Making Democracy Work

November 2011 Ballot Measure Pros & Cons

CITY OF OAKLAND SPECIAL NOVEMBER VOTE BY MAIL ELECTION

NOVEMBER 15, 2011

   The Pros & Cons is a Voter Education publication from the League of Women Voters of Oakland. It offers a nonpartisan explanation of ballot measures, with supporting and opposing arguments. The arguments come from many sources and are not limited to those presented in the official ballot pamphlet. The LWVO does not judge the merits of the arguments or guarantee their validity.

   This publication is part of the League of Women Voters of Oakland's work to encourage informed and active participation in government and increase understanding of public policy issues. LWVO Voter Education programs and publications do not support or oppose candidates, political parties, or ballot measures.

   The Oakland City Council has called a special election for voters to consider three ballot measures, two of which address the city's fiscal crisis. All voting in this election will be conducted by mail. Ballots will be mailed to all registered voters beginning October 6. They must be mailed back or returned in person to the office of the Registrar of Voters, 1225 Fallon Street, Room G-1, Oakland, CA 94612, and be received there no later than November 15.

MEASURE H

RETURN TO APPOINTMENT OF THE CITY ATTORNEY

Needs simple majority to pass

THE QUESTION: Should the Oakland City Charter be amended so that the position of City Attorney, presently an elected one, will be changed to a position appointed by the City Council, and should the current salary guidelines for the elected City Attorney be removed?

THE SITUATION
   City Attorney of Oakland was an appointed position until the voters approved Measure X, the "strong mayor" initiative, in 1998. Measure X changed the form of Oakland city government from one in which the City Council was the central power and the office of Mayor was rotated among the councilmembers, to one with a separately elected Mayor with executive powers. Measure X also established the City Attorney as an elected position independent of the Council and of the Mayor. Salary guidelines were set for the elected City Attorney based on the average salaries of city attorneys in cities of comparable size.

   The first and only elected City Attorney, who was re-elected in 2008 to a third term, resigned in June 2011. The position is currently filled by an acting City Attorney appointed by the City Council to serve until the end of the current term in January 2013.

   Elected or appointed, the City Attorney's responsibilities are to represent the City in lawsuits and to give legal advice to elected and appointed officials and to commissions and committees of the city.

   Only 2.5 % of California cities have elected city attorneys. These include Los Angeles, Long Beach, San Diego, and San Francisco. Oakland is often compared to Long Beach and San Francisco. However, San Jose and Sacramento, other cities to which Oakland is compared, have appointed city attorneys.

   The former elected Oakland City Attorney said his job was to represent the best interests of the city even if his views of those "best interests" did not coincide with the views of the City Council. The City Council generally thought that as the elected policymakers, it should be able to control the relationship with the City Attorney in order to have an effective attorney client relationship. This created some conflicts.

THE PROPOSAL
Measure H would change the City Attorney from an elected to an appointed position. The City Attorney would be appointed by, and serve at the pleasure of, the City Council, and the Council would set the salary without the guidelines in current law.

FISCAL EFFECTS
Eliminating the salary guidelines is not expected to lead to significant additional costs. Costs associated with recruiting a well-qualified City Attorney are estimated to be about $30,000. Since the City Attorney would no longer be elected, costs associated with the election to this office would be eliminated.

SUPPORTERS SAY

  • Elected city attorneys are subject to many kinds of political pressures and may not make the best decisions for the city.

  • The City Council can choose a City Attorney who has the best professional qualifications for the job, rather than the one who is the best politician.

  • Because political campaigns require the expenditure of time and thousands of dollars, the best attorneys may choose not to run for the office of City Attorney. And those that do may be beholden to special interests who contributed to their campaigns.

  • Almost all cities in California have appointed city attorneys.

OPPONENTS SAY
  • Measure H takes away Oakland citizens' right to vote for their City Attorney.

  • The City Attorney should be an independent representative for the city, not someone beholden to the City Council for his or her job. This is similar to the elected City Auditor.

  • A city attorney who is responsible only to the City Council could offer legal advice that is what the council wants to hear, rather than the advice that is best for the city.

  • The larger cities in California are much more likely to have elected city attorney.

MEASURE I

TEMPORARY PARCEL TAX

Needs 2/3 vote to pass

THE QUESTION: Should a temporary, five-year parcel tax of $80 per single-family home and specified amounts for other properties be established to help restore some city services?

THE SITUATION
Declining tax revenues and cuts to the city budget have led to reductions in almost all city services, and to furloughs and layoffs as well as reductions in salaries for city workers. In the last five years, Oakland has eliminated 528 positions and cut its budget by 25 percent.

THE PROPOSAL
   Measure I would add an $80 "special" parcel tax for single family homes in Oakland. The tax for apartment owners would be $54.66 per unit; half of the amount could be passed along to tenants. The tax for commercial property is based on the size of the building and the lot. Very low income households will be exempt from the tax. Tenants in foreclosed homes can have their tax rebated, and there is a 50 percent reduction in the tax for non-profit affordable housing. The tax will be imposed for five years, beginning with fiscal year 2011-12 and ending with fiscal year 2015-16.

   Money raised from the tax will be placed in a special account, and can be used only for costs associated with restoring police services and police technology, fire services, parks maintenance and recreational services, library services, youth violence prevention, street and infrastructure repair, and senior services. An independent firm will perform an annual review to ensure that the money is used well and for the purposes intended.

FISCAL EFFECTS
The tax would raise about $11 million per year for the city's general fund. The City Council will determine how and how much money is allocated each year to each authorized category

SUPPORTERS SAY

  • Measure I will help restore services that Oakland citizens say they want: training academies to maintain policing levels, public safety technology, road repair, park maintenance, youth violence intervention programs.

