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Theresa Nelson's avatar

Well said. Oakland has more than double the number of employees it had 30 years ago, and most of the growth has been in middle-management and top administrative positions. I think most of the people currently on city council don't even understand pension funding and how it has and will hobble the budget. The actual increase in the number of employees magnifies the significant % salary increases and benefits cited by the author. Oakland budget future must include reductions in staff in less productive departments, such as Violence Prevention, which really acts more like a private foundation and does not report on metrics or results beyond demographics. The city continues to offshore the employee headcount by taking staff out of the general budget under certain types of restricted funding. In 2004, Oakland had 3,822 employees. IN 2012, 4,073, and in 2023, 4,285 (https://dig.abclocal.go.com/kgo/PDF/022824-kgo-opd-agenda-report-pdf.pdf) . (Where Oakland was in 2012: chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://cao-94612.s3.us-west-2.amazonaws.com/documents/OAK039273.pdf )

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Scott Law's avatar

Usual excellent analysis and reporting. Agree with all suggestions, with an important caveat... the city needs to be very cautious in bond refinancing strategies. Refinancing needs to be simple and "fixed rate to fixed rate - ie avoiding bets on variable interest rate financing/swaps schemes. Here is a summary from the 2010-2011 Grand Jury report on Peralta College district's disastrous OPEB Bond scheme, which cost taxpayers at least 150 million dollars due to bad bets on interest rates. "In addition to the fiscal challenges of funding OPEB costs and related bonds,

there remains the issue of whether the board of trustees will avoid similar risks in

the future. During 2010, PCCD saw the departure of the former chancellor, a vice

chancellor of finance, and the outside financial advisors who oversaw the OPEB

financing. The board of trustees is still comprised of all but one of the same

elected members who were ultimately responsible for each of the financing

decisions:

 The board of trustees chose exotic, high-risk financial instruments to fund

a large liability for OPEB. Because of the complexity of these investments,

the district hired new outside financial advisors just to monitor these

derivative investments and bond positions at considerable cost to

taxpayers.

 The board of trustees made a series of decisions, each of which worsened

the district’s financial exposure by refinancing bonds to avoid payments

from the general fund in the initial years and to try to increase revenues on

the basis of temporary interest rate anomalies.

 The board of trustees failed to recognize signs that the district’s financial

management was seriously deficient; e.g., unable to perform basic

functions of producing budgets, closing the financial books, completing

financial audits, and submitting required reports on time. " AC Grand Jury Report 2011 pg 143 - 151 Situation sound familiar ?.. Great job in compiling these suggestion...

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