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

General Fund Expenditures: Significant changes in expenditures are as follows: • General government decreased by $57.4 million, or 27.6 percent, due to reduced personnel spending driven by vacancy management and delayed hiring, reduced discretionary spending, and deferral of certain costs including contracts, as part of actions taken to address the City's budget deficits. • Public safety decreased by $15.7 million, or 2.9 percent, due to reduced personnel spending driven by vacancy and overtime management and delayed hiring, as part of actions taken to address the City's budget deficits. • Community and human services decreased by $18.4 million, or 24.8 percent, due to reduced personnel spending driven by vacancy management and delayed hiring, reduced discretionary spending, and deferral of certain costs including contracts, as part of actions taken to address the City's budget deficits. • Community and economic development increased by $6.5 million, or 18.0 percent, due to increased City expenditures for affordable housing projects. • Public works and transportation decreased by $18.2 million, or 34.2 percent, primarily due to reduced personnel spending driven by vacancy management and delayed hiring, reduced discretionary spending, and deferral of certain costs including contracts, as part of actions taken to address the City's budget deficits. Federal/State Grant Fund: The Federal/State Grant Fund has a fund balance of negative $28.4 million as of June 30, 2025 which represents a deterioration of $11.0 million from the prior fiscal year and is primarily due to delays in reimbursement of eligible expenditures. The deficit is expected be cured through grant drawdowns in future years. Low and Moderate Income Housing Asset Fund (LMIHF): Upon the dissolution of the Former Redevelopment Agency, the City retained the housing activities previously funded by the Former Agency, created LMIHF, and transferred the assets and affordable housing activities of the low and moderate income fund to the City. The ending fund balance as of June 30, 2025 was $51.8 million and the fund’s net loans receivable balance was $305.9 million. The fund balance decrease of $9.4 million is attributable to issuance of new loans to developers for affordable housing projects. Municipal Capital Improvement Fund: The Municipal Capital Improvement Fund had a fund balance of $358.2 million as of June 30, 2025 that represents an decrease of $103.4 million, or 22.4 percent, from the prior fiscal year. This decrease is primarily due to increased expenditures related to affordable housing, street and infrastructure projects. The Other Special Revenue Fund accounts for activities of several special revenue funds, including the following local measures; Measure Z – Violence Prevention and Public Safety Act of 2014; Measure C – Oakland Hotel Tax; Measure Q (2004) – Library Services Retention and Enhancement; Measure WW – East Bay Regional Park District local grant program; Measure N – Paramedics Services Act; Measure Q (2020) – Oakland Parks and Recreation Preservation, Litter Reduction, and Homelessness Support Act; Measure AA - Oakland Children's Initiative, Oakland Kid’s First Fund; Development Service Fund; and other miscellaneous special revenue programs. The ending fund balance as of June 30, 2025 was $232.6 million, which decreased $7.9 million from the previous fiscal year. This result primarily reflects increases in expenditures for Measure AA projects. CITY OF OAKLAND Management’s Discussion and Analysis (Unaudited) Year Ended June 30, 2025 17