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Milpitas council adopts balanced $268 million budget for 2025–26, sets multi‑year work plan
Summary
The Milpitas City Council on June 3 adopted a balanced fiscal year 2025–26 operating budget of $268 million, approved an appropriations limit and a set of work streams to address a multi‑year structural deficit while preserving core services.
The Milpitas City Council on June 3 adopted a $268,000,000 fiscal year 2025–26 operating budget and related fiscal policies after a presentation from city staff and a public hearing.
City Manager Diana said the adopted plan is balanced for 2025–26 and represents “the beginning of attaining fiscal sustainability” after staff identified a multi‑year structural shortfall earlier in the year. Finance Director Luz Coforsi Howe told the council the budget follows the City Council’s direction to avoid using ongoing reserves to cover recurring expenses.
The adopted spending plan maintained service levels and did not eliminate existing full‑time positions, Luz Coforsi Howe said. The budget package also includes a five‑year general fund forecast and work streams to reduce the structural deficit through a mix of ongoing reductions, revenue initiatives and organizational changes.
Budget highlights cited in the staff presentation included: the FY 2025–26 operating budget total of $268 million; a multi‑year forecast that showed a previously identified $28.8 million structural gap that staff has reduced through proposed actions; a 43% structural‑deficit reduction across five years; and one‑time fund uses of about $5.1 million for targeted initiatives and transition activities. Luz Coforsi Howe said the city is targeting additional cost containment, revenue modernization (including a business tax study) and an organizational assessment over the next 12–18 months.
At the conclusion of council discussion, Councilmember Chua moved to adopt the budget as recommended by staff; Councilmember Lynn seconded. Vice Mayor Barbadillo voted yes “with reservations”; the motion otherwise passed unanimously.
Councilmembers and staff framed the vote as part of an ongoing fiscal strategy rather than a final solution. Interim and department leaders told the council that continued work—fee adjustments, cost‑allocation corrections, a consultant‑led business tax modernization study and an organizational assessment—will be needed to place the city on a sustainable trajectory beyond the next two years.
The council approved the FY 2025–26 appropriation limit and authorized staff to implement the budget, with staff planning return reports and midyear updates as needed.
