A financial report warning of impending bankruptcy was accidentally released by Oakland city officials last week before it was quickly swapped out for an official document with less drastic language.The local nonprofit newsroom The Oaklandside was first to report on the mistakenly published report and the differences between the two documents. The draft report, briefly posted on the city’s website, claimed that Oakland faced a $93 million budget shortfall and warned of insolvency if urgent action wasn’t taken. It even referenced Chapter 9 bankruptcy, typically reserved for cities unable to meet their financial obligations. The language was stark, urging immediate measures to “maintain the solvency of the General Purpose Fund,” according to a copy of the document reviewed and uploaded by The Oaklandside.By Friday afternoon, city officials swapped the draft for an official version that removed mentions of bankruptcy. In a statement released Monday to The Oaklandside, the city administration said the draft was “unapproved” and that its references to Chapter 9 were “premature.” Still, officials underscored the urgency of addressing Oakland’s financial challenges. The estimated budget shortfall remained the same in both versions of the report.City of Oakland officials did not immediately respond to Fortune’s request for comment. While the alarmist draft report was disavowed, both versions agree on a single core issue: Oakland is grappling with rising expenses, flatlining revenues, and a structural deficit that could worsen in the coming year. Key revenue streams like real estate transfer taxes have dwindled, leaving the city with fewer options to balance the books.According to the reports, Oakland’s Police Department (OPD) is projected to overspend its 2024-2025 budget by $52 million, primarily due to overtime costs.Municipal bankruptcies in the U.S. are relatively rare. Since Detroit’s historic bankruptcy filing in 2013, only a few cities have sought Chapter 9 protection. Notably, the City of Chester in Pennsylvania filed for bankruptcy in November 2022 after enduring decades of financial distress. Prior to that, the City of Fairfield, Alabama, filed in 2020How many degrees of separation are you from the globe's most powerful business leaders? Explore who made our brand-new list of the 100 Most Powerful People in Business. Plus, learn about the metrics we used to make it.
