Subject: Fiscal Year 2024-25 Fourth Quarter Revenue And Expenditures (R&E) Report From: Finance Department: Recommendation: Receive An Informational Report On Fiscal Year (FY) 2024-25 Fourth Quarter (Q4) Audited Results For The General Purpose Fund (GPF, 1010), And Select Funds

This informational report details the City of Oakland's Fiscal Year (FY) 2024-25 Fourth Quarter (Q4) audited financial results for the General Purpose Fund (GPF) and select other funds. The City ended the year with a positive operating surplus of $73.60 million relative to the adjusted budget, primarily due to expenditure reductions and one-time revenue gains.

Revenue Highlights: Total GPF revenue reached $815.90 million, exceeding the adjusted budget by 3.4% ($26.56 million). Key drivers included a 26.5% increase in Real Estate Transfer Tax (due to a single $985.5 million property sale), 8.0% over-budget Business Tax collections, and 645.2% over-budget Interfund Transfers (enabled by a declaration of "severe financial event"). However, Sales Tax was 5.9% under budget, and Transient Occupancy Tax (TOT) was 17.0% under budget.

Expenditure Highlights: GPF expenditures totaled $742.30 million, coming in 6.0% ($47.03 million) under the adjusted budget. While most departments underspent due to vacancy management and spending controls, public safety departments significantly overspent: the Police Department exceeded its budget by $10.88 million (3.4%) and the Fire Department by $14.17 million (8.5%), largely due to overtime costs.

Fiscal Outlook: The available year-end GPF fund balance is $16.87 million after accounting for obligations. The report emphasizes that many balancing measures were temporary, and the City continues to face significant structural financial challenges, including rising personnel costs (pension, OPEB) and limited ongoing revenue growth. The emergency reserve is 7.9% of the adopted budget, below the recommended 16.7% target.

While the city avoided a deficit this year, its reliance on one-time revenues and temporary measures means long-term fiscal challenges persist. Residents may see continued pressure on city services due to structural deficits and potential future tax measures. Significant overspending in Police and Fire overtime also impacts the budget, potentially diverting funds from other critical services.

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