Cover page photo courtesy of the Oakland Convention & Visitors Bureau Photograph by Barry Muniz City of Oakland FY 2005-07 Adopted Policy Budget Mayor Jerry Brown Members of the City Council Ignacio De La Fuente (District 5) President Jane Brunner (District 1) Vice-Mayor Desley Brooks (District 6) Nancy Nadel (District 3) Henry Chang, Jr. (At-Large) Jean Quan (District 4) Pat Kernighan (District 2) Larry Reid (District 7) City Administrator Deborah Edgerly Prepared by Office of the City Administrator Budget Office Marianna Marysheva Budget Director Analytical Staff Robert R. Davila Kirby Smith Donna Howell Deborah Spaulding Myra Jew Cheryl L. Taylor Sydney Oam Support Staff Debbie Comeaux Rowena Quindiagan Pauline Feng Kinji Wooten Leslie Pham Elected Officers John Russo, City Attorney Roland Smith, City Auditor Administration Deborah Edgerly, City Administrator Cheryl Thompson, Assistant City Administrator Niccolo De Luca, Deputy City Administrator City Clerk LaTonda Simmons Agency and Department Directors Claudia Cappio & Dan Vanderpriem Community & Economic Development Dennis Power Carmen Martinez Cultural Arts Library Services William Noland Audree Jones-Taylor Finance & Management Parks & Recreation Daniel Farrell Wayne G. Tucker Fire Services Police Services Andrea Youngdahl Raul Godinez, II Human Services Public Works Mission Statement The City of Oakland is committed to the delivery of effective, courteous and responsive services. Citizens and employees are treated with fairness, dignity and respect. Civic and employee pride are accomplished through constant pursuit of excellence and a workforce that values and reflects the diversity of the Oakland community. The Government Finance Officers Association of the United States and Canada (GFOA) presented a Distinguished Budget Presentation Award to the City of Oakland for its biannual budget for the fiscal years 2003-04 and 2004-05. In order to receive this award, a governmental unit must publish a budget document that meets program criteria as a policy document, as an operations guide, as a financial plan and as a communications device. The award is valid for a period of one budget cycle only. We believe our current budget for fiscal years 2005-06 and 2006-07, continues to conform to program requirements, and we are submitting it to GFOA to determine its eligibility for another award. August 19, 2005 Honorable Mayor Edmund G. Brown Jr. Honorable President De La Fuente and Members of the Oakland City Council Oakland, California Subject: The City of Oakland’s FY 2005-07 Adopted Policy Budget Dear Mayor Brown, President De La Fuente and Members of the City Council: I am pleased to transmit to you the Adopted Policy Budget for the City of Oakland, for the period of July 1, 2005 through June 30, 2007. This budget was adopted by the City Council on June 21, 2005, following a series of public hearings and extensive discussions. The Adopted Policy Budget for Fiscal Years 2005-2007 incorporates a number of amendments made by the City Council to the Proposed Budget of the Mayor and City Administrator. These amendments, totaling over $8 million in the first year of the budget and over $7 million in the second year, are fully balanced by the additional revenues, and can be found under the “Legislation” tab of this document, following the budget adoption resolution. The Fiscal Year 2005-07 budget is structurally balanced, addresses Council priorities, and follows the fundamentals of the City’s financial management policies. This financial plan effectively balances community needs and accomplishes City Council goals while maintaining the City’s financial strength. FY 2005-07 Adopted Policy Budget – Transmittal Letter Page 2 Budget Summary The FY 2005-07 Adopted Budget contains two-year appropriations of just over $2 billion, including $941 million for FY 2005-06 and $1,061 million for FY 2006-07, across all funding sources: FY 2005-06 FY 2006-07 General Purpose Fund $443.51 mill $464.80 mill Other General Funds $106.65 mill $109.11 mill Special Revenue Funds $147.13 mill $143.28 mill Enterprise Funds $37.83 mill $39.26 mill Internal Service Funds $42.55 mill $43.75 mill Capital Projects Funds $16.19 mill $113.57 mill Debt Service Funds $115.56 mill $115.11 mill Trust and Agency Funds $32.07 mill $32.76 mill TOTAL $941.50 mill $1,061.64 mill The array of funding sources contained in the budget reflects the diversity of the City’s resources, as well as our continued effort to maximize opportunities from grants and special revenue sources. The programs included in this budget are intended to reflect the Mayor and City Council goals and objectives for the City. The FY 2005-07 Adopted Budget is, in itself, the City’s strategic spending plan for the next two years. The chart