FY 2025-26 Second Quarter (Q2) Revenue and Expenditure ReportPresenterBradley Johnson,Finance DirectorMarch 24, 2026Finance and Management Committee Meeting Agenda
Projected GPF Fund Balance for FY2020-2023
2 FY 2025-26 Q2 R&E Report
• GPF Overview• GPF Revenues• GPF Expenditures• GPF Fund Balance• Select Non-GPF FundsIntroduction • Report BackgroundEntering FY 2026-27 Midcycle
• Pressures and Oppurtunities• Summary of FY 2025-26 Q2 R&E and Next Steps Report Background
Projected GPF Fund Balance for FY2020-2023
3 •This FY 2025-26 Q2 Report has been provided per the City’s Consolidated Fiscal Policy (Ordinance No. 13487 C.M.S.).•This report presents revenue and expenditure information only on the funds required to be reported in accordance with the City of Oakland Consolidated Fiscal Policy (Ordinance No. 13487 C.M.S.).•The purpose of this report is to inform the public of the City’s projected financial performance to use as a budget monitoring tool, improve fiscal transparency and accountability, and present data to make informed adjustments to maintain fiscal health.•In the event that a department is projected to overspend in the General Purpose Fund by more than one percent (1%), the City Administrator shall bring an informational report to the City Council within 60 days following acceptance of the Revenue& Expenditure report by the City Council. The report shall list the actions the Administration is taking to bring the expenditures into alignment with the budget.
FY 2025-26 Second Quarter Results: General Purpose Fund (GPF) Projected GPF Fund Balance for FY2020-2023
4 In FY 2025-26 GPF Expenditures are projected to exceeded Revenues by $64.84 million•The Adjusted Budget of $844.16 million assumes the following to balance expenditures:a.51.93 million in use of fund balance to cover FY 2024-25 carry-forwards.b.$0.40 million in fund balance to support budgeted expenditures.•Revenues are projected to end the year $59.92 million under the Adjusted Budget.•Expenditures are projected end the year $4.91 million over the Adjusted Budget.FY 2025-26 General Purpose Fund Second Quarter ($ in millions) Year-End % Over / Under Adjusted BudgetYear-End $ Over / Under Adjusted BudgetFY 2025-26 Q2 Year-End EstimateFY 2025-26 Q2 YTD ActualsFY 2025-26 Adjusted BudgetFY 2025-26 Adopted Budget(7.1) %(59.92)784.24 167.02 844.16 791.29 FY 2025-26 Revenues(0.6) %(4.91)849.07 347.26 844.16 791.29 FY 2025-26 Expenditures(7.7) %(64.84)(64.84)(180.24)——Operating (Shortfall) / Surplus FY 2025-26 Second Quarter GPF RevenuesFY 2025-26 GPF Budget to Actual Expenditures ($ in millions) Mar-Jun15 FebJanDec4 Sep28 Aug16 Mar11 Mar4 Mar202120212021202020202020202020202020 5 Year-End % Over / Under Adjusted BudgetYear-End $ Over / Under Adjusted BudgetFY 2025-26 Q2 Year-End EstimateFY 2025-26 Q2 YTD ActualsFY 2025-26 Adjusted BudgetFY 2025-26 Adopted BudgetRevenue Category(3.11)%(10.04)312.26 13.85 322.29 322.29 Property Tax(3.56)%(3.00)81.15 22.20 84.14 84.14 Sales TaxN / A0.66 0.66 0.66 --Vehicle License Fee0.00%-129.53 10.42 129.53 129.53 Business License Tax(7.09)%(5.36)70.26 34.59 75.62 75.62 Utility Consumption Tax2.54%1.73 70.03 35.01 68.30 68.30 Real Estate Transfer Tax9.65%1.49 16.97 8.67 15.48 15.48 Transient Occupancy Tax(7.32)%(0.87)11.06 5.48 11.94 11.94 Parking TaxN / A--(0.01)--Local Tax0.00%-1.35 0.73 1.35 1.35 Licenses & Permits6.09%1.50 26.07 12.81 24.57 24.57 Fines & Penalties FY 2025-26 Second Quarter GPF Revenues (continued)FY 2025-26 GPF Budget to Actual Expenditures ($ in millions) Mar-Jun15 FebJanDec4 Sep28 Aug16 Mar11 Mar4 Mar202120212021202020202020202020202020 6 Year-End % Over / Under Adjusted BudgetYear-End $ Over / Under Adjusted BudgetFY 2025-26 Q2 Year-End EstimateFY 2025-26 Q2 YTD ActualsFY 2025-26 Adjusted BudgetFY 2025-26 Adopted BudgetRevenue Category635.14%2.16 2.50 (0.05)0.34 0.34 Interest Income2.82%1.47 53.46 17.85 51.99 51.90 Service ChargesN / A-----Internal Service Funds194.09%1.65 2.51 2.08 0.85 -Grants & Subsidies37.76%1.17 4.27 2.72 3.10 3.10 Miscellaneous Revenue0.00%-2.16 -2.16 2.16 Interfund Transfers(0.94)%(7.43)784.24 167.02 791.67 790.72 Subtotal(100.00)%(0.56)--0.56 0.56 Transfers from Fund Balance(100.00)%(51.93)--51.93 -Project Offsets & Carryforwards(7.10)%(59.92)784.24 167.02 844.16 791.29 Total Revenue FY 2025-26 Second Quarter Property Tax
