Oakland proposal to use bond proceeds for jobs program comes under fire

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The Oakland city attorney is advising the City Council that a proposal to use bond money for job training programs violates state and federal law.

The plan, which will go before the council Tuesday, proposes to fund the program by taking 5% from a variety of sources including bond proceeds, special taxes and grants.

In a May 10 memo City Attorney Barbara Parker stated that bond proceeds may not be used for the proposed program.

In 2002, Oakland voters approved Measure DD, a $198.2 million bond measure for parks, trails and other waterfront projects along the city’s Lake Merritt. In 2016, voters approved Measure KK, a $600 million bond measure for street improvements, upgrades to city facilities and affordable housing projects.

Under state law, general obligation bonds can only be used for real property acquisition, Parker said. Tapping into those funds for the job training program “would violate state and federal laws, the terms of the voter-approved bond measures, and the express terms of the bond documents,” she said in the memo.

Councilwoman Desley Brooks, who introduced the proposal, said in an April 11 memo that action is needed to deal with what she called “a crisis in our community.”

“Our residents are being pushed out of our city,” she said. “They are being locked out of the construction boom that is taking place. The city has failed to reach our hiring goals and we know that there is skilled work that is going unfilled because we don’t have a skilled labor pool.”

Her proposal would take 5% from capital improvement budgets, parking revenue funds and development services funds. It would also charge city contractors 30 cents per hour worked. The funds would go to private, nonprofit groups in the city that provide job training in the construction industry.

The city attorney’s office is not the only one expressing concerns about the proposal.

An attorney for the Alameda County Transportation Commission wrote the city April 30 that funds from two transportation sales tax measures that provide $25 million a year to the city could not be used for the jobs programs either.

“We believe it is clear that this restriction to transportation improvements would absolutely prohibit the diversion of any ACTC funds to the employment training currently under consideration,” wrote attorney R. Zachary Wasserman.

Ed Gerber, chairman of Oakland’s Budget Advisory Commission, advised against the proposal in memos to the council. He said the advisory body voted unanimously against it at an April 10 meeting, stating the proposal had not been vetted properly.

“It violates the fundamental purposes for which taxpayers thru their votes have entrusted the City to use public infrastructure and housing funds,” he said.

Brooks told the San Francisco Chronicle that the ordinance included an exclusion clause that says the funding would not apply if not allowed. But she said it was important to address the jobs needs in the city.

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General obligation bonds Government finance City of Oakland, CA California