Mountain View staff present balanced preliminary FY 2025–26 general fund plan; council asks staff to explore library hours, AI translation and funding shifts

City staff presented a preliminary general fund budget for fiscal year 2025–26 showing a modest projected operating balance for next year but structural deficits in following years unless revenues or expenditure plans change. Finance staff described the city’s long history of conservative fiscal management, current reserve levels, and an updated economic outlook noting recent market volatility and potential federal actions that could affect municipal borrowing costs.

Finance director and staff highlighted Measure G (a new higher property transfer tax tier for transactions over $6 million) as a recently authorized local revenue source expected to produce new receipts but noted receipts are transaction‑driven and timing is uncertain. Staff also warned that market declines and potential shortfalls in CalPERS investment returns could increase the city’s pension contribution obligations and that proposed federal changes to tax treatment of municipal bonds could raise borrowing costs for capital projects such as the planned Public Safety Administration building.

The recommended FY 2025–26 general fund budget as presented by staff would include limited new ongoing positions (two new ongoing and two conversions from limited‑term positions) and a mix of one‑time, limited period allocations. Staff recommended using a portion of estimated year‑end operating balances to fund some limited‑period expenditures; projected carryforward available balances were also shown. The draft budget includes about $500,000 proposed as a capital/pavement reserve, limited‑period funds for prioritized programs and four staffing additions. Staff estimated a small operating balance for 25–26 (about $96,000) and projected deficits in subsequent years ($2M–$3.7M range) absent revenue or expenditure changes.

Council discussion focused on risk management and priorities under economic uncertainty. Councilmembers asked staff to explore several ideas for follow‑up analysis: expanding weekend library hours (and associated costs), piloting or procuring live AI translation/real‑time translation tools for council meetings, targeting pavement funding to active transportation/complete streets where possible, and evaluating whether a portion of the equipment replacement fund could be temporarily shifted toward the Public Safety Administration building financing gap. Several members stressed the need for clearer community‑facing budget summaries; staff had already prepared a “budget in brief” and a short video for public outreach. Ramirez moved to accept staff’s preliminary recommendations with direction to explore the follow‑up items; the motion passed unanimously.

Staff will return with the recommended budget in May and a final adopted operating and CIP budget in June after council feedback and updated revenue forecasts.