The Adopted Budget and accompanying resolution conforms to the requirements of the City's Consolidated Fiscal Policy (CFP) Ordinance 13487 C.M.S.. Compliance with specific sections are noted below.

COMPLIANCE WITH THE CONSOLIDATED FISCAL POLICY

Policy on Balanced Budgets

The Adopted Budget is a balanced budget that limits appropriations to the total of estimated revenues and unallocated fund balances projected to be available at the close of the current fiscal year. Appropriated transfers from unallocated fund balance are only included when such fund balance is reasonably expected to exist by the end of the current fiscal year.

Use of One-Time Revenues

The Adopted Budget does include the use of one-time revenues for ongoing purposes. This is a departure from how the City normally balances its budget, and is due to the extraordinary circumstances surrounding the COVID-19 Pandemic and the loss it has created within the City’s incoming revenues. As such, for this budget cycle, the City is temporarily suspending Part D Section 2 of the CFP so that it can use the American Rescue Plan Act (ARPA) funds to maintain ongoing services. The resolution accompanying the Budget contains the necessary explanations for the need to use one-time revenues for purposes other than those established in the CFP as well as the steps the City will take to return to using one-time revenues pursuant to it. Specifically, one-time revenues, primarily ARPA Funds, are used to:

• Maintain core City services of library services, parks & recreation facilities, fire & emergency services, and children & youth programming;
• Fill deficits in other funds that typically are sustained through incoming ongoing revenues such as OPRCA Self-Sustaining Revolving Fund (1820), the Measure Z fund (2252), and the Measure C fund (2419)

Use of Excess Real Estate Transfer Tax (RETT) Revenues

Excess Real Estate Transfer Tax (RETT), defined as any amount of projected RETT revenues that exceed 15% of General Purpose Fund Tax Revenues. For this Proposed Budget, this excess RETT is estimated at $15,757,365 in FY 2022-23.

This excess Real Estate Transfer Tax, per the CFP, is to be used in the following manner and appropriated through the budget process:

1. At least 25% shall be allocated to the Vital Services Stabilization Fund, until the value in such fund is projected to equal to 15% of total General Purpose Fund revenues over the coming fiscal year; and
2. At least 25% shall be used to fund debt retirement and unfunded long-term obligations such as negative fund balances, Police and Fire Retirement System (PFRS) unfunded liabilities, CalPERS pension unfunded liabilities, paid leave unfunded liabilities, and Other Post-Employment Benefits (OPEB) unfunded liabilities; and
3. The remainder shall be used to fund one-time expenses or to augment reserves.

Consistent with the FY 21-23 Adopted budget where the CFP section on one-time revenues for one-time expenditure has been temporarily suspended, the excess RETT is proposed to continue to be used in the following ways in the Proposed Midcycle Budget:

• The Proposed Budget transfers 25% of this total excess revenue to the City’s Vital Services Stabilization Fund (1020). For FY 2022-23, this amount is $3,939,341.
• The Proposed Budget allocates the same percentage of 25% to the repayment of the City’s OPEB unfunded obligation and thus complies with the use of excess RETT. For FY 2022-23, this amount is $3,939,341.
• The Proposed Budget uses the remaining amount along with the ARPA funds to plug the deficit the City has in its General Purpose Fund (1010).

Reserve Funds

The Proposed Budget is consistent with the General Purpose Fund Emergency Reserve Policy to maintain in each fiscal year a reserve equal to 7.5% of the General Purpose Fund (Fund 1010) appropriations as unobligated fund balance. For the FY 2022-23, the Emergency Reserves estimated unobligated fund balance at the end of FY 2022-23 is $65.41 million. There are no appropriations made from the General Purpose Fund Emergency Reserve in the FY 2021-23 Adopted Budget.

The Proposed Budget is consistent with the Vital Services Stabilization Fund (VSSF) policy and makes additional contributions to said fund of $3,747,095 in FY 2022-23 in accordance with the CFP. No transfers were made into the VSSF in FY 2019-20 and FY 2020-21. These transfers were suspended in accordance with Resolution No. 88108 adopted by the City Council on May 12, 2020. Instead the entirety of the VSSF was used to balance the FY 2020-21 budget. VSSF's fund balance at the end of FY 2022-23 is estimated to be $ 10,518,745 which is 1% of General Purpose Fund Revenues.

