The Oakland City Council passed a $4.2 billion city spending plan late Monday night, plugging a historic $360 million shortfall. In a press statement issued Tuesday morning, Council President Bas said the new budget shows Oakland’s leaders are “standing together despite facing the worst deficit Oakland has ever seen.”
But while the majority of the council sided with Mayor Sheng Thao and Bas, the vote exposed a schism: Three councilmembers–Janani Ramachandran, Treva Reid, and Noel Gallo–refused to endorse the budget, with the first two abstaining and Gallo voting no.
The final budget, which legally had to be approved by June 30, hews closely to the proposal Mayor Sheng Thao introduced in May. Thao and Council President Nikki Fortunato Bas worked closely together for months to craft a budget they could agree on. As a result, in the run-up to last night’s meeting the City Council did not push back on the most important elements of Thao’s plan, which prevented layoffs by freezing hundreds of vacant funded positions citywide and cut department budgets.
It appeared the council was operating cohesively compared to the last budget cycle, which was dominated by divisive debates between then-Mayor Libby Schaaf and a council faction over whether to spend less on policing and increase funding for non-police public safety programs.
However, several councilmembers on Monday broke with the mayor and council president over Thao’s plan to merge several departments. Pending an ordinance approving this change next year, Community Homelessness Services will be absorbed by the Housing and Community Development Department. A new entity—the Department of Children, Youth and Families—will be created through the merger of Parks, Recreation and Youth Development and Human Services. Finally, the Department of Economic and Workforce Development is merging with the Department of Planning, Building and Economic Development.
Thao argues this maneuver will save the city about $2 million per year and streamline critical services. At previous meetings and in budget memos, Ramachandran, Reid, and Gallo had been skeptical of the plan and objected to pieces of it. But on Monday, this group put its foot down, complaining that they were being ordered to rubber-stamp a vague plan.
Ramachandran said that the city hasn’t done a feasibility study to guide its decision, and doesn’t have basic information like how many staff positions will be affected, or whether the mergers will improve services. She also criticized the lack of coordination with Alameda County, which controls much of the funding for homelessness-related services in Oakland. She characterized it as dangerous to approve the mergers without rigorous vetting.
“If someone asked you to get on the Titanic submarine because it sounded like a good idea, would you go without doing your research first?” Ramachandran asked, referring to a tourist submarine disaster that killed five people last week. According to media reports, the owner of the submarine allegedly shirked safety standards.
Fife—who gave an exaggerated slow clap after Ramachandran’s speech—urged her colleague to adopt the same level of scrutiny when the council discusses OPD expenditures.
Ramachandran attempted to stall the proposed mergers of homeless services with Housing and Community Development and the consolidation to create the new Department of Children, Youth and Families through a procedure known as a “substitute motion.” This motion failed 5-3, with Ramachandran, Reid, and Gallo voting in favor.
Reid said she thinks the reorganization plan is a bad idea because some of the departments that will be changed haven’t had consistent leadership over the past year, as some department heads have retired or left the city for other reasons.
“We’re not giving consideration to the other paths that can be discussed and considered, and that is challenging,” Reid said.
Thao’s chief of staff, Leigh Hanson, argued the mergers are a necessary step in Oakland’s long-term strategy to address its structural fiscal problems. For years, the city’s costs of providing services—from police and fire to road repairs and libraries—have outpaced increases in revenues. The reorganization, said Hanson, puts Oakland on a path toward reining in some costs and becoming more efficient.
“We have seen the devastating impact of delaying structural changes,” Hanson said at the meeting. “We know this crisis will worsen if we do not act.”
The council budget team, led by Bas and including Fife, Kaplan, and Jenkins, freed up a little revenue to prevent some cuts but Oaklanders will still experience service reductions in key areas, including OPD and the Department of Violence Prevention. Officials also warn that the budget is composed of one-time fixes, and the city needs to start thinking immediately about how it will address another expected deficit in 2026.
“I am deeply grateful for Council President Bas, Councilmembers Fife, Kaplan, Jenkins, and Kalb, who voted to pass this budget, which, despite a historical deficit, puts Oaklanders first by investing in the full landscape of public safety, resulting in more officers moving forward, while simultaneously investing in violence prevention,” Mayor Sheng Thao said in a press release Tuesday morning.
Below are several of the most significant decisions in the final budget.
Federal funds protect fire while police services and violence prevention programs are reduced
The Oakland Fire Department is the only branch of city government that secured a windfall of new money to offset serious proposed cuts. In May, the department was awarded a $27.4 million federal grant to bolster its staffing. City officials diverted some of that money to prevent the temporary suspension of a fire engine, which would have hampered the department’s ability to respond to emergencies.
The Police Department’s budget is increasing by roughly $40 million over what it received in the last two-year cycle, growing to $722 million from $683 million. However, the costs of running the department—salaries, materials, contracts, and more—have grown faster than this new funding. To make up for this, the budget freezes numerous vacant OPD positions, reduces the number of sworn officer positions from 726 to 710, and cuts the overtime budget by 15%. No police officers are being laid off.
The department also may have a retention problem: according to the city’s latest staffing report, OPD lost 50 employees to retirements, resignations, and other reasons in fiscal year 2022-2023. The new budget will cover five police academies but it’s unclear if they will help the department hire more officers than are leaving. According to OPD’s most recent staffing report, seven officers resigned during field training between July 2022 and March 2023.
