Page 1 of 65

Finance and Management Committee

October 22, 2024

TO: Jestin D. Johnson

City Administrator

FROM: Erin Roseman

Director of Finance

SUBJECT: FY 2023-24 Fourth Quarter Q4 Revenue

and Expenditures (R&E) Report And FY

2024-25 Fiscal Condition and Challenges DATE: October 10, 2024

City Administrator Approval Date:

RECOMMENDATION

Staff Recommends That The City Council Receive An Informational Report On Fiscal Year

(FY) 2023-24 Fourth Quarter (Q4) Revenue and Expenditure (R&E) Results For The General

Purpose Fund (GPF, 1010), and select funds, Preliminary Analysis of the Condition of the

FY 2024-25 Budget, and Information on the City's Fiscal Condition & Fiscal Challenges

EXECUTIVE SUMMARY

This report details the City of Oakland’s (the City) unaudited Fourth Quarter (Q4) financial results

for FY 2023-24 in the General Purpose Fund (GPF) and other select funds. At year end, revenue

collected reflects 85.1% of the adjusted revenue budget and expenditures reflect 94.3% of the

adjusted expenditure budget.

Table 1 below summarizes the FY 2023-24 GPF revenue and expenditures adjusted budget and

the year-end unaudited actuals which resulted in a $79.84 million or 9.2% year-end operating

shortfall.

Jestin Johnson (Oct 11, 2024 05:36 PDT) Oct 11, 2024

Page 2 of 65

Jestin D. Johnson, City Administrator

Subject: FY 2023-24 Q4 R&E Report and FY 2024-25 Fiscal Condition and Challenges

Date: October 10, 2024 Page 2

Finance and Management Committee

October 22, 2024

Table 1: Summary of FY 2023-24 Q4 GPF Revenues & Expenditures Budget to Year-End

Unaudited Actuals ($ in millions)

FY 2023-24

Adopted Budget

FY 2023-24

Adjusted Budget

FY 2023-24

Year-End Actuals

Year-End $

(Over) / Under Net

Adjusted Budget

Year-End %

(Over) / Under Net

Adjusted Budget

FY 2023-24

Revenues 834.12 863.68 734.68 (129.00) (14.9)%

FY 2023-24

Expenditures 834.12 863.68 814.52 49.16 5.7%

Operating

(Shortfall) /

Surplus

— — (79.84) (79.84) (9.2)%

FY 2023-24 GPF revenue ended the year at $734.68 million, which is $129.00 million or 14.9%

under the FY 2023-24 Adjusted Budget of $863.68 million. Revenue categories in the GPF

sensitive to macroeconomic conditions ended the year below revenue projections. Specifically for

Real Estate Transfer Tax (RETT), the impact of rising interest rates on property demand

contributed to the revenue shortfalls. In addition, the Adjusted Budget assumed a one-time use

of fund balance in the amount of $30.12 million to balance adopted expenditures and $27.97

million to support carryforwards.

FY 2023-24 GPF expenditures ended the year at $814.52 million, which is $49.16 million or 5.7%

under compared to the Adjusted Budget of $863.68 million.

This results in an operating deficit of $79.84 million for the GPF in FY 2023-24.

BACKGROUND / LEGISLATIVE HISTORY

Below is a summary of the Council and administrative actions that have occurred from the

beginning of the fiscal year through Q4 that have modified the FY 2023-24 Budget:

Pursuant to the City’s Consolidated Fiscal Policy - Part G. Criteria for Project Carryforwards and

Encumbrances, the FY 2023-24 Adopted Budget has also been adjusted to include $27.97 million

in prior year carryforwards in the GPF which utilizes available fund balance to cover the cost.

On November 7, 2023, the City Council adopted Resolution No. 89981 C.M.S., amending the

current year FY 2023-24 budget to reallocate $2.5 million of newly available funds from reduced

debt payments to the Oakland-Alameda County Coliseum Authority (OACCA) to fund

improvements to 9-1-1 dispatch and the recruitment and retainment of workers.

On March 27, 2024, the City Administrator released a memo outlining several policies to be

implemented immediately that would help reduce City expenditures, primarily in the GPF. There

was and continues to be a hiring freeze for all non-sworn positions for the remainder of FY 2023-

Page 3 of 65

Jestin D. Johnson, City Administrator

Subject: FY 2023-24 Q4 R&E Report and FY 2024-25 Fiscal Condition and Challenges

Date: October 10, 2024 Page 3

Finance and Management Committee

October 22, 2024

24. Additionally, a citywide moratorium on professional training and conference requests funded

through the GPF has stayed in effect. All other discretionary spending in the GPF has been limited

as the City attempted to bridge the widening gap between GPF revenues and expenditures.

On June 26, 2024, the City Administrator presented an Informational Report to the City Council

outlining several actions the City could take to reduce the deficit in the GPF. One of the actions

included was the fiscal retrenchment of carryforward funds in the GPF based on the inaction to

utilize the funds and the lack of funding in the GPF fund balance by year-end. Fiscal retrenchment

is defined as the reduction of costs or spending in response to economic difficulty where

jurisdictions take immediate action to begin to stabilize the fiscal situation. This resulted in an

estimated reduction in the Adjusted Budget by about $26.5 million. Additionally, approximately $1

million in CIP Department projects was transferred either into eligible bond funds or the Facilities

Fund.

On August 23, 2024, prior to the closure of FY 2023-24, departments were tasked with moving

eligible labor costs out of the GPF into other eligible funding sources. The goal was to help

alleviate the growing deficit in the GPF. This cost saving measure resulted in about $12.5 million

transferred out of the GPF into other eligible funding sources.

ANALYSIS AND POLICY ALTERNATIVES

This report supports the Citywide priority of a responsive, trustworthy government by providing

timely and up-to-date financial information, it enhances transparency allowing residents,

stakeholders, and decision-makers to be informed of the City’s fiscal health, promoting a culture

of responsible financial stewardship.

General Purpose Fund (GPF)

FY 2023-24 Q4 Revenues

In total, GPF revenue ended FY 2023-24 at $734.68 million, which is 14.94% below the Adjusted

Budget of $863.68 million. FY 2023-24 ended with significant shortfalls in key areas, namely Real

Estate Transfer Tax (RETT), Sales Tax, Fines and Penalties, and Transit Occupancy Tax (TOT).

High interest rates significantly impacted RETT, which accounts for 74.5% of the net revenue

deficit in the GPF. The construction and retail sectors also showed declines, affecting Business

License Tax and Sales Tax. Issues such as under staffing and legal constraints on new revenue

collection methods (like automatic license plate readers that identify vehicles with delinquent

parking taxes) led to shortfalls in Fines and Penalties. Furthermore, the budget anticipated one- time revenues in the form of a land sale that did not materialize during the fiscal year in addition

to optimistic assumptions about business recovery in certain sectors post-COVID. On the positive

side, property values continued to rise, supporting property tax revenues to end above budget.

Page 4 of 65

Jestin D. Johnson, City Administrator

Subject: FY 2023-24 Q4 R&E Report and FY 2024-25 Fiscal Condition and Challenges

Date: October 10, 2024 Page 4

Finance and Management Committee

October 22, 2024

The most impactful variances are detailed below.

• Real Estate Transfer Tax (RETT): FY 2023-24 Real Estate Transfer Tax collections

ended the year at $57.61 million which is $52.80 million or 47.8% under the Adjusted

Budget of $110.41 million. This level of collections is below the prior year level of $75.55

million by $17.94 million or 23.7%. The decision by the Federal Open Market Committee

(FOMC) to raise interest rates multiple times to combat inflation has had a ripple effect on

the real estate sector. The increase in the federal funds rate has directly influenced

mortgage rates, making borrowing more expensive. This had a cooling effect on the real

estate market as higher interest rates deterred potential home buyers, which reduced the

overall number of transactions. The correlation between rising interest rates and declining

real estate transactions is well-illustrated here, with a significant drop in both the volume

of sales and the value of properties sold, especially in the higher price brackets. High- value property sales contribute disproportionately more to RETT revenue due to their

higher tax yield per transaction, since these taxes are calculated as a percentage of the

sale price. For the City as a whole, there was a reduction in property sales year over year

of about 10.1% when compared to FY 2022-23. The amount decreased is amplified when

considering that sales fell by 19.6% when accounting for the sales prices. This resulting

shortfall in RETT collections significantly affects the GPF, as it accounts for 74.5% of the

net GPF revenue shortfall.

• Miscellaneous Revenue: FY 2023-24 collections of miscellaneous revenues ended the

year at $9.14 million which is $12.08 million or 56.9% under the Adjusted Budget of $21.22

million. One-time revenue from land sales was included in the budget as a miscellaneous

revenue source. This one-time land sale has been delayed and thus represents the

second largest contributor to the shortfall in GPF revenues.

• Business Tax (BT): FY 2023-24 collections of BT ended the year at $123.48 million, which

is $1.77 million or 1.4% under the FY 2023-24 Adjusted Budget of $125.25 million. The

Construction, Utilities, and Rental sectors showed decreased activity and did not meet tax

contributions as anticipated in the budget. Despite these shortfalls there was a general

increase in gross receipts of 1.3% reported by businesses renewing their tax filings in FY

2023-24 compared to the gross receipts reported in the prior fiscal year by the same

accounts across all BT sectors. This year’s growth rate is slightly below the 2.7% average

annual percentage increase in gross receipts reported for account renewals over the

previous four fiscal years. In total, BT collection increased by $8.10 million or 7.0% in FY

2023-24 from the $115.38 million collected in FY 2022-23. The sectors with the highest

year over year increase in BT remitted were led by Professional / Semi-Professional

Services, Admin Headquarters, and Wholesale Sales. The November 17, 2023, report to

the City Council on Measure T's implementation showed that these three categories

accounted for approximately 47.5% of the overall net revenue increase from the amended

business tax structure resulting from Measure T, totaling about $8.3 million in growth

annually.

Page 5 of 65

Jestin D. Johnson, City Administrator

Subject: FY 2023-24 Q4 R&E Report and FY 2024-25 Fiscal Condition and Challenges

Date: October 10, 2024 Page 5

Finance and Management Committee

October 22, 2024

• Sales Tax: Receipts ended the year at $62.27 million, which is $5.95 million or 8.8% under

the FY 2023-24 Adjusted Budget of $67.69 million. Data available through the third quarter

(Q3) reflects that Oakland’s Sales Tax receipts in FY 2023-24 came in 4.2% below the

level of collection compared to Q3 in FY 2022-23. (Sales Tax is collected by the State and

the corresponding detailed data becomes available to the City in the subsequent quarter.)

The decline reflects broader economic trends influenced by moderating inflation and shifts

in consumer behavior. Inflation, though less aggressive than in previous periods, has left

its imprint on the economy. Its moderation has somewhat stabilized prices, yet the overall

impact has led to a contraction in certain business sectors, led by Fuel and Service

Stations, Autos and Transportation, and the General Consumer Goods industries. Taxes

from jet fuel dropped significantly as airlines sought cheaper locations to fuel aircraft and

cargo outside of the area. New motor vehicle sales absorbed a decline as the cost of

financing increased. Retail declines in General Goods follow a nationwide trend towards

online shopping and a preference for services over goods, which led to decreases in

physical retail, impacting sales tax collections traditionally sustained by in-store

purchases.

• Transient Occupancy Tax ("TOT"): FY 2023-24 collections ended the year at $18.93

million, which is $3.55 million or 15.8% under the adjusted budget of $22.48 million. The

shortfall was mirrored by TOT collections from hotels near the airport area which ended

the year 14.8% below FY2022-23 levels. As of June 30, 2024, the net number of accounts

paying TOT to the City decreased by 2, from 70 in June 2023 to 68. Specifically, accounts

with the land use code for Hotel or Motel fell from 58 to 55. In addition, a nationwide trend

of falling room rates further contributed to lower TOT collections in the City as well.

• Service Charges: Revenues from Service Charges ended the year at $46.98 million,

which is $5.38 million, or 10.3% under the Adjusted Budget of $52.36 million. Reduced

collections in parking meter fees led to the shortfall. Sectors like hospitality and retail,

which often contribute to parking revenue, have not fully rebounded to pre-pandemic

levels. This slower recovery impacts the frequency of parking usage and, consequently,

revenue from parking meters. As a result, collections from parking meters came in at

$10.24 million which is $6.36 million below the $16.60 million estimated in the budget.

• Fines & Penalties: Collections of Fines and Penalties ended the year at $19.19 million,

which is $3.89 million or 16.8% under the Adjusted Budget of $23.07 million. Parking

Citations constitute the majority of Fines and Penalties. The Adjusted Budget assumed

increased revenues from an increase in parking fines of 5% for FY 2023-24, with an

additional 5% planned for FY 2024-25 aimed to keep pace with inflation. However,

Revenue from Parking Citations ended the year at $16.77 million, which is $0.98 million

or 0.5% below the $16.87 million collected in FY 2022-23. There was also an anticipated

$1.20 million revenue increase from the deployment of Automatic License Plate Reader

(ALPR) equipped vehicles for the Scofflaw Detail that was not realized due to legal

restrictions, further exacerbating the revenue shortfall. The Parking Enforcement Unit also

experienced staffing shortages, which directly impacted the ability to enforce parking

regulations effectively.

