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The Great Contradiction of 2014

Some candidates for mayor of Oakland contend that the city is in dire financial shape — but they also want to spend more than $150 million to hire 200 to 300 new cops.

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Two of the hottest issues in the 2014 Oakland mayoral campaign likely will be the city's budget and the size of its police force. In fact, some candidates have already criticized Mayor Jean Quan on these issues, contending that the city is in much worse financial shape than she has let on, and that she should be doing all she can to add hundreds of cops to the understaffed Oakland Police Department. Yet an inherent contradiction in these two criticisms has gone overlooked — that is, how can Oakland afford to spend lots of money on recruiting, hiring, and training new cops if the city is broke?

Oakland's finances became a flashpoint again last weekend, when City Auditor Courtney Ruby, who is running for mayor against Quan this year, released a new report, contending that the city is facing a dire financial problem — about $1.5 billion in unfunded liabilities stemming from its public employee retirement plans. Ruby labeled the situation "a solvency issue." "There is simply not enough money coming in to pay for what must go out," she wrote in her report.

Ruby told the Oakland Tribune she didn't want to discuss the findings of her report in the context of the mayoral campaign. But she has previously criticized Quan for allegedly soft-pedaling the city's financial woes. San Francisco State University professor Joe Tuman, one of the other leading candidates in the mayor's race, also has attacked Quan on the pension issue and the city's financial commitments to its public employee unions. Tuman says Oakland will face large budget deficits as a result.

Yet at the same time, Tuman and Ruby have been two of the most vocal proponents of dramatically increasing the size of OPD from the current 650 officers to 800 to 900 in the next several years. The problem, of course, is that such a proposal is extraordinarily expensive, and would make the city's budget situation far worse than it already is.

Currently, each Oakland police officer costs the city at least $180,000 a year in salary and benefits. Adding 250 new cops, as a result, will cost the city roughly $45 million annually. And that's not all. The city must also spend about $4 million for each police academy needed to train the new officers.

Because of attrition in the city's police force, to reach 900 officers by 2018, Oakland likely would need to fund at least three academies a year for the next four years at a total cost of about $48 million. OPD typically loses about five officers a month — sixty a year — to retirement and transfers to other departments. Each police academy, meanwhile, graduates roughly forty rookies. So with three academies annually, the city would add about 120 new cops a year, while losing 60 veterans, for a net gain of about 60 annually. Under that scenario, it would take about four years to add 240 officers to the force.

When adding the annual costs of paying those officers' salaries and benefits — about $108 million over four years — to the $48 million it will cost to train them, the total price tag for Oakland to bring the force up to nine hundred cops would be about $156 million.

And that's a conservative estimate. The city is actually losing more than five officers per month right now, and there's no guarantee that OPD will be able to graduate forty cops in every academy. In other words, it could end up costing a lot more than $156 million to reach nine hundred officers.

That total also doesn't factor in the added burden that new cops would ultimately place on Oakland's pension obligations. According to Ruby's audit, the city already is looking at about $521 million in unfunded pension liabilities related to sworn police and fire personnel — along with hundreds of millions more in post-retirement-benefit costs. A larger police force would only make this situation worse over the long-term.

So how did Oakland's pension problem get so bad? A big factor was the Great Recession and the negative impact it had on investments made by CalPERS, the state's public-employee retirement system. Unfortunately for Oakland and other cities, local government must make up the difference when CalPERS' investments turn sour. In that way, Oakland's pension woes are not unique.

But they are real, and they will make it tougher in the years ahead for Oakland to pay for basic public services such as maintaining city streets, keeping parks and libraries open, and funding violence prevention programs. Moreover, the pension shortfalls will make it nearly impossible for OPD to add two hundred to three hundred cops during the next four to five years — unless police and other public employee unions agree to contribute much more to their retirement plans than they're already paying, a proposition that seems highly unlikely at this point.

To his credit, Tuman at least has been talking about the need for higher tax revenues — specifically, business and hotel taxes — to help pay for more police officers. But such increases likely will still leave the city far short of being able to add 250 police officers and fulfill the city's pension obligations at the same time.

Goodbye, Warriors

In all likelihood, the Golden State Warriors will be playing in San Francisco by the end of this decade. Over the weekend, the team's owners bought land in Mission Bay, next to UC San Francisco, and plan to build a new arena there. The site appears likely to win easy approval from the City of San Francisco because it does not pose any of the political challenges that promised to derail the team's waterfront proposal near the Bay Bridge. The Warriors had a good run in Oakland — consistently selling out Oracle Arena even when the team was lousy — and will be missed.

Clarification: Joe Tuman said after this report was published that when he said at the April 3 mayoral debate that “new revenue measures need to be in place” to help pay for adding three hundred police officers, he meant he believes the City of Oakland can grow existing tax revenues without having to necessarily increase taxes or create new ones. This report has been changed to reflect this clarification.

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