Ramachandran proposed paying for an OPD grant writer so the department can drum up more outside dollars for public safety. Bas instead proposed a grant writer position who can work across city departments. Thao was forced to make an appearance to break a tie vote after Ramachandran suggested that the grant writer focus on public safety issues. In the end, the council approved Bas’s recommendation.
Another major change to OPD will occur sometime after June 2024, when the Internal Affairs Division is replaced by civilian investigators. Currently, sworn police officers are responsible for investigating allegations of police misconduct. These officers will be reassigned to investigate crimes like homicides and burglaries. They will be replaced by civilians working for the Community Police Review Agency, an arm of the Police Commission. The plan, says councilmembers, will save money, help solve more violent crimes against the community, and make police oversight more independent of the department.
This year, Mayor Thao and Council President Nikki Fortunato Bas were essentially in agreement on how to fund the police department, in contrast to the last budget cycle, when council was split over defunding OPD. A proposal by Kalb to unfreeze 10 vacant OPD positions in hopes of filling these with new officers did not make it into the budget. A request from Reid for $150,000 from the last budget to be carried forward to pay for public safety cameras in commercial corridors in East Oakland did get carried forward.
The approved budget eases some of the cuts Thao originally proposed for the Department of Violence Prevention, which was established in 2017 to address the root causes of violent crime. Thao proposed reducing the department’s budget by about $6.5 million from what it received in 2021-2023. The City Council restored $2.1 million to fund the department’s grants, plus hundreds of thousands of dollars to counter sex trafficking. On Monday, the City Council also approved a last-minute amendment to divert $750,000 from the IT Department and community grants to the Department of Violence Prevention. Bas made clear that the additional money given to DVP is one-time funding.
To some extent, the department’s budget reduction reflects changes in grants: during the last two-year period, the department had nearly $8 million in funding from the California Board of Corrections, money that isn’t available this time.
The brunt of the department’s cuts will fall on the nonprofit organizations that are contracted to do DVP’s frontline work. For weeks, Communities United for Restorative Youth Justice and other DVP contractors have protested at City Hall, saying budget cuts will hamper their work with at-risk youth and diminish their ability to support families suffering in the aftermath of homicides.
Affordable housing and homelessness remain city priorities
Thao’s budget will pump $216 million into building, acquiring, and rehabilitating affordable housing. A little over half the funds will come from Measure U, which voters approved last year.
The council set aside an additional $8.8 million to create a fund that will be used to rapidly create housing for the homeless and $1 million per year for tenant legal services to try to prevent renters from being displaced from their homes during disputes with property owners.
Roads get $213 million in upgrades. Arts and culture funding mostly protected
The council approved Thao’s proposal to put $213 million toward repairing and upgrading roads, parks and recreation facilities, libraries, storm drains, and other non-road infrastructure. About $87 million will be used to continue street resurfacing projects, which are a critical priority following winter storms that badly damaged roads.
Thao proposed several million dollars for traffic safety programs—including traffic calming programs and safe routes to school—and bike and pedestrian plans. All councilmembers agreed road safety is a paramount concern given the 35 traffic collision deaths in 2022. The council added an extra $1.7 million for this cause: each councilmember will receive $100,000 to pay for traffic safety projects in their district. The remaining $770,000 will be spent on preventing violence and sideshows. A portion of money geared toward Lake Merritt improvements will pay for traffic safety changes around the lake. According to Bas, the new budget invests over $10 million in traffic safety changes.
The City Council scaled back some of the big cuts Thao wanted to impose on the Cultural Affairs Division, which helps support arts and culture groups across the city. Artists and residents were upset by the initial proposal, which would have slashed funding for grants and subsidies for local artists and some of Oakland’s most cherished cultural sites, including Children’s Fairyland, Chabot Space and Science Center, and the Asian Cultural Center.
The approved budget restores some funding for cultural organizations, increases cultural affairs grants by $300,000 each year, and gives each Councilmember money to spend on direct community grants. It will also unfreeze several positions that help permit and organize events. And the final budget adds $100,000 per year for the activation of Frank Ogawa Plaza, which is still hundreds of thousands of dollars short of what the activation fund covered in the previous budget.
A setback for the Public Ethics Commission
Councilmembers offered little assistance to the beleaguered Public Ethics Commission, which is responsible for overseeing campaign finance and transparency rules in Oakland but is understaffed and overloaded with work. Last November, voters approved a new elections program called “Democracy Dollars,” which will give every registered Oakland voter money vouchers to support candidates in local elections. The program is intended to level the campaign finance playing field among residents, ensuring that the funding of elections is no longer dominated by wealthy residents who live mostly in District’s 1 and 4.
Thao wanted to postpone the Democracy Dollars program until the next budget cycle in 2026 because it relies on $4 million from the general fund. The council mostly agreed but also unfroze a role in the commission to prepare for implementing the program, possibly on a smaller scale. They set aside $155,000 for the commission, which will likely be used to restore public financing in local elections. This is an important concession to the commission, which had expressed concerns about the fact that Measure W repealed the city’s Limited Public Financing Act, a program that gave some public funds to candidates running for City Council and imposed a spending cap on candidates who accept money under this program.
An earlier version of this article incorrectly stated that City Council approved diverting $750,000 from the IT Department to the Department of Violence Prevention. The council reallocated this money from both IT and community grants.