Oakland city officials mysteriously published then deleted an alarming public report warning the California city is facing bankruptcy.
On November 8, Oakland’s Finance Director Erin Roseman authored the city’s 2024/25 fiscal year report, alerting officials that their reckless spending was leading to a ‘Chapter 9 process’, which comes after a bankruptcy declaration.
The report noted that Oakland was running at a 12.3 percent operating shortfall, and said ‘failure to take dramatic and immediate steps to reduce expenditures will almost certainly result in insolvency.’
But just hours after the document sent shockwaves across the city’s political scene, the report disappeared from the online agenda of Oakland’s upcoming City Council meeting.
Officials then published a revised version, which removed all refences to bankruptcy including any mention of ‘Chapter 9’ or requiring ‘insolvency.’
After the revision raised eyebrows, the city explained in a statement on Monday that the report was an ‘unapproved draft’ that was ‘inadvertently and briefly published.’
Oakland downplayed the alarming findings and said that ‘internal analysis concluded that the Chapter 9 level of decision making was, and remains, premature at this time.’
‘However, that analysis does not in any way diminish the urgency of the financial discussion that needs to be held at City Council,’ a spokesperson added, per Mercury News.
The city of Oakland, California has been facing financial crisis for years, and this month mysteriously published then deleted an alarming public report warning the city is facing bankruptcy
Although Oakland officials were quick to downplay the concerning report, it comes at a time when city insiders warn it is grappling with a severe and urgent financial crisis.
Living standards in Oakland have notably declined in recent years amid a spike in crime, homelessness and vagrancy, with Mayor Sheng Thao hit with a recall effort in the election this year.
According to Mercury News, the budget problems are expected to result in a deficit reaching almost $115 million when the current fiscal year ends in June.
Oakland Mayor Sheng Thao has grappled with the city’s financial crisis for years, and has already taken steps including freezing the hiring of fire crews
Roseman warned in both her original report and the revised document that significant spending cuts will be required, including to Oakland’s police and fire departments.
The decisions were made after fiscal analysis found the city’s fire and police departments are driving the city’s shortfall, projected to run over budget by $34 million and $51 million, respectively.
Both department have already been hit by a city-wide hiring freeze, and police leaders have reportedly paused its trainee academy operations.
Oakland’s Mayor Sheng Thao has already made some moves to curb the financial crisis, including freezing the hiring of five fire engine crews that would employ 60 full-time firefighters.
Living standards in Oakland have notably declined in recent years amid a spike in crime, homelessness and vagrancy
She has also cut $1.1 million in funding for IT cybersecurity, and ending a popular ‘five after five’ program that allowed restaurant workers to save money by parking in a city-owned garage at a flat $5 rate after 5pm.
But the retraction of Roseman’s report seemingly undercut the city’s cost-cutting moves, as Oakland police union president Huy Nguyen said this week his department ‘won’t accept any cuts until we know the extent of the city’s debt.’
Roseman’s report notable does not call for renegotiating union staffing numbers or contracts.
‘All City policy makers, staff, residents and other stakeholders must seriously grapple with the current financial circumstances,’ Roseman wrote in both of the reports.
In a line she then removed from the second report, Roseman added: ‘Fecklessness and failure to take dramatic and immediate steps to reduce expenditures will almost certainly result in insolvency.’