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Menlo Park council adopts mid‑year FY2025–26 budget amendments, cites $2.6M projected shortfall
Summary
Council unanimously approved staff‑recommended FY2025–26 mid‑year amendments that include $697,648 in changes to grants and benefits and a projected mid‑year shortfall of about $2.6 million; staff will monitor grant risk and present additional budget workshops in March–May.
Menlo Park’s City Council on Feb. 24 unanimously adopted mid‑year amendments to the FY2025–26 budget that adjust appropriations for grants, health premium contributions and election preparations and update revenue projections.
Assistant administrative services staff (recorded in the transcript as Fanley) and budget staff outlined the recommended changes: approximately $697,648 in adjustments tied to grant awards, health premium and election‑related costs, revisions to internal service fund assumptions for vehicle replacement, and revenue refinements including a $1 million increase in permits and $400,000 in business license revenue offset by declines in housing‑related tax revenue.
Staff presented a consolidated view that produced an approximate mid‑year deficit of $2.6 million after combining the $3.4 million in amended revenues with $5.2 million in expenses and factoring prior deficits. The presentation noted a previous 2023–24 debt of $9.5 million and stressed these are projections subject to change as staff updates assumptions.
Councilmembers pressed staff on the city’s reliance on grants — the presentation cited about $43.2 million in grant awards across federal, state and local sources — asking what early‑warning systems exist for at‑risk grants and how reserves would be used to manage the projected shortfall. Staff said they monitor federal notices and other grant signals and will provide additional detail.
Councilmember Coms moved to adopt the amendments and supplemental appropriations; the motion was seconded and passed unanimously. Staff noted follow‑up workshops are scheduled for March 21, April 14 and May 28 to refine priorities and present more data to the council.
Councilmembers asked staff to provide clearer breakdowns of large appropriations, context for multi‑year trends and updated five‑year projections as part of upcoming budget workshops.
Next procedural steps: staff will continue monitoring grant and revenue developments, prepare requested cost estimates and present detailed materials at the scheduled budget workshops.
