Grand Jury had warned of future bankruptcy as unfunded liability for retiree healthcare grew to $860 million
Oakland city staff have warned for years of the financial cliff ahead due to mounting debt for underfunded employee retirement benefits, but city leaders have done very little about it.
These warnings were magnified in July by an Alameda County Grand Jury report that Oakland’s unfunded liability for retiree health care coverage had grown to $860 million. The alarming report criticized the city for not putting money aside to fund the benefits and allowing the annual cost to grow unchecked to $40 million per year.
The report concluded in stark terms: “The city must immediately develop a long-term, multifaceted plan to address (unfunded retiree healthcare benefits) or accept that municipal bankruptcy is an option in the future.”
After the report was published, city staff again in October warned the City Council’s Finance Committee of the fiscal danger if these unfunded liabilities were not addressed. Astonishingly, the warning was met by silence from council members.
Faced with a looming fiscal crisis, city staff asked Oakland’s police officers for help. Despite having a closed labor contract, but well aware of the urgency, Oakland police officers stepped up to tackle this crisis. The sheer size of the problem was not lost on us. The impacts on city services of doing nothing would be catastrophic.
A deal, including reductions in police officer benefits, totaling over $300 million, and concessions to the city was put to Oakland police officers. Of 750 officers, of all ranks, not one voted against these concessions. Instead, they banded together to help the city we love.
After voting to tackle this massive problem, Oakland police officers were dismayed to watch what happened next when the agreement was presented to the City Council. The city administrator, finance director and human resources director outlined how Oakland police officers had stepped up to help the city at a time of critical need. As each spoke, they were shouted at by people in the public gallery.
Scores of Oaklanders lined up during public comment to decry our plan and deride Oakland police officers. Leading the naysayers was Councilmember Rebecca Kaplan, who ignored that officers had come to the city’s rescue. And a prospective City Council member, who has since been sworn in, took to social media to denounce our plan.
Oakland police officers not only respect people’s free-speech rights but have sworn to uphold them. Oakland’s finest are all too familiar with the anti-police rhetoric that comes out of City Hall. However, when Kaplan, the incoming City Council president, with many years on the council and who should know the state of the city’s finances, decries our efforts in a time of crisis, it makes every cop wonder what is to become of the city’s fiscal health.
Kaplan was the lone vote (among eight council members and 750 cops) to oppose our deal. She voted against an agreement to save the city more than $300 million, create equity in benefits between new police officers and every city employee and avoid financial Armageddon for the city of Oakland.
Her distaste of Oakland’s finest trumps protecting the city’s financial health. Her vote and her comments were met with cheers by the audience, but they left every Oakland police officer wondering about the commitment of Oakland’s elected officials to our city.
On Tuesday, the Oakland City Council Finance Committee revisits the unfunded liabilities issue. This time, it will be armed with a plan, structural change and a huge concession — all courtesy of Oakland’s police officers.
I suspect there will be speeches congratulating themselves on a job well done. Oakland cops, on the other hand, will be responding to emergency calls — all the while knowing who really saved the city.
January 25, 2019
The Mercury News
By Barry Donelan, sergeant with the Oakland Police Department and president of the Oakland Police Officers’ Association
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