The Proposed Budget is consistent with the Capital Improvements Reserve Fund and makes an additional one-time contribution to said reserve in the amount of $787,253 in FY 2022-23.

COMPLIANCE WITH KEY VOTER APPROVED MEASURES

The 2020 Oakland Parks and Recreation Preservation, Litter Reduction, and Homelessness Support Act (Parks Measure Q – Fund 2244) authorizes a twenty-year annual special parcel tax beginning in fiscal year (FY) 2020-21 through FY 2039-40. Tax revenues* collected (net of any collection and tax levy costs and fees) are limited to the following purposes:

• No less than 64% for parks, landscape maintenance, and recreational services;
• 30% for services to address homelessness and enable unsheltered and unhoused residents to access temporary shelters, transitional and supportive housing, and permanent housing;
• 5% for services and projects to address water quality and litter reduction, including by maintaining and cleaning stormwater trash collection systems; and
• 1 % to cover the costs of auditing and evaluating programs, strategies, and services undertaken pursuant to this measure.

*Central Services Overhead costs may not be recovered from this revenue.

Maintenance of Effort

For so long as the parcel tax is in effect, the City of Oakland must maintain service levels at the equivalent or greater than the service levels as to those provided in the Fiscal Year (FY) 2019-21 Adopted Policy Budget for FY 2019-20. If this maintenance of effort is not met, the City may not expend any revenue attributable to this parcel tax for the service area.

Parks, Landscape Maintenance, and Recreational Services: The maintenance of effort language restricts that the City’s operative fiscal year budget may not appropriate more than 55% of the estimated revenue allocated to the parks, landscape maintenance and recreation services to preserve parks maintenance services.

Homeless Services: The City's operative fiscal year budget maintenance of effort language excludes any revenue appropriated from the Affordable Housing Trust Fund, Fund 1870.

You may read the full ballot measure language for The 2020 Oakland Parks and Recreation Preservation, Litter Reduction, and Homelessness Support Act here.

The Oakland Vacant Property Tax Act (Fund 2270) is a special parcel tax on vacant property within the City of Oakland where the revenue may be used to provide services and programs to the homeless, to reduce homelessness, and to support the protection of existing and production of new housing affordable to lower income households. Additional uses of revenue include job training, job readiness assistance, and drug treatment programs for homeless people; housing assistance including temporary housing or move-in expenses; sanitation, bathroom, and cleaning services related to homeless encampments; deterring blight and illegal dumping; and code enforcement and cleanup of blighted vacant properties.

Maintenance of Effort

For so long as the parcel tax is in effect, no more than fifteen percent (15%) of the revenue deposited into the Vacant Parcel Tax Act fund in any single year may be used to pay for administrative costs (excluding costs of the Homelessness Commission). For Fiscal Year (FY) 2022-23 no more than $806,758 shall be allocated towards administrative costs and the FY 2022-23 proposed budget allocates this amount.

In addition, no less than twenty-five percent (25%) of the revenue deposited into the Vacant Parcel Tax Act fund in any single year shall be used to pay for code enforcement and clean-up of blighted vacant properties, blight elimination, remedying illegal dumping, and legal action to address any of the foregoing, as necessary. For FY 2022-23 no less than $1,344,597 shall be allocated towards this maintenance of effort. The Proposed Budget allocates $4.6M in FY 2022-23.

The Kids First Charter Amendment was first established in 1996 to create a separate fund exclusively dedicated to supporting Oakland’s youth and children with programming and services so they can grow to become healthy and productive adults. The Kids First Charter Amendment requires that 3% of the City’s unrestricted General Purpose Fund revenues be set aside in a separate fund (1780) every year.

The law requires that 90% of the Kids First funds to be used for eligible services for youth and children. No more than 10% can be used for administrative overhead, grant management, strategic planning, or third-party evaluation.

As a part of managing the Kids First fund, the City indicates the budget for fund 1780 in the Adopted Budget for the upcoming two fiscal years. Once the General Purpose Fund’s revenues are audited, the City then applies a “true-up” to the Adopted Budget based on what the City received in terms of actuals for its revenue from that prior fiscal year. This “true-up” can either be positive or negative, depending on if the budgeted amount was higher or lower than the actuals in General Purpose Fund Revenue.

For FY 2022-23, the Kids First Budget is $ 21,321,563 (which includes a positive true-up of $308,206 from FY 2020-21).

