A financial report warning of impending bankruptcy was accidentally released by Oakland city officials last week before it was quickly replaced by an official document with less harsh language.
Local nonprofit newsroom The Oaklandside first reported the erroneously published report and discrepancies between the two documents.
The draft report, briefly posted on the city’s website, claimed Oakland faced a $93 million budget shortfall and warned of bankruptcy if immediate action was not taken. He even cited Chapter 9 bankruptcy, which is usually reserved for cities that are unable to meet their financial obligations. According to a copy of the document reviewed and uploaded by The Oaklandside, the language was harsh, urging immediate measures to “maintain the solvency of the General Purpose Fund.”
By Friday afternoon, city officials had changed the draft to an official version that removed the mention of bankruptcy. In a statement released Monday to Oaklandside, city officials said the draft was “unapproved” and that its Chapter 9 references were “premature.” Still, officials stressed the urgency to address Oakland’s fiscal challenges. The estimated budget shortfall remained the same in both versions of the report.
City of Oakland officials did not immediately respond. of luck Request for comment.
Although the alarmist draft report was rejected, both versions agree on the same basic problem: Oakland is plagued by rising costs, flat-line revenue, and a structural deficit that could worsen in the coming year. Key revenue streams such as real estate transfer taxes have declined, leaving the city with fewer options to balance the books.
The Oakland Police Department (OPD) is expected to spend more than $52 million in its 2024-2025 budget, primarily due to overtime costs, according to reports.
Municipal bankruptcies are relatively rare in the United States. Since Detroit’s historic bankruptcy filing in 2013, only a handful of cities have sought Chapter 9 protection. Notably, the city of Chester, Pennsylvania filed for bankruptcy in November 2022 after enduring decades of financial woes. Previously, the City of Fairfield, Alabama filed in 2020.
