Chair McElhaney opens the Finance Committee Mtg by saying that this will be her last meeting chairing. She'll be replaced by new D3 CM Carroll Fife. This will be a thread of the meeting. #oakmtg

City Administrator Ed Reiskin is giving the Finance Report. They're focusing on a review of the underbudgeted previous fiscal year, which ended on June 30 and forecast for the coming fiscal 20-21 year.

Reiskin notes city deviated from usual fiscal policies by dipping into rainy day funds. He says that the City did not predict or expect the "second Covid wave" in May-June. "The situation is considerably worse than we thought it was when we adopted the mid-cycle budget" #oakmtg

Extended Covid will require us to make "in-year corrections now and will make the development of the next year budget more difficult" #oakmtg

Finance Dept Margaret O'Brien is presenting the report. She starts with a graph of historical recessions. The economic shock in May-June was far sharper than previous recessions #oakmtg

O'Brien says that in January, California was expecting a 5.6 billion surplus, now expecting a 54 billion deficit. #oakmtg

O'Brien says that the City lost 27 million in GPF revenues since last year. Oakland's unemployment rate increased by a factor of 3 #oakmtg

Back to back deficits between 19-20 and 20-21 are going to end with a 62 million deficit. O'Brien says that without aggressive action, Oakland is in trouble

In explaining the primary driver of over-expenditure vs revenue, a Finance Staffer puts the problem in the context of overspending as a problem of under-budgeting. NOt sure how that's going to fill the hole, except by cutting other programs.

The staffer says that 20-21's 52 million deficit is greater than 400 civilian positions, 250 sworn positions, equivalent to the budget of almost every City dept. She says the numbers are likely to be worse than the prediction #oakmtg

Reiskin gives options on budget deficit: deferring city wage increases, increasing benefits share, reducing staff wages, service reductions [closing city hall and services, periodic closures, "brownouts" for OFD, reducing senior services, animal care, affordable housing] #oakmtg

Its also clear that cutting police alone wouldn't solve the forecast budget deficit [but it could be a big chunk of it]

Several public comments taking City to task for not adequately predicting current shortfalls, most have complained the City didn't cut police spending when it could to meet the deficit. Another caller complains about Reiskin's comment about cutting vegetation management #Oakmtg

Liz Ortega Exec Director of Alameda Labor Council says that she's disappointed to hear that Oakland is considering general staff cuts instead of focusing on OPD's consistently spending more than allowed without sanction #oakmtg

IFPTE's research director says that the City could cut police spending and carry forwards, she also says that the police overtime data was provided without subtracting potential reimbursable overtime. She adds that the potential federal stimulus wasn't added.

James Burch, from APTP and a member of the Reimagining Public Safety Taskforce says that city should focus on police, says for years nothing has been done to address the OPD's overtime spending. #oakmtg

Burch says that APTP has been addressing the issue of over spending on police and underfunding other areas for years and that OPD has to be held accountable for its overspending #oakmtg

Several commenters have commented that the City is creating a false sense of a need for austerity to balance the budget, without a full accounting of where the spending is happening [police].

Finance has also provided a somewhat confusing portrait of OPD's overtime. Some of the overtime is compensated [Home Depot, concerts, etc], but the report has listed such costs, without clarifying if they will be or have been compensated. #oakmtg

Council President Kaplan's chief of staff, Kimberly Jones reads a statement from Kaplan. She says the revenue reductions aren't as severe as OPD's overspending of over 30 million. She says that Kaplan had fought for accountability process on overtime, and a hold on OT

Finance Chair McElhaney says the problem is not just in police, and says that the Council has not used a reality check in allocating police budget. She says Council should "tone down allegations". Obvious hat tip to idea that OPD is actually UNDERFUNDED by Council #oakmtg

McElhaney also says that the Council asked the City to hold off on staffing cuts to see how things turned out and implies that was a mistake. She also says that OPD's previous recession based OPD cuts led to the current overtime expenditures instead #oakmtg

McElhaney leaving on a McElhanian note.

Reiskin explains that City referred to consultants to predict impact of Covid, with a pessimistic assumption, and more positive one. They went with the more positive one that led to fewer cuts #oakmtg

Reiskin says he "shares frustration about how we've been doing budgeting on OPD overtime", says City has been complicit in structural imablance between public/council expectations and Council budgeting. Reiskin redirecting back to idea that OPD is under-budgeted #oakmtg

Reiskin adds that there are things that OPD does that think that police shouldn't be doing, but until those are designated and other providers put into effect, there's no way to do that.

Reiskin says there was no policy direction on what activities the OPD should stop doing. He says that Council needs to do that. This is a dare Council always fails to meet, because they'll be seen as cutting police directly, rather than behind the scenes and City/Chief know that.

CM Kalb's comments/questions: Asks if city staff furloughs are an option, Reiskin says that would in effect be the product of periodic shutdowns of govt.

Kalb adds suggestions: wouldn't want furloughs, but wants that on the table as option. Transferring animal services to a non profit as other cities do. Talks about broader uses of Sugar Sweetened Beverage Tax. Freezing more vacancies, but not all, including OPD vacancies #oakmtg

Chair McElhaney stopped Kalb. Its her prerogative as Chair, but she seems to speak whenever she wants to.

Thao says she wants a list of staff vacancies with explanations about how long they've been open, and what kind of progress there is to fill them. She also asks for a breakdown of raises that become due in January [that Reiskin mentioned possibly freezing] to see the impact

In response to predictive power of current Q1, Finance Director O'Brien says they wouldn't normally put as much faith in Q1 figures, but this is historically bad in terms of revenue, especially in parking and transient occupancy tax.

Thao wondered if a revenue bounce would happen more quickly than previous recessions, but Reiskin warns not to expect any kind of bounce back during the 20-21 fiscal year [which ends June 30]

Bas says that the audit on OPD OT suggested more than just increasing the budget. It also mentioned that OT policies haven't been updated since 1999, and that management reporting system is poor. She says OFD has systems in place to manage budget in real time.

Kalb is back asking about project carry forward issue that IFPTE brought up [the amount not spent on a project in an FY, but that is then dedicated to the project for the next FY budget]. He says there shouldn't be assumptions, but they should be looked at case by case.

In response to Kalb's question, Reiksin explains OPD OT amount in report takes into account salary savings, overage is overspend after vacant savings have been payed off overtime. If that's true, the total overage is 19 million. Not clear if that includes reimbursable tho

This may be why OPD's table on 19-20 overtime is so much greater than what the Finance Department lists. Manheimer's report may be total overtime spent, before OPD uses the savings from its vacancies, and applies reimbursements. I will follow up on this, but vague reporting

Reiskin says that City will come to Council in January with recommendations about adjusting the current FY budget. It will be a new Council, so will be interesting to see how well they're received #oakmtg

Finance Director says that the 20-21 Q2 analysis will come in early March with updated projections. But the City will want to have started to consider budget adjustments before then.

The Finance Committee voted to forward the report to City Council for December 15, so there will be another discussion of the budget, OPD, and possible cuts next week. #oakmtg