Pink slips will go out to more than 1,500 city employees next week, as Oakland races to meet a Feb. 1 deadline to dissolve its redevelopment agency.

Although fewer than 200 employees are actually expected to lose their jobs, the City Council wants maximum flexibility as it considers major cuts to make up for the $25 million to $30 million in redevelopment funds that went to pay employee salaries.

In a Thursday letter informing city employees of the pending layoff notices, City Administrator Deanna Santana announced that she was imposing a moratorium on new hires, ordering department heads to propose 5 percent cuts and asking labor unions for concessions.

The City Council will meet on Jan. 25 to discuss budget cuts and corresponding layoffs.

"There is no place to go to fill this gap," Councilwoman Jane Brunner said. "There are whole departments that are just going to be bare bones."

A state Supreme Court ruling last month effectively eliminated the state-subsidized redevelopment program, which cities used to fight blight and build affordable housing. Oakland, which designated nearly half the city as blighted, had one of the most active redevelopment programs in the state.

Redevelopment funds paid for the equivalent of 159 full-time employees, stretching over 11 departments, including 17 police officers and nearly 100 members of the city's Community and Economic Development Agency. The police officers funded through $3.5 million in redevelopment funds are immune from layoffs under the police contract. All layoff notices must go out Wednesday to give employees the required notice before layoffs could begin on Feb. 1.


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Santana said she asked department heads to propose 5 percent reductions to help her prioritize essential services.

The city is holding out hope that state legislators will delay the dissolution date of redevelopment agencies, or, even better, devise a new system of redevelopment that would help the city avoid making any layoffs.

Senate President Pro Tem Darrell Steinberg has introduced legislation that would preserve redevelopment funding for affordable housing, which would save $35 million for Oakland projects and associated city staff positions, assistant city administrator Fred Blackwell said.

Contact Matthew Artz at 510-208-6435.