2025-city-of-oakland-acfr_final-123025.pdf

The City also advanced both near-term fiscal stabilization efforts and long-term community investments. In the near term, the City strengthened local revenue streams by implementing enhancements to recover delinquent business license taxes and adopting a new sales tax rate, providing resources to sustain City services and support economic resilience. For the long-term, the City made strategic infrastructure investments to improve quality of life and support sustainable growth. These investments include renovations to the Downtown Oakland Senior Center, upgrades to nine neighborhood mini parks, installation of 244 public EV charging stations in downtown parking facilities, and the launch of the $16 million “Oakland Connect” broadband initiative to expand high-speed internet access to over 2,500 households in historically underserved areas. Budget Process and Controls The City’s budget is a detailed operating plan that identifies estimated costs in relation to estimated revenues. The budget includes: • Programs, projects, services, and activities to be carried out during the fiscal year; • Estimated revenue available to finance the operating plan; and • Estimated spending requirements for the operating plan. The budget represents a process where policy decisions by the Mayor and the City Council are adopted, implemented and controlled. The notes to the required supplementary information summarize the budgetary roles of various City officials and the timetable for their budgetary actions per the City Charter. The City Charter prohibits expending monies for which there is no legal appropriation. Therefore, the City is required to adopt budgets for all City funds. The level of budgetary control (that is, the level at which expenditures cannot legally exceed the appropriated amount) is established at the fund level, although for management purposes, the line item budget is controlled at the departmental level within funds. The City Administrator is authorized to administer the budget and may transfer monies from one activity, program, or project to another within the same agency and fund. Supplemental appropriations or transfers of appropriations between funds or agencies must be approved by the City Council. The City also maintains an encumbrance accounting system to provide budgetary controls for governmental funds. Encumbrances which would result in an overrun of an account balance are suspended in the system until additional funding is made available via budget change requests or withdrawn due to lack of funding. Encumbrances outstanding at June 30 and carried forward are reported as assigned of the appropriate governmental fund’s fund balance since they do not constitute expenditures or liabilities. Encumbrances that do not lapse but are brought forward to the new fiscal year are incorporated as part of the budget adopted by the City Council for that year. The City Council receives quarterly reports on the City’s revenues and expenditures compared to budget as a management tool to pro-actively monitor the City’s fiscal condition. The City continues to meet its responsibility for sound financial management as demonstrated by the statements and schedules included in the financial section of this report. On June 11, 2025, the City Council adopted the Biennial Budget for FY 2025-27. The $4.37 billion budget closed a two-year projected deficit of $265 million while prioritizing public safety and the delivery of core municipal services. The gap was addressed through targeted spending reductions, streamlining operations, continued hiring freeze, and elimination of more than 400 primarily vacant or frozen positions, while avoiding layoffs of filled positions to minimize service disruptions. The budget assumes continuation of existing federal and state funding and includes contingency planning should those resources change. Funding supports police, fire, and violence prevention services, reflecting the City’s commitment to public safety as its top priority. v