Below is how the Kids First calculation was made:

In 2014, Oakland voters overwhelmingly approved The 2014 Oakland Public Safety and Services Violence Prevention Act (Measure Z) to continue many of the services funded under the City’s Violence Prevention and Intervention Initiative, Measure Y. Measure Z authorized the City to renew for ten years a parcel tax. It also authorized the City to continue to impose a parking tax for ten years. These taxes were accompanied by certain police staffing requirements that, if not met, would compromise the City's authority to levy the taxes.

The projected revenue from these two taxes combined over the ten-year life of Measure Z was estimated by city officials to be $277.2 million. Not counting the 3% required for oversight and evaluation and $2 million for the Oakland Fire Department, the revenue from this tax was designed to be split 60% going to police staffing, programs, and services and 40% going to community violence prevention/intervention programs.

On November 8, 2016, Oakland voters approved Measure LL in favor to establish the Police Commission (Commission). The Commission would oversee the Oakland Police Department to ensure that its policies, practices, and customs conforms to national standards of constitutional policing. Measure LL is a Charter amendment which established a Commission to oversee the Oakland Police Department. The Commission and Community Police Review Agency (CPRA) replaced the Citizens’ Police Review Board (CPRB).

On November 3, 2020, Oakland voters approved Measure S1 in favor to amendment City's Charter creating an Office of Inspector General to review and report on the Police Department’s and the CPRA’s practices regarding police misconduct, changing the Commission’s and CPRA’s powers, duties and staffing, and allowing the Commission and the CPRA to hire their own attorneys independent of the City Attorney.

Measure LL & Measure S1 has a requirement that the City must allocate enough money to the Commission and the CPRA so that they can perform their required functions and duties. Specifically the Measures require the allocation of:

• No fewer than one line investigator for every one hundred (100) sworn officers in the Department, rounded up or down to the nearest one hundred (100). The number of investigators shall be determined at the beginning of each budget cycle based on the number of sworn officers employed by the Department the previous June 1. A City Attorney opinion notes that the classifications of Complaint Investigator II and Complaint Investigator III fufill the rolls of line investigators.
• 1.0 FTE Attorney or Contract Services for Legal Advice to provide legal services to the Police Commission
• 2.0 FTE Attorneys or Contract Services for Legal Advice to provide legal services to the CPRA

The Oakland Public Library (Library) is responsible for complying with two voter approved measures that provide supplemental funding for Library services. The measures are the Library Services Retention and Enhancement Act (Measure Q) and the 2018 Oakland Public Library Preservation Act (Measure D).

Measure Q is an extension of Measure O, which was approved by voters in 1994, Measure Q was renewed and amended in 2004. Measure Q established an annual parcel tax to raise revenue to enhance Library service; the measure was approved through 2024. The Library complying with the Ordinance requirements:

• The minimum General Purpose Fund appropriation $9.059M
• Spending reserve of 5% of previous year’s collected tax revenue
• Tax proceeds are spent for intended use

Measure D was approved by voters in 2018 for a period of 20 years. Measure D is a $75 parcel tax to raise nearly $10M annually to preserve Library services. The Library complying with the Ordinance requirements:

• The minimum General Purpose Fund appropriation $12.99M
• Tax proceeds are spent for intended use

Measure Q and D require a panel of citizens, the Library Advisory Commission, to provide oversight. The Measures also require the City Auditor to perform regular performance audits.

COMPARISON WITH RECOMMENDATIONS OF ADVISORY BODIES

The Oakland Youth Advisory Commission (OYAC) submitted a budget request for the FY 2021-23 budget cycle that would support their efforts to strengthen and increase civic engagement among Oakland's youth.

The following four items were a part of their proposal:

1. Annual education scholarship to OYAC members $1,200 per year;
2. Fund a full-time Program Associate to staff OYAC;
3. Reinstate a Student Trainee position compensated at $25 per hour for 20 hours per week for 10 months out of the year for $20,000 ;
4. Dedicate $25,000 in 2021 to develop a citywide youth strategic plan.

The Adopted Budget will fulfill three of the four items OYAC requested. For item 1, the Adopted Budget gives OYAC members an education scholarship that is at the same level of $900 currently given to the youth commissioners of OFCY's Planning and Oversight Committee. Item 2 was not fulfilled. For item 3, a part-time Management Intern position has been funded. For item 4, this amount has been fully adopted into the Adopted Budget to support a citywide youth strategic plan.