Amid City Hall turmoil, Oakland City Council faces crucial budget decision relying on Coliseum sale
Nearly a week after the FBI search of Oakland Mayor Sheng Thao's home threw City Hall into turmoil, the City Council faces a crucial decision on the mayor's budget proposal.
The council has a Friday deadline to pass Thao's budget plan, which relies on selling the city's half of the Oakland Coliseum site to avoid major job cuts and service reduction.
In the meantime, the council is working on a backup plan if that falls through, which could lead to some painful choices.
A council meeting on Wednesday was not the official budget discussion, but it certainly involved a big piece of it.
"I also want to make it very clear that the item in front of us is about the purchase and sale agreement for this project, for future economic development at the Coliseum. Our budget item is a separate item that we will discuss on Friday."
"I also want to make it very clear that the item in front of us is about the purchase and sale agreement for this project, for future economic development at the Coliseum. Our budget item is a separate item that we will discuss on Friday."
Wednesday's meeting was not the official budget discussion, but it certainly involved a big piece of it.
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Without the Coliseum land sale city officials are now considering an alternative budget contingency that would declare a kind of financial emergency, cutting some $60 million, freezing 78 police positions, and five fire companies.
"So basically it's almost impossible for a city Council to support those things. But I suppose if the Coliseum deal isn't real or falls through, I don't know what choices they have," former city manager Dan Lindheim told CBS News Bay Area.
Lindheim said the real budget problems are systemic, namely a reliance on parcel transfer taxes, and the one-time relief of the Coliseum sale is a kind of a band aid.
"And I don't begrudge using the Coliseum money, if it's part of a plan to buy time and we're gonna do X, Y and Z moving forward. But if you just gonna balance the budget by selling the Coliseum and not do anything else, then you're just kicking the can down the road here. And then you're in a real disaster a year from now," he went on to say.
Brendan Moriarty, the city's Real Property Asset Manager, told the council, "Purchase price of at least $105 million, with at least $60 million received in this next fiscal year."
City staff said the sale negotiations are continuing every single day but there's no timetable. And there are more questions about how the payments would be delivered.
"And what I like to know, based on what we've heard is that y'all on the first the first escrow deposit you're only going to get X, Y and Z, on the second one you get this amount," said District 5 Councilmember Noel Gallo.
Moriarty responded, "There may be multiple payments that satisfy the 60 or more but that's all subject to negotiation. That is ongoing right now and the ordinance delegates to the City Administrator the ability to get those point details."
Members of the African American Sports and Entertainment Group were on hand, but they too offered no timeframe for a deal.
"There is an opportunity for us to create jobs, to create something new, to create opportunity for the most impacted communities in our city," said Ray Bobbitt, the group's founder and president. "And so we're very much supportive of it and hope that you will vote for it."
CBS News Bay Area asked Bobbitt whether this deal would come together in time for the city's budget discussions. He said he didn't have an answer for that.
While the budget is supposed to be finished Friday, there was some discussion that the City Council could give itself five additional days. But Oakland would like to receive at least $15 million on the sale by Sept. 1. That is still a very large uncertainty.
