Milpitas council advances FY25–26 budget; staff to pursue contract reviews, fee studies and business tax modernization

The Milpitas City Council reviewed a proposed FY2025–26 operating budget on May 13 and gave staff consensus direction to move the plan toward adoption on June 3, while authorizing a set of follow‑up work streams intended to shrink a multiyear structural deficit.

City Manager (unnamed) opened the special meeting presentation by describing the immediate budget picture and the longer‑term challenge, saying, "We have a problem, but we have a plan, which is the best case scenario that we can be in." Finance staff presented a package of onetime and recurring reductions that together eliminate a $3.1 million shortfall in FY25–26 and reduce the projected five‑year structural deficit from about $28.5 million to roughly $14.8 million.

Why it matters: council members and staff repeatedly stressed that the one‑year balancing does not erase a larger multiyear shortfall. The meeting advanced a multipronged approach that combines (1) immediate recurring savings and reallocation of costs to non‑general funds, (2) a set of one‑time investments to audit contracts and fees and to stabilize operations, and (3) a strategy to modernize the city's business tax as a potential recurring revenue source.

Most important decisions and staff direction

- Council provided consensus to proceed toward adoption of the FY25–26 operating budget and the fiscal‑strategy framework at the June 3 meeting. The budget as presented includes recurring reductions and one‑time proposals the city manager and finance director characterized as preserving service levels for now.

- Council also gave consensus approval to several prioritized items the staff will incorporate into the proposed budget: ongoing funding for the annual Black April event (staff said the likely amount is $5,000), ongoing support for the Milpitas Community Concert Choir (amount not specified), creation of a Milpitas Summer College…