Fiscal Year 2013-2015 Special Budget Meeting

CITY OF OAKLAND O N E F R A N K H . O G A W A P L A Z A  3 R D F L O O R  O A K L A N D , C A L I F O R N I A 9 4 6 1 2 Office of the Mayor Honorable Jean Quan Mayor FAX (510) 238-3141 (510) 238-4731 Office of the City Administrator Deanna J. Santana City Administrator FAX (510) 238-3301 (510) 238-2223 April 17, 2013 HONORABLE CITY COUNCIL & OAKLAND RESIDENTS On behalf of the City Administration, we are pleased to present the City of Oakland’s Proposed Policy Budgets for Fiscal Years 2013-14 and 2014-15 for the City Council’s consideration. This budget represents a crossroads for Oakland. Our economy is on the rise, and we see many opportunities ahead to realize our vision of success, safety and stability for our city. We have worked to balance the priorities and needs of everyone in the City, and we believe this is a "fair share" budget for all. We are investing strongly in public safety and economic development to restore our police force and build on the economic opportunities before us. Due to growing expenses beyond our control, we are still forced to propose some cuts and position eliminations, but we have worked hard to minimize them. Significantly, employee contributions made over two years ago, at the height of the recession, will sunset starting in July 2013. For several years now, our employees have given contributions that were critical to stabilizing the City and creating an environment where we can now make thoughtful, though urgent, decisions about our future. We are grateful to all City employees, whose sacrifices have been essential to stabilizing the City’s finances and resuming our economic growth. Looking ahead, we will have to make smart, tough decisions together about how we move forward to tackle our challenges and seize the great opportunities before us. While we have weathered fiscal storms and made substantial progress, there are factors beyond our local control that pose big challenges for balancing this two-year budget in the short term and ensuring our financial stability in the long term. It is crucial that we prepare now to address anticipated increases in expenditures. Our recent economic gains have been offset and outpaced by the following factors: • Unknown federal and state funding cuts; • Rising health care costs; • Rapidly growing costs of employee pensions as the CalPERS funding system undergoes necessary reform; • Sunsetting of local tax measures; and • Expiring public safety grants worth millions of dollars.