Council to Consider Proposed 2025/26 Operating Budget
Five-Year Deficit Projection Reduced by 43%, from $28.5M to $16.3M

On Tuesday, May 13, 2025, the City Council will hold a Study Session at the Barbara Lee Senior Center at 5:30 p.m., to hear the proposed FY 2025 – 2026 Operating Budget and how City staff plan on reducing the $28.5 million five-year structural budget deficit.

In February 2025, the City identified a structural budget deficit within the operating budget. The Operating Budget funds public services provided daily within Milpitas such as parks, community center programs, streets/roads, housing, police, fire, development and inspections, and administrative services. The City Council then directed City staff to return with budget proposal solutions to resolve the projected FY 2025-26 deficit, with limited use of one-time dollars to fix costs that repeat year to year and minimize the five-year structural budget deficit.

“I am delighted with the progress made since last month, and the ability to address this problem head on without kicking the can down the road,” said Mayor Carmen Montano. Mayor Montano added, “Our City deserves our best efforts to preserve service levels to the maximum extent and the City Council is fully aligned with that value. I encourage our community to tune into this discussion, as the Study Session is specifically designed for community input and transparency for the public.”

The City has prepared a FY 2025-26 budget proposal that follows the Council guidance, and accomplishes the following if advanced for approval and appropriation on June 3:

1. Balances the current budget deficit for this year and potentially next year, resulting in a

deferred and significantly reduced structural deficit;

2. Creates a window of opportunity to evaluate further structural corrections within the City organization to strengthen the General Fund that supports important city services;

3. Funds new proposals needed to stabilize services, manage risk to the City, and implement a Fiscal Strategy Framework that can generate new revenue and increase city efficiencies;

4. Reduces the Structural Deficit by 43%, within five fiscal years, from $28.5 Million to $16.3 million; and

5. Has minimal impact to services, if any, and results in no filled full-time positions eliminated.

As the City prepares for the Study Session, we encourage the community to join us in discussing the proposed FY 2025-26 Operating Budget. Your input is essential as we confront our budget challenges and ensure that vital City services remain intact. Together, we can build a sustainable path forward for Milpitas. Your voice matters – let's shape our city's future collaboratively.

Join the Study Session via Webinar Registration - Zoom

Please note: Oral public comments can only be provided in person during the City Council meeting. Comments will not be accepted via Zoom.