below illustrates that there are several distinct fund groups in the City, each with a number of separate funds. Composition of City's FY 2005-07 Adopted Budget (2-Year Total Expenditure) Capital Debt Service Internal Projects Funds Service Funds 12% Funds 6% Trust and 4% Agency Funds Enterprise 3% Funds 4% Special Revenue Funds 14% Other General General Purpose Fund Funds 46% 11% The City’s various fund groups include: • General Funds (where the City’s General Purpose Fund resides, along with Self- Insurance Liability, Workers Compensation, Kids First, and others) FY 2005-07 Adopted Policy Budget – Transmittal Letter Page 3 • Special Revenue Funds (mainly Federal and State grants/reimbursements, pass- throughs and donations, along with local voter-approved assessments such as the Landscaping and Lighting Assessment District, Measure Y-Violence Prevention, and Wildfire Prevention Assessment District) • Enterprise Funds (Sewer Service and Golf Courses) • Internal Service Funds (which account for internal service transactions such as facility, fleet and radio replacement, repair and maintenance) • Capital Projects Funds (which include funding restricted to capital investments and improvements and related expenditures) • Debt Service Funds (where income and payments related to City’s debt service are tracked) • Trust Funds (such as retirement trusts, and the Oakland Redevelopment Agency projects fund) All of the City’s funds, with the exception of the General Purpose Fund (GPF), are considered restricted. Their revenues can only be spent on particular types of programs, activities and purchases. Budget Development Principles Faced with projected shortfalls in the General Purpose, as well as other City funds, we have adhered to three important principles during budget development. Principle 1: Develop a budget that identifies the staffing and resources allocated to, and revenues generated by, specific programs that support the Mayor and City Council goals. First and foremost, the City must remain strategic and continue focusing on goals and priorities. The FY 2005-07 Adopted Budget reflects the Mayor and Council goals and priorities for the next two years, as listed below. GOAL 1: DEVELOP A SUSTAINABLE CITY 1A Maximize socially and environmentally sustainable economic growth, including conserving natural resources 1B Encourage and support social equity for all Oakland residents 1C Develop and institutionalize sound financial management policies and practices GOAL 2: BUILD COMMUNITY AND FOSTER LIVABLE NEIGHBORHOODS 2A Reduce crime by implementing a comprehensive crime prevention/reduction strategy 2B Facilitate the development of housing for all incomes 2C Reduce blight and nuisance 2D Provide for clean, well-maintained and accessible streets and sidewalks, facilities, amenities, parks, recreational facilities and trees. 2E Encourage and support civic engagement GOAL 3: ENSURE THAT ALL OAKLAND YOUTH AND SENIORS HAVE OPPORTUNITY TO BE SUCCESSFUL 3A Provide effective community programs for seniors, youth, and people with disabilities FY 2005-07 Adopted Policy Budget – Transmittal Letter Page 4 As in the last budget cycle, the FY 2005-07 Adopted Budget is developed and presented by program, showing how each program supports specific Council goals and objectives. In proposing budget reductions for FY 2005-07, we considered the Mayor and Council priorities, and attempted to minimize the impact and, where possible, even enhance programs deemed essential to the Mayor and Council and their constituents, as reflected by the programs’ links to the FY 2005-07 goals and objectives. Principle 2: Incorporate input from the 2005 Community Survey. A Community Survey of Oakland residents was conducted in February of 2005 to determine the community’s priorities for the upcoming budget. The results of that survey showed education and public safety as top priorities for most residents. In addition, the survey revealed the following: o Oakland residents continue to be highly pleased with the quality of life in the community. Emergency services, safe neighborhoods and schools, and clean environment are most important to Oaklanders’ quality of life. o Among issue areas impacted by City services, crime, housing costs, and unemployment are top-tier concerns for Oakland residents. Drugs, unsafe driving, robberies and gang activity are residents’ top public safety concerns. o Affordable housing, recreation programs for youth, and safe schools are the areas where greatest gaps between the community’s priorities and satisfaction with existing service levels have been identified. o Overall satisfaction with City government’s performance has declined slightly, but satisfaction with most individual services remains high. Residents continue to perceive