These five could steer Oakland away from the financial cliff
Oakland is in serious financial trouble, ill-prepared despite years of economic growth in the city to weather the serious challenges of the coronavirus downturn.
With voting about to begin for a majority of the City Council seats, it’s disheartening that few of the candidates recognize the depth of the problem. Most are concerned, understandably, about restructuring the police department, helping the homeless and providing affordable housing. They may differ on how to get there, but almost all the candidates are clear that they must somehow.
But there’s a disconnect between their progressive agenda and the need to stabilize city finances so they can afford to pay for it. For most in this labor- controlled city, the notion of trimming city staff is off the table. And serious plans for addressing the city’s mounting retirement debt? Forget it.
So, our recommendations are generally candidates who would, when the tough decisions come, demonstrate more recognition of the fiscal reality.
Voters should back Derreck Johnson for the citywide atlarge seat, Steph Dominguez Walton in District 1, Lynette Gibson McElhaney in District 3, Noel Gallo in District 5 and Treva Reid in District 7.
The challenges the new council will face result from a decade of excessive spending. After the Great Recession, as Oakland municipal revenues rapidly increased, city officials ramped up expenditures without heeding the lessons to prepare for the next economic downturn.
Consequently, the California state auditor last year ranked Oakland as the 13th most financially at-risk city in the state in the event of an economic downturn. Numbers from the city’s Finance Department earlier this year show the shortfall in the city’s pension and retiree health programs had grown from an already staggering $2.3 billion in 2010 to $2.8 billion in 2019.
Meanwhile, according to Oakland’s auditor, since the 2013 fiscal year, the difference between the city’s unrestricted assets and liabilities, an indicator of its ability to maintain services when faced with unexpected expenses, worsened almost sevenfold. And the city last year maintained less than the minimum standard two months of general fund reserves.
All of that was before the coronavirus struck, as the city was still enjoying a strong economy and revenues bolstered by the insatiable property tax appetite of Mayor Libby Schaaf and the City Council, led by President Rebecca Kaplan.
Then the pandemic took hold. To close a $105 million budget gap for the current fiscal year, which began July 1, the City Council was bailed out by $37 million in federal relief funding and then still had to freeze vacant positions, use all of one of its two small reserve funds and suspend planned payments to the employees’ retiree health plan fund, thereby pushing the city deeper into debt. Next fiscal year will be even tougher.
In short, Oakland is fiscally crippled. This election will determine whether the city begins to responsibly face its finances or plunges deeper into a fiscal hole.
At-large — Johnson
Three-term incumbent Rebecca Kaplan has been all talk and no action when it comes to the city’s finances, especially its mounting retirement debt. She claims to have fiscal acumen while instead manufacturing revenue numbers during the budget process and undermining city labor negotiators to advantage her union supporters.
Derreck Johnson provides a serious and refreshing alternative. He acknowledges that he has a lot to learn about city finances, but he brings the perspective of a successful businessman with a progressive social consciousness.
In 2004, Johnson, who grew up in West Oakland’s Acorn housing project, opened Home of Chicken and Waffles in Jack London Square. Over 70% of his employees have been formerly incarcerated people. From personal experience, he understands why Oakland needs to rethink its culture of policing, but he wants to do it in a way that unifies, rather than divides, the city.
District 1 — Dominguez Walton
During eight years on the council, Dan Kalb has had plenty of time to address the city’s financial instability. He seems to understand the issue — yet we’ve seen no action or leadership from him. It’s time for change.
Fortunately, there’s a solid option, Steph Dominguez Walton. A former broadcast media salesperson and mortgage adviser, Dominguez Walton brings a clear understanding of the city’s challenges around homelessness and policing, and a businesswoman’s realistic perspective that the city needs to start living within its budgetary constraints.
District 3 — Gibson McElhaney
Incumbent Lynette Gibson McElhaney is an independent thinker who is acutely aware of the financial and social challenges the city faces.
She wants to reform policing in the city but do it thoughtfully. She would like more revenue for the city, but she was the only member of the council in 2018 unwilling to change election rules after the ballots were counted to claim passage of a tax measure. She deserves high marks for integrity and political courage.
Her leading opponent, Carroll Fife, is perhaps best known as one of the masterminds of last year’s Moms 4 Housing takeover of an empty West Oakland house. While we respect her concerns about housing the homeless, we can’t support her tactics.
Fife, who moved into District 3 in July so she could run for the council seat, was recruited by city labor unions trying to defeat Gibson McElhaney and further tighten their control of city spending. That’s the last thing Oakland needs.
District 5 — Gallo
Incumbent Noel Gallo, seeking his third term, is wisely measured in his approach to governing, recognizing that raising taxes on large businesses could drive them out of town, that city leaders will have to make tough budget decisions in the months ahead, and that reallocation of police funding should be done carefully to ensure public safety is not endangered.
Both of his opponents, Richard Raya and Zoe Lopez-Meraz, lack basic knowledge of city finances; neither had not even heard about the city’s multibillion- dollar retirement funding shortfall. Raya, who teaches low-income youth about the law, is the candidate backed by the city’s labor unions. Lopez-Meraz, a medical scribe, is a Moms 4 Housing volunteer.
District 7 — Reid
This is the seat from which incumbent Larry Reid is retiring after six terms. Treva Reid is by far the best pick to replace him, not because she’s his daughter, but because she is the most knowledgeable about the city. A public affairs representative for PG& E, she recognizes that the city is spending more than it can afford.
None of her opponents — Bishop Bob Jackson, founder of Acts Full Gospel Church of God in Christ; Aaron Clay, founder of a renewable energy software company; Marchon Tatmon, government affairs manager for San FranciscoMarin Foodbank, or former Peralta Community College District trustee Marcie Hodge — had as strong a handle on the city’s financial challenges.
Hodge has other disqualifying issues, as well. While a Peralta trustee, she made nearly $4,400 of personal purchases on her district credit card during an 18-month period in 2008-9. She had her chance in elective office — and blew it.