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

Governmental Activities Business-Type Activities Total 2025 2024 2025 2024 2025 2024 General obligation bonds $ 706,815 $ 735,565 — $ — $ 706,815 $ 735,565 Lease revenue bonds 15,850 23,195 — — 15,850 23,195 Pension obligation bonds 53,605 104,000 — — 53,605 104,000 Special assessment debt district bonds 1,065 1,460 — — 1,065 1,460 Sewer bonds — — 12,935 15,795 12,935 15,795 Unamortized premium and discounts 37,659 40,207 1,372 1,715 39,031 41,922 Total bonds payable 814,994 904,427 14,307 17,510 829,301 921,937 Financed purchase obligations payable 4,852 8,433 — — 4,852 8,433 Right-to-use liabilities 10,734 17,711 — — 10,734 17,711 Other long-term liabilities 271,952 260,503 — — 271,952 260,503 Total long-term obligations $ 1,102,532 $ 1,191,074 $ 14,307 $ 17,510 $ 1,116,839 $ 1,208,584 The City’s long-term obligations decreased by $91.7 million compared to the prior fiscal year balance. The decrease is primarily attributable to the repayment of long-term debt. Additional information on the City’s long-term debt obligations can be found in Note II, part G to the financial statements. Economic Factors and Next Year’s Budget Economic conditions in the City of Oakland remained challenging during FY 2024-25, with recovery efforts continuing; however, economic activity did not materially deteriorate further from the post- pandemic levels experienced in the prior fiscal year. The City’s large and diverse tax base continues to provide a foundation for moderate growth over time. While economic conditions remained constrained, the City’s financial position improved during the fiscal year as a result of immediate and decisive actions taken after a projected budget deficit was identified during FY 2024-25. On the revenue side, the City experienced increases in business tax and fine revenues driven by enhanced recovery efforts targeting past-due business tax delinquencies and the enforcement of stricter fines. In addition, voters approved an increase to the sales tax rate; however, the revenue impact will not be realized until the subsequent fiscal year. On the expenditure side, the City implemented cost-containment measures to address budgetary pressures, including reductions in personnel costs through vacancy management and delayed hiring, limits on discretionary spending, and the deferral of certain costs, including contracts. Collectively, these actions stabilized the City’s financial position and allowed General Purpose Fund reserves to be replenished to levels exceeding the minimum required thresholds. While the balancing actions taken during FY 2024-25 materially strengthened the City’s year-end financial position, they provided near-term relief and did not fully resolve the City’s underlying structural budget challenges. Certain operational and staffing needs deferred during the fiscal year are expected to re-emerge in future periods, and rising costs related to insurance, medical benefits, and pension obligations will continue to place pressure on the City’s finances. In addition, uncertainty related to federal and state funding presents ongoing fiscal risk. Nevertheless, the City is well positioned to address these challenges by building on its underlying strengths, including a well-established infrastructure, a large and diverse tax base, and a strategic location within the San Francisco Bay Area near major centers of innovation. By leveraging its geographic, cultural, and economic assets, and through disciplined financial management and forward-looking CITY OF OAKLAND Management’s Discussion and Analysis (Unaudited) Year Ended June 30, 2025 20