The city of Oakland recently reduced a planned note sale by $5 million, after the state picked up part of the tab for costs of fighting the city's deadly October fire.
In anticipation of aid payments from the state, Oakland officials allocated part of a $40 million tax and revenue anticipation note issue to pay for fire-fighting costs. But because the state paid sooner than expected, Oakland was able to trim the issue.
"We downsized it simply because some of the fire-fighting costs were paid directly by the state," said Alex Burnett, a consultant with Public Financial Management Inc., the city's financial adviser.
The city sold competitively the $35 million Tran deal on Nov. 21, and Goldman, Sachs & Co. won the issue with a true interest cost of 4.22%. The notes were sold to bridge temporary imbalances in the city's cash flow.
The expenses of fighting the Oct. 20 fire that swept through the hills of Oakland have cost the city an estimated $17.4 million. That figure includes $2.2 million in fire-fighting, $1.3 million in police, $600,000 in storm drain costs, and $2.5 million in public roadway expenses.
Other costs to the city include about $5 million in erosion stabilization and $7.8 million in fire debris removal.
The fire caused a total of $1.5 billion in damages to public and private property, killed 25 people, and destroyed 2,843 homes.
Rating officials recently predicted fire costs would not result in any negative rating action against the city.