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Oakland Was Right to Return Stimulus Funds

It would have been illegal for the city to have used the money as it had planned. Plus, Oakland is ousted from medical pot case.


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Oakland city officials came under fire last week following the revelation that the city had been forced to return $644,000 in job-training funds to the federal government. Critics noted that Oakland has a much higher unemployment rate than the rest of California and could have used the money to help get residents back to work. "I'm extremely upset," Councilman Larry Reid told the Oakland Tribune. "We've got all these folks out here that needed the help."

However, a city memo released late last week made it clear that the city had no legal choice but to return the funds, and raised questions as to whether Oakland should have received the money in the first place.

At issue was a federal grant awarded in 2010 as part of President Barack Obama's stimulus package. The office of then-Mayor Ron Dellums had applied for and received the grant. But according to a February 15, 2013 memo from John Bailey, executive director of Oakland's Workforce Investment Board, the Dellums plan for the funds did not match the requirements of the stimulus grant. As such, it would have been illegal for the city to have spent the money.

The stimulus funds came with the requirement that they be used only for on-the-job training programs — that is, the money could only be spent if job trainees actually received jobs after the training program was over. The Dellums plan, by contrast, was a job-training proposal with no guarantee of employment for participants.

In addition, the stimulus funds required that only businesses or nonprofits that had undergone a competitive bidding process would supply the on-the-job training. But there was no bidding process in the city's plan either, Bailey stated.

Mayor Jean Quan's administration asked for an extension to fix these errors, but was unable to find businesses or nonprofits to bid on the grant and then guarantee jobs for trainees within the specified period. Some of Quan's critics, including Reid, have blamed her administration for not being able to solve the problems in a timely manner. But the city's inability to identify businesses or nonprofits that can guarantee actual jobs is no simple task. As the Express has previously reported, the federal government has spent billions on job-training programs in recent years, but the expenditures have produced far fewer jobs than expected. That's been especially true in the so-called green-collar jobs sector (see "Redefining Green Jobs," 1/12/11), and it remains true in other sectors of the economy as the nation recovers slowly from the Great Recession.

Bailey also stated in his memo that his office is now attempting to win a $900,000 grant from the state for on-the-job training to replace the federal grant money. But that may be easier said than done.

Oakland Ousted from Pot Case

As of late last week, the City of Oakland had not yet decided whether to appeal a federal judge's decision to block its attempt to keep the federal government from closing Harborside Health Center. The city had sued to stop the US Attorney's Office from seizing the property occupied by the popular dispensary, arguing that closing it would harm Oakland and force cannabis patients to buy pot on the black market. But US Magistrate Maria-Elena James ruled last week that the city cannot be considered a legal party to the case. The judge's ruling, however, does not stop Harborside's attempts to block its closure.

"We are, of course, disappointed in today's ruling," said Harborside CEO Stephen DeAngelo in a statement released immediately after the decision. "But the message of Oakland's lawsuit remains powerful and relevant: the city council and mayor have determined that if Harborside Health Center is closed, the entire city will be harmed. ... We continue to look forward to our own day in court, and are confident that a Bay Area jury will recognize Harborside's positive contributions and decline to shut our doors. In the meantime, Harborside will continue to provide our patients with the very best cannabis medicines we can find, in the safest and most beautiful environment we can create, with the very highest level of care and service."

Three-Dot Roundup

About 4,000 demonstrators assembled in San Francisco on Sunday to protest the proposed Keystone XL pipeline, which would ship dirty tar sands oil from Canada to the Gulf of Mexico, the San Francisco Chronicle reported. The demonstration coincided with protests around the nation, including one in Washington, DC that drew tens of thousands of people. Environmentalists oppose the Keystone XL because it promises to expand the extraction of tar sands oil — the most carbon-intensive fossil fuel in the world. ... California Senator Barbara Boxer is pushing for a national tax on carbon in which three-fifths of the proceeds would be refunded directly to taxpayers. The bill is based on a popular Alaska program that levies royalty fees on oil and gas extraction and gives the proceeds directly to residents. ... A super-majority of California residents — 68 percent — support a tax on soda, but only if the proceeds are used to improve nutrition and fitness programs in schools, according to a Field Poll. Richmond residents overwhelmingly defeated a proposed soda tax in November that did not legally require the city to spend the revenues on fighting obesity. ... And a man accused of threatening to kill Leland Yee because the state senator from San Francisco is calling for stricter gun-control laws has been charged with ten felony crimes, the San Jose Mercury News reported.

Correction: The original version of this column erroneously stated that the Dellums administration had delegated the responsibility of conducting the bidding process to the Oakland-based Private Industry Council.


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