OAKLAND, Calif. (CN) — Oakland’s elected leaders finally approved a $2.2 billion budget amid major revenue problems and discord over how to spend the proceeds from the sale of the city's share of the Oakland Coliseum.
The Oakland City Council approved the budget in a special meeting Tuesday, having clashed last week over how best to address a projected shortfall of $117 million this year and $175 million next year. Several council members attacked the mayor’s proposal to budget with the projected $63 million windfall from the city’s share of the Oakland Coliseum in mind. On June 26, the city approved moving forward with the sale to African American Sports and Entertainment Group.
Ultimately, the City Council voted 5-3 to approve the mayor’s amended proposal to continue the same level of citywide service for public safety through September, awaiting proceeds for the Coliseum sale, rather than making a series of dramatic service cuts over the summer.
Amid a protest in City Hall following the vote, Council President Nikki Fortunato Bas emphasized that no budget options presented Tuesday were perfect. Another special meeting to consider other budget-trimming opportunities could take place later in July.
Councilmember Carroll Fife said the personal strife displayed during council meetings causes anxiety to bondholders, and asked that all elected officials not point fingers at each other so as to improve Oakland’s public image.
“We’re only going to get out of this situation into better waters if we work together,” Fife said.
Mayor Sheng Thao lauded the majority Tuesday for adopting her budget proposal.
“We must remain disciplined and address our deficit responsibly while maintaining our focus on the issues that matter most to Oaklanders, public safety and clean streets. This budget achieves that goal,” Thao said.
Oaklanders have been distracted by recent raids of several homes in the Oakland Hills, including Thao’s, by federal agents. Thao said she is fully cooperating with the investigation, which involves addresses tied to the politically invested Duong family — which has a city contract to provide recycling services and donates widely to California politicians.
The mayor’s proposal added a contingency plan should the Coliseum sale revenue not arrive in September to make significant cuts across all city departments — including within the police and fire departments — and cancellation of many capital improvement projects.
By voting to rely on funds from that sale, the council majority declined what city staff said was a less risky option: an alternative budget making many severe cuts to city services this summer and ignoring the Coliseum sale out of caution. However, City Administrator Jestin Johnson said his staff would not make an official recommendation favoring either budget option.
The staff also said that without major budget strategy changes in the coming year, layoffs in many departments are guaranteed next year.
The council previously met on the budget options Friday, when budget adviser Mike Forbes told the council the city must commit to ending a cycle of breaking its own fiscal rules.
“We’ve created bad habits, we repeat them every year and it’s tough for the city,” he said.
At that meeting, finance director Erin Roseman said that even with the Coliseum sale the city remains short about $40 million. There is no signed purchase and sale agreement, meaning the sale is not yet assured and could be risky to bondholders.
Three members of the council advised voting to make department cuts this summer.
Janani Ramachandran, while having voted for the deal, said the proceeds from it should never have been incorporated into the budget. Ramachandran had released a video on Instagram claiming the mayor’s budget amendments would cut police academies.
“It is now crystal clear as confirmed by our staff, that we simply do not know when this incredibly complex deal will be finalized,” Ramachandran said.
The deal won authorization at the June 26 meeting which many Oaklanders attended to voice their support. There, John Jones III, a member of the African-American Sports and Entertainment Group, said the proposal to sell the city’s portion of the Coliseum to allow for new business development is perfect for Oakland’s growth.
“It’s a perfect example of the leadership that this city deserves,” he said. “The community is thirsty for hope.”
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