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

revised its ratings outlook from stable to negative. On February 19, 2025, S&P downgraded the City's pension obligation bond and general obligation bond ratings from AA+ to AA-. S&P also downgraded the City's lease revenue bonds from AA to A+ and revised its ratings outlook from stable to negative. These rating actions followed the City's publication of financial projections on November 19, 2024 citing ongoing imbalances between General Fund revenues and expenditures that have reduced available reserves. Subsequent to fiscal year end 2025, in connection with the bond issuance, Moody's and S&P affirmed the City's existing ratings and maintained negative outlooks. The City of Oakland’s underlying ratings for its bonds as of June 30, 2025 were as follows: Ratings Type of Bond Moody's S&P Fitch General obligation bonds Aa21 AA-2 A3 Lease revenue bonds Aa31 A+2 N/A Pension obligation bonds Aa21 AA-2 N/A Tax Allocation bonds4 A1 A+/AA-/AA/AA5 N/A 1Ratings reflect downgrade on December 5, 2024. 2Ratings placed on Credit Watch Negative on November 20, 2024. The Credit Watch placement reflects S&P's view that there is at least a one-in-two chance of a lower rating, potentially by multiple notches, in the following 90 days. 3Issuer Default Rating reflects downgrade on November 27, 2024. 4Ratings vary by series 5Insured Rating General Fund Bonded Debt Limit At the end of the current fiscal year, the City’s debt limit (3.75 percent of property valuation, net of exemptions subject to taxation) was $3.3 billion. The total amount of debt applicable to the debt limit was $706.8 million. The resulting legal debt margin was $2.6 billion. Long-Term Obligations As of June 30, 2025, the City had total long-term obligations of $1.1 billion compared to $1.2 billion outstanding for the prior fiscal year, a decrease of 7.6 percent. Of this amount, $706.8 million is general obligation bonds backed by the full faith and credit of the City. The remaining $410.0 million is comprised of various long-term debt instruments listed below plus accruals of year-end estimates for other long-term liabilities (in thousands): CITY OF OAKLAND Management’s Discussion and Analysis (Unaudited) Year Ended June 30, 2025 19