Page 6 of 65

Jestin D. Johnson, City Administrator

Subject: FY 2023-24 Q4 R&E Report and FY 2024-25 Fiscal Condition and Challenges

Date: October 10, 2024 Page 6

Finance and Management Committee

October 22, 2024

Revenue categories with surpluses at year-end compared to the FY 2023-24 Adjusted Budget in

the GPF are led by the Property Tax, the Utility Consumption Tax (UCT), and Parking Tax.

• Property Tax: Collections of Property Tax came in at $299.15 million, which is $4.98

million or 1.7% above the FY 2023-24 Adjusted Budget of $294.17 million. In comparison

FY 2022-23 ended the year at $281.28 million. The year over year growth mirrors the

overall growth of assessed taxable value for the City of approximately 6.6 % when

compared to FY 2022-23. The year over year growth reflects an increase in assessed

value due to California Consumer Price Index increase of 2%, as limited by Proposition

13, 2.96 % increased valuation due to changes in ownership, and 0.95% increased

valuation due to new construction.

• Utility Consumption Tax: Collections of Utility Consumption Tax ended the year at

$66.22 million which is $4.32 million or 7.0% above the FY 2023-24 Adjusted Budget of

$61.90 million. The increase is attributed to the approval of a 12.8% rate increase in

consumer utility rates, approved by the California Public Utilities Commission (CPUC)

which took effect in the second half of the fiscal year.

• Parking Tax ("PT"): Collections of Parking Tax ended the year at $11.87 million which is

$0.61 million or 5.4% above the FY 2023-24 Adjusted Budget of $11.26 million. Across

the city, PT revenues have now returned to levels seen before the COVID-19 pandemic.

Notably, the Downtown area has experienced significant year-over-year increases in

parking tax collections over the past three fiscal years, with sequential annual rises of

31%, 18%, and 11% of revenue collected respectively. In contrast, there was a 6%

decrease in parking tax collections around the Airport area in FY 2023-24 compared to FY

2022-23, after experiencing two consecutive years of growth in that area.

The Adjusted Budget of $890.07 million as reported in the Q3 R&E was reduced by fiscal

retrenchment, primarily by reducing the amount of appropriations that had been carried forward

from FY 2022-23, due to the inaction to utilize the funds and the lack of funding (the operational

budget deficit) in the GPF fund balance. Fiscal retrenchment is defined as the reduction of costs

or spending in response to economic difficulty where jurisdictions take immediate action to begin

to stabilize the fiscal situation. This in turn reduced the anticipated use of fund balance

proportionally. The updated FY 2023-24 Adjusted Revenue Budget of $863.68 million at year end

still assumed $30.12 million in use of fund balance to support expenditures adopted in the budget

and $27.97 million in use of fund balance to support the remaining prior year carryforwards. Net

of use of fund balance, actual revenues ended the year at $734.68 million, compared to the

$805.59 million estimated in the Adjusted Budget, representing a net shortfall of $70.91 million or

8.8% for actual revenues.

Page 7 of 65

Jestin D. Johnson, City Administrator

Subject: FY 2023-24 Q4 R&E Report and FY 2024-25 Fiscal Condition and Challenges

Date: October 10, 2024 Page 7

Finance and Management Committee

October 22, 2024

Table 2 below highlights revenue categories year-end actuals when compared to the FY 2023-

24 Adjusted Budget.

Table 2: FY 2023-24 Q4 GPF Revenues Budget to Actuals ($ in millions)

Revenue

Category

FY 2023-24

Adopted

Budget

FY 2023-24

Adjusted

Budget

FY 2023-24 Q4

YTD

Unaudited

Actuals

Year-End $

Over / Under

Adjusted

Budget

Year-End %

Over / Under

Adjusted

Budget

Property Tax 294.17 294.17 299.15 4.98 1.7 %

Business License

Tax 125.25 125.25 123.48 (1.77) (1.4) %

Real Estate

Transfer Tax 110.41 110.41 57.61 (52.80) (47.8) %

Sales Tax 67.69 67.69 61.74 (5.95) (8.8) %

Utility

Consumption Tax 61.90 61.90 66.22 4.32 7.0 %

Service Charges 51.60 52.36 46.98 (5.38) (10.3) %

Fines & Penalties 23.07 23.07 19.19 (3.89) (16.8) %

Transient

Occupancy Tax 22.48 22.48 18.93 (3.55) (15.8) %

Miscellaneous

Revenue 21.22 21.22 9.14 (12.08) (56.9) %

Interfund

Transfers 13.08 13.08 13.08 — — %

Parking Tax 11.26 11.26 11.87 0.61 5.4 %

Licenses &

Permits 1.39 1.39 1.44 0.05 3.4 %

Interest Income 0.48 0.48 3.55 3.07 633.3 %

Grants &

Subsidies — 0.82 1.77 0.95 115.5 %

Subtotal 804.00 805.59 734.68 (70.91) (8.8) %

Transfers from

Fund Balance 30.12 30.12 — (30.12) (100.0)%

Project Offsets &

Carryforwards — 27.97 — (27.97) (100.0)%

Total Revenue 834.12 863.68 734.68 (129.00) (14.9)%

FY 2023-24 Q4 Expenditures

At the end of Q4 for FY 2023-24, expenditures ended the fiscal year at $814.52 million, or $49.16

million under the Adjusted Budget of $863.68 million. All but four departments ended the fiscal

year under or at budget. One department is overspending at a much higher rate than can be offset

by the other departments.

Page 8 of 65

Jestin D. Johnson, City Administrator

Subject: FY 2023-24 Q4 R&E Report and FY 2024-25 Fiscal Condition and Challenges

Date: October 10, 2024 Page 8

Finance and Management Committee

October 22, 2024

By and large, the savings being observed by most departments is due to vacancy savings. The

budgeted vacancy factor assumed in the FY 2023-24 Biennial Budget is 8.00% across most City

Departments, recognizing the trend and capturing vacancy savings. The actual vacancy rate as

of Q4 in the GPF is 15.0%, which is almost twice of that assumed in the budget, resulting in further

savings.

The Biennial Adopted Budget assumed a use of fund balance in the amount of $30.12 million to

balance the expenditures as budgeted. This follows a trend in recent years, during which one- time funding was needed in the balancing of the expenditures. Expenditure monitoring is

heightened as citywide hiring is a large focus, and current inflationary trends and federal monetary

policy are likely to continue throughout the fiscal year and have an impact on spending trends by

year-end.

Table 3 below breaks down the FY 2023-24 Expenditures by Department.

Table 3: FY 2023-24 Q4 GPF Expenditures Budget to Actuals ($ in millions)

Department FY 2023-24

Adopted Budget

FY 2023-24

Adjusted Budget

FY 2023-24 Q4

Year-End

Actuals

Year-End $

(Over) / Under

Adjusted Budget

Year-End %

(Over) / Under

Adjusted Budget

Capital

Improvement

Projects 0.55 1.89 0.59 1.30 68.8 %

City

Administrator 9.81 11.31 8.38 2.93 25.9 %

City Attorney 21.75 23.38 20.56 2.82 12.1 %

City Auditor 3.31 3.60 2.31 1.29 35.7 %

City Clerk 7.85 7.94 5.42 2.53 31.8 %

City Council 7.12 7.26 6.38 0.89 12.2 %

Department of

Transportation 20.54 22.53 22.14 0.39 1.7 %

Department of

Violence

Prevention 10.79 13.08 10.43 2.64 20.2 %

Department of

Workplace and

Employment

Standard 4.31 4.92 4.91 0.01 0.2 %

Economic and

Workforce

Development

Department 11.19 14.01 9.60 4.41 31.5 %

Finance

Department 30.00 33.18 25.78 7.41 22.3 %

Fire Department 199.87 200.37 186.70 13.67 6.8 %

Page 9 of 65

Jestin D. Johnson, City Administrator

Subject: FY 2023-24 Q4 R&E Report and FY 2024-25 Fiscal Condition and Challenges

Date: October 10, 2024 Page 9

Finance and Management Committee

October 22, 2024

Department FY 2023-24

Adopted Budget

FY 2023-24

Adjusted Budget

FY 2023-24 Q4

Year-End

Actuals

Year-End $

(Over) / Under

Adjusted Budget

Year-End %

(Over) / Under

Adjusted Budget

Housing and

Community

Development

Department 0.24 1.01 2.88 (1.87) (185.5)%

Human

Resources

Management

Department 9.50 9.79 8.72 1.07 11.0 %

Human

Services

Department 44.76 41.92 44.36 (2.44) (5.8) %

Information

Technology

Department 16.97 18.67 15.04 3.63 19.4 %

Mayor 4.60 4.66 4.02 0.65 13.9 %

Non

Departmental

and Port 55.60 60.69 34.82 25.73 42.5 %

Oakland Animal

Services 6.49 6.54 5.84 0.70 10.7 %

Oakland Parks

and Recreation

Department 18.30 19.06 14.91 4.16 21.8 %

Oakland Public

Library

Department 12.31 12.32 10.54 1.77 14.4 %

Oakland Public

Works

Department 1.36 1.84 2.50 (0.66) (35.7)%

Police

Commission 7.96 8.14 6.16 1.97 24.3 %

Police

Department 325.39 332.05 358.57 (26.38) (7.9) %

Public Ethics

Commission 2.25 2.07 1.75 0.32 15.5 %

Race and

Equity

Department 1.29 1.44 1.22 0.22 15.2 %

Total 834.12 863.68 814.52 49.16 5.7 %

The City's number of vacancies is a contributing factor to projected expenditure savings in the

GPF. At Q4, the GPF's vacancy rate (net positions that are frozen as part of the FY 2023-24

Adopted Budget), is 15.00% as shown in Table 4 below. The vacancy rate assumed in the FY

2023-24 Adopted Budget is 8.00% across most City Departments.

Page 10 of 65

Jestin D. Johnson, City Administrator

Subject: FY 2023-24 Q4 R&E Report and FY 2024-25 Fiscal Condition and Challenges

Date: October 10, 2024 Page 10

Finance and Management Committee

October 22, 2024

Table 4: FY 2023-24 Q4 GPF Filled and Vacant Positions (Percent %)

Status as of Q4 FY 2023-2024 Percent (%)

Filled or Encumbered 85.0 %

Vacant 15.0 %

FY 2023-24 Fund Balance

The City's GPF Fund net obligations, is projected to end FY 2023-24 with a negative fund

balance.Table 5 below shows mandated reserves required by City Ordinances and the City

Charter, as well as other commitments that adjust or draw down on the GPF balance totaling

$30.40 million, decreasing the estimated FY 2023-24 year-end available fund balance to

negative $16.60 million. In addition, there are $55.06 million in additional possible carry

forwards that could further reduce the FY 2023-24 available fund balance to negative $71.66

million. The estimated FY 2023-24 available Fund Balance is the amount of unobligated

funding available to the City in the GPF.

Table 5: Summary of FY 2023-24 Fiscal Situation with GPF Fund Balance ($ in millions)

GENERAL PURPOSE FUND (1010) FY 2023-24 Q4 FYE

Estimated FY 2023-24 Beginning Audited Fund Balance 93.28

FY2023-24 Performance

Revenue 734.68

Expenditures 814.52

FY 2023-24 Operating Surplus / Deficit (79.84)

Obligations Against Ending Fund Balance

Encumbrances (12.9)

Settlement Set Aside (4.4)

Required Carry Forward on to FY 2024-251 (12.74)

FY 2023-24 Maximum Available Ending Fund Balance (16.60)

Additional Possible Carry Forward on to FY 2024-25 (55.06)

FY 2023-24 Minimum Available Ending Fund Balance (71.66)

Composition of the GPF Fund Balance

1 Required Carryforward include funds that are tied to legally binding contracts or agreements, required to meet

legal settlement terms which may be restricted for specific uses, committed to payments that have processed,

matching funds necessary for federal grant programs, and planned used of carryforward funds adopted in the budget.

Page 11 of 65

Jestin D. Johnson, City Administrator

Subject: FY 2023-24 Q4 R&E Report and FY 2024-25 Fiscal Condition and Challenges

Date: October 10, 2024 Page 11

Finance and Management Committee

October 22, 2024

The GPF fund balance represents the difference between total assets in the GPF and its

liabilities. However not all GPF these assets are of the same type nor are they all immediately

liquid. The GPF fund balance at the end of FY2023-24 shows a significant negative cash

balance of $62 million offset in part by other assets.

A substantial portion of the GPF’s assets are tied up in non-cash items, such as receivables and

land held for resale. These assets, while valuable, do not provide immediate cash flow to

address the City’s operational needs. As such, the GPF borrows against the pooled cash

available from other funds in order to make payments. This arrangement is true for other CIty

funds, most notably grant funds which are reimbursed after expenditures occur, but it has not

historically been true for the GPF and reflects our precarious fiscal condition.

