Fiscal Year 2013-2015 Special Budget Meeting

HONORABLE CITY COUNCIL AND OAKLAND RESIDENTS Subject: FY 2013-2015 Proposed Policy Budget Date: April 17, 2013 Page 4 • Reduced park, median and grounds and building maintenance and custodial services. We have pursued various ways to maximize revenue by: (1) pursuing grants from federal and state governments as well as foundations and the private sector, (2) aggressively pursuing dollars owed the City through special revenue collection efforts, (3) developing more public/private partnerships, and (4) increasing fees to fully recover the costs related to providing services. The results of a growing economy and aggressive revenue development efforts have proven fruitful. Over the past five years, the City has made significant strides in stabilizing its financial condition, and the City Council, residents, and employees have played a major role in getting the City to a stronger fiscal condition. The following fiscal actions that have strengthened our financial standing: • Instituted strong fiscal controls and strengthened financial policies; • Proactively collected revenues and implemented targeted efforts to collect past-due funds; • Paid down negative fund balances, which have gone from $138 million to about $99 million at the close of FY 2012-2013 (this is internal debt that comes from inter-fund borrowing); • Fully funded the General Fund reserve to meet the level mandated by City Council policy for the first time in five years; • Reorganized to reduce costs and enhance efficiency; and, • Planned for anticipated additional fiscal impacts from the dissolution of Redevelopment. Two years ago this Administration walked in the door to more than $40 million in existing budget shortfalls, a dramatically reduced police force, high debt, reduced revenues, and high unemployment. Together, since Mayor Quan took office, we have:  Closed the budget shortfalls  Minimized layoffs and service reductions  Rehired all the laid-off police officers who wanted to return, and awarded a grant for 25 new officers  Funded the first police academy in more than four years and proposed more  Significantly paid down debt  Maintained AA credit ratings through multiple reviews by raters/investors  Supported modest, steady revenue increases  Brought down unemployment from 16.6% to 13.1% in January 2013. Ready for Growth The good news is that the economy is showing steady signs of modest recovery, the housing market is red hot, and key economic indicators are trending in a positive direction: unemployment is down and revenues are up in most categories (e.g., property tax, sales tax, business tax, real estate tax). The financial markets are taking notice of Oakland’s judicious approach to address both short-term and long-term financial challenges: just recently, the credit-rating agencies reaffirmed our AA credit rating and noted our stable fiscal outlook.