The Milpitas City Council unanimously approved adjustments Tuesday to its current budget to offset an estimated $13.8 million revenue loss due in large part to the COVID-19 pandemic.
The amendments include returning $5.4 million from the city’s metro plan to the city’s general fund, reversing a $4 million commitment from the city’s infrastructure improvement plan, and defunding various staff positions that have been vacant for more than a year, according to city officials.
“The numbers are encouraging here,” said Mayor Rich Tran. “We’re all very concerned here in City Hall about how our world is right now.”
Approximately $1.5 million from the city’s budget amendments will be used to establish a reserve fund to address the city’s anticipated 2022 deficit of $7.5 million.
Money from the reserve fund, along with city staffing reductions, will ensure that the city will address more than half of its 2022 deficit in the coming months, according to Deputy City Manager Walter Rossmann.
By December, 2020, the city incurred $4.2 million in COVID-related costs, with nearly $1 million already reimbursed by the federal government. Spending included items such as cleaning supplies, employee testing, personal protective equipment, and COVID-related outreach.
The city is expecting the Federal Emergency Management Agency, or FEMA, to reimburse Milpitas to the tune of up to $675,000 for some of its COVID-19 costs — something that was difficult to work toward, according to Rossmann.
“We’ve been nickeled and dimed, unfortunately,” Rossmann said.
City officials however were optimistic that the council’s approval of the deficit reserve fund will help the city to recover from what city staff call “the worst economic downturn since the Great Depression.”
“The council’s actions on Tuesday really puts the city on a strong fiscal path getting out of the pandemic,” Rossmann said. “I think the council made really wise decisions.”