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Milpitas council hears budget plan to close FY26 shortfall without tapping reserves; hiring freeze instituted
Summary
City staff presented a plan on April 2 to close a roughly $3.1 million projected FY26 shortfall without using reserves, proposing revenue recognition and a mix of recurring and one‑time reductions and announcing a temporary hiring freeze while staff refines options for council adoption.
City of Milpitas staff presented an updated operating budget forecast and a set of proposed actions to eliminate a projected fiscal year 2025–26 shortfall while preserving the city’s budget stabilization reserve, at a special City Council study session on April 2.
The finance director, Luz Capricci Howe, reported an updated forecast showing a persistent structural deficit that staff estimated at about $3.1 million for FY26 prior to corrective action. Staff proposed a mix of revenue recognition and recurring and one‑time expenditure reductions that, together, would close the FY26 gap without drawing on reserves. “We have an updated forecast … and we are proposing revenue increases and expenditure reductions that would allow us to balance FY26 without using the reserves,” the finance director said.
What staff proposed - Revenue adjustments (one‑time and ongoing): Staff recommended recognizing…
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