OakDOT Mid-Cycle Budget Adjustment Proposal FY 20-21

At the June 18, 2020 BPAC meeting, Oakland Department of Transportation (OakDOT) Director Ryan Russo and OakDOT Agency Administrator Ariel Espiritu-Santo discussed the proposed mid-cycle budget amendment to the Fiscal Year 2020-21 budget. This proposal reflects significant reductions to key transportation revenue sources resulting from the current global health crisis. Russo described the proposed budget balancing measures and potential impact to OakDOT operations.

Excerpts:

The current global health crisis has severely impacted revenue for the City of Oakland.

  • FY 2020-21 budget expecting a deficit of over $96 million
    • $54 million in the General Fund
    • $43 million in other funds

The budget proposes the following steps at a City-wide level to close the gap

  • Use of all of the Vital Services Stabilization Fund (VSSF) reserves of $14.65 million to preserve services in the GPF
  • Suspension of contributions to long term liabilities (including Other Post-Employment Benefits) yielding approximately $10 million in savings across all funds net of other fringe rate adjustments
  • Restructuring the negative fund repayments plan saving approximately $1.96 million in the GPF
  • Transfers eligible costs (both personnel and O&M) from funds with shortfalls to other funds with surplus resources
  • Temporary freeze of 90+ Full Time Equivalents (FTE) (vacant positions only)
  • Reduction of $6.52 million in O&M (contracts, grants, equipment, supplies, etc.)

$10M gap still remains after these actions, to be addressed potentially via labor concessions negotiations.

The full presentation slides are below, followed by the summary of discussion.
Watch the recording of the presentation here, at 1h 14m.

Summary of discussion:

  • Despite the economic hardship, a lot of good safety work can continue because signs and stripes are inexpensive and these treatments can be effective safety improvements.
  • Bringing back the program that necessitated bikes to be registered for a fee like cars was recommended as a form of income but it was noted that the program was inequitably enforced and caused the City to lose money processing the registrations.
  • Measure KK allowed OakDOT to shift some staff positions from operations & maintenance to capital work. This shift makes these positions more resistant to the economic downturn, as those positions are secure for the duration of Measure KK.
  • Recently there are a handful of examples of construction bids coming in under budget, and OakDOT is cautiously optimistic that construction costs may be getting lower for major capital projects.
  • A silver lining to the economic downturn is that it may create a larger applicant pool for OakDOT jobs as OakDOT continues working to reduce its vacancy rate.
  • OakDOT remains challenged in not having the staff needed to respond to the large number of safety-related requests that the department receives.
  • While frozen positions are unlikely to jeopardize OakDOT’s ability to meet grant deadlines, OakDOT is striving to accelerate its work and do better than the status quo. The economic downturn is likely to create challenges for OakDOT delivering projects more quickly.

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