Oakland to cut $29M during 'one of the most serious financial challenges'

FILE PHOTO: Aerial view of Alameda and Oakland Harbor

The city of Oakland will cut $29 million in personnel, law enforcement and public safety spending in an effort to close its projected $62 million deficit, city officials said Tuesday.

The city will cut $9 million in general spending by enacting a hiring freeze, reducing the use of temporary staff, freezing discretionary spending, cutting pay for senior staff members who are not unionized and using unspent funds from the last fiscal year, which ended June 30.

The city will also cut the Oakland Police Department's budget by $15 million by reducing overtime and the use of specialized units and programs and the Oakland Fire Department's budget by $5 million by temporarily closing three fire stations between January and June.

The cuts take effect immediately and will last at least through the end of the fiscal year, according to city officials.

In a letter to city staff last week, Oakland Mayor Libby Schaaf and City Administrator Ed Reiskin warned the city will be insolvent before the end of the fiscal year without significant spending reductions.

"The city will not be able to fund essential services or respond to emergencies like an earthquake or natural disaster," Schaaf and Reiskin said in the letter. "Even the city's emergency reserve will be completely exhausted. 

"Although Oakland is not alone in this crisis, this situation represents one of the most serious financial challenges the City of Oakland has ever faced," they said.

City officials hope the deficit will be further reduced by relief funding from the federal government and the coronavirus pandemic receding in the first half of 2021 as more people get vaccinated.

While no action is needed by the Oakland City Council for the city to tighten its belt, the council in expected to hear a report on the spending cuts on Wednesday at 11 a.m.