Milpitas city leaders are looking to save millions of dollars next year — mainly by cutting vacant city staff positions and support programs — in an effort to close an anticipated $28.5 million budget deficit over the next five years.
For the 2026-2027 fiscal year, the city is proposing a $3.1 million cut from its operating budget, which funds public services such as parks, community center programs, emergency services and inspections, among other services. The council will officially approve the budget next month.
By making similar cuts over the next five years, the city hopes to shrink the deficit by 43%, from $28.5 million to $16.3 million, according to Interim City Manager Deanna Santana.
“We have a problem, but we have a plan, which is the best case scenario to be in,” Santana said during a Tuesday budget study session. ” We have time to plan ahead and conduct and plan the work that needs to be done.”
Several vacant staff positions will be removed, including that of a full-time fire prevention inspector, which falls under the fire department and conducts fire and safety-related building and code compliance inspections. That will spare the city $354,992, according to city documents.
A full-time vacant police officer position is also on the chopping block in order to help the city save a similar $343,256. Milpitas Financial Director Luz Cofresí-Howe said the decision stems from the department’s recent difficulties in recruiting new officers.
“This is not just with Milpitas, frankly it’s a national challenge,” she said. “This defunding reflects reality. Because you simply won’t be able to recruit this year in that position.” she said.
Cofresí-Howe said both the inspector and officer positions could be brought back in the future if need be.
Other high cost service cuts include $100,000 from the city’s legislative support program, which funds a government relations consultant tasked with monitoring legislation and assisting in interactions with federal and state agencies to secure funding for city initiatives.
The city is also planning a one-time reduction of $50,000 from the Storefront Improvement Grant Program. The program provides business owners on North and South Main Street with grants for exterior commercial storefront improvements. The city council had previously allocated $365,000 in American Rescue Plan Act funds for the program.
In a statement Monday, Mayor Carmen Montano said she is “delighted” with the progress and staff’s ability to “address this problem head on without kicking the can down the road.”
“Our city deserves our best efforts to preserve service levels to the maximum extent and the City Council is fully
aligned with that value,” Montano said.