
dollar
value
threshold
–
rather
than
a
percentage
threshold
–
for
RETT
revenues
available
for
GFP
purposes
can
help
smooth
out
the
City’s
budget
during
economic
downturns,
and
provide
additional
revenues
during
economic
upcycles
to
help
pay
down
long-term
liabilities,
invest
in
infrastructure,
or
save
for
a
rainy
day.
BAC will be working on these and other items per our work plan. Additional strategies
and
recommendations
that
have
been
discussed
at
recent
BAC
meetings
can be found in the March 2025 and April 2025 BAC meetings packets. Contact Information Jane Yang, Budget Advisory Commission Chair Mike Forbes, Budget Advisory Commission Vice-Chair Mike Petouhoff, Budget Advisory Commission Ad-Hoc Committee Ben Gould, Budget Advisory Commission Ad-Hoc Committee Additional References: 2021 GPF Revenues and Expenditures 2024-25 Estimated GPF Rev and Exp - Q2 R&E GPF Revenues vs Forecast - Presented in Oakland Report Decline in Reserve Funds - See P12