Preliminary Analysis of the Condition of the FY 2024-25 Budget, and Information on the

City's Fiscal Condition & Fiscal Challenges

The FY 2024-25 budget is in a precarious position, with projected overspending in the GPF

based on latest financial data. Preliminary projections indicate that the GPF is anticipated

to exceed the expenditure budget by an estimated $30 million, primarily driven by

spending in public safety departments.

Compounding the situation are required changes to the current year budget based on the

contingency budget, which was adopted to be activated if payment from a land sale did

not arrive according to the schedule outlined in the budget resolution. The conditions for

the contingency budget have been met, and implementation is in progress. Steps are being

taken to minimize impacts to public safety of implementation.

Considering these factors – implementation of the contingency budget, initial projected

overspending, and the accumulated deficit from FY 2023-24 – the City’s fiscal health is at

significant risk. Expenditure reductions and reallocation of resources are necessary to

mitigate the deficit and ensure fiscal stability throughout the remainder of FY 2024-25.

Once revenue and expenditure information is available from the First Quarter of FY 2024-

25 staff recommends that the Mayor and City Council address the totality of the City’s fiscal

challenges though a formal budget amendment process.

Looking ahead, the City’s Fiscal challenges extend beyond the current year. Preliminary

analysis of the FY 2025-27 baseline budget projects a substantial structural deficit of $120

million. This reflects deeper, ongoing imbalances between revenues and expenditures. To

restore long-term fiscal sustainability, the City will need to adopt comprehensive, ongoing

balancing measures, mostly focusing on the strategic reorganization and prioritization of

services to align spending with available resources.

Page 12 of 65

Jestin D. Johnson, City Administrator

Subject: FY 2023-24 Q4 R&E Report and FY 2024-25 Fiscal Condition and Challenges

Date: October 10, 2024 Page 12

Finance and Management Committee

October 22, 2024

Conclusion

The City faces fiscal challenges related to last year FY 2023-24, the current year FY 2024-25,

and the coming Biennium FY 2025-27. To shore up its finances the City will need to adopt and

implement significant reductions to expenditures and strategically prioritize the services it

provides subject to available resources. The $188 million in one-time federal aid from the

American Rescue Plan Act (ARPA) provided temporary financial relief to the General Purpose

Fund (GPF) for the last three fiscal years, addressing what was a persistent structural budget

deficit. However, as these funds are now depleted, the underlying financial issues have

resurfaced, worsened by a significant decline in Real Estate Transfer Tax (RETT) revenues, which

were $52.80 million below the adjusted budget expectations at year's end. Additionally,

macroeconomic trends including inflation is increasing the pressure on city expenditures, though

this is somewhat mitigated by numerous unfilled positions across city services, which

unfortunately also leads to a reduction in service provision.

PUBLIC OUTREACH / INTEREST

No outreach was deemed necessary for this informational report beyond the standard City

Council agenda noticing procedures.

COORDINATION

This report was prepared in coordination between the Finance Department, the City

Administrator’s Office and various departments.

SUSTAINABLE OPPORTUNITIES

Economic: No direct economic opportunities have been identified.

Environmental: No direct environmental impacts have been identified.

Race & Equity: No direct Race & Equity opportunities have been identified in this informational

report.

Page 13 of 65

Jestin D. Johnson, City Administrator

Subject: FY 2023-24 Q4 R&E Report and FY 2024-25 Fiscal Condition and Challenges

Date: October 10, 2024 Page 13

Finance and Management Committee

October 22, 2024

Erin Roseman (Oct 10, 2024 16:08 PDT)

ACTION REQUESTED OF THE CITY COUNCIL

Staff Recommends That City Council Receive An Informational Report On Fiscal Year (FY)

2023-24 Fourth Quarter (Q4) Revenue And Expenditure (R&E) Results For The General

Purpose Fund (GPF, 1010), And Select Funds, Preliminary Analysis of the Condition of the FY

2024-25 Budget, and Information on the City's Fiscal Condition & Fiscal Challenges.

For questions regarding this report, please contact Bradley Johnson, Budget Administrator, at

(510) 238-6119.

Respectfully submitted,

Erin Roseman

Director of Finance, Finance Department

Reviewed by:

Bradley Johnson, Budget Administrator

Sherry Jackson, Revenue & Tax Administrator

Prepared by: Revenue Management Bureau &

Budget Bureau:

Agaba, Rogers

Dang, Huey

Mariano, Daniel

Maurer, Chuck

Segura, Jose

Soares, Michelle

Stabler, Rina

Urrutia, Kristin

Attachments:

A: FY 2023-24 Q4 Detailed Report

Page 14 of 65

Jestin D. Johnson, City Administrator

Subject: FY 2023-24 Q4 R&E Report and FY 2024-25 Fiscal Condition and Challenges

Date: October 10, 2024 Page 1

Finance and Management Committee

October 22, 2024

Attachment A: FY 2023-24 Q4 Detailed Report

TABLE OF CONTENTS

The report has the following major sections:

1. General Purpose Fund Q4 Revenues

2. General Purpose Fund Q4 Expenditures

3. General Purpose Fund Q4 Fund Balance

4. Reserves

5. Select Non-GPF Summaries

Appendixes:

Consolidated Fiscal Policy

Page 15 of 65

Jestin D. Johnson, City Administrator

Subject: FY 2023-24 Q4 R&E Report and FY 2024-25 Fiscal Condition and Challenges

Date: October 10, 2024 Page 2

Finance and Management Committee

October 22, 2024

Summary of FY 2023-24 Q4 GPF Revenues & Expenditures

FY 2023-24 GPF Revenue came in at $734.68 million, which is $129.00 million or 14.9% under

the Adjusted Budget of $863.68 million. GPF Expenditures came in at $814.52 million, which is

$49.16 million or 5.7% under the Adjusted Budget of $863.68 million. Table 1 below shows the

FY 2023-24 General Purpose Fund Adjusted Budget and year-end actuals for revenues and

expenditures, which ended with a year-end operating shortfall of $79.84 million or 9.2%.

Table 1: Summary of FY 2023-24 Q4 GPF Revenues & Expenditures Budget to Estimated

Year-End Actuals ($ in millions)

FY 2023-24

Adjusted Budget

FY 2023-24 Q4

Year-End Actuals

Year-End $

Over / Under

Adjusted Budget

Projected Year-End %

(Over) / Under Adopted

Budget

FY 2023-24

Revenues 863.68 734.68 (129.00) (14.9)%

FY 2023-24

Expenditures 863.68 814.52 49.16 5.7 %

Operating

(Shortfall) /

Surplus

— (79.84) (79.84) (9.2)%

I. GENERAL PURPOSE FUND FY 2023-24 Q4 REVENUES

The revenue in the General Purpose Fund (GPF) ended the fiscal year at $734.68 million, which

is $129.00 million or 14.9% under the FY 2023-24 Adjusted Budget of $863.68 million. The

Adjusted Budget included the use of $30.12 million from the fund balance to cover adopted

expenditures and $27.97 million in use of the fund balance to cover prior year carry-forwards.

Excluding these one-time funds, actual GPF revenues ended with a shortfall of $70.91 million

compared to the $805.59 million estimated in the Adjusted Budget. Persistent high inflation has

reduced purchasing power, potentially decreasing tax revenue as consumers buy less or opt for

cheaper alternatives. High interest rates are directly impacting Real Estate Transfer Taxes by

cooling the housing market, reducing property sales, and thus lowering tax revenue from property

transactions. Similarly, higher interest rates have also made other financing more expensive,

which decreased automobile sales and reduced spending in general, impacting Sales Tax,

Business Tax, and other consumer-driven revenues. Perceived increased theft and vandalism

further reduced local tax bases by deterring business investment and consumer spending in

affected areas,

Page 16 of 65

Jestin D. Johnson, City Administrator

Subject: FY 2023-24 Q4 R&E Report and FY 2024-25 Fiscal Condition and Challenges

Date: October 10, 2024 Page 3

Finance and Management Committee

October 22, 2024

FY 2023-24 Q4 REVENUE HIGHLIGHTS

Property Tax: The largest revenue source for the City ended the year at $299.15 million, which

is $4.98 million or 1.7% above the FY 2023-24 adjusted budget of $294.17 million. In comparison

FY 2022-23 ended the year at $281.28 million. The year over year increase is driven by the overall

increase in assessed taxable values in the City of approximately 6.6% according to the most

recent County Property Tax Rolls, which results in a proportional increase in the amount of

property tax assessments. Growth was led by residential assessed values which increased by

7.9% for a total of $4.63 billion, followed by commercial properties which posted an increase in

assessed value of $599 million or a year over year increase of 5.2%, and by industrial properties

which posted gains in assessed value of $302.3 million or 9.6%.

The largest secured roll increase was reported on a developing vacant property owned by CVOW

Parcel J Owner LLC at 37 8th Avenue with a growth of $116.6 million. This is an 8-story residential

building under development as part of the Brooklyn Development in the Brooklyn Basin of

Downtown Oakland. The second largest increase in property value came from an office building

in Downtown Oakland owned by 300 F Ogawa Plaza LP at the same address, which reported an

increase in value of $94.1 million between FY 2022-23 and FY 2023-24. This property

reevaluation was due after the current owner purchased the property in 2021. The third highest

increase in property value came from a vacant site developing into a mixed-use site in downtown

Oakland. Owned by 19 Bdwy Tower Development LLC, at 1920 Broadway, the added

improvements to the property resulted in an increase in assessed value of $62 million.

Business License Tax (BT): The second largest revenue source ended the year at $123.48

million, which is $1.77 million or 1.4% under the FY 2023-24 Adjusted Budget of $125.25 million.

This discrepancy primarily stems from certain economic sectors underperforming compared to

budget assumptions led by the Construction, Utilities, and Property Rental sectors which

experienced a decrease in activity compared to the previous year. However, overall businesses

that renewed their tax filings in FY 2023-24 showed a 1.3% rise in gross receipts compared to the

previous year. This year’s growth rate is slightly below the 2.7% average annual percentage

increase in gross receipts reported for account renewals over the previous four fiscal years. In

total, FY 2023-24 saw an increase of $8.10 million in BT collected compared to the FY 2022-23

year-end total of $115.38 million. This growth was predominantly driven by increases in amounts

collected from Professional Services, Administrative Headquarters, and Wholesale Sales. The

November 17, 2023, report to the City Council on Measure T's implementation showed that these

three categories accounted for approximately 47.5% of the overall net revenue increase from the

amended business tax structure resulting from Measure T, totaling about $8.3 million in growth

annually.

Page 17 of 65

Jestin D. Johnson, City Administrator

Subject: FY 2023-24 Q4 R&E Report and FY 2024-25 Fiscal Condition and Challenges

Date: October 10, 2024 Page 4

Finance and Management Committee

October 22, 2024

Real Estate Transfer Tax (RETT): The third largest revenue source for the City ended the fiscal

year at $57.61 million, which is $52.80 million, or 47.8% under the FY 2023-24 adjusted budget

of $110.41 million, representing the largest shortfall in the GPF. The significant reduction is

attributable to rising interest rates that impact the affordability factor and consequently the number

of property sales subject to RETT. To combat inflation, the Federal Open Market Committee

(FOMC) raised and maintained the federal funds rate at the 5.25%-5.50% range throughout the

fiscal year. This has led to an increase in mortgage rates, with the 30-year fixed rate being at

6.95% as of June 27, 2024, according to the Freddie-Mac Mortgage Market Survey Archive.

Higher interest rates make home buying more expensive, reducing buyer interest and transaction

volume.

The number of properties sold during FY 2023-24 dropped by 371 properties, compared to the

number of properties sold in the prior year. The notable decrease in transaction volume, dropping

from 3,680 in FY 2022-23 to 3,309 in FY 2023-24, represents a reduction of about 10.1%. The

volume decreased is amplified when considering that the gross sales fell by 19.6% when

accounting for the sales prices. There's been a significant drop in high-value property

transactions. Only 25 properties valued over $5 million were sold in FY 2023-24, compared to 38

in the previous year, representing a 34.2% decline. For properties over $10 million, the numbers

fell from 18 to 13 or by 27.7%.

The FOMC made a significant move by cutting interest rates by 50 basis points in September

2024, bringing the federal funds rate target range to 4.75% to 5.00%. This was the first rate cut

since 2020, signaling an aggressive approach to stimulate economic activity amid signs of

economic slowdown or to prevent a steeper downturn. Looking into 2025, there are expectations

for additional cuts, which could lead to a gradual recovery for the market as financing for

properties becomes less expensive over time.

Table 2 below provides the year over year variance in gross sales and volume by sales price tiers.

