By Sarah Ravani

Mayor Libby Schaaf proposed a budget Friday that would spend nearly $700 million, or 18% of Oakland’s overall budget on the police department, a slightly smaller share of the city’s spending than in previous years.

Though the share is slightly smaller, the $3.85 billion two-year budget actually increases police spending to account for overtime expenses.

Activists who have pushed to cut the police budget in half criticized the plan, arguing that reducing police spending would free up money to fund social services instead.

To address a swelling homeless population, Schaaf also set aside $41 million to providing interim housing and shelter and to move people to permanent affordable housing. She also proposed creating a new homelessness unit to manage the city’s encampments and address the crisis.

Schaaf said her staff used a “racial equity analysis tool” that analyzed how service changes would affect low-income Black, Indigenous and people of color. She also noted that the city has no rainy day funds to fall back on.

“We did our best within these complex set of rules to address not only the most pressing demands of the day — like homelessness, housing, streets, and public safety — but also our future liabilities that place unacceptable strain on the City’s fiscal health,” Schaaf wrote in her letter introducing the proposal.

In the days leading up the mayor’s budget release, community members urged her to listen to the advocates’ demands. Members of the Defund OPD and Refund Coalition gathered outside Schaaf’s house Wednesday, calling on her to immediately release a budget that prioritizes housing and services for the homeless, cuts the police department’s funding and reinvests in social services.

The budget release intensified the debate about policing and homelessness, both controversial issues in the city, as gun violence swells in some neighborhoods and homelessness surges.

Cat Brooks, the co-founder of the Anti Police-Terror Project, said in a statement that Schaaf’s proposal is “completely antithetical” to people’s demands to reinvest in city services.

“Increasing OPD’s funding after years of Oakland police abusing their power and terrorizing Black and Brown communities proves that Libby is incapable of imagining — let alone implementing — a safe Oakland that doesn’t include the mass policing, incarcerating and terrorizing of Black, Brown, Indigenous and poor Oaklanders,” she said.

Brooks said the city needs better schools, emotional and mental health support, cleaner neighborhoods, housing for all and more economic opportunities.

Angelo Isaac Sandoval, the senior organizer and legal advocate at the Ella Baker Human Rights Center in Oakland, said it’s frustrating to see “hundreds of millions of dollars continue to go to law enforcement.” Sandoval said last summer’s demonstrations showed a cultural shift in how people view policing and “the Schaaf administration is missing it.”

But Schaaf noted in her letter released Friday that “views of funding for police are complex.”

She stated that a community survey found 78% of respondents said they want the same or more police patrolling their neighborhoods and responding to 911 calls. Nearly 60% supported removing police from nonviolent situations and mental health calls.

Oakland was one of the first cities to pledge to reinvest a sizable portion of the police budget last summer after George Floyd’s murder. The Reimagine Public Safety Task Force, which met for nearly a year, recently released a list of recommendations that would funnel a portion of the police department’s budget to social services.

Balancing the city’s needs is difficult. More funds are needed for affordable housing and other social services as the homelessness crisis continues to explode, further exacerbated by the pandemic. At the same time, some people in East Oakland, which has experienced in uptick in gun violence, and other areas don’t want police cut.

Schaaf released her budget proposal a week after the mandated deadline. Council President Nikki Fortunato Bas criticized the delay, arguing the mayor’s failure to publish her budget on time “erodes public trust” and “impedes our critical work for Oaklanders.”

Schaaf sent an email to council members the day before the deadline explaining that she and her staff have been working “day-and-night” to deliver her budget by the deadline, but “circumstances dictate — as they frequently have during this unprecedented year — that we need a little more time.”

Bas said in a Friday statement that she will work with her budget team, which includes council members Carroll Fife, Dan Kalb and Noel Gallo, to amend the proposal.

“We cannot go back to the status quo — the unacceptable conditions our most marginalized communities were already facing pre-pandemic and that have only worsened during COVID,” she said.

Fife told The Chronicle Oakland budgets are complex and she planned to spend the weekend studying the proposal.

“I don’t quite understand what is being proposed nor how that fits in with the community concerns about actually streamlining policing so that it addresses the root causes of crime,” she said. “I have to do my own personal analysis.”

The mayor’s office is expected to give a presentation Monday on her proposal. The City Council will then hold budget town halls to get public feedback and pass a final budget by June 30.

The budget proposal comes three days after the City Council voted to prioritize 12 recommendations on how to transform public safety by shifting responsibilities away from the police department.

Schaaf’s proposal would pay for six police recruit academies over two years to bring in another 32 sworn officers per academy, which would off-set retirements and departures and leave the department with roughly the same number of officers. The department currently has 709 sworn officers.

Schaaf said she’s increasing police funding to cover overtime. About $19 million of overtime wasn’t budgeted for last year.

A 2019 city audit — which concluded that the police department has averaged nearly $30 million in overtime costs over the previous four fiscal years — said the city “still needs to take significant steps to better manage overtime and increase transparency on the true costs of overtime.”

The $62 million budget shortfall the city faced in December was partly driven by the police overtime. Without the $192 million that Oakland received from the federal stimulus bill, it would have faced painful cuts.

The city used $58.5 million in federal funds in the current fiscal year to close the budget deficit. The mayor said her proposal sets aside the remaining $133.5 million to close a $274 million budget shortfall.

On Monday, the council approved a resolution, introduced by Councilwoman Carroll Fife and Bas, that recommended investing in the Mobile Assistance Community Responders of Oakland program, known as MACRO. The council voted in March to create MACRO within the Fire Department to respond to certain calls police previously responded to, such as people who are publicly intoxicated, disturbing the peace or acting erratically.

Other recommendations that the council voted to prioritize are moving some traffic enforcement from police to the city’s transportation department and ending the use of militarized vehicles. Among other recommendations, the council wants to invest in organizations that address domestic violence, create community healing centers and restorative justice hubs for youth. Restorative justice focuses on repairing the harm caused by crime and is done through a meeting involving everyone involved.

Sandoval said Friday that the mayor’s proposal fails to heed community demands that were represented in the Reimagine Public Safety Task force recommendations.

“We are only as safe as the most vulnerable amongst us,” he added.

Sarah Ravani is a San Francisco Chronicle staff writer. Email: sravani@sfchronicle.com Twitter: @SarRavani