Oakland set to cut temporary employees, furlough others

Leaders say measures are required to ease $62 million budget shortfall

OAKLAND >> With Oakland facing a $62 million budget shortfall fueled by police overtime spending and a decline in tax revenue, city officials are proposing to lay off temporary employees, furlough managers and delay scheduled pay raises to help close the gap.

Mayor Libby Schaaf and City Administrator Ed Reiskin, in a letter posted to the city’s website, laid out a list of directives they are using to help cut expenses.

At a special City Council meeting Wednesday, the council will be asked to approve an emergency ordinance to furlough non-union staff — mostly department directors — for 10 days each before the end of the fiscal year on June 30, and to delay pay raises that were scheduled to take effect in January, along with any of their expected individual salary raises for the next six months.

That won’t be nearly enough to cover the $62 million budget hole in the general purpose fund. According to a report attached to Wednesday’s public meeting agenda, the sixmonth delay on pay increases will save about $85,000 for the 2020-21 fiscal year, $38,000 of which is in the general fund.

But other measures are on the table. Reiskin and Schaaf also say in the letter that they have directed an immediate hiring freeze, including all vacant positions that are not sworn police officers, a halt on all training or conferences, and a reduction of discretionary spending and overtime. They have also asked departments to look at ways to cut 10% to 20% of their budgets for the remainder of the year.

Most of the city’s temporary workers will be let go by Jan. 9, the letter stated.

Reiskin and Schaaf, in their memo, warned of dire outcomes for the city if it cannot close the gap.

“To be direct, absent immediate and significant expenditure reductions, the general purpose fund will be insolvent before the end of the fiscal year,” they wrote. “The city will not be able to fund essential services or respond to emergencies like an earthquake or natural disaster. Even the city’s emergency reserve will be completely exhausted.”

But labor representatives and others have criticized the city for punishing employees citywide and reducing city services in light of the police department’s role in the budget gap.

“We are asking that your budget reflect the desperate need of the people of this city,” said Liz Ortega, secretary-treasurer of the Alameda Labor Council. “We are asking that the police department be held accountable for its overtime expenditures and that essential social services be prioritized — not penalized — at the moment they are most needed.”

The police department exceeded its budget last fiscal year by $32 million, including $19 million of unbudgeted overtime. The department’s budget for the last fiscal budget was $288 million. The report projects the police department to go $29 million over budget for

the current fiscal year. In memos to the City Council, interim Police Chief Susan Manheimer has noted that several protests this year, an increase in homicides and unfilled vacancies have contributed to the department’s overtime spending.

But it’s also not a totally new problem. The Oakland Police Department has exceeded its overtime budget every year since at least the 2011-12 fiscal year, according to city records, prompting some of ficials, including the police chief, to urge the council to plan for that in their budget process.

The economic fallout of the COVID-19 pandemic has certainly contributed to the budget shortfall, as well, according to a report from the city’s finance director.

Oakland lost $20.6 million in revenue during the past fiscal year, when spending on hotels, restaurants and other businesses decreased during the shutdowns and cut into any tax revenue that would have gone to the city.

The fallout has had severe impacts already on people in Oakland. The unemployment rate spiked from 3.2% in October 2019 to 10% in October 2020, the report noted. And with the county again under restrictions on dining, hotel stays and other businesses, both people’s employment and the city’s tax revenue are both expected to take further hits.

Labor representatives don’t want the burden to fall disproportionately on city employees, especially temporary and part-time workers.

In a statement shared publicly on the SEIU Local 1021’s Facebook page, Oakland chapter Vice President Michael Pandolfo noted that “Even before the pandemic, our staffing levels were in many cases not back to pre-recession levels; many full-time positions had been replaced by so- called temporar y, part- time positions; and our vacancy rates were almost as high as Oakland’s rents.”

Pandolfo urged the city administration “to put people first and make services a priority, not try to staunch the flow of red ink by laying off the workforce’s lowest-paid and most vulnerable members.”