Table 2: RETT Growth Rate ($ in millions)

FY 2022-23 FY 2023-24 Year-Over-Year

Variance

Sale Price Gross Sales Volume Gross Sales Volume Gross Sales Volume

$300,000 or below $ 37.44 229 $39.28 225 4.9 % (1.7) %

$300,001 to $2 Million $ 2,877.48 3,168 $2,597.53 2,880 (9.7) % (9.1) %

$2 million to $5 Million $ 674.24 245 $474.03 179 (29.7)% (26.9)%

$5 -10 Million $ 139.54 20 $79.17 12 (43.3)% (40.0)%

$10 - 50 Million $ 293.32 14 $217.85 11 (25.7)% (21.4)%

$50.01-100 Million $ 212.65 3 $126.28 2 (40.6)% (33.3)%

Over $100 Million $ 163.29 1 $0.00 $ — — % — %

Total $ 4,397.96 3,680 $3,534.14 3,309 (19.6)% (10.1)%

Page 18 of 65

Jestin D. Johnson, City Administrator

Subject: FY 2023-24 Q4 R&E Report and FY 2024-25 Fiscal Condition and Challenges

Date: October 10, 2024 Page 5

Finance and Management Committee

October 22, 2024

Sales Tax: The fourth largest revenue source for the City ended the year at $62.27 million, which

is $5.95 million, or 8.8% under the FY 2023-24 Adjusted Budget of $67.69 million. FY 2023-24 for

Oakland has been marked by a significant downturn in Sales Tax receipts. This decline reflects

broader economic trends influenced by moderating inflation and shifts in consumer behavior.

Inflation, though less aggressive than in previous periods, has left its imprint on the economy. Its

moderation has somewhat stabilized prices, yet the overall impact has led to a contraction in

certain business sectors, directly affecting sales tax revenue. Sales Tax is collected by the State

and the corresponding detailed data becomes available to the City in the subsequent quarter.

Oakland’s receipts through the third quarter in FY 2023-24 were on average 6.2% below the third

quarter mark in FY 2022-23 across the various Sales Tax categories as shown on Table 3 below.

Leading the shortfall were Fuel and Service Stations which declined by 23.0% compared to the

FY 2022-23 Q3. Service station revenues were slightly up and right in line with the statewide

average. However, taxes from jet fuel declined as airlines sought cheaper locations to fuel aircraft

and cargo outside of the area. New motor vehicle sales also absorbed a decrease as buyers

steered toward affordable models and stayed away from luxury brands, as prices and the cost of

financing increased. As a result through Q3, the Autos and Transportation sector declined by

11.3% year over year. General Consumer Goods posted a decrease in receipts and the

decadence was furthered by a large store closure resulting in a 12.2% year over year decline for

this category. Retail declines follow a nationwide trend towards online shopping and a preference

for services over goods, which led to decreases in physical retail, impacting sales tax collections

traditionally sustained by in-store purchases. Despite declines in all sales tax sub-categories, a

significant decrease in another agency's receipts increased the City's share of the County pool,

boosting the State/County Pool & Transfers category by 8.9% year over year through Q3.

Table 3 below provides a year over year comparison of Sales Tax by Category through Q3.

Table 3: Sales Tax Comparison by Category FY2022-23 and FY 2023-24 ($ in millions)

Category

Thru Q3

FY 2022-23

Thru Q3

FY 2023-24 Inc/Dec

Autos & Transportation $ 7.68 $ 6.89 -11.3%

Building & Construction $ 4.56 $ 4.42 -3.2%

Business & Industry $ 4.55 $ 4.14 -9.7%

Food & Drugs $ 4.05 $ 3.60 -12.7%

Fuel & Service Stations $ 6.26 $ 5.09 -23.0%

General Consumer Goods $ 4.12 $ 3.67 -12.2%

Restaurants & Hotels $ 8.08 $ 7.87 -2.7%

State/County Pools & Transfers $ 8.41 $ 9.23 8.9%

Average $ 5.96 $ 5.61 -6.2%

Page 19 of 65

Jestin D. Johnson, City Administrator

Subject: FY 2023-24 Q4 R&E Report and FY 2024-25 Fiscal Condition and Challenges

Date: October 10, 2024 Page 6

Finance and Management Committee

October 22, 2024

Utility Consumption Tax: This fifth largest revenue source for the City ended the year at $66.22

million which is $4.32 million or 7.0% above the FY 2023-24 Adjusted Budget of $61.90 million.

The increase is attributed to the approval of a 12.8% rate increase in consumer utility rates,

approved by the California Public Utilities Commission (CPUC) which took effect in the second

half of the fiscal year.

Interfund Transfers & Transfers from Fund Balance: The adjusted budget assumes $30.12

million in use of fund balance to balance budgeted expenditures and $27.97 million in use of fund

balance to support carryforward expenditures. Additionally, there is $13.08 million budgeted in

anticipated interfund transfers.

All Other Revenue Sources:

Table 4 below summarizes the FY 2023-24 Adjusted Budget to actuals performance by revenue

category in the GPF. Other notable GPF revenues in FY 2023-24 include:

Miscellaneous Revenues: FY 2023-24 ended at $9.14 million, a shortfall of $12.08 million or

56.9% under the $21.22 million budget, mainly due to a delayed land sale.

Transient Occupancy Tax (TOT): Collected $18.93 million, $3.55 million or 15.8% under budget.

Decline attributed to reduced hotel collections near the airport and fewer TOT accounts, down

from 70 to 68.

Service Charges: Revenues were $46.98 million, falling under the Adjusted Budget by

$5.38million or 10.3% due to lower collections in parking meter fees.

Fines and Penalties: Achieved $19.19 million, $3.89 million or 16.8% under budget. Parking

fines did not increase as expected, and an Automatic License Plate Reader (ALPR) vehicle

deployment for enforcement was hindered by legal issues.

Parking Tax: Reached $11.87 million, exceeding the Adjusted Budget by $0.61 million or 5.4%.

Downtown areas saw significant increases, while the airport area experienced a 6% decline in

collections.

All revenue categories as summarized on Table 4 below.

Page 20 of 65

Jestin D. Johnson, City Administrator

Subject: FY 2023-24 Q4 R&E Report and FY 2024-25 Fiscal Condition and Challenges

Date: October 10, 2024 Page 7

Finance and Management Committee

October 22, 2024

Table 4: FY 2023-24 Q4 Adopted Budget to Actuals and Year End Estimate ($ in millions)

Revenue Category FY 2023-24

Adopted Budget

FY 2023-24

Adjusted Budget

FY 2023-24 Q4

YTD Unaudited

Actuals

Year-End $ Over /

Under Adjusted

Budget

Year-End % Over /

Under Adjusted

Budget

Property Tax 294.17 294.17 299.15 4.98 1.7 %

Business License Tax 125.25 125.25 123.48 (1.77) (1.4) %

Real Estate Transfer

Tax 110.41 110.41 57.61 (52.80) (47.8) %

Sales Tax 67.69 67.69 61.74 (5.95) (8.8) %

Utility Consumption

Tax 61.90 61.90 66.22 4.32 7.0 %

Service Charges 51.60 52.36 46.98 (5.38) (10.3) %

Fines & Penalties 23.07 23.07 19.19 (3.89) (16.8) %

Transient Occupancy

Tax 22.48 22.48 18.93 (3.55) (15.8) %

Miscellaneous

Revenue 21.22 21.22 9.14 (12.08) (56.9) %

Interfund Transfers 13.08 13.08 13.08 — — %

Parking Tax 11.26 11.26 11.87 0.61 5.4 %

Licenses & Permits 1.39 1.39 1.44 0.05 3.4 %

Interest Income 0.48 0.48 3.55 3.07 633.3%

Grants & Subsidies — 0.82 1.77 0.95 115.5%

Internal Service Funds — — — — N / A

Subtotal 804.00 805.59 734.68 (70.91) (8.8) %

Transfers from Fund

Balance 30.12 30.12 — (30.12) (100.0) %

Project Offsets &

Carryforwards — 27.97 — (27.97) (100.0) %

Total Revenue 834.12 863.68 734.68 (129.00) (14.9) %

Page 21 of 65

Jestin D. Johnson, City Administrator

Subject: FY 2023-24 Q4 R&E Report and FY 2024-25 Fiscal Condition and Challenges

Date: October 10, 2024 Page 8

Finance and Management Committee

October 22, 2024

II. GENERAL PURPOSE FUND FY 2023-24 Q4 EXPENDITURES

GENERAL PURPOSE FUND EXPENDITURE HIGHLIGHTS

Unaudited GPF expenditures ended the year at $814.52 million, or $49.16 million under the

Adjusted Budget of $863.68 million. The Adjusted Budget required a use of fund balance in the

amount of $30.12 million to balance the expenditures as budgeted. This follows a trend in recent

years, during which one-time funding was needed in the balancing of the FY2019-20, FY2020-

21, FY2021-22 and FY2022-23 expenditures in the budget by programming CARES dollars

($36.99 million), ARPA dollars ($188 million), and use of VSSF ($14.65 million) for a total of

$239.64 million, which would equal 27% of FY 2023-24 GPF budgeted expenditures. The

budgeted personnel expenditures also assume a vacancy factor of 8.00%, it is expected that the

actual vacancy factor will be higher with the hiring freeze in effect.

On March 27, 2024, the City Administrator released a memo outlining several policies to be

implemented immediately that would help reduce City expenditures, primarily in the GPF. A hiring

freeze went into effect for all non-sworn positions for the remainder of FY 2023-24. Additionally,

there was a citywide moratorium on professional training and conference requests funded through

the GPF. All other discretionary spending in the GPF was limited as the City attempted to bridge

the widening gap between GPF revenues and expenditures.

On June 26, 2024, the City Administrator presented an Informational Report to the City Council

outlining several actions the City could take to reduce the deficit in the GPF. One of the actions

included was the fiscal retrenchment of carryforward funds in the GPF based on the inaction to

utilize the funds and the lack of funding in the GPF fund balance by year-end. This resulted in a

reduction in the Adjusted Budget and realized savings of approximately $26.5 million. Additionally,

approximately $1 million in CIP Department projects was transferred either into eligible bond funds

or the Facilities Fund. This cost saving measure resulted in a few departments to slightly exceed

their budget during the fiscal year.

On August 23, 2024, prior to the closure of FY23-24, departments were tasked with moving

eligible labor costs out of the GPF into other eligible funding sources. The goal was to help

alleviate the growing deficit in the GPF. This cost saving measure resulted in about $12.5 million

transferred out of the GPF into other eligible funding sources.

Overall, the increase in the appropriations level compared to previous years merits further

consideration as it reflects the current global inflationary trend affecting the economy.

Page 22 of 65

Jestin D. Johnson, City Administrator

Subject: FY 2023-24 Q4 R&E Report and FY 2024-25 Fiscal Condition and Challenges

Date: October 10, 2024 Page 9

Finance and Management Committee

October 22, 2024

Table 5 below reflects the GPF expenditures at $816.96 million, which is $46.72 million or 5.4%

under the adjusted budget of $863.68 million.

Table 5: Summary of FY 2023-24 Q4 GPF Expenditures Budget to Actuals ($ in millions)

FY 2023-24

Adopted Budget

FY 2023-24

Adjusted Budget

FY 2023-24

Q4 Year-End

Actuals

Year-End $

(Over) / Under

Adjusted

Budget

Year-End %

(Over) / Under

Adjusted

Budget

FY 2023-24

Expenditures 834.12 863.68 814.52 49.16 5.7 %

Page 23 of 65

Jestin D. Johnson, City Administrator

Subject: FY 2023-24 Q4 R&E Report and FY 2024-25 Fiscal Condition and Challenges

Date: October 10, 2024 Page 10

Finance and Management Committee

October 22, 2024

Department Level Spending Trends

Table 6 below reflects department level spending and year-end GPF expenditures. As a result,

City-wide GPF departmental expenditures came in below the Adjusted Budget by $49.16 million.

.

