Oakland (Special to ZennieReport.com) – Two months ago, The City of Oakland proudly floated $334 million in municipal bonds of two types to pay for affordable housing and capital improvement projects. The City of Oakland’s own press release reads as follows:
The City of Oakland successfully priced a total of $334 million of General Obligation bonds on December 4, 2025. This milestone provides access to capital funding that will be used by City departments to deliver paved roads, restored public facilities, and investments in affordable housing.
City of Oakland’s Own Bond Book Doesn’t Paint A Good Picture Of The Future
The trouble is, the City’s own bond prospectus shows the bond debt is based on a rate of growth in assessed value that has a questionable future that hints at poor growth. Such a scenario should be concerning for City of Oakland fiscal observers who contend that Oakland’s spending habits are pushing it toward bankruptcy.
Indeed, a single paragraph in the City of Oakland’s Bond Prospectus should be a warning of a possible outcome of revenue shortfalls to pay off bonds:
The City’s assessed valuation and property-related revenues have grown at a steady rate historically. See “PROPERTY TAXATION” above. However, there can be no assurances that such growth will continue in the future. Total net assessed valuation in the City grew approximately 0.84% in Fiscal Year 2024-25 as compared to Fiscal Year 2023-24, significantly below the most recent 10 year gross annual growth average of approximately 6% as shown in Table 1
And to add insult to injury, the City of Oakland’s October 6th 2025 own report done by S&P Global Rating on the same bond issue I am reviewing for you gives a negative view of its future.
No kidding. Makes you wonder if Oakland managed to pump weed smoke in the hearing room before the press conference? How else could the local media be so out-to-lunch? But here we are. Read this and weep:
Oakland, CA Series 2025, 2025B-1, B-2, And B-3 GO Refunding Bonds Rated ‘AA-‘; Outlook Is Negative
October 6, 2025
Overview
- S&P Global Ratings assigned its ‘AA-‘ long-term rating to Oakland, Calif.’s anticipated $94.260 million series 2025B-1 (tax exempt), $180.475 million series 2025B-2 (tax exempt), $10.050 million 2025B-3 (taxable), and $49.1 million series 2025 (tax exempt) refunding general obligation (GO) bonds.
- At the same time, S&P Global Ratings affirmed its ‘AA-‘ long-term rating on the city’s previously issued GO bonds, its ‘AA-‘ long-term rating and underlying rating (SPUR) on the city’s previously issued non ad valorem obligations, and its ‘A+’ long-term rating on the city’s previously issued appropriation obligations.
- The outlook is negative.
Still think this City of Oakland gang should show its face around town?
No Oakland Economic Development Plan, No Presentation Of Big-Ticket Projects Guaranteed To Increase The Rate Of Growth In Property Value
The City of Oakland’s Bond Prospectus contains no mention of an economic development plan aimed at bringing in new investment to Oakland, all the better to calm concerns of future bad economic performance. Indeed, the City of Oakland’s Bond Prospectus lays out a number of reasons why the City’s overall assessed value could go south in growth rate, and none – zero – forecasts of positive growth caused by to-be-unfolded economic development plans.
The City of Oakland is literally betting on the come. But it moves forward, anyway. Here’s the meat of the press release:
“Oakland is on the move and building momentum with this bond sale. We are reviving access to funding for paving our streets, restoring public facilities we all use and depend upon, and investing in affordable housing for our community, all while maintaining transparency and fiscal discipline,” Mayor Barbara Lee said. “These bonds represent our City’s continued commitment to sound financial management and responsible investment in Oakland’s future. Together, we are strengthening our foundation for generations to come. I’m grateful to our partners in the City Council for their leadership and support, and to City Administrator Jestin Johnson for driving this process and ensuring we brought it home.”
$285 million of the bonds support new projects and $49 million of the bonds refund existing bonds for debt service savings. The City’s bond offering was well received with strong investor demand. Investors placed $638 million in orders for the $334 million of bonds offered by the City. There was broad investor demand with 26 separate investment firms placing orders. The oversubscription ultimately allowed the City to lower the final interest rates offered to investors and reduce the City’s borrowing cost.
There was both a tax-exempt portion and a taxable portion for the bond offering, reflecting the various uses of the bond proceeds. The $143.5 million of tax-exempt bonds have a 30-year final maturity and received an all-in borrowing cost of 3.99%. The $191 million of taxable bonds have a 24-year final maturity and received an all-in borrowing cost of 5.55%. The $49 million in tax-exempt bonds that refinance existing obligations of the City resulted in $5.6 million of debt service savings for taxpayers through 2039, or $4.7 million on a present value basis.
The new money bonds will fund affordable housing, roadway safety and infrastructure improvements, and renovations to parks, libraries, senior centers, and other public facilities under the City’s Measure U Authorization. In September, the City Council approved the sale of these bonds along with a list of projects and programs that will receive the funds. The full list is available online (Resolution 90850 C.M.S.) – highlights include:
- $50.5 million for Citywide Street Resurfacing
- $13 million for the Complete Streets Capital Program
- $9.5 million for the Curb Ramps Program
- $30 million for the Acquisition and Preservation of Existing Affordable Housing
- $33 million for the Mandela Transit Oriented Development
- $28 million for the Liberation Park Development
- $3 million for the Brookdale Recreation Center capital project
- $1.5 million for the Oakland Tool Lending Library at the Temescal Branch Library
- $10 million for the Oakland Ice Center
“We deeply appreciate the work of our finance team and underwriting partners who help position Oakland as a trustworthy investment and vibrant, resilient City,” City Administrator Jestin Johnson said. “An incredible team of City professionals and partner firms went above and beyond to make this happen, and I want to recognize them by name for their invaluable contributions.” They include:
- Finance: Bradley Johnson, Dawn Hort, Jan Mazyck, David Jones, Greg Danielian, Pooja Shrestha, Nicole Welch
- City Administrator’s Office: Deborah Edgerly, Monica Davis
- City Attorney’s Office: Amber Macaulay, Malia McPherson
City Administrator Johnson also thanked PFM Financial Advisors LLC serving as municipal advisor, and the Oakland-based firm Siebert Williams Shank & Co., LLC serving as the Senior Manager along with Loop Capital Markets, LLC and BofA Securities, Inc. as co-managers for their remarkable support and professional services that enabled the sale.
City Of Oakland Celebrates Borrowing Money But Doesn’t Talk About Increasing Economic Activity To Have The Revenue To Pay It Back
This situation is like a business borrowing money to pay bills, but not having a secure list of clients to make sure the money is coming in to pay off the loans. In its bond prospectus, the City of Oakland presents the scenario of bankruptcy as an option should revenues drop such that the City can’t pay the bond debt, but not having a growth plan that would help avoid such an option is troubling.
It’s like Oakland is saying, we need the money, we got the money, we’ll deal with the future as it comes.
That’s not a good way to run a city.