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San Mateo City hears midyear budget update as VLF shortfall pressures reserves
Summary
Finance Director Abby Vieser told the City Council the midyear projection for FY 2025–26 shows a $6.9 million deficit if savings and revenues materialize; a Vehicle License Fee (VLF) payment this cycle was 67% of expected and the council signaled legal and advocacy steps to recover missing funds.
San Mateo City’s Council convened a special study session on Monday evening for a midyear review of the FY 2025–26 budget, where Finance Director Abby Vieser laid out revenue shortfalls, expenditure controls and next steps on both the operating budget and capital program.
Vieser said the city closed FY 2024–25 stronger than anticipated, finishing with an audited surplus of about $1.5 million after an originally adopted deficit. The council adopted a FY 2025–26 budget in June with an expected $12 million shortfall; at midyear the administration now projects that shortfall could narrow to roughly $6.9 million if projected savings and revenues come in as forecast. "Back in June, the city council adopted our budget with a $12,000,000 deficit," Vieser said, and at midyear "we're expecting closer to $6.9 [million] as our deficit." (Abby Vieser)
The most immediate uncertainty is a shortfall in the Vehicle License Fee (VLF) entitlement that flows to cities through county and school-district allocations. Vieser said the city received 67% of the $6.6 million VLF shortfall it expected (about $4.4 million…
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