Table 6: Summary of FY 2023-24 GPF Projected Expenditure Variance ($ in millions)

Department FY 2023-24

Adopted Budget

FY 2023-24

Adjusted Budget

FY 2023-24 Q4

Year-End Actuals

Year-End $

(Over) / Under

Adjusted Budget

Year-End %

(Over) / Under

Adjusted

Budget

Capital

Improvement

Projects 0.55 1.89 0.59 1.30 68.8%

City

Administrator 9.81 11.31 8.38 2.93 25.9%

City Attorney 21.75 23.38 20.56 2.82 12.1%

City Auditor 3.31 3.60 2.31 1.29 35.7%

City Clerk 7.85 7.94 5.42 2.53 31.8%

City Council 7.12 7.26 6.38 0.89 12.2%

Department of

Transportation 20.54 22.53 22.14 0.39 1.7%

Department of

Violence

Prevention 10.79 13.08 10.43 2.64 20.2%

Department of

Workplace and

Employment

Standard 4.31 4.92 4.91 0.01 0.2%

Economic and

Workforce

Development

Department 11.19 14.01 9.60 4.41 31.5%

Finance

Department 30.00 33.18 25.78 7.41 22.3%

Fire Department 199.87 200.37 186.70 13.67 6.8%

Housing and

Community

Development

Department 0.24 1.01 2.88 (1.87) (185.5)%

Human

Resources

Management

Department 9.50 9.79 8.72 1.07 11.0%

Human Services

Department 44.76 41.92 44.36 (2.44) (5.8)%

Page 24 of 65

Jestin D. Johnson, City Administrator

Subject: FY 2023-24 Q4 R&E Report and FY 2024-25 Fiscal Condition and Challenges

Date: October 10, 2024 Page 11

Finance and Management Committee

October 22, 2024

Department FY 2023-24

Adopted Budget

FY 2023-24

Adjusted Budget

FY 2023-24 Q4

Year-End Actuals

Year-End $

(Over) / Under

Adjusted Budget

Year-End %

(Over) / Under

Adjusted

Budget

Information

Technology

Department 16.97 18.67 15.04 3.63 19.4%

Mayor 4.60 4.66 4.02 0.65 13.9%

Non

Departmental

and Port 55.60 60.69 34.82 25.73 42.5%

Oakland Animal

Services 6.49 6.54 5.84 0.70 10.7%

Oakland Parks

and Recreation

Department 18.30 19.06 14.91 4.16 21.8%

Oakland Public

Library

Department 12.31 12.32 10.54 1.77 14.4%

Oakland Public

Works

Department 1.36 1.84 2.50 (0.66) (35.7)%

Police

Commission 7.96 8.14 6.16 1.97 24.3%

Police

Department 325.39 332.05 358.57 (26.38) (7.9)%

Public Ethics

Commission 2.25 2.07 1.75 0.32 15.5%

Race and Equity

Department 1.29 1.44 1.22 0.22 15.2%

Total 834.12 863.68 814.52 49.16 5.7%

The following section details Q4 GPF savings or overspending by Department, as compared to

the FY 2023-24 Adjusted Budget.

Capital Improvement Program (CIP)

The Capital Improvement Program has savings of $1.30 million, or 68.8% of the CIP Adjusted

Budget.

City Administrator (CAO)

The City Administrator’s Office has savings of $2.93 million, or 26% of their budget, due to

vacancies. $1.9 million of the total savings is from unspent O&M. In the General Purpose Fund,

CAO has a vacancy rate of 15%, with six vacant positions.

Page 25 of 65

Jestin D. Johnson, City Administrator

Subject: FY 2023-24 Q4 R&E Report and FY 2024-25 Fiscal Condition and Challenges

Date: October 10, 2024 Page 12

Finance and Management Committee

October 22, 2024

City Attorney (OCA)

The City Attorney has savings of $2.82 million, or 11% of their budget, due to vacancies. $1.5

million of the total savings is from unspent O&M. In the General Purpose Fund, OCA has a

vacancy rate of 10%, with six vacant positions.

City Auditor

The City Auditor has savings of $1.29 million, or 36% of their budget, due to vacancies. In the

General Purpose Fund, City Auditor has a vacancy rate of 25%, with three vacant positions.

City Clerk

The Office of the City Clerk has savings of $2.53 million, or 32% of their budget, due to

vacancies. $2.0 million of the total savings is from unspent O&M. In the General Purpose Fund,

City Clerk has a vacancy rate of 17%, with two vacant positions.

City Council

The City Council has savings of $0.89 million, or 12% of their budget, due to vacancies. In the

General Purpose Fund, the City Council has a vacancy rate of 3%, with one vacant position.

Department of Transportation (DOT)

The Department of Transportation has savings of $0.39 million, or 4% of their budget, due to

vacancies. In the General Purpose Fund, DOT has a vacancy rate of 11%, with ten vacant

positions.

Department of Violence Prevention (DVP)

The Department of Violence Prevention has savings of $2.64 million, or 21% of their budget,

due to vacancies. $700,000 of the total savings is from unspent O&M. In the General Purpose

Fund, DVP has a vacancy rate of 19%, with six vacant positions.

Department of Workplace & Employment Standards (DWES)

The Department of Workplace & Employment Standards has savings of $0.01 million, or 0.24%

of their budget. In the General Purpose Fund, DWES has a vacancy rate of 12%, with two

vacant positions.

Economic & Workforce Development (EWD)

Page 26 of 65

Jestin D. Johnson, City Administrator

Subject: FY 2023-24 Q4 R&E Report and FY 2024-25 Fiscal Condition and Challenges

Date: October 10, 2024 Page 13

Finance and Management Committee

October 22, 2024

Economic & Workforce Development has savings of $4.41 million, or 32% of their budget, due

to vacancies. $3.0 million of the total savings is from unspent O&M. In the General Purpose

Fund, DWES has a vacancy rate of 27%, with six vacant positions.

Finance Department

The Finance Department has savings of $7.41 million, or 22% of their budget, due to vacancies.

$3.4 million of the total savings is from unspent O&M. In the General Purpose Fund, Finance

has a vacancy rate of 12%, with 14 vacant positions.

Fire Department

The Oakland Fire Department has savings of $13.67 million, or 8% of their budget. In the

General Purpose Fund, Fire has a vacancy rate of 17%, with 96 vacant positions which results

in savings in the amount of $26.59 million. However, these estimated savings from the

vacancies are partially offset by $15.43 million in over-time overspending resulting in a net

personnel year-end underspend in the amount of $11.16 million.

Housing & Community Development (HCD)

Housing & Community Development overspent by $1.87 million, or 185.5% of their Adjusted

Budget. The overspending is due to grants related to the Homeless Prevention Pilot Program

and legal services for prisoners with children, and unreimbursed federal FEMA expenditures for

residents of the Coliseum Connections housing development.

Human Resources Management (HRM)

Human Resources Management has savings of $1.07 million, or 11% of their budget, due to

vacancies. In the General Purpose Fund, HRM has a vacancy rate of 9%, with three vacant

positions.

Human Services Department (HSD)

Human Services Department overspent by $2.44 million, or 5.8% of their budget. This is

primarily due to unreimbursed Federal FEMA Expenditures related to homelessness. In the

General Purpose Fund, HSD has a vacancy rate of 11%, with four vacant positions.

Information Technology (ITD)

Page 27 of 65

Jestin D. Johnson, City Administrator

Subject: FY 2023-24 Q4 R&E Report and FY 2024-25 Fiscal Condition and Challenges

Date: October 10, 2024 Page 14

Finance and Management Committee

October 22, 2024

The Information Technology Department has savings of $3.63 million, or 19% of their budget,

due to vacancies. $1.5 million of the total savings is from unspent O&M. In the General Purpose

Fund, ITD has a vacancy rate of 21%, with twelve vacant positions.

Mayor’s Office

The Mayor’s Office has savings of $0.65 million, or 14% of their budget, due to vacancies. In the

General Purpose Fund, Mayor's Office has a vacancy rate of 9%, with one vacant position.

Non-Departmental

Non-Departmental has savings of $25.73 million, or 38% of the Adjusted Budget. The savings

were primarily from $9 million in savings that were intended for the replacement of City vehicles

and about $5 million in prior year carryforward funds. Additionally, there was about $2 million in

savings from unspent funds for long-term liabilities.

Oakland Animal Services

The Department of Animal Services has savings of $0.70 million, or 11% of their budget, due to

vacancies. In the General Purpose Fund, Animal Services has a vacancy rate of 19%, with six

vacant positions.

Oakland Parks, Recreation and Youth Development (OPRYD)

Oakland Parks, Recreation and Youth Development has savings of $4.16 million, or 22% of their

budget, due to vacancies. In the General Purpose Fund, OPRYD has a vacancy rate of 25%,

with 26 vacant positions.

Oakland Public Library (OPL)

Oakland Public Library has savings of $1.77 million, or 14% of their budget, due to vacancies. In

the General Purpose Fund, OPL has a vacancy rate of 10%, with four vacant positions.

Oakland Public Works (OPW)

Oakland Public Works overspent by $0.66 million, or 35.7% of their Adjusted Budget.

Police Commission

The Police Commission has savings of $1.97 million, or 24% of their budget, due to vacancies.

In the General Purpose Fund, the Police Commission has a vacancy rate of 24%, with six

vacant positions.

Page 28 of 65

Jestin D. Johnson, City Administrator

Subject: FY 2023-24 Q4 R&E Report and FY 2024-25 Fiscal Condition and Challenges

Date: October 10, 2024 Page 15

Finance and Management Committee

October 22, 2024

Police Department

The Police Department overspent by $26.38 million, or 8% of their budget, primarily due to

overtime overspending. A detailed explanation of this overage can be found in the "Public Safety

Costs & Analysis" section below.

Public Ethics Commission (PEC)

The Public Ethics Commission has savings of $0.32 million, or 16% of their budget. In the

General Purpose Fund, PEC has a vacancy rate of 0%, with no vacant positions.

Race & Equity

The Department of Race & Equity has savings of $0.22 million, which is 15% of their budget. In

the General Purpose Fund, Race & Equity has a vacancy rate of 0%, with no vacant positions.

Public Safety Costs & Analysis

Table 7 below shows the personnel expenditures, including overtime, for Public Safety in the

GPF. Once all other personnel costs are accounted for, Oakland Police Department shows the

personnel budget over spent by $21.76 million in the General Purpose Fund at year end. Details

are provided on Table 7 below.

Table 7: FY 2023-24 Public Safety GPF Personnel Expenditures ($ in millions)

Department

FY 2023-24

Adjusted

Budget

FY 2023-24

Q4 Year-End

Actuals

Year-End $

Over / Under

Adjusted

Budget

Year-End % Over

/ Under Adjusted

Budget

Police Department

Overtime (OT) 24.19 55.25 (31.05) (128.3)%

Reimbursable OT (Special Events, (5.71) 5.71

All Other Personnel (non-OT) 262.50 259.83 3.58 1.4 %

OPD Total Personnel 286.69 309.37 (21.76) (7.6)%

Fire Department

Overtime (OT) 13.80 29.24 (15.43) (111.8) %

All Other Personnel (non-OT) 163.79 137.68 26.59 16.2%

OFD Total Personnel 177.59 166.91 11.16 6.3%

In Fiscal Year (FY) 2023-24, the Oakland Police Department (OPD) overtime budget was

$24,190,510 and actual total overtime expenditures reached $55,247,289 (excluding salary

savings and reimbursable overtime), which exceeded the overtime budget by $31,056,779.

However, OPD recovered $6,512,910 through a combination of $805,667 in salary savings and

$5,707,243 in reimbursable overtime that reduced overall overtime spending. As shown in

Page 29 of 65

Jestin D. Johnson, City Administrator

Subject: FY 2023-24 Q4 R&E Report and FY 2024-25 Fiscal Condition and Challenges

Date: October 10, 2024 Page 16

Finance and Management Committee

October 22, 2024

Table 8, a monthly breakdown of overtime expenditures, along with offsetting salary savings and

reimbursable overtime amounts, is provided. After accounting for these offsets, the total net

overtime expenditures were $48,734,379, resulting in a net overspend of $24,543,869.

Table 8: Breakdown of OPD Overtime by Month

Month Overtime

Expenditures

#of

Vacancies

Salary

Savings

Reimbursable

Overtime

Total (Salary

Savings +

Reimbursable

OT)

Adjusted

Overtime

Expenditures

(Net Salary

Savings +

Reimbursable

OT)

July 4,728,493 -2 -48,828 455,306 406,478 4,322,015

August 4,600,311 2 48,828 557,292 606,120 3,994,191

September 5,324,585 2 48,828 547,652 596,480 4,728,105

October 4,308,380 5 122,071 419,549 541,619 3,766,761

November 4,913,592 10 244,141 386,690 630,831 4,282,761

December 4,426,225 -13 -317,384 319,653 2,270 4,423,955

January 4,340,559 -1 -24,414 256,894 232,480 4,108,079

February 4,200,458 1 24,414 317,131 341,545 3,858,912

March 5,045,833 3 73,242 587,281 660,523 4,385,310

April 4,679,230 8 195,313 563,868 759,181 3,920,049

May 5,212,349 13 317,384 680,558 997,942 4,214,407

June 4,810,992 5 122,071 615,369 737,440 4,073,552

Total 55,247,289 33 805,667 5,707,243 6,512,910 48,734,379

Table 9 below provides an overview of the FY 23-24 overtime budget and expenditures,

including the allocated budget, total annual overtime expenses, variance from the budget, total

recovered savings, and net overtime costs after accounting for these savings.

Table 9: OPD Overtime Calculation Summary

FY23-24

Overtime

Budget

FY23-24

Overtime

Expenditures

Variance

(Over) / Under

Budget

FY 23-24

Salary Savings

&

Reimbursable

OT Total

Net Overtime

Expenditures

for FY23-24

(Over) /

Under

Budget

24,190,510 55,247,289 (31,056,779) 6,512,910 48,734,379 (24,543,869)

Table 10 below provides a breakdown of the FY 23-24 budgeted overtime (July 1, 2023, through

June 30, 2024) by organization number and name and the variance in the Department's

overtime based on Q4 payroll data, covering the period.

