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 7 Balancing priorities. Tough choices lie ahead. Everyone’s priorities are important, and we have made every effort to respect and champion the collective expectations, needs and goals of the people and employees of Oakland. Oakland at a Crossroads It is clear that the City is at a critical juncture. The decisions we make now are pivotal to our future and to realizing the full promise of Oakland. The city has won recent international recognition, and with our economy on the rise, we are well positioned for growth. Great opportunities are before us and we are within reach of a prosperous, bright future. However, to get there, we must deal directly with our remaining challenges. The most urgent, immediate priority is to reduce crime and increase police staffing. This proposed budget will fund the graduation of four police academies over the next two fiscal years and bring police sworn staffing to 697 by the end of FY 2014-2015. As we tackle police staffing shortages in the near term, we must also keep our eyes sharply focused on the horizon to ensure that our long-term financial issues are addressed without “kicking the can” further down the road. For Oakland to truly flourish, we must begin to confront the imbalance between revenues and expenditures. This will take systematic planning, difficult trade-offs, patience, and will to create sustainable, long-term solutions that provide relief from the shortfalls predicted for the future, absent a permanent solution. Among our upcoming challenges are:  Two major tax measures will sunset in the coming years: Measure Y, which largely funds police officers and community-based violence prevention service, amongst other services, as well as the Wildfire Prevention Assessment District, which provides for the ongoing safety needs necessary to preventing another firestorm such as the one Oakland endured in 1991. Renewal of these measures will require voter approval. As a result, we need to begin problem-solving over the next fiscal year to stabilize these services and funding should they not be renewed;  Prepare for the reforms that CalPERS will put in place over the next six years that will have a significant fiscal impact;  Prepare to implement the Affordable Care Act during the term of this proposed budget, with as- yet unknown fiscal impacts and many unresolved questions;  Still absorbing the impact of the loss of Redevelopment;  Five years of structural deficit is forecasted; and  More than $1 billion of unfunded liabilities and/or deferred capital projects projected. With labor agreements expiring beginning in July 2013, the proposed Policy Budget does not assume these savings and, instead, provides a prioritized list of services that we recommend be restored, if additional contributions are received. In general, the proposed budget-balancing measures seek to leverage City services by reducing hours rather than eliminating programs, ensuring that the fees we charge cover the cost of providing the service, generating additional revenue, and expanding the Oakland Police Department. Examples of proposed service eliminations, reductions, and reorganizations are presented in detail in the Service Impacts section of this document.