Milpitas City Council
May 14, 2024

May 14, 2024 Milpitas City Council Agenda Page 1

SPECIAL MEETING OF THE MILPITAS

CITY COUNCIL
AGENDA
TUESDAY, MAY 14, 2024
BARBARA LEE SENIOR CENTER, 40 N MILPITAS BLVD, ROOM 140/141,

MILPITAS, CA
5:30 PM (PUBLIC BUSINESS)
For assistance in the following languages, you may call:

Đối với Việt Nam, gọi 408-586-2400
Para sa Tagalog, tumawag sa 408-586-3051
Para español, llame 408-586-3072
The Special City Council meeting is held in the Barbara Lee Senior Center, 40 N. Milpitas Blvd, Milpitas, and via teleconference/Zoom webinar.

You may watch the Council meeting without providing public comment by accessing it via links here.

Meeting shall be livestreamed - Go to:

Facebook: https://www.facebook.com/CityofMilpitas/
YouTube: https://www.milpitas.gov/youtube
Web Streaming: https://www.milpitas.gov/webstreaming

PUBLIC COMMENT INSTRUCTIONS
Oral public comments may only be provided live during the City Council meeting in person, unless the City Council approves remote public comment. All comments provided shall be limited to three minutes or less as determined by the Mayor. All members of the public will be limited to one comment per agenda item, and one comment for non-agenda items. Members of the public may submit written comments by email to [email protected].

The meeting will be streamed via Zoom for viewing purposes only unless the City Council approves remote public comment. To watch via Zoom, please register at:
https://ci-milpitas-ca-gov.zoom.us/webinar/register/WN_XSov8R_BR0-G7wCrk-u8xQ NOTE: If a member of the public wishes to share any presentation materials for Council consideration, they must be submitted to the Clerk’s Office by email to [email protected] by 12:00 p.m. on the day of the meeting. No presentations will be accepted in person in the Council Chambers.

MILPITAS CITY COUNCIL CODE OF CONDUCT
•Be respectful and courteous (words, tone, and body language). •Model civility.
•Avoid surprises.
•Praise publicly and criticize privately.
•Focus on the issue, not the person.
•Refrain from using electronic devices while on the Council dais. •Disclose conflicts of interest and affiliations related to agenda items. •Separate governing from campaigning.
•The Council speaks with one voice after making policy on issues. •Respect the line between policy and administration.
•Council will hold one another accountable to comply with this Code of Conduct.

May 14, 2024 Milpitas City Council Agenda Page 2
CALL MEETING TO ORDER by Mayor and ROLL CALL by City Clerk (5:30 PM)

PLEDGE OF ALLEGIANCE

PRESENTATIONS
PUBLIC FORUM (5:35 PM)
Members of the public are invited to address the City Council on the agenda item listed below only. Comments will be limited to three minutes or less at the Mayor’s discretion. When called to speak, you are encouraged to state your name for the record.

ANNOUNCEMENT OF CONFLICT OF INTEREST AND CAMPAIGN CONTRIBUTIONS

READING OF THE CITY COUNCIL CODE OF CONDUCT

APPROVAL OF AGENDA
AGENDA ITEMS (5:40 PM)

1. Receive Presentation on the FY 2024-25 Proposed City of Milpitas Operating Budget and Provide Direction (Staff Contact: Luz Cofresi-Howe, Finance Director, 408-586-3111) Recommendation: Receive a presentation on the FY 2024-25 Proposed City of Milpitas Operating Budget and provide direction to staff.

ANNOUNCEMENTS AND FUTURE AGENDA ITEMS
Members of the City Council or City Manager may make brief announcements at this time. Members of the City Council may also suggest future agenda items. For future agenda items, the City Council shall not debate the topic or engage in discussion but shall simply state a “yes” or “no” as whether to move the item forward. If a majority of the City Council agrees to move the item forward, the City Manager shall place the item on a future agenda.

ADJOURNMENT

KNOW YOUR RIGHTS UNDER THE OPEN GOVERNMENT ORDINANCE
Government’s duty is to serve the public, reaching its decisions in full view of the public. Commissions and other City agencies exist to conduct the people’s business. This ordinance assures that deliberations are conducted before the people and City operations are open to the people’s review. For more information on your rights under the Open Government Ordinance or to report a violation, contact the City Attorney’s office at Milpitas City Hall, 455 E. Calaveras Blvd., Milpitas, CA 95035 e-mail:[email protected] / Phone: 408-586-3040 The Open Government Ordinance is codified in the Milpitas Municipal Code as Title I Chapter 310 and is available online at the City’s website www.milpitas.gov by selecting the Milpitas Municipal Code link.

Materials related to an item on this agenda submitted to the City Council after initial distribution of the agenda packet are available for public inspection at the City Clerk’s office at Milpitas City Hall, 3rd floor 455 E. Calaveras Blvd., Milpitas and on City website. City Council agendas and related materials can be viewed online: www.milpitas.gov/government/council/agenda_minutes.asp (select meeting date)

APPLY TO SERVE ON A CITY COMMISSION
Commission application forms are available online at www.milpitas.gov or at Milpitas City Hall.

Contact the City Clerk’s Office at 408-586-3001 for more information.

If you need assistance, per the Americans with Disabilities Act, for any City of Milpitas public meeting, please call the City Clerk at 408-586-3001 or send an e-mail to [email protected] prior to the meeting. You may request a larger font agenda.

CITY OF MILPITAS

AGENDA REPORT
(AR)
Item Title: Receive Presentation on the FY 2024-25 Proposed City of Milpitas Operating Budget and Provide Direction (Staff Contact: Luz Cofresí-Howe, Finance Director, 408-586-3111)
Category: Leadership and Support Services
Meeting Date: 5/14/2024
Recommendation: Receive a presentation on the FY 2024-25 Proposed City of Milpitas Operating Budget and provide direction to staff.

Background:

This agenda report is supplemental to the FY2024-25 Proposed Operating Budget (Proposed Budget) and City Manager transmittal letter. At the FY 2024-25 Preliminary Budget Study Session held on January 30, 2024, the City Council received the preliminary ten-year General Fund Financial Forecast, the budget community engagement plan, and a report on accomplishments. During the Study Session, City staff projected a structurally balanced budget, modest revenue increases, and status quo service levels.

On May 9, 2024, the City Manager released a balanced FY 2024-225 Proposed Operating Budget, available on the City’s website and attached here, consistent with his duties as City Manager as outlined in the City’s Municipal Code.

Overall, the $248.4 million Proposed Budget reflects optimism regarding the City’s financial future but also wariness of near-term economic uncertainty arising from continuing high interest rates, moderate-to-high inflation, foreign conflicts, and the lingering financial impacts of the worldwide COVID-19 pandemic. In addition, the City recognizes the Fiscal Year 2028-29 expiration of a critical local revenue source – the Milpitas Public Services Measure (Measure F) – requires strict fiscal discipline while simultaneously finding ways to increase revenues and control expenses.

The Proposed Budget aligns well with areas of high priority in the Milpitas community, investing over $1 million in staffing and equipment to address ongoing maintenance of City streets, parks, water and sewer infrastructure, and other critical community services. The Proposed Budget also includes a realignment of responsibilities in the City Manager’s Office and Development Services as well as additional staff in Public Works, Finance, and