Page 30 of 65

Jestin D. Johnson, City Administrator

Subject: FY 2023-24 Q4 R&E Report and FY 2024-25 Fiscal Condition and Challenges

Date: October 10, 2024 Page 17

Finance and Management Committee

October 22, 2024

Table 10: Breakdown of OPD Overtime by Organization

Organization Number and Name FY 23-24 Budget

(OT)

Total

Overtime

(Over) / Under

Budget

101110 - Office of Chief: Administration 13,346 128,275 (114,929)

101112 - Public Information 45,747 - 45,747

101120 - Internal Affairs 525,062 1,013,228 (488,166)

101130 - Office of the Inspector General 105,570 93,309 12,261

101140 - Intelligence Unit 70,380 287,724 (217,344)

102120 - Property and Evidence 130,035 168,442 (38,407)

102130 - Special Victims Section 501,675 1,491,642 (989,967)

102140 - Research, Planning and Crime

Analysis 7,918 39,881 (31,963)

102280 - Crime Analysis Section - 3,904 (3,904)

102310 - Criminal Investigation 143,068 249,058 (105,990)

102320 - Homicide 391,404 3,605,901 (3,214,497)

102321 - Misdemeanor Crimes and Task Forces 194,490 1,021,698 (827,208)

102324 - Felony Assault and Gang Section - 144,187 (144,187)

102330 - Robbery and Burglary Section 200,306 1,666,642 (1,466,336)

102331 - Assault - 1,699 (1,699)

102341 - Field Support 12,917 29,401 (16,484)

102342 - Violent Crime Operations Center - 1,184,271 (1,184,271)

102350 - Youth and School Services Section 40,619 77,272 (36,653)

102610 - Criminalistics 17,510 7,502 10,008

103110 - Bureau of Services: Administration 1,030 32,604 (31,574)

103240 - Records - 384 (384)

103242 - Records and Warrants 529,420 760,179 (230,759)

103310 - Communications 2,631,199 2,853,236 (222,037)

103430 - Training Unit 2,357,315 2,969,082 (611,767)

106210 - Police Personnel 47,230 123,612 (76,382)

Page 31 of 65

Jestin D. Johnson, City Administrator

Subject: FY 2023-24 Q4 R&E Report and FY 2024-25 Fiscal Condition and Challenges

Date: October 10, 2024 Page 18

Finance and Management Committee

October 22, 2024

Organization Number and Name FY 23-24 Budget

(OT)

Total

Overtime

(Over) / Under

Budget

106410 - Police Information Tech 217,150 8,003 209,147

106510 - Budget Accounting 20,600 56,813 (36,213)

106610 - Background and Recruiting 357,050 957,126 (600,076)

106810 - PAS Administration 138,299 60,006 78,293

107010 - Bureau of Field Operations-Admin 1,759 567 1,192

107110 - Bureau of Field Operations 1 - 27,302 (27,302)

107210 - Bureau of Field Operations 2 - 3,317 (3,317)

107410 - Support Operations 3,519 24,500 (20,981)

107510 - Traffic Operations 593,342 412,173 181,169

107710 - Special Operations 4,224,081 11,272,865 (7,048,784)

108010 - District Command Administration 77,311 377,813 (300,502)

108110 - District Area 1 2,100,378 5,825,623 (3,725,245)

108120 - District Area 2 1,913,471 3,109,517 (1,196,046)

108130 - District Area 3 1,974,503 3,982,935 (2,008,432)

108140 - District Area 4 2,052,314 3,156,419 (1,104,105)

108150 - District Area 5 2,145,698 3,829,264 (1,683,566)

108160 - District Area 6 - 2,822,997 (2,822,997)

108630 - Ceasefire 404,794 1,366,915 (962,121)

Grand Total 24,190,510 55,247,289 (31,056,779)

Table 11 below highlights the five areas within OPD with the highest overspending in Q4.

Page 32 of 65

Jestin D. Johnson, City Administrator

Subject: FY 2023-24 Q4 R&E Report and FY 2024-25 Fiscal Condition and Challenges

Date: October 10, 2024 Page 19

Finance and Management Committee

October 22, 2024

Table 11: Top 5 OPD Organizations Overtime Overspending

Top 5 Units to Overspend

FY 23-24 Budget

(OT) Total Overtime Variance

107710 - Special Operations 4,224,081 11,272,865 (7,048,784)

108110 - District Area 1 2,100,378 5,825,623 (3,725,245)

102320 - Homicide 391,404 3,605,901 (3,214,497)

108130 - District Area 3 1,974,503 3,982,935 (2,008,432)

108150 - District Area 5 2,145,698 3,829,264 (1,683,566)

The Department's primary goals are to reduce violent crime and enhance public safety.

Achieving these objectives required overtime and increased spending in the Homicide Section,

Special Operations Division (SOD), and Areas 1, 3, and 5.

Special Operations Division: The Special Operations Division (SOD) plays a critical role in the

Department's law enforcement efforts and is comprised of 11 sergeants, three lieutenants, and a

captain. Increased overtime expenditures were driven by substantial administrative

responsibilities, including preliminary investigations, division-level inquiries, use of force

investigations, and risk management-related tasks.

In Q4, SOD's overtime costs exceeded its budget primarily due to numerous special events

requiring operational staff to work overtime. While these events were reimbursable, the funds

were directed back into the general-purpose fund rather than offsetting SOD's operational costs.

Additionally, the Air Unit within SOD was essential to the Department's crime reduction

strategies and operated nearly seven days a week. Despite having six members, one was on

long-term modified duty and unable to pilot. The limited number of trained pilots required

qualified personnel to work overtime to meet operational demands. Overtime costs were

covered by the 'Restore' fund, which is specifically designated for overtime expenses.

Area 1: In Q4, Area 1 undertook several targeted overtime deployments authorized by the

captain to address specific safety and crime issues. These initiatives included a Violence

Suppression detail consisting of one sergeant and four police officers, a Chinatown detail staffed

with four police officers, and a Night Club detail, typically active on weekends with one sergeant

and three to five police officers. Additionally, the Big Four Detail was funded by third-party

reimbursable overtime. As a long- term strategy for weekend nights was being developed,

overtime officers provided a visible downtown presence, supported by shifting resources from

patrol units.

From late March to mid-April 2024, the Chinatown detail was temporarily understaffed but was

fully operational by mid-April with the authorized personnel. The officer's presence had a strong

Page 33 of 65

Jestin D. Johnson, City Administrator

Subject: FY 2023-24 Q4 R&E Report and FY 2024-25 Fiscal Condition and Challenges

Date: October 10, 2024 Page 20

Finance and Management Committee

October 22, 2024

deterrent effect, correlating with a significant reduction in robberies and thefts in Area 1, which

had previously seen an increase in such crimes. This strategic deployment of resources

highlights Area 1's proactive approach to effectively managing and reducing crime.

Homicide Section: The Homicide Section maintains a 68% clearance rate. In 04, 15 sworn

personnel were responsible for investigating 68 homicide cases and handling hundreds of

unexplained deaths. Their extensive responsibilities included following up on older cases with

the Cold Case Unit, mandatory training, and managing numerous outstanding witness and

suspect warrants. This frequently involved overnight interviews and off-hour work.

Despite the demands, the Homicide Section continued to meet its goals while also managing

court appearances, which have become more demanding with the increased use of video and

digital forensic evidence. Investigators were responsible for analyzing the evidence, as OPD

does not have a dedicated team of evidence analysts. Thus, in any given case, the investigator

will serve as the detective, evidence recovery specialist, digital forensics expert, interviewer,

legal analyst, administrative professional, and court testifier. Staffing challenges in the Homicide

Section have led to ongoing overtime usage to maintain the quantity and quality of

investigations.

Area 3: In Q4, Area 3's overtime expenditures were driven by various initiatives, including

deploying Violence Suppression officers in the San Antonio/Saigon Area, addressing human

trafficking along International Boulevard, and managing large gatherings at Lake Merritt during

summer weekends. Mandatory overtime was required to backfill positions for officers on

training, sick leave, or vacation and to address administrative deadlines amid investigation

backlogs.

Early in 2024, Area 3 experienced an initial 80% surge in robberies, which was reduced to a

28% increase by April. The consistent, seven-day-a-week operations of the Violence

Suppression unit played a crucial role in addressing these issues. Most of the violence in Area 3

is linked to human trafficking activities along International Boulevard, where the OPD's Vice Unit

conducts two to four operations each month. These operations are partially reimbursable by the

FBI, ranging from $7,000 to $10,000 annually, while OPD's portion ranges between $80,000 and

$120,000 annually.

The summer months saw heightened activity at Lake Merritt, requiring an increased police

presence funded by a $200,000 budget to ensure weekend safety. Following a mass shooting

on Juneteenth 2024 at Grand Avenue and Bellevue, Area 3 significantly increased police

presence during Lakefest 2024, leading to substantial overtime costs to ensure public safety.

Area 5: In Q4, Area S's violence suppression teams were actively deployed, primarily funded by

the area itself, to address rising crime rates. These units significantly aided the Bureau of Field

Operations 2, contributing to an 18% reduction in assaults involving firearms and a significant

52% decrease in homicides, with only ten incidents during the reporting period compared to 21

at the same time last year.

Page 34 of 65

Jestin D. Johnson, City Administrator

Subject: FY 2023-24 Q4 R&E Report and FY 2024-25 Fiscal Condition and Challenges

Date: October 10, 2024 Page 21

Finance and Management Committee

October 22, 2024

Area 5 implemented five violence suppression overtime assignments, each focused on a

specific sector. Teams were instructed to remain within their designated sectors, ensuring high

visibility and conducting necessary enforcement and security checks. These sectors were

chosen based on a comprehensive analysis of crime statistics and ShotSpotter activations,

identifying areas with the highest levels of violent crime. Weekly evaluations of these sectors

allowed for tactical adjustments in response to shifting crime trends. Due to the presence and

effectiveness of these units, the Crime Reduction Team (CRT) East allocated minimal resources

to Area 5, allowing for more concentrated efforts in Areas 4 and 6.

Table 12: Year-Over-Year Comparison of Public Safety GPF Personnel Expenditures ($ in

millions)

Police Department

Overtime (OT) FY 2019-20 FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24

Adjusted Budget 16.56 15.39 33.36 30.90 24.08

Actuals 35.07 29.18 34.35 51.16 55.24

(Over)/Under (18.51) (13.79) (0.99) (20.26) (31.16)

All Other Personnel (non-OT) FY 2019-20 FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24

Adjusted Budget 232.95 239.29 245.01 252.38 262.47

Actuals 242.01 244.23 234.29 182.02 263.46

(Over)/Under (9.06) (4.94) 10.71 70.36 4.09

Total Personnel FY 2019-20 FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24

Adjusted Budget 249.51 254.68 278.37 283.28 286.55

Actuals 277.08 273.41 264.27 233.18 313.62

(Over)/Under (27.57) (18.73) 14.09 51.57 (27.07)

Fire Department

Overtime (OT) FY 2019-20 FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24

Adjusted Budget 2.37 4.22 19.83 11.19 13.80

Actuals 20.63 24.22 29.83 29.96 29.24

(Over)/Under (18.26) (20.00) (10.00) (18.77) (15.43)

All Other Personnel (non-OT) FY 2019-20 FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24

Adjusted Budget 142.70 144.73 132.44 143.28 163.79

Actuals 123.59 126.99 119.50 129.85 137.19

(Over)/Under 19.11 17.74 12.94 13.44 26.59

Total Personnel FY 2019-20 FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24

Adjusted Budget 145.07 148.95 152.27 154.47 177.59

Actuals 144.22 151.21 149.33 159.80 166.43

(Over)/Under 0.85 (2.26) 2.94 (5.33) 11.16

Page 35 of 65

Jestin Johnson, City Administrator

Subject: FY 2023-24 Q4 R&E Report and FY 2024-25 Fiscal Condition and Challenges

Date: October 10, 2024 Page 22

Finance and Management Committee

October 22, 2024

III. GENERAL PURPOSE FUND - FUND BALANCE

The City's GPF Fund net obligations, is projected to end FY 2023-24 with a negative fund

balance. Table 13 below shows mandated reserves required by City Ordinances and the City

Charter, as well as other commitments that adjust or draw down on the GPF balance totaling

$30.40 million, decreasing the estimated FY 2023-24 year-end available fund balance to

negative $16.60 million. In addition, there are $55.06 million in additional possible carry

forwards that could further reduce the FY 2023-24 available fund balance to negative $71.66

million. The estimated FY 2023-24 available Fund Balance is the amount of unobligated

funding available to the City in the GPF.