7 • FY 2025-26 collections of Property Tax are projected to end the year at $312.26 million, which is $10.04 million or 3.1% under the Adjusted Budget of $322.29 million.• Assessed value growth slowed in FY 2025–26 primarily due to Proposition 8 (Prop 8) reductions, which temporarily lower assessed values when market value falls below the adjusted base-year value; Commercial properties accounted for most.FY 2025-26 Change in Assessed Property Value by Cause ($ in Millions)Assessed Valuation Growth Slowdown ParcelAdd/DropsNet ChangeChange fromCPI 2.0%GrowthPrior YearTransfer ofOwnershipNewConstruction- Non-ResidentialNewConstruction- ResidentialProp. 8 -Reduce /RecaptureNetUnsecuredValue ChangeOtherChangesTotal Change Change from 2024-25(1.67) 1,506.64 820.74 129.27 145.35 (1,694.96) 89.80 (256.01) 739.17(2,000.00)(1,500.00)(1,000.00)(500.00)-500.00 1,000.00 1,500.00 2,000.00 8 FY 2025-26 Second Quarter Utility Consumption Tax • Utility Consumption Tax (UCT): FY 2025-26 collections of UCT are projected to end the year at $70.26 million which is $5.36 million or 7.1% under the Adjusted Budget.• UCT revenues have grown significantly over the past decade, largely driven by substantial utility rate increases • Electric rates appear to have leveled off this year, according to PG&E, following prior years of sharp increases.• Year-to-date UCT revenue trends are consistent with this stabilization in rates, revenue collected through Q2 is under by slightly less than1% of revenue collected through Q2 in FY 2024-25.PG&E Residential Average Electrical Rate Changes Jan 2014 - Jan 2026 Utility Rates Flattening
FY 2025-26 Second Quarter Sales Tax
9 • FY 2025-26 Sales Tax collections are projected to end the year at $81.15 million, which is $3.01million or 3.6%, below the Adjusted Budget of $84.14 million.• Sales Tax is collected by the State reporting lags other categories. Detailed data is available through the First Quarter (Q1) of FY 2025-26. Oakland’s receipts in FY 2025-26 Q1 were on average 4.5% below FY 2024-25 Q1.Sales Tax Comparison by Major Categories FY2024-25 Q1 and FY 2025-26 Q1Sales Tax Comparison by Major Categories FY2024-25 Q1 and FY 2025-26 Q1 - 500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 3,500,000Autos AndTransportationBuilding AndConstructionBusiness AndIndustryFood And Drugs Fuel And ServiceStationsGeneralConsumer GoodsRestaurants AndHotelsPools & TransfersFY 24-25 Q1FY 25-26 Q1 FY 2025-26 Second Quarter GPF ExpendituresFY 2025-26 GPF Budget to Actual Expenditures ($ in millions) Mar-Jun15 FebJanDec4 Sep28 Aug16 Mar11 Mar4 Mar202120212021202020202020202020202020 10 % of Adjusted Budget Spent YTDYear-End % Over / Under Adjusted BudgetYear-End $ Over / Under Adjusted BudgetFY 2025-26 Q2 Year-End EstimateFY 2025-26 Q2 YTD ActualsFY 2025-26 Adjusted BudgetFY 2025-26 Adopted BudgetDepartment0.0%-3.10 1.07 3.10 0.32 Capital Improvement Projects0.0%-4.74 2.40 4.74 4.17 City Administrator0.3%0.08 25.40 9.20 25.49 22.25 City Attorney5.0%0.19 3.64 1.53 3.83 3.49 City Auditor7.7%0.55 6.66 1.56 7.21 3.97 City Clerk5.5%0.40 6.91 3.49 7.32 7.28 City Council0.6%0.15 27.08 10.05 27.23 26.20 Department of Transportation6.9%0.41 5.59 2.19 6.00 5.72 Department of Violence Prevention8.6%0.13 1.37 0.43 1.49 1.33 Department of Workplace and Employment Standard7.2%0.91 11.81 2.65 12.72 10.38 Economic and Workforce Development Department4.6%1.25 25.77 9.38 27.02 23.35 Finance Department0.5%1.04 220.81 99.87 221.85 210.49 Fire Department(13.3)%(0.08)0.64 0.19 0.57 0.44 Human Resources Management Department33%45%35%21%29%36%37%48%22%40%36%51%35% FY 2025-26 Second Quarter GPF Expenditures (continued)FY 2025-26 GPF Budget to Actual Expenditures ($ in millions) Mar-Jun15 FebJanDec4 Sep28 Aug16 Mar11 Mar4 Mar202120212021202020202020202020202020 11 % of Adjusted Budget Spent YTDYear-End % Over / Under Adjusted BudgetYear-End $ Over / Under Adjusted BudgetFY 2025-26 Q2 Year-End EstimateFY 2025-26 Q2 YTD ActualsFY 2025-26 Adjusted BudgetFY 2025-26 Adopted BudgetDepartment(11.5)%(4.45)43.29 4.63 38.84 36.36 Human Services Department(7.4)%(0.54)7.85 2.45 7.31 6.06 Information Technology Department9.1%0.53 5.34 2.79 5.87 5.70 Mayor(27.6)%(10.87)50.20 7.77 39.34 32.35 Non Departmental and Port8.1%0.44 5.01 2.39 5.45 5.27 Oakland Animal Services6.8%0.88 12.11 5.23 12.98 12.69 Oakland Parks and Recreation Department(5.5)%(0.67)12.91 7.58 12.24 11.75 Oakland Public Library Department(131.5)%(2.04)3.60 0.76 1.55 0.79 Oakland Public Works Department26.1%2.01 5.70 2.17 7.71 7.13 Police Commission1.3%4.64 355.40 166.17 360.04 349.96 Police Department20.7%0.65 2.51 0.89 3.17 2.82 Public Ethics Commission9.1%0.10 0.99 0.43 1.09 1.01 Race and Equity Department(0.6)%(4.91)849.07 347.26 844.16 791.29 Total41%40%28%46%28%49%62%40%44%20%48%34%12% *Departments projected to overspend were manually adjusted to include one-time bonuses and additional carryforwards. Without these adjustments, these departments would have been projected to come in under budget.
