Dear City of Oakland employees,
In December we shared with you updates regarding the City’s ongoing efforts to stabilize our projected budget shortfall to maintain the City’s fiscal solvency. The City faced a significant, immediate fiscal challenge, with a projected FY 2024-25 General Purpose Fund (GPF) year-end deficit of $129.79 million. This shortfall stems from a $21.82 million ending negative balance in FY 2023-24, alongside preliminary FY 2024-25 projected year-end revenues and expenditures based on First Quarter (Q1) trends, pointing to an estimate $93.08 million year-end operating shortfall. Additionally, necessary General Purpose Fund carryforwards from FY 2023-24 total $27.62 million. As such, immediate action is needed to stabilize the City’s finances and bring the City’s General Purpose Fund into balance. At the December 17 City Council meeting, the Council affirmed the Administration’s planned next steps and approved the steps we requested they approve to help us manage this critical, immediate challenge. The Council also directed the Administration to explore some additional measures to close the shortfall and bring additional stability to our budget, and those efforts are underway. As Council directed in the contingency budget adopted last summer, the Administration implemented temporary closure (or “brownout”) of fire stations, in addition to the fire station that had already been closed for construction and cancelled the police academies that were scheduled between January and June of 2025.
Among the many challenging, but necessary actions we are taking to maintain fiscal solvency is the elimination of filled employee positions, or layoffs. In December we shared that about 92 filled positions would need to be eliminated based on input from our departmental leaders. I asked our Human Resources Management Department to review all considered eliminations on a case by case basis to assess programmatic impacts, individuals’ seniority and reinstatement rights, including individuals who will be moving into different positions to be consistent with their seniority and bumping rights, as well as individuals who will be laid off.
That work has now been completed, and today we are issuing the notices to the majority of affected individuals. There will be approximately 100 people affected – either bumped or laid off – during this noticing process, with the effective date of layoffs and transitions on February 28. Department heads will be providing direct notification to their staff, and notices will also be mailed to individuals. This is a hard but necessary step for our organization. The leadership team empathize with every person impacted, and I hope you know that you have my respect and appreciation despite this action. Truthfully, there remain more hard choices ahead of us as we head into the upcoming biennial budget process. We will be guided by our systems and values, and by our strategic plan, and we will continue to work with our departments, our Mayor and City Council, and our community to chart the path forward.
Today’s steps are unfortunate, and difficult. I won’t sugarcoat that, but I do want you all to know we are moving toward a long-term financial stability this City has desperately needed for too long. I thank you all for your ongoing dedication, and to those who are leaving us, I sincerely thank you for your service and wish you well in your next steps.
As employees are considering those next steps, we will be providing assistance. The City will be sponsoring information workshops to assist employees that may be laid off take advantage of available resources. These resources will include information such as applying for EDD unemployment insurance, COBRA continuation medical or accessing health care through Covered California, Dental & Vision benefits, 457 Deferred Compensation & Retirement benefits, employment counseling, application and resume writing, labor market research, and job search resources. We are working now on the details of these workshops and we will provide them in an additional update soon. We will provide that information to all staff through an additional Announcements message, and we will be sure that all department SPOCs also receive this information to share it with department staff.
The budget team and I will continue to provide updates on our next steps in this process. If you have questions, please elevate them through your supervisors and department heads and we will work on answering them.
Sincerely,
Jestin D. Johnson
City Administrator
City of Oakland