The Milpitas City Council mulled solutions Tuesday to make up for budget shortfalls pertaining to several city funds.
According to Deputy City Manager Walter Rossmann, the city will see a budget shortfall of at least $11 million in hotel tax revenue this fiscal year because of the pandemic, one of the largest deficits since the Great Recession.
The discussion was part of the finance department’s end-of-fiscal-year report—the city’s first quarterly budget report since the COVID-19 pandemic began.
The finance department proposed budget amendments for the city, including a proposed increase in the city attorney’s operating budget of $26,419, to come from the city’s affordable housing fund.
The city has meanwhile racked up an estimated $664,000 in unexpected pandemic-related expenses, including $364,000 in expenses for “PPE, extra daytime disinfecting cleaning, sterilizers and temperature scanners” and $115,000 in funding and consulting for Measure F.
As well, the city reported an expense savings of approximately $4.8 million for the fiscal year. Vice Mayor Bob Nuñez suggested some of the money could be used to “help those in need.”
“This is not an average year,” Nuñez continued. “We have a lot of residents, a lot of homeowners who are digging into their own reserves and their own savings trying to keep themselves afloat, as well as businesses. If we’re looking to move along as if nothing else around us has changed, I find it difficult to accept.”
Mayor Rich Tran was open to the idea, but he also hoped the city could keep the money instead to “sustain and secure” the city’s services.
“If this trend continues with our economy…at this rate, we’re not going to see a $4 million savings in the future. Tonight is our opportunity to think ahead and do what’s right, and save those dollars for our sewer and our water.”
The council plans to tentatively revisit the item, including the ideas presented by Nuñez, at the October 6 council meeting.