Oakland (Special to OaklandNewsOnline.com and based on email to Zennie62Media, Inc. from the District 4 Councilmember Janani Ramachandran) – Oakland City Council passed a contentious FY 24-25 Oakland Budget – a budget that I could not support in order to stay true to my firmly-held values of transparency, good governance, and accountability to the people. I was deeply disappointed, and frankly speaking, shocked that a majority of my Oakland City Council colleagues made the irresponsible decision to close our Oakland budget deficit using money that we do not yet have – money that would come from the sale of the Oakland Coliseum.
Oakland Coliseum Land Sale To AASEG Not Done
While I do support the sale of the Oakland Coliseum to the African American Sports & Entertainment Group (AASEG), which is led by East Oakland professionals with deep roots in the community, the deal is nowhere near being finalized, so incorporating $63 million of sale proceeds into this year’s budget poses an unacceptable risk to our fiscal stability.
By including Oakland Coliseum revenues to close our Oakland budget deficit, five City Councilmembers took a leap of faith that Oakland and AASEG can negotiate a deal, execute a Land Sale Agreement, and receive an initial $15 million payment from the total sale price by September 1st.
If this does not occur, a “contingency” budget would go into effect and trigger drastic cuts to vital services, including reducing our police force to 600 officers, temporarily closing five fire stations, and immediately halting all City contracts (including those funding violence prevention, road paving, and arts and culture nonprofits).
Oakland City Council Is Engaging In Fiscally Risky Behavior
Whether or not the deal goes through on time, the fact that Council is engaging in fiscally risky behavior by incorporating funds to the budget that are not yet promised to the City would trigger negative financial implications for the City.
For example, Oakland’s AA+ bond rating is very likely to be decreased after yesterday’s vote, which would threaten our access to the capital market. This would likely lead to the cancellation of $200 million of pending capital projects to fund critical affordable housing and infrastructure projects.
Moreover, using such a large amount of one-time funds only kicks the can down the road, as the City Council will still have to close an estimated $100 million gap in next year’s biennial Oakland budget – where there would be no one-time revenues to bail us out and layoffs could be on the table. All of these risks were very clearly presented to Oakland City Council by our Finance Department during this past week’s budget meetings.
Although I was initially skeptical of the ability of Coliseum sale to completed in time for sale proceeds to be incorporated into this year’s Oakland budget, I mistakenly relied on the repeated assurances of our Mayor and City Administrator that it would be. However, new information was revealed to the Council and the public last week that the timeline for closing the deal was still uncertain.
Alternative Oakland Budget Proposal Came Nine Days Before The Vote
On June 25th – just three days before the scheduled final vote on our City’s budget – we received an “alternative” proposal without Coliseum sale proceeds that would have made major cuts to public safety – which I was unwilling to accept, but recognized could be a starting point for substantial amendments.
Due to the nine-day timeline required for Councilmembers to confer with the Finance team to submit amendments, it was impossible to digest the new proposal and submit meaningful alternatives in time for the vote. I proposed to Council an extension until the end of the July to re-open the budget process, engage in public dialogue around possible amendments, and submit amendments – an option fully permissible under our Charter – but this proposal was struck down by a majority of Council.
There is no doubt that, given our financial realities, painful cuts would have to be made to certain aspects of city services in any budget scenario this year. However, the situation in front of us absolutely could have been avoided if Council had received budget proposals from the Mayor and City Administrator in a timely fashion that would have allowed Council the opportunity to review the proposals, have our questions answered, and file our own amendments.
But instead, Council received the Mayor’s initial budget proposal on May 24th (significantly later than most mayoral budgets in Oakland) and the “alternative” proposal that excluded the Coliseum sale just days before the budget vote.
Because the Mayor and City Administrator chose to issue these proposals at the 11th hour, the majority of my fellow Councilmembers have made the wildly irresponsible choice to close this budget with money the City does not yet have. This year’s budget process has been an insult to the people of Oakland – people who now will have to bear the consequences of this failure of leadership.
