Official’s plan partly illegal, says Oakland city attorney
The Oakland city attorney said in a public legal opinion that a controversial funding proposal from City Councilwoman Desley Brooks runs afoul of state and federal law.
Yet despite the memo — which was released Friday and followed similar, though confidential, legal advice in recent weeks — the City Council is expected to take up the proposal Tuesday night. Some good-government watchdogs and officials inside City Hall worry the specter of its passage could dissuade voters from approving bond measures and tax increases in the future.
The Brooks proposal would take a percentage of various funding streams, including at least three voter-approved bond measures, and give the monies to several private job-training organizations in the city.
The ordinance would set up a fund for the
organizations that would collect 5 percent of capital improvement project costs, 5 percent of parking revenue and 5 percent of development services. City contractors would also be charged 30 cents per hour worked and would be subject to late fees if they do not send checks on time.
From the combined sources, the job-training organizations could receive roughly $10 million in public funds a year.
In her memo, City Attorney Barbara Parker analyzed each of the funding sources. She suggested that some, like parking revenue, could be fair game. Others would be illegal, she said.
Using the bonds, for instance, “would violate state and federal laws, the terms of the voter approved bond measures, and the express terms of the bond documents,” Parker wrote.
She was referring to Measure DD, which was meant for waterfront improvements, and Measure KK, which was a $600 million infrastructure and affordable housing bond that Oakland voters passed in 2016.
Taking funds from capital improvements financed by the gas tax would likewise be “unlawful,” Parker said. The city attorney also cautioned that “certain federal regulations prohibit designating funds for a particular organization without a competitive process” when it comes to grant-financed programs.
The idea that Measures B and BB — which give Oakland almost $25 million in transportation funding each year through a countywide sales tax — could be a financial source for private job-training organizations seemed to alarm the Alameda County Transportation Commission.
Lawyers for the commission wrote last week to City Administrator Sabrina Landreth making clear that a restriction clause on the monies “would absolutely prohibit the diversion of any ACTC funds to the employment training currently under consideration.”
“We understand that some members of the City Council have proposed the adoption of an ordinance that would channel 5 percent of the funding for every capital project carried out by the city to organizations providing employment training,” the attorneys wrote. “While the original draft of the ordinance does contain language stating that the ordinance would only apply where it was legally permitted to do so, our client wants to be clear that funds from Measures B and BB could not be diverted for such a purpose.”
The groups identified in the proposal to receive the money are the Cypress Mandela Training Program, which has operated at a deficit in recent years; Men of Valor, which is run by leaders of religious organizations; and the Laborers Community Training Foundation, which is in San Ramon and connected to a politically active union.
Other centers that “provide accessible, high-quality training and employment services to local residents and employers” could also qualify for the funds.
The groups and their members have rallied around the proposal. Dozens have spoken at committee meetings in favor of the idea and of Brooks, arguing that the city has an obligation to fund organizations that prepare people for jobs in construction and other trades.
Brooks defended the proposal, despite the legal memo.
“Each draft of the jobs legislation has had an exclusion clause which says if the funding stream prohibits using the fund in this manner the ordinance does not apply,” she said in an email Friday.
Brooks emphasized that the language was taken from a long-standing city ordinance that gives 1.5 percent of capital improvement project costs to a public art fund.
“What’s important,” Brooks said, is the legislation’s ability to “address the unemployment crisis, the unfilled jobs crisis and the displacement crisis in our community.”