Rotating firehouse shutdowns, a reduced police force, fewer positions in violence prevention programs: Oakland departments are in jeopardy as the city faces a fiscal cliff, with few solvency-saving options.
The budget administrator has tasked the Oakland City Council with slashing $115 million from its $2.2 billion spending plan by year’s end.
“Fecklessness and failure to take dramatic and immediate steps to reduce expenditures will almost certainly result in insolvency,” said a budget report that was swiftly removed last week from the city’s website and replaced with softer language and no mention of bankruptcy.
Oakland’s position is reminiscent of that of 2009, during the Great Recession, when the city faced a $100 million shortfall, and council members discussed bankruptcy protections in closed session.
Even if Oakland is able to pull back from the brink this time, the city is not fundamentally structured for financial success, observers contend.
The state of affairs perplexes Steve Falk, a career public servant who was Oakland’s interim public administrator in 2020 and 2023. But he has a diagnosis.
“I think there’s a leadership void in Oakland, and that’s due to the charter,” Falk said.
In “strong mayor” governments, such as those of San Francisco and Los Angeles, the mayor is the administrative chief. But the vast majority of California cities have a councilor-manager form of government, wherein an elected board hires a city manager to follow its policy direction. The Town has a hybrid system known as a “weak mayor” government.
No one official is responsible for delivering a balanced budget in Oakland. The mayor has limited veto power and ability to shape policy and doesn’t supervise day-to-day operations of city departments. The buck stops nowhere.
“They created a weak mayor system rather than a strong mayor system, and so that’s what Oakland has now, and I think the system has failed the city,” Falk said. “People have been talking about this for years, but I think that the problem is now manifested in this budget.”
Urban think tank SPUR issued a report in 2021 detailing how Oakland’s governance structure should be changed so that the mayor has legislative power and the ability to veto line items on the budget.
“The budget crisis that we’re in right now is very complex,” said SPUR policy director Nicole Neditch. “There are lots of factors that are going into that, but I certainly think that this is one of the things that needs to be improved in order to make sure that we’re able to make better decisions on behalf of Oaklanders.”
Several unions are encouraging the city to adopt a “road map” to stabilize the budget that outlines fiscal controls for police overtime pay — a major cause of the deficit — along with ideas to grow revenue.
Oakland Vice Mayor Rebecca Kaplan, who’s leading the effort to borrow from the city’s liability insurance fund for cash needed immediately, agreed that the system could be improved but emphasized that the government is handling its business.
“[We] are taking action right now, under the current system, to prevent the fiscal emergency,” she said.