FY 2025-26 Third Quarter (Q3) Revenue and Expenditure ReportPresenterBradley Johnson,Finance DirectorMay 26, 2026Finance and Management Committee Meeting Agenda
Projected GPF Fund Balance for FY2020-2023
2 FY 2025-26 Q3 R&E Report
• GPF Overview• GPF Revenues• GPF Expenditures• GPF Fund Balance• Select Non-GPF FundsIntroduction • Report BackgroundOngoing Concerns
• Pressures and Oppurtunities• Summary of FY 2025-26 Q3 R&E and Next Steps Report Background
Projected GPF Fund Balance for FY2020-2023
3 •This FY 2025-26 Q3 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 Third Quarter GPF Fund Balance
4 •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 $32.32 million. This is an increase of $15.45 million from the FY 2024-25 YE Fund Balance of $16.87 million. Year End Fund balance is equivilent to less than 4% of projected expenditures.FY 2025-26 General Purpose Fund Estimated Year-End Available Fund Balance ($ in millions)FY 2025-26 General Purpose Fund Projected Fiscal Year-End FY 2025-26 Q3 Year-End EstimateGENERAL PURPOSE FUND (1010)87.43Beginning Fund Balance - Audited787.61 Revenue840.80 Expenditures(53.19)Estimated Current Year Surplus/(Shortfall)34.24Estimated Ending Fund BalanceUse of Fund Balance in FY 2025-26(1.92)Restricted Legal Settlements32.32Estimated Ending Fund Balance FY 2025-26 Third Quarter Results: General Purpose Fund (GPF) Projected GPF Fund Balance for FY2020-2023
5 In FY 2025-26 GPF Expenditures are projected to exceeded Revenues by $53.19 million•The Adjusted Budget of $847.54 million assumes the following to balance expenditures:a.$55.30 million in use of fund balance to cover FY 2024-25 carry-forwards.b.$0.56 million in fund balance to support budgeted expenditures.•Revenues are projected to end the year $59.93 million under the Adjusted Budget.•Expenditures are projected end the year $6.74 million over the Adjusted Budget.FY 2025-26 General Purpose Fund Third Quarter ($ in millions)•The Operating shorfall in the above table is the result of the 55.30 million n use of fund balance to cover FY 2024-25 carry-forwards. Without these carryforwards the City would not have an operating deficit.
Year-End % Over / Under Adjusted BudgetYear-End $ Over / Under Adjusted BudgetFY 2025-26 Q3 Year-End EstimateFY 2025-26 Q3 YTD ActualsFY 2025-26 Adjusted BudgetFY 2025-26 Adopted Budget(7.1) %(59.93)787.61 528.03 847.54 791.29 FY2025-26 Revenues0.8 %6.74 840.80 576.45 847.54 791.29 FY 2025-26 Expenditures(6.3) %(53.19)(53.19)(48.42)——Operating (Shortfall) / Surplus FY 2025-26 Third Quarter GPF RevenuesFY 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 Q3 Year-End EstimateFY 2025-26 Q3 YTD ActualsFY 2025-26 Adjusted BudgetFY 2025-26 Adopted BudgetRevenue Category(3.1)%(10.04)312.26 190.61 322.29 322.29 Property Tax2.0 %2.54 132.08 115.65 129.53 129.53 Business License Tax(3.1)%(2.59)81.56 45.40 84.14 84.14 Sales Tax(6.6)%(5.02)70.60 47.52 75.62 75.62 Utility Consumption Tax 2.4 %1.62 69.92 52.44 68.30 68.30 Real Estate Transfer Tax 2.8 %1.47 53.46 28.21 51.99 51.90 Service Charges8.2 %2.02 26.59 18.10 24.57 24.57 Fines & Penalties FY 2025-26 Third Quarter GPF Revenues (continued)FY 2025-26 GPF Budget to Actual Expenditures ($ in millions) Mar-Jun15 FebJanDec4 Sep28 Aug16 Mar11 Mar4 Mar202120212021202020202020202020202020 7 Year-End % Over / Under Adjusted BudgetYear-End $ Over / Under Adjusted BudgetFY 2025-26 Q3 Year-End EstimateFY 2025-26 Q3 YTD ActualsFY 2025-26 Adjusted BudgetFY 2025-26 Adopted BudgetRevenue Category(8.2)%(0.98)10.96 7.82 11.94 11.94 Parking Tax37.8 %1.17 4.27 3.77 3.10 3.10 Miscellaneous Revenue— %—2.16 2.16 2.16 2.16 Interfund Transfers19.2 %0.26 1.61 1.20 1.35 1.35 Licenses & Permits— %1.73 2.58 2.58 0.85 —Grants & Subsidies635.1 %2.16 2.50 (0.75)0.34 0.34 Interest IncomeN / A0.66 0.66 0.66 ——Vehicle License Fee(0.5)%(4.06)787.61 528.03 791.67 790.72 Subtotal(100.0)%(55.30)—55.30 —Project Offsets & Carryforwards(7.1)%(59.93)787.61 528.03 847.54 791.29 Total Revenue FY 2025-26 Third Quarter Property Tax
8 • 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 $322.29 million.• Assessed value growth slowed sharply to below 1% in FY 2025–26, driven primarily by Proposition 8 (Prop 8) reductions, which lower assessed values when market value falls below assessed base-year value; commercial properties accounted for the majority of these reductions. • Over the past 30 years, assessed values increased at an average rate of approximately 6% annually, highlighting the contrast with the current slowdown.FY 2025-26 Change in Assessed Property Value by Cause ($ 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 9 FY 2025-26 Third Quarter Utility Consumption Tax • Utility Consumption Tax (UCT): FY 2025-26 collections of UCT are projected to end the year at $70.60 million which is $5.02 million or 6.6% under the Adjusted Budget.• UCT revenues have grown significantly over the past decade, largely driven by substantial utility rate increases • The budget assumed continued growth, but electric rates have stabilized.• Year-to-date UCT revenue trends are consistent with this stabilization in rates. Through February, revenues were essentially flat compared to the same period in the prior year, declining slightly by 0.2%.PG&E Residential Average Electrical Rate Changes January 2014 - March 2026 Utility Rates Flattening
FY 2025-26 Third Quarter Sales Tax
10 • FY 2025-26 Sales Tax collections are projected to end the year at $81.56 million, which is $2.59 million or 3.1%, below the Adjusted Budget of $84.14 million.• Sales Tax is collected by the State reporting lags other categories. Detailed data is available through the Second Quarter (Q2) of FY 2025-26. Oakland’s receipts through FY 2025-26 Q2 were on average 3.5% below FY 2024-25 through Q2.Sales Tax Comparison by Major Categories FY2024-25 Q2 and FY 2025-26 Q2Sales Tax Comparison by Major Categories FY2024-25 Q2 and FY 2025-26 Q2
FY 2025-26 Third Quarter GPF ExpendituresFY 2025-26 GPF Budget to Actual Expenditures ($ 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 Q3 Year-End EstimateFY 2025-26 Q3 YTD ActualsFY 2025-26 Adjusted BudgetFY 2025-26 Adopted BudgetDepartment— %—3.07 2.92 3.07 0.32 Capital Improvement Projects— %—4.74 3.49 4.74 4.17 City Administrator(1.33)%(0.34)25.82 17.83 25.49 22.25 City Attorney3.03%0.12 3.72 2.31 3.83 3.49 City Auditor7.63%0.55 6.66 2.20 7.21 3.97 City Clerk4.50%0.33 6.99 5.09 7.32 7.28 City Council(1.51)%(0.41)27.64 15.58 27.23 26.20 Department of Transportation5.35%0.32 5.68 2.97 6.00 5.72 Department of Violence Prevention12.85%0.20 1.34 0.59 1.53 1.33 Department of Workplace and Employment Standard7.04%0.90 11.82 3.62 12.72 10.38 Economic and Workforce Development Department3.83%1.03 25.99 14.85 27.02 23.35 Finance Department(0.01)%(0.03)221.95 151.53 221.92 210.49 Fire Department(4.59)%(0.03)0.59 0.25 0.57 0.44 Human Resources Management Department43%68%55%28%38%49%57%70%30%60%70%74%95% FY 2025-26 Third Quarter GPF Expenditures (continued)FY 2025-26 GPF Budget to Actual Expenditures ($ in millions) Mar-Jun15 FebJanDec4 Sep28 Aug16 Mar11 Mar4 Mar202120212021202020202020202020202020 12 % of Adjusted Budget Spent YTDYear-End % Over / Under Adjusted BudgetYear-End $ Over / Under Adjusted BudgetFY 2025-26 Q3 Year-End EstimateFY 2025-26 Q3 YTD ActualsFY 2025-26 Adjusted BudgetFY 2025-26 Adopted BudgetDepartment1.46%0.59 39.52 31.36 40.10 36.36 Human Services Department(8.45)%(0.62)7.99 3.40 7.37 6.06 Information Technology Department7.08%0.42 5.45 4.07 5.87 5.70 Mayor(10.34)%(4.06)43.34 35.54 39.27 32.35 Non Departmental and Port11.07%0.71 5.73 3.52 6.44 5.27 Oakland Animal Services6.87%0.90 12.22 7.53 13.12 12.69 Oakland Parks and Recreation Department(6.19)%(0.76)13.07 9.85 12.30 11.75 Oakland Public Library Department(98.95)%(1.57)3.16 0.92 1.59 0.79 Oakland Public Works Department24.56%1.89 5.81 3.37 7.71 7.13 Police Commission1.81%6.53 354.32 251.65 360.85 349.96 Police Department21.56%0.68 2.48 1.35 3.17 2.82 Public Ethics Commission4.98%0.05 1.03 0.68 1.09 1.01 Race and Equity Department0.80%6.74 840.80 576.45 847.54 791.29 Total68%63%42%70%44%58%80%57%55%90%69%46%78% *Departments projected to overspend were adjusted to include one-time bonuses. Without these adjustments, these departments would have been projected to come in under budget.
