Oakland's $73.6M 'Surplus' Was Already Spoken For

Oakland's Department of Finance told the City Council it closed the fiscal year that ended June 30, 2025 with a $73.60 million General Purpose Fund operating surplus⧉.▸ Eleven months later, the same department wrote that the fiscal year now underway represents "the greatest pressure the City has faced on its resources since minimally the 2008 financial crisis"⧉ -- bad enough to justify suspending five separate voter-mandated spending requirements at once. Both statements come from the same finance department, and both are accurate. The surplus was real money; it was also, almost entirely, money the city didn't expect to have twice. Its own fund-balance table shows that once a signing bonus, legal settlements, and one-time carryforward spending are subtracted, $16.87 million of the $73.60 million was actually free going into the next year.

The FY2024-25 Q4 Revenue and Expenditure Report⧉, presented to Oakland's Finance and Management Committee on February 10, 2026, put year-end General Purpose Fund (GPF) -- the city's main operating account -- revenue at $815.90 million against $742.30 million in expenditures: a $73.60 million operating surplus.▸ Added to the $13.31 million the city started the year with, that produced an $86.91 million ending fund balance. The report's own Table 16 then subtracts what was already spoken for: $12.77 million in encumbrances, $1.83 million set aside for legal settlements, $10.22 million for a union signing bonus approved the previous September, and $45.22 million recommended to carry forward into the next fiscal year. What remained -- the amount the city itself calls actually available -- was $16.87 million.

Part of why the surplus looks different once the obligations are subtracted is that the city was never counting on most of the revenue it eventually reported.▸ The FY2024-25 Adopted Budget assumed $63.10 million from selling the former Oakland-Alameda County Coliseum site; the Q4 report's own Table 1 shows zero collected against that dedicated budget line, with the $63.10 million assumption stripped out of the Adjusted Budget entirely. The report does disclose, separately, that the city received a $5 million initial payment from the sale -- booked as Miscellaneous Revenue rather than against the Coliseum line -- a fraction of what had originally been budgeted.

In place of the rest, the year-end result leaned on $22.94 million in one-time interfund transfers⧉ -- money the city could move only because the Council had declared a severe financial event and a state of extreme fiscal necessity, a designation that temporarily lifts restrictions on otherwise protected funds.▸ Against that backdrop, the city's mandated Emergency Reserve held $63.80 million at year's end -- 7.9% of the adopted budget, a level Oakland's own Finance Department calls inadequate to survive a downturn, citing a 16.7% standard recommended by the Government Finance Officers Association⧉.

Some of the $10.22 million signing bonus -- and potentially much more -- traces to the same one-time source.▸ On September 15, 2025, the City Council approved one-year contracts with four public-employee unions: the Service Employees International Union (SEIU) Local 1021, the International Federation of Professional and Technical Engineers (IFPTE) Local 21, the International Brotherhood of Electrical Workers (IBEW) Local 1245, and the Confidential Management Employees Association, plus matching terms for certain non-union staff. The city's own agenda report⧉ says the $10,219,680 signing-bonus cost was funded by "the FY 2024-25 unallocated fund balance derived from unanticipated Real Estate Transfer Tax" -- a windfall driven in large part by a single large property sale.

The same contracts carry a second, larger, contingent commitment: raises of up to 3%, worth as much as $14,871,001 combined, that take effect only if FY2025-26 GPF unrestricted revenue beats its adopted budget by at least $9 million.▸ Whether that threshold was cleared is set to be confirmed either through the fiscal year's Third Quarter report or, if the city instead relies on audited actuals, around January 2027.

Oakland's Finance Department traces the deeper problem to structurally lower revenue: Real Estate Transfer Tax collections fell from $138.4 million in FY2021-22 to a budgeted $72.0 million in FY2026-27⧉ -- a roughly 48% drop -- while the city continues to "endure the effects of the absence of more than $100 million from the Sale of the Coliseum site."▸ Measure E, a citizen-sponsored ballot initiative that Oaklandside reported⧉ would have added roughly $34 million a year in new parcel-tax revenue for nine years, was meant to convert some of that one-time patchwork into a recurring source; a union-backed committee funded the signature drive that put it on the June 2, 2026 ballot. Voters said no. Certified results from the Alameda County Registrar of Voters⧉ show Measure E lost, 57,379 votes to 48,741 -- 54.07% against, 45.93% in favor, short of the simple majority it needed.

Ten days after the election, the City Council adopted a resolution⧉ declaring, again, a state of extreme fiscal necessity -- this time to balance the FY2026-27 midcycle budget.▸ It temporarily suspends five voter-approved spending floors: the 700-sworn-officer minimum required by the 2024 Oakland Community Violence and Emergency Response Act (Measure NN), park-maintenance spending under Measure Q, a campaign-financing set-aside under the Oakland Fair Elections Act (Measure W), an advisory-board consultation requirement for Sugar-Sweetened Beverage Tax revenue, and the funding ratio protecting the Affordable Housing Trust Fund.

The Midcycle Budget funds 678 sworn officers, 22 short of Measure NN's mandate; reaching 700 would cost an additional $18.8 million a year, by the city's own estimate.▸ The stakes of that particular shortfall aren't only symbolic: Measure NN requires Oakland to reach 700 officers by July 1, 2026 to fully collect its own parcel tax, or the tax itself is suspended for the year absent an exemption. Full compliance with all five waived requirements would cost $33.9 million in FY2026-27 -- money the Finance Department's own report says the city does not have.