OAKLAND — The City Council today will take up the question of whether to place an $18.2 million-a-year parcel tax before voters in November as it works to fill a looming $42.6 million deficit.
"The big decision (tonight) is: Do we put an initiative on the ballot in November or not?" City Council President Jane Brunner (North Oakland) said. "If the council does not support that, then we have to request that the city administrator come back with an additional $20 million worth of cuts."
The council meets at 5:30 p.m. at 1 Frank H. Ogawa Plaza. Officials have until July 20 to hammer out the specific details of a measure, but for now a city proposal envisions a tax that would cost the average homeowner $180 a year to preserve funding in the police and fire departments. The council also is considering putting a half-percent increase in the utility users' tax on the ballot that would generate about $2.4 million a year.
Police and fire, together with debt service, account for about 85 percent of the city's general fund, which the city estimates will have revenues of nearly $400 million for the 2010-11 fiscal year beginning July 1. Some who question whether the time is right to put a tax measure on the ballot say officials should move more aggressively to get concessions from the police and fire unions — a prospect the unions reject.
Also included in the package of proposals to fill the budget gap are plans to sell the Henry J. Kaiser Convention Center and slash positions in the information technology, finance and management departments. Council members voted April 1 to cut the budgets of elected officials' offices by 15 percent.
Some budget observers — inside and outside City Hall — think that asking for a parcel tax is an uphill battle in a troubled economy. Joe Haraburda, president and CEO of the Oakland Metropolitan Chamber of Commerce, said in a letter to council members that the city should focus on a plan that would include restructuring its pension system, controlling costs and reducing salaries by 15 percent across the board.
"I think the average man on the street is saying, 'Hey I'm paying a lot already,' " he said of possible new taxes. "I think that to assume that people would just go forward and agree to additional taxes — I don't think there's any certainty in that."
Councilmember Nancy Nadel (Downtown-West Oakland) suggested in a memo to her colleagues that the council "encourage the city administrator to request reopening" the police contract to negotiate lower starting salaries. Councilmember Ignacio De La Fuente (Glenview-Fruitvale) said he will not support a tax unless all city unions — including police and fire — agree to more concessions.
"At this point, we've got to be realistic that the present benefits when it comes to pensions and medical benefits are not sustainable," De La Fuente said. "I think we have to seriously look at a two-tiered system for their pension, I think we have to look at (the police) paying into their pensions."
Under the current police contract, officers begin paying 2 percent of their salaries into their retirement Jan. 1, 2013. De La Fuente said they should start contributing immediately.
Last year, all of the city's major unions agreed to roughly 10 percent compensation reductions. Leaders with the two public safety unions gave no indication they are willing to reopen contracts.
Chuck Garcia, president of Local 55 of the International Association of Firefighters, said in the last contract that firefighters agreed to work more hours and freeze wage increases. "We've been cut to the bone already," he said.
Police Sgt. Barry Donelan, vice president of the Oakland Police Officers Association, said in raw dollar figures, "We gave back more than anybody last year. We are not going to go back to our members again this year."
Even with givebacks, without a new revenue stream the city could be looking at significant layoffs in the Police Department. The Fire Department is protected to a degree by a provision in the firefighters' contract that says the city cannot lay off anyone on "active, paid status" hired before July 1, 2009.
Brunner said without a parcel tax, the city could see as many as 150 layoffs in the police department — something she said no one wants to have happen.
"We have crime going down, a very good chief" — Anthony Batts — "and this is not the time to lower our police force," she said. As for trying to get concessions out of the unions before putting a measure on the ballot, she said there might not be time. "I'm not willing to gamble and play a game of chicken with the police."