  • Measure I is the last piece of Mayor Quan's "fair share" budget plan. Already, all employees are contributing to their pension funds, and most are working fewer hours for reduced rates of pay.

  • This parcel tax will cost average households less than 25 cents a day.

  • The annual independent reviews required in Measure I will ensure accountability for the appropriate and prudent use of the funds generated by the tax.

OPPONENTS SAY
  • Measure I gives the City Council complete discretion to allocate funds as they wish. There are no guarantees the money will be spent wisely or efficiently. The city's mishandling of Measure Y moneys gives little confidence that Measure I funds will be any better spent.

  • Oakland residents already pay the highest property tax rates in Alameda County.

  • The $80 is a lot of money for people who are facing long-term unemployment or underemployment and/or foreclosure on their homes

  • Oakland needs structural change in order to do more with less just like everyone else in this down economy.

MEASURE J

NEW DEADLINE TO FULLY FUND CLOSED POLICE AND FIRE RETIREMENT PLAN

Needs simple majority vote to pass

THE QUESTION: Should the City Charter be amended to extend the full-funding deadline for the closed Police and Fire Retirement System (PFRS)?

THE SITUATION
    Police and fire personnel hired prior to 1976 became members of the Police and Fire Retirement System (PFRS). In 1976, newly hired personnel became members of the Public Employees Retirement System (PERS), and PFRS was closed so that no additional employees could contribute to or receive benefits from PFRS.

    PFRS is a defined benefit retirement system, which pays retirees specified allowances for life. The governing board for PFRS and the City of Oakland are required to ensure that the trust fund from which allowances are paid is sufficient to pay allowances as they become due. In addition, the City charter currently requires that PFRS be "fully funded" by July 1, 2026. This means that on that date the trust fund must have in it enough money to pay all members the benefits due until their deaths. Reviews by actuaries every three years determine how much money it will take to achieve full funding; the current estimate is $494 million.

    PFRS has been funded by contributions from the city and from active employees, and from returns on investments. Since all but one of the current 1153 PFRS members are retired, PFRS now depends on the city and the PFRS investment portfolio. Declines in the financial markets in recent years have put a greater burden on the city. The city owes the PFRS trust fund $45.6 million for fiscal year 2011-12.

    In 1997 and 2001, voters authorized pension obligation bonds to bring in funds for the system, and a property tax levy to pay off the bonds. This tax also ends in 2026, and cannot be extended except by a ballot measure requiring a two-thirds vote.

    The terms of the bond measures gave the city a PFRS funding "holiday" until 2011-12, so the city must resume payments into the fund this year

THE PROPOSAL
    Measure J would allow the full-funding deadline of 2026 to be changed if both the PFRS Board and the City approve, and if the new deadline is based on and supported by an actuarial study commissioned by the board. This would not change the city's obligation, but could allow the city to lessen its yearly payments by spreading them out past 2026.

    Beginning ten years from the full-funding deadline, Measure J also requires the PFRS Board to amortize each year's gains and losses to protect the city from market volatility. Such smoothing, as it is called, would not change the overall payment obligation, but would help the city avoid large changes in annual payments from year to year.

    Measure J would allow the full-funding deadline of 2026 to be changed if both the PFRS Board and the City approve, and if the new deadline is based on and supported by an actuarial study commissioned by the board. This would not change the city's obligation, but could allow the city to lessen its yearly payments by spreading them out past 2026.

    Beginning ten years from the full-funding deadline, Measure J also requires the PFRS Board to amortize each year's gains and losses to protect the city from market volatility. Such smoothing, as it is called, would not change the overall payment obligation, but would help the city avoid large changes in annual payments from year to year.

    Measure J would allow the full-funding deadline of 2026 to be changed if both the PFRS Board and the City approve, and if the new deadline is based on and supported by an actuarial study commissioned by the board. This would not change the city's obligation, but could allow the city to lessen its yearly payments by spreading them out past 2026.

    Beginning ten years from the full-funding deadline, Measure J also requires the PFRS Board to amortize each year's gains and losses to protect the city from market volatility. Such smoothing, as it is called, would not change the overall payment obligation, but would help the city avoid large changes in annual payments from year to year.

FISCAL EFFECTS
    If the full-funding deadline is extended for a number of years beyond 2026, the city's annual payments will be reduced by an estimated $3 million to $9 million, depending on the length of the extension. The city's obligation, currently estimated at $494 million, would remain the same, but be paid over a longer period of time.     The smoothing mechanism could reduce large swings in annual payments, but unpredictable market conditions make it impossible to estimate the actual impact on the city's cash flow.

SUPPORTERS SAY

  • Measure J provides better financial stability for the City of Oakland, and helps the city meet its obligations to this group of retirees.

  • The 2026 deadline, set over 20 years ago, appears to be an earlier one than necessary, and makes the city's annual payments higher than necessary when funds are sorely needed for other services.

  • Any changes made as a result of Measure J must be based on reviews and findings by independent financial experts.

  • Measure J does not increase taxes or add more debt, nor does it cut city services. The current tax dedicated to servicing the city's pension bonds expires in 2026 and can only be renewed by a city ballot measure requiring a two-thirds vote for passage

OPPONENTS SAY
  • The pension obligation bonds were an irresponsible way to raise funds for the PFRS trust fund.

  • Extending the deadline will lead to the extension of the hidden taxes now being levied to cover the costs of the pension obligation bonds.

  • This is a scheme to sell more poorly devised pension bonds.

  • Extending the deadline doesn't solve the real problems involved in fully funding PFRS.

Additional Information

For information about voter registration and voting by mail,
Call the Alameda County Registrar of Voters: 510-272-6973
Or go to the website at http://www.acgov.org/rov/

For assistance in Chinese, call 510-208-9665.
For assistance in Spanish, call 510-272-6975.