Table 13: FY 2023-24 Year-End Available GPF Fund Balance

GENERAL PURPOSE FUND (1010) FY 2023-24 Q4 FYE

Estimated FY 2023-24 Beginning Audited Fund Balance 93.28

FY2023-24 Performance

Revenue 734.68

Expenditures 814.52

FY 2023-24 Operating Surplus / Deficit (79.84)

Obligations Against Ending Fund Balance

Encumbrances (12.9)

Settlement Set Aside (4.4)

Required Carry Forward on to FY 2024-252 (12.74)

FY 2023-24 Ending Maximum Available Fund Balance (16.60)

Additional Possible Carry Forward on to FY 2024-25 (55.06)

FY 2023-24 Ending Minimum Available Fund Balance (71.66)

2 Required Carryforward include funds that are tied to legally binding contracts or agreements, required to meet

legal settlement terms which may be restricted for specific uses, committed to payments that have processed,

matching funds necessary for federal grant programs, and planned used of carryforward funds adopted in the budget.

Page 36 of 65

Jestin Johnson, City Administrator

Subject: FY 2023-24 Q4 R&E Report and FY 2024-25 Fiscal Condition and Challenges

Date: October 10, 2024 Page 23

Finance and Management Committee

October 22, 2024

IV. RESERVES

On December 9, 2014 Council Ordinance No. 13279 amended the City’s Consolidated Fiscal

Policies to include designated reserves for both the Vital Services Stabilization Fund and for the

acceleration of long-term obligations, in addition to the mandated 7.5% GPF Emergency

Reserve (refer to the City of Oakland Consolidated Fiscal Policy, Section I, Part C: Use of

Excess Real Estate Transfer Tax). It is important to note that while these balances are

designated each fiscal year, reserve appropriations adopted in subsequent fiscal years may

include any prior year true-ups.

Emergency Reserve

The City’s GPF Emergency Reserve, was calculated by multiplying 7.5% by the FY 2022-23

Adopted Budget amount of $872.07 million, plus accrued interest. The reserve is approximate to

one month of FY 2023-24 Adopted Budget in the GPF. This reserve is held in Fund 1011 as

directed by Council in Resolution 88717 C.M.S. The reserve requirement, pursuant to the CFP

has been met.

However, the emergency reserve policy level of 7.5% is inadequate to sustain city services in an

economic downturn as evidenced by the events of the last 2 years. The recommended policy

level is 16.7% or two months of operating expenditures. This recommended level is supported

by best practices outlined by the Government Finance Officer's Association's (GFOA).

Vital Services Stabilization Fund

The Vital Services Stabilization Fund (VSSF) was established in 2014 by City Council after the

Great Recession to serve as the City's "Rainy Day" fund. Per the Consolidated Fiscal Policy,

25% of excess RETT revenue is intended to go into the VSSF. The FY 2022-23 ending available

balance of $10.27 million was assumed in its entirety in the FY 2023-24 Adopted Budget to

balance expenditures as City Council declared that the City is experiencing a severe financial

event and state of extreme fiscal necessity. The target funding level per the City's Consolidated

Fiscal Policy is $125.22 million, or 15% of the GPF revenues.

Table 14 below shows the estimated FY 2023-24 year end reserve balances.

Table 14: FY 2023-24 Q4 Reserve Balances ($ in millions)

Description

FY 2023-24

Beginning

Balances

FYE Estimated

2023-2024

Balances

Mandated Emergency Reserves FY 2022-23* 65.41 70.16

Vital Services Stabilization Fund 10.27 0.50

OMERS Reserves (Reso. No. 85098 C.M.S) 2.36 2.36

Total Reserves 78.04 73.02

*The 7.5% GPF reserve is not a cumulative balance

Page 37 of 65

Jestin D. Johnson, City Administrator

Subject: FY 2023-24 Q4 R&E Report and FY 2024-25 Fiscal Condition and Challenges

Date: October 10, 2024 Page 24

Finance and Management Committee

October 22, 2024

V. SELECTED FY 2023-24 Q4 NON-GPF

This section of the Q4 report contains additional analysis on selected non-GPF funds. For

additional fund descriptions, please visit

https://stories.opengov.com/oaklandca/published/_dhbklVRjPB.This Q4 report discusses

selected funds that are of special interest to the City because the revenue comes from a special

tax or local measure, or because of the particular revenue or expenditure restrictions. For these

funds, the revenue and expenditure tables below will show year-end actuals compared to the

FY 2023-24 Adopted Budget.

The fund balance tables compare the FY 2023-24 beginning fund balance to the FY 2023-24

unaudited ending fund balance for these funds. Please note that some of the fund tables below

show a budgeted transfer from fund balance for FY 2024-25. These amounts represent dollars

designated to balance the Adopted Budget.

All other funds are summarized in Table 46.

Measure HH - Sugar Sweetened Beverage Distribution Tax (SSBT) Fund (1030)

Measure HH - SSBT Fund (1030) is a City of Oakland ballot initiative approved by voters on

November 8, 2016, that established a general tax of one cent per fluid ounce on the sugar

sweetened beverage products. The tax is imposed upon the first non-exempt distribution of

sugar-sweetened beverage products in the City. While this revenue is not restricted by State

statute, City Council has elected to restrict it by policy and separate it into its own fund because

the primary purpose of the tax is to raise revenue to support programs designed to discourage

sugar consumption and to reduce the growing burden of obesity and non-communicable

diseases.

The measure formed a nine-member Community Advisory Board, appointed by the Mayor, and

approved by City Council. The Board is responsible for:

1. Making recommendations to City Council on use of funding/programs that will reduce the

health consequences from consuming sugar-sweetened beverages (final allocations are

still determined by City Council).

2. Publishing an annual report regarding the implementation of the Board's

recommendations and the impact on the use of these funds.

Revenues - Measure HH revenues ended the year at $5.72 million which is $10.55 million or

64.8% under the FY 2023-24 Adjusted Budget of $16.27 million. The Adjusted Budget includes

$9.09 million in use of fund balance to support the FY 2023-24 carryforwards. Net of use of fund

Page 40 of 65

Jestin D. Johnson, City Administrator

Subject: FY 2023-24 Q4 R&E Report and FY 2024-25 Fiscal Condition and Challenges

Date: October 10, 2024 Page 27

Finance and Management Committee

October 22, 2024

1. Measure BB, passed by voters in November 2014, authorized collection of the initial

half-cent transportation sales tax by the Board of Equalization. Collection began on April

1, 2015 and extended through March 31, 2022 as a compliment to Measure B which

sunset in March 2022. The full one-cent sales tax authorized by Measure BB took effect

April 1, 2022 and will extend through March 31, 2045. Starting in July 2015, Alameda

CTC began making monthly direct local distribution payments to local jurisdictions and

transit agencies, per the 2014 Transportation Expenditure Plan, for the following

programs: local streets and roads (including county bridges), bicycle and pedestrian,

transit, and paratransit.

2. Measure F, approved by voters in November 2010, authorizes the collection of $10 per

year per vehicle registration fee to fund the Local Road Improvement & Repair Program

and other congestion relief, transportation technology, and pedestrian/bicyclist safety

programs in Alameda County.

Revenues - Measure BB and Measure F revenues ended the year at $38.21 million which is

$40.97 million or 51.7% under the FY 2023-24 Adjusted Budget of $79.18 million. The Adjusted

Budget assumes $4.67 million in use of fund balance to balance the Adjusted Budget as

adopted, and $35.74 million in use of fund balance to support FY 2022-23 carry forwards. The

actual Sales Tax for Measure BB came in at $33.46 million which is $3.50 million or 9.5% under

the $36.96 million Adjusted budget estimate.

Table 18: FY 2023-24 Measure BB & F Fund Revenues ($ in millions)

Revenue Category

FY 2023-24

Adjusted

Budget

FY 2023-24

Q4 YTD

Actuals

Year-End $

Over / Under

Adjusted

Budget

Year-End %

Over / Under

Adjusted

Budget

Sales Tax 36.96 33.46 (3.50) (9.5)%

Project Offsets &

Carryforwards 35.74 — (35.74) (100.0)%

Transfers from Fund

Balance 4.67 — (4.67) (100.0)%

Grants & Subsidies 1.81 — (1.81) (100.0)%

Interest Income — 2.29 2.29 — %

Service Charges — 0.13 0.13 — %

Miscellaneous Revenue — 2.32 2.32 — %

Total Revenue 79.18 38.21 (40.97) (51.7)%

*The adjusted budget includes Council Budget Amendments and Carryforwards

Expenditures - FY 2023-24 year-end expenditures are at $34.88 million, which is a savings of

$44.30 million, compared to the Adjusted Budget of $79.18 million. The savings is primarily due

to underspending in personnel costs.

Table 19: FY 2023-24 Measure BB/F Funds Expenditures ($ in millions)

Page 41 of 65

Jestin D. Johnson, City Administrator

Subject: FY 2023-24 Q4 R&E Report and FY 2024-25 Fiscal Condition and Challenges

Date: October 10, 2024 Page 28

Finance and Management Committee

October 22, 2024

Agency / Department

FY 2023-24

Adjusted

Budget

FY 2023-24

Q4 YTD

Actuals

Year-End $

Over / Under

Adjusted

Budget

Year-End %

Over / Under

Adjusted

Budget

Capital Improvement

Projects 33.36 4.35 29.01 87.0 %

City Administrator 0.39 0.35 0.04 9.8 %

City Attorney 0.05 0.05 — (2.9)%

Department of

Transportation 36.66 25.65 11.01 30.0 %

Finance Department 0.01 — — 2.6 %

Human Resources

Management

Department 0.24 0.06 0.18 75.3 %

Human Services

Department 5.31 2.45 2.85 53.8 %

Information Technology

Department — — — — %

Mayor 0.23 0.23 — 0.4 %

Non Departmental and

Port 0.52 — 0.52 100.0 %

Oakland Public Works

Department 2.12 1.73 0.39 18.5 %

Police Department — — — — %

Total Expenditures 79.18 34.88 44.30 55.9 %

*The adjusted budget includes Council Budget Amendments and Carryforwards

Fund Balance - FY 2023-24 revenue ended the year at $38.21 million. Expenditures ended the

year at $34.88 million. As a result, the estimated available fund balance in the Measure BB/F

Funds increased from $54.39 million to $57.71 million in FY 2023-24.

Table 20: FY 2023-24 Measure BB/F Funds Year-End Available Fund Balance ($ in

millions)

Measure B/BB and Measure F Funds (2211, 2212, 2213, 2215, 2216, 2217,

2218, 2219, 2220)

FY 2023-24 Q4 Year- End Actuals

Beginning Fund Balance - Audited $ 54.39

Revenue 38.21

Expenditures 34.88

Estimated Current Year Surplus/(Shortfall) 3.33

Estimated Ending Fund Balance 57.71

State Transportation Gas Tax Funds (2230, 2232)

The State of California imposes a per-gallon excise tax on gasoline and diesel fuel, sales taxes

on gasoline and diesel fuel, and registration taxes on motor vehicles with allocations dedicated

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Page 43 of 65

Jestin D. Johnson, City Administrator

Subject: FY 2023-24 Q4 R&E Report and FY 2024-25 Fiscal Condition and Challenges

Date: October 10, 2024 Page 30

Finance and Management Committee

October 22, 2024

Agency / Department

FY 2023-24

Adjusted

Budget

FY 2023-24

Q4 YTD

Actuals

Year-End $

Over / Under

Adjusted

Budget

Year-End %

Over / Under

Adjusted

Budget

Capital Improvement

Projects 5.54 0.10 5.44 98.2 %

City Administrator 0.18 0.12 0.06 33.3 %

Department of

Transportation 25.86 22.60 3.26 12.6 %

Economic and

Workforce

Development

Department 0.01 0.01 — 20.0 %

Finance Department 0.09 0.01 0.09 91.7 %

Human Resources

Management

Department 0.24 0.06 0.18 75.3 %

Oakland Public Works

Department 0.02 0.01 — 22.9 %

Total Expenditures 31.94 22.91 9.03 28.3 %

*The adjusted budget includes Council Budget Amendments and Carryforwards

Fund Balance - FY 2023-24 revenue ended the year at $23.19 million. Expenditures ended the

year at $22.91 million. As a result, the estimated available fund balance in the State

Transportation Gas Tax Funds increased from $11.56 million to $11.79 million in FY 2023-24.

Table 23: FY 2023-24 State Transportation Funds Year-End Available Fund Balance ($ in

millions)

State Transportation (Gas Tax) Funds (2230, 2232) FY 2023-24 Q4 Year- End Actuals

Beginning Fund Balance - Audited $ 11.56

Revenue 23.19

Expenditures 22.91

Estimated Current Year Surplus/(Shortfall) 0.28

Estimated Ending Fund Balance 11.84

Measure Q - OPR Preservation, Litter Reduction, Homelessness Support Act Fund (2244)

Measure Q, the 2020 Oakland Parks and Recreation, Preservation, Litter Reduction, and

Homelessness Support Act Fund (2244), is a City of Oakland ballot initiative approved by voters

on March 3, 2020, that established an annual special parcel tax for 20 years. This measure,

which passed by more than a two-thirds majority, imposes a special parcel tax for the purpose

of raising revenue to provide services for parks, landscape maintenance, and recreational

services; to address homelessness and enable unsheltered and unhoused residents to access

Page 44 of 65

Jestin D. Johnson, City Administrator

Subject: FY 2023-24 Q4 R&E Report and FY 2024-25 Fiscal Condition and Challenges

Date: October 10, 2024 Page 31

Finance and Management Committee

October 22, 2024

temporary shelters, transitional, supportive, and permanent housing; and to address water

quality and litter reduction, including the maintenance and cleaning of stormwater trash

collection systems.