FY 2025-26 Second Quarter GPF Fund Balance
12 •When obligations against fund balance are considered, the City’s estimated available fund balance in the GPF at the end of FY 2025-26 is $20.67 million.FY 2025-26 General Purpose Fund Estimated Year-End Available Fund Balance ($ in millions)FY 2025-26 General Purpose Fund Projected Fiscal Year-End FY 2025-26 Q2 Year-End EstimateGENERAL PURPOSE FUND (1010)87.43Beginning Fund Balance - Audited784.24Revenue849.07Expenditures(64.84)Estimated Current Year Surplus/(Shortfall)22.59Estimated Ending Fund BalanceUse of Fund Balance in FY 2025-26(1.92)Restricted Legal Settlements20.67Estimated Ending Fund Balance FY 2025-26 Second Quarter Reserve BalancesFY 2024-25 Reserve Balances Mar-Jun15 FebJanDec4 Sep28 Aug16 Mar11 Mar4 Mar202120212021202020202020202020202020 13 FY 2024-25 Q4 Reserve Balances ($ in millions)*The 7.5% GPF reserve is not a cumulative balance.The 7.5% GPF reserve requirement is met.FYE Estimated 24-25 BalanceFY 2024-25 Beginning BalancesDescription64.1363.81Mandated Emergency Reserves FY 2022-23*——Vital Services Stabilization Fund2.362.36OMERS Reserves (Reso. No. 85098 C.M.S)66.4966.17Total Reserves FY 2025-26 Second Quarter Select Non-GPF FundsFY 2025-26 Fund Balance and Appropriations ($ in millions)Mar-Jun15 FebJanDec4 Sep28 Aug16 Mar11 Mar4 Mar202120212021202020202020202020202020 14 FY25-26 YearEnd Estimated Fund Balance Recommended CarryforwardFY25-26 YearEnd Exp Projections FY25-26 YearEnd Rev Projections FY25-26 Beg Audited Fund Balance Fund Description 1.030.6811.016.006.731030 - Measure HH (SSBDT) 29.330.0068.2073.7923.731100 - Self Insurance Liability (5.05)0.3634.02 14.36 14.971870 - Affordable Housing Trust Fund33.370.4787.8538.4883.22Measure BB and Measure F Funds (2215, 2216, 2217, 2218, 2219, 2220) 25.650.00 14.3524.8114.18State Transportation (Gas Tax) Funds (2230, 2232) 14.230.00 39.6034.2219.642244 - Measure Q - Parks & RecreationPreservation, Litter Reduction, and Homelessness Support Act 3.180.00 18.5719.801.942310 - Lighting and Landscape Assessment District 4.560.00 42.8928.7818.674100 - Equipment 3.290.00 53.2548.567.984400 - City Facilities Fiscal Pressures & Opportunities
Projected GPF Fund Balance for FY2020-2023
15 •CalPERS, Healthcare, Insurance•Uncertainty around Federal Funding•June 2026 Revenue Measure•Restoring Ballot Measure MOE’s•Equipment & Facility Needs•Negative Funds•Build on Revenue Collection Performance •Maintain Discipline in Spending•Positive Beginning Position•Successful Access of Bond MarketThe City continues to face fiscal pressures from several areas including:However, the City has opportunities to potentially mitigate these fiscal pressures:
16 Key Takeaways of FY 2025-26 Q2 R&E & Next Steps• While there remains a projected positive fund balance of $20.67 million, FY 25-26 is projected to end the year with an operating deficit of $64.84 million in the GPF.• With the FY26-27 Midcycle Budget Process underway, the City continues to work on correcting imbalances between revenues and expenditures on an ongoing basis.• The City must continue to exercise fiscal prudence to ensure long term fiscal sustainability. 17 Questions