OAKLAND, Ca. – The city of Oakland is underwater. Financially, anyway. At the October 22 city council meeting, Oakland’s Director of Finance reported that the city overspent its budget by nearly $100 million in the last fiscal year.
Hiring freezes, travel restrictions, and reductions of city contracts have had little effect, and the finance department estimates a $120 million deficit in each of the next two years.
To prevent this, the city council is weighing cuts to Oakland fire and police departments, which make up the majority of the city’s general purpose fund.
Mayor Sheng Thao, who is facing the first recall of an Oakland mayor in 100 years, recently amended the deal to sell the Coliseum – the former stadium of the Oakland Athletics and Raiders – to bring in $125 million. However, the city received the initial $15 million in October and not by a September deadline. As a result, the city triggered its contingency budget, a backup plan officials created this summer.
The contingency budget is being implemented and council members are considering laying off over 100 active police officers and freezing five fire stations for nine months in a city reeling from the impacts of the recent Oakland Hills wildfire. Asked how challenging it would have been to fight the Oakland Hills fire without current resources, Oakland Fire Chief Damian Covington did not mince words.
“Virtually impossible,” he said. “[The budget cuts] are on the backs of our citizens because they’re the ones that aren’t gonna receive the timely 9-1-1 calls that they’ve become accustomed to.”
Oakland’s bond rating, which it uses to fund long-term projects like building roads and highways, will also take a hit.
“Given the current state of the city’s finances, we are unsure whether we will be able to deliver a bond issuance,” City Budget Administrator Brad Johnson said. “Should we not be able to go to market, we will need every dime in places like transportation funds to maintain our capital improvements for paving and traffic safety.”
Thao has come under fire for changing the terms of the Coliseum sale without involving members of the city council. The new deal increased the purchase price by $15 million and sped up the final payment deadline by a year to June 2025. However, it also eliminated the $33 million payment the city would have received in January 2025.
Oakland Councilmembers Treva Reid, Janani Ramachandran, and Noel Gallo denounced the deal changes and have claimed the mayor’s approach to the deal has been filled with “deception, delay, silence, [and] manipulation.” They have continued to call for greater transparency on the terms, though Thao said the council members were briefed on the new deal by the City Administrator, Finance Department, and Coliseum Negotiating Team.
The budget crisis and the Coliseum sale have also become a point of contention in the crowded City Council At-Large race, which has 10 candidates running for one position. At a recent virtual candidate forum hosted by the East Bay Housing Organizations (EBHO), candidates criticized Thao’s changes.
“First of all, the sale of the Coliseum to solve the budget was a crazy idea,” said candidate Mindy Pechenuk. “You should never tie a budget to a sale of an item like that…the mayor herself changed the agreement without even the city council.”
Many candidates called for the formation of a community advisory board and for oversight from local leaders of the faith, business, non-profit, and sports communities as well as from residents living closest to the Coliseum.
In an interview with NBC Bay Area earlier this month, Thao said the Coliseum sale was meant as a one-time funding source rather than a long-term solution.
“I want to be very clear that this sale of the Coliseum was a creative idea by my administration,” she said. “It is not the silver bullet to solve all of our budget issues. It never was.”