Revenues - Year-end revenues came in at $32.41 million, which is $15.19 million or 31.9%

under the FY 2023-24 Adjusted Budget of $47.60 million. The Adjusted Budget assumes $2.53

million in use of fund balance to balance the Adjusted Budget as adopted, and $14.28 million to

support carryforward expenditures. The actual Measure Q Tax, net of use of fund balance, came

in at $31.18 million, which is $0.39 million or 1.3% over the Adjusted Budget estimate. This local

measure is collected through property tax bills and is a consistent revenue source.

Table 24: FY 2023-24 Preservation, Litter Reduction, Homelessness Support Act Fund

Revenues ($ in millions)

Revenue

Category

FY 2023-24

Adjusted

Budget

FY 2023-24 Q4

YTD Actuals

Year-End $

Over / Under

Adjusted

Budget

Year-End %

Over / Under

Adjusted

Budget

Local Tax 30.78 31.18 0.39 1.3 %

Project Offsets

& Carryforwards 14.28 — (14.28) (100.0)%

Transfers from

Fund Balance 2.53 — (2.53) (100.0)%

Interest Income — 1.01 1.01 — %

Miscellaneous

Revenue — 0.22 0.22 — %

Total Revenue 47.60 32.41 (15.19) (31.9)%

*The adjusted budget includes Council Budget Amendments and Carryforwards

Expenditures - FY 2023-24 year-end expenditures are at $26.99 million, which is a savings of

$20.47 million, when compared to the Adjusted Budget of $47.46 million. The savings are

primarily due to underspending in personnel costs.

Page 47 of 65

Jestin D. Johnson, City Administrator

Subject: FY 2023-24 Q4 R&E Report and FY 2024-25 Fiscal Condition and Challenges

Date: October 10, 2024 Page 34

Finance and Management Committee

October 22, 2024

Agency / Department

FY 2023-24

Adjusted

Budget

FY 2023-24

Q4 YTD

Actuals

Year-End $

Over / Under

Adjusted

Budget

Year-End %

Over / Under

Adjusted

Budget

City Administrator 0.23 0.14 0.09 38.6 %

Finance Department 0.81 0.64 0.17 21.1 %

Human Services

Department 0.17 — 0.17 100.0 %

Oakland Public Works

Department 4.90 4.08 0.82 16.8 %

Total Expenditures 6.12 4.86 1.26 20.5 %

*The adjusted budget includes Council Budget Amendments and Carryforwards

Fund Balance - FY 2023-24 revenue ended the year at $6.37 million. Expenditures ended the

year at $4.86 million. As a result, the estimated available fund balance in the Vacant Property

Tax Fund (2270) increased from $1.01 million to $2.51 million in FY 2023-24.

Table 29: FY 2023-24 Vacant Property Tax Fund Year-End Available Fund Balance ($ in

millions)

Vacant Property Tax Fund (2270) FY 2023-24 Q4 Year- End Actuals

Beginning Fund Balance - Audited $ 1.01

Revenue 6.37

Expenditures 4.86

Estimated Current Year Surplus/(Shortfall) 1.50

Estimated Ending Fund Balance 2.51

Landscaping and Lighting Assessment District (LLAD) Fund (2310)

The Landscaping and Lighting Assessment District (LLAD) Fund (2310) revenue is generated

through a direct benefit assessment, or special assessment and is restricted by statue to be

used for street lighting, landscaping, and public parks and recreation facility maintenance, and

multi-use fields.

Revenues - The FY 2023-24 year-end revenues came in at $19.43 million, which is $0.19 million

under the FY 2023-24 Adjusted Budget of $19.62 million. The Local tax came in at $19.32 million

which is $0.24 million over the $19.08 million estimated in the Adjusted Budget. The Adjusted

Budget also assumed FY 2023-23 carryforwards in the amount of $0.26 million that will be

supported with use of fund balance.

Table 30: FY 2023-24 Landscaping and Lighting Assessment District (LLAD) Fund

Revenue ($ in millions)

Page 48 of 65

Jestin D. Johnson, City Administrator

Subject: FY 2023-24 Q4 R&E Report and FY 2024-25 Fiscal Condition and Challenges

Date: October 10, 2024 Page 35

Finance and Management Committee

October 22, 2024

Revenue

Category

FY 2023-24

Adjusted

Budget

FY 2023-24 Q4

YTD Actuals

Year-End $

Over / Under

Adjusted

Budget

Year-End %

Over / Under

Adjusted

Budget

Local Tax 19.08 19.32 0.24 1.3 %

Project Offsets

& Carryforwards 0.26 — (0.26) (100.0)%

Service

Charges 0.21 — (0.21) (99.8)%

Licenses &

Permits 0.08 0.12 0.04 48.8 %

Interest Income — 0.01 0.01 — %

Grants &

Subsidies — — — — %

Miscellaneous

Revenue — (0.01) (0.01) — %

Total Revenue 19.62 19.43 (0.19) (1.0)%

*The adjusted budget includes Council Budget Amendments and Carryforwards

Expenditures - FY 2023-24 year-end expenditures are at $20.02 million, which is an overage of

$0.40 million, when compared to the Adjusted Budget of $19.62 million.

Table 31: FY 2023-24 Landscaping and Lighting Assessment District (LLAD) Fund

Expenditures ($ in millions)

Agency / Department

FY 2023-24

Adjusted

Budget

FY 2023-24

Q4 YTD

Actuals

Year-End $

Over / Under

Adjusted

Budget

Year-End %

Over / Under

Adjusted

Budget

Department of

Transportation 2.60 2.53 0.07 2.7 %

Finance Department 0.03 0.01 0.03 74.6 %

Non-Departmental and

Port 2.94 2.75 0.20 6.7 %

Oakland Parks and

Recreation Department 5.00 5.00 — — %

Oakland Public Works

Department 9.04 9.74 (0.70) (7.7)%

Total Expenditures 19.62 20.02 (0.40) (2.0)%

*The adjusted budget includes Council Budget Amendments and Carryforwards

Fund Balance - FY 2023-24 revenue ended the year at $19.32 million. Expenditures ended the

year at $20.02 million. As a result, the estimated available fund balance in the Landscaping and

Lighting Assessment District (2310) decreased to negative $0.70 million in FY 2023-24.

Table 32: FY 2023-24 Landscaping and Lighting Assessment District (LLAD) Fund

Balance ($ in millions)

Page 50 of 65

Jestin D. Johnson, City Administrator

Subject: FY 2023-24 Q4 R&E Report and FY 2024-25 Fiscal Condition and Challenges

Date: October 10, 2024 Page 37

Finance and Management Committee

October 22, 2024

Agency / Department

FY 2023-24

Adjusted

Budget

FY 2023-24

Q4 YTD

Actuals

Year-End $

Over / Under

Adjusted

Budget

Year-End %

Over / Under

Adjusted

Budget

Information Technology

Department 0.11 0.13 (0.02) (18.3)%

Police Department 1.33 0.90 0.44 32.7 %

Total Expenditures 1.44 1.03 0.42 28.8 %

*The adjusted budget includes Council Budget Amendments and Carryforwards

Fund Balance - FY 2023-24 revenue ended the year at $0.79 million. Expenditures ended the

year at $1.03 million. As a result, the estimated available fund balance in False Alarm

Reduction Program Fund (2411) decreased from negative $3.66 million to negative $3.91 million

in FY 2023-24.

Table 35: FY 2023-24 False Alarm Reduction Program Fund Balance ($ in millions)

False Alarm Reduction Fund (2411) FY 2023-24 Q4 Year- End Actuals

Beginning Fund Balance - Audited (3.66)

Revenue 0.79

Expenditures 1.03

Estimated Current Year Surplus/(Shortfall) (0.24)

Estimated Ending Fund Balance (3.91)

Development Service Fund (2415)

The Development Service Fund (2415) was created on June 20, 2006 by Ordinance No. 12741

C.M.S. This fund collects revenues from licenses, fees, and permits from housing and

commercial planning and construction-related activities to support planning and zoning services,

construction inspections and permit approvals, building code enforcement, plan checks and

engineering services. This fund is required to keep a minimum 7.5% reserve of annual budgeted

revenues for its balance, which would be $5.48 million in FY 2023-24.

Table 36: Historical Revenue for Fund 2415

Page 51 of 65

Jestin D. Johnson, City Administrator

Subject: FY 2023-24 Q4 R&E Report and FY 2024-25 Fiscal Condition and Challenges

Date: October 10, 2024 Page 38

Finance and Management Committee

October 22, 2024

Fiscal Year Budgeted Revenue Projected Year End Revenue

FY 2023-24 73.02 66.94

FY 2022-23 52.24 65.32

FY 2021-22 63.98 73.94

FY 2020-21 47.33 50.25

FY 2019-20 61.5 60.7

FY 2018-19 49.92 63.20

FY 2017-18 45.14 90.13

FY 2016-17 38.03 77.15

Revenues - Year-end revenues came in at $66.94 million, which is $77.81 million or 50.3%

under the Adjusted Budget of $134.75 million. The FY 2023-24 $134.75 million Adjusted Budget

assumes $31.27 million in use of fund balance to balance the FY 2023-24 Adjusted Budget and

$30.46 million in use of fund balance to support FY 2022-23 carryforward expenditures.

Table 37: FY 2023-24 Development Service Fund Revenues ($ in millions)

Revenue Category

FY 2023-24

Adjusted

Budget

FY 2023-24 Q4

YTD Actuals

Year-End $

Over / Under

Adjusted

Budget

Year-End %

Over / Under

Adjusted

Budget

Licenses & Permits 41.91 25.45 (16.46) (39.3)%

Transfers from Fund

Balance 31.27 — (31.27) (100.0)%

Project Offsets &

Carryforwards 30.46 — (30.46) (100.0)%

Service Charges 30.11 30.23 0.12 0.4 %

Fines & Penalties 0.62 2.53 1.91 306.0 %

Miscellaneous

Revenue 0.38 2.72 2.34 618.9 %

Interest Income — 5.48 5.48 — %

Grants & Subsidies — 0.53 0.53 — %

Total Revenue 134.75 66.94 (67.81) (50.3)%

*The adjusted budget includes Council Budget Amendments and Carryforwards

Expenditures - FY 2023-24 year-end expenditures came in at $84.02 million, which is a savings

of $50.73 million, compared to the adjusted budget of $134.75 million. The projected savings

are mainly attributed to vacancies.

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Page 52 of 65

Jestin D. Johnson, City Administrator

Subject: FY 2023-24 Q4 R&E Report and FY 2024-25 Fiscal Condition and Challenges

Date: October 10, 2024 Page 39

Finance and Management Committee

October 22, 2024

Table 38: FY 2023-24 Development Service Fund Expenditures ($ in millions)

Agency /

Department

FY 2023-24

Adjusted

Budget

FY 2023-24

Q4 YTD

Actuals

Year-End $

Over / Under

Adjusted

Budget

Year-End %

Over / Under

Adjusted

Budget

Capital Improvement

Projects 0.06 1.38 (1.32) (2309.4)%

City Administrator 3.48 3.12 0.37 10.6%

City Attorney 3.59 3.75 (0.16 (4.6)%

City Auditor 0.05 0.05 — (9.3)%

City Council — 0.03 (0.03) — %

Department of

Transportation 20.03 9.71 10.33 51.6%

Economic and

Workforce

Development

Department 2.62 2.32 0.30 11.4%

Finance Department 1.81 1.31 0.50 27.5%

Fire Department 14.45 6.51 7.95 55.0%

Human Resources

Management

Department 2.03 1.46 0.57 28.3%

Information

Technology

Department 5.40 3.75 0.59 10.9%

Mayor 0.35 0.28 0.07 19.7%

Non Departmental

and Port 2.68 1.41 1.27 47.2%

Oakland Public

Works Department 3.22 1.66 1.56 48.3%

Planning and

Building Department 74.96 47.26 27.70 37.0%

Total Expenditures 134.75 84.02 50.73 37.6 %

*The adjusted budget includes Council Budget Amendments and Carryforwards

Fund Balance - The large fund balance has accumulated over the life of the fund due to

revenues exceeding the budget as well as longstanding underspending or delays in

expenditures attributed to a high number of vacancies within the Planning and Building

Department. This fund is required to keep a minimum 7.5% reserve of annual budgeted

revenues for its balance, which would be $5.48 million in FY 2023-24.

FY 2023-24 revenue ended the year at $66.94 million. Expenditures ended the year at $84.02

million. As a result, the estimated available fund balance in the Development Service Fund

(2415) decreased from $122.38 million to $105.30 million in FY 2023-24.

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