FY 2025-26 Third Quarter GPF Fund Balance
13 •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 $32.32 million. This is an increase of $15.45 million from the FY 2024-25 YE Fund Balance of $16.87 million. Year End Fund balance is equivilent to less than 4% of projected expenditures.FY 2025-26 General Purpose Fund Estimated Year-End Available Fund Balance ($ in millions)FY 2025-26 General Purpose Fund Projected Fiscal Year-End FY 2025-26 Q3 Year-End EstimateGENERAL PURPOSE FUND (1010)87.43Beginning Fund Balance - Audited787.61 Revenue840.80 Expenditures(53.19)Estimated Current Year Surplus/(Shortfall)34.24Estimated Ending Fund BalanceUse of Fund Balance in FY 2025-26(1.92)Restricted Legal Settlements32.32Estimated Ending Fund Balance FY 2025-26 Third Quarter Reserve BalancesFY 2025-26 Reserve Balances Mar-Jun15 FebJanDec4 Sep28 Aug16 Mar11 Mar4 Mar202120212021202020202020202020202020 14 FY 2025-26 Q3 Reserve Balances ($ in millions)*The 7.5% GPF reserve is not a cumulative balance.The 7.5% GPF reserve requirement is met.FYE Estimated 2025-26 BalancesFY 2024-25 Beginning BalancesDescription64.1363.81Mandated Emergency Reserves——Vital Services Stabilization Fund2.362.36OMERS Reserves (Reso. No. 85098 C.M.S)66.4966.17Total Reserves FY 2025-26 Third Quarter Select Non-GPF FundsFY 2025-26 Fund Balance and Appropriations ($ in millions)Mar-Jun15 FebJanDec4 Sep28 Aug16 Mar11 Mar4 Mar202120212021202020202020202020202020 15 FY25-26 Year End Estimated Fund Balance FY25-26 Year End Exp Projections FY25-26 Year End Rev Projections FY25-26 Beg Audited Fund Balance Fund Description 1.7811.206.256.731030 - Measure HH (SSBDT) 29.4068.2073.8723.731100 - Self Insurance Liability (0.86)29.5913.7614.971870 - Affordable Housing Trust Fund*(6.49)86.5336.7143.33Measure BB and Measure F Funds (2215, 2216, 2217, 2218, 2219, 2220) ** 2.4138.6226.8514.18State Transportation (Gas Tax) Funds (2230, 2232) *** 13.0641.0334.4519.642244 - Measure Q - Parks & Recreation Preservation, Litter Reduction, and Homelessness Support Act 2.8718.8719.801.942310 - Lighting and Landscape Assessment District 5.7643.0730.1718.674100 - Equipment 4.0752.6048.697.984400 - City Facilities *Fund 1870 expenditure projection was reduced by $4.8M after adjustments were made to account for anticipated prior year carryforwards.**Measure BB beginning fund balance reduced by $40M to correct a prior miscalculation presented during the Q2.***Gas Tax expenditure projection increased by $24M to reflect expenditures not previously captured in Q2, primarily related to CIP projects.
Fiscal Pressures & Opportunities
Projected GPF Fund Balance for FY2020-2023
16 •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:
17 Key Takeaways of FY 2025-26 Q3 R&E & Next Steps• There is a projected positive ending fund balance of $32.32 million.• FY 25-26 is projected to end the year with an operating deficit of $53.19 million in the GPF due to carryforward, to the extent these carryforwards represent ongoing expenditures they pose a future fiscal challenge.• With a balanced FY26-27 Midcycle Proposed Budget released, the City continues to work on correctingstructural imbalances between revenues and expenditures on an ongoing basis.• The City must continue to exercise fiscal prudence to ensure long term fiscal sustainability. 18 Questions