Oakland's $850 Million Bond Sat Unsold for Three Years

A general obligation bond -- debt backed by a dedicated property-tax levy, requiring two-thirds voter approval in California -- is supposed to be the strongest, most reliable financing tool a city has.▸ Oakland voters have approved two of them for roads and housing since 2016, worth $1.45 billion combined. As of spring 2025, the city's own capital budget confirms, the road department had received $0 from the newer of the two -- not because the projects weren't ready, but because the city's finances were too weak to sell the bonds at all. The mechanism of harm is specific, not abstract: OakDOT could not open a single new paving or sidewalk contract, and the 2024-2025 Alameda County Civil Grand Jury⧉ -- a panel of citizens the county's Superior Court empanels each year to investigate local government -- found the annual paving goal of 55-plus miles had fallen to about 10.

In 2016, Measure KK authorized $600 million in bonds "to improve public safety and invest in neighborhoods... by re-paving streets to remove potholes."▸ In 2022, with 75.33% approval, Measure U⧉ added another $850 million for the same purposes plus affordable housing. Combined, the two measures put $640 million behind transportation projects specifically. Neither measure disburses on its own, though: a bond authorization only lets a city borrow: the sale itself depends on the city's credit standing, and that is where Oakland's plan broke down.

Oakland's last bond sale before the freeze was October 2023 -- $101.1 million under Measure U, all of it to affordable housing, none to roads.▸ The city's own FY2025-27 capital budget⧉ shows what happened next: the FY2025 Measure U transportation budget, originally $55.1 million, was "reduced to $0" when a contingency budget took effect in October 2024. With Measure KK's transportation share also more than 95% spent, the city patched paving contracts with $20.7 million in one-time reallocations -- money from OakDOT's own projects, from Measure KK-funded Public Works work, and from Measure BB's fund balance. By January 2025 even that ran out: "all pending paving projects have been deferred until a bond sale is completed."

The city's General Purpose Fund -- the account that pays for police, fire, and basic operations, and which is legally separate from bond proceeds -- was itself running a structural deficit the Grand Jury pegged at $265 million over two years.▸ That is the baseline that matters here: bond buyers price risk off a city's overall financial health, not just a bond's own collateral, so a General Fund crisis can freeze even well-secured debt. Within a ten-week span in late 2024 and early 2025, all three national credit-rating agencies acted on it: Moody's cut Oakland from Aa1 to Aa2, S&P Global from AA+ to AA-, and Fitch from AA- to A -- each assigning a negative outlook. City finance officials told the Grand Jury plainly that a new bond offering, attempted amid those downgrades, risked another rating cut. The city council was warned in writing before the fact -- a Finance Department slide said a contingency budget meant "cancellation or multi-year delay of... $200,000,000 bond funded projects" -- and enacted the contingency budget anyway that October.

The condition of the pavement is not a separate story from the condition of the balance sheet -- it is the balance sheet's most visible symptom.▸ OakDOT reported fixing 53,000 potholes in one recent year across Oakland's 806 miles of paved streets, roughly one repair for every eight of the city's 425,000 residents. On the Pavement Condition Index, the 0-100 scale transportation agencies use nationwide, Oakland scored 57 in 2023 -- inside the "At Risk" band where deterioration accelerates -- against an Alameda County average of 67, comfortably in the "Fair" range. Patching potholes is not the fix: pavement that has failed needs full repaving, which is exactly the work Measure U's transportation money was supposed to fund and, for three years, did not.

On December 4, 2025, the city priced $334 million in general obligation bonds⧉ -- $285 million in new Measure U money plus $49 million refunding older debt for $5.6 million in taxpayer savings.▸ Investors placed $638 million in orders across 26 firms for the $334 million on offer, oversubscribed enough that the city said it lowered its own borrowing costs: 3.99% on the $143.5 million tax-exempt tranche, 5.55% on the $191 million taxable tranche. Of the new money, the city itemized $50.5 million for citywide street resurfacing, $13 million for its Complete Streets program, and $9.5 million for curb ramps -- $73 million, the first Measure U dollars OakDOT has ever received. That still leaves $463.9 million of the 2022 authorization unissued, with no announced date for the next sale.

What both bond measures explicitly require is where Oakland's own governance has fallen furthest short: Measure KK mandates an annual audit and Measure U an "annual independent audit... by an external entity."▸ Across $667.3 million sold under the two measures combined, the Grand Jury could not find that either audit has ever been performed. The city council's own answer to that gap -- a nine-member I-Bond Oversight Committee, mayor-appointed, tasked with reviewing bond spending and reporting back -- has issued four reports on Measure KK since 2017, none since 2022, and zero on Measure U in the three years since it passed; it met only twice in 2023 and once in 2024, with meetings cancelled in December 2024, February 2025, and March 2025. The obligation is specific and it is still open: the committee owes the public a first report on how $386.1 million in Measure U money has been spent, and the mayor's office owes the committee the members needed to write it.