BUDGET STABILIZATION & AVOID BANKRUPTCY
At a Glance
RATIONALE:
A history of corruption, self-dealing, and political gamesmanship has eroded trust between City Hall and Oaklanders. Implementing an audit by a neutral third party will enhance public trust in the findings, and help rebuild Ooklanders’ confidence in their government.
KEY STRATEGIES:
1.1 Oversee a 3rd party financial auditor to benchmark Oakland’s current budget practices and budget status as compared to high-performing cities with similar characteristics
1.2 Consult legal and financial experts in municipal bankruptcy to determine all necessary steps to avoid bankruptcy; use insights and findings to develop a bankruptcy avoidance plan.
1.3 Explore ways to redirect use of restricted funds (within legal limitations) to offset budget pressures on the general fund
RATIONALE:
Regardless of how we got into our current situation, it will take all of us to get out of it. It is also only fair that when we reach a stronger and more fiscally sound future, those who make sacrifices today will be prioritized to receive greater benefits. And the difficult reality is that avoiding bankruptcy is in everyone’s best interest — we just need to have the strength to face the situation head-on and make the hard decisions, leveraging lessons learned from other cities in similar situations.
KEY STRATEGIES:
2.1 Renegotiate all vendor contracts greater than $5M to generate a 6-8% reduction in related spend
2.2 Collectively bargain with Labor partners to secure meaningful concessions to help close the structural deficit.
2.3 Ask all exempt employees to agree to concession amounts similar to that of non-exempt employees
2.4 Explore options to restructure General Obligation Loan payment terms to reduce / extend near-term payments (frequently a powerful lever in potential bankruptcy situations)
RATIONALE:
The public service needs in Oakland are simply much greater than our current budget can accommodate. Until we can grow our internal revenues sufficiently, to maintain desired service levels we need to actively seek and successfully obtain outside funding, such as corporate partnerships, grants, and foundation funding.
KEY STRATEGIES:
3.1 Aggressively collect unpaid bills (Accounts Receivable)
3.2 Actively partner with Oakland business community to define new investment opportunities and incentives (“Committee of the Willing”)
3.3 Conduct grant writing blitz
3.4 Aggressively pursue philanthropic funding for Big Impact Initiatives
3.5 Require every department to contribute to revenue generation and incorporate it into the performance management dashboard
3.6 Partner with Bloomberg Philanthropies through their “What Works Cities” program to enhance operational efficiencies and performance, and identify long-term cost-saving opportunities
RATIONALE:
When funds are limited, we have to prioritize. As a charter city, our first obligation is to meet the requirements outlined in our city charter before considering other desired spend categories. In addition, it is important to direct precious resources to items that are self-funding and revenue generating. That is how we grow the pie instead of simply dividing it up in different ways as it shrinks.
KEY STRATEGIES:
4.1 Prioritize funding for public safety and other charter-mandated services over other budget items
4.2 Prioritize funding for revenue generating investments (staff and technology that bring in direct revenue greater than their cost/salary)
4.3 Evaluate all GPF funded projects vs total remaining cost, percent completion, alignment with core priorities, and equity impact
RATIONALE:
The close of the Coliseum development deal should have never been tied to the city budget. It is time to unwind that irresponsible decision.
KEY STRATEGIES:
5.1 Establish realistic timeline for Coliseum Development deal including key milestones and cash flow expectations
5.2 Re-affirm the city’s commitment to using only ongoing revenue to pay for ongoing expenses
5.3 Develop a budget that adheres to realistic timelines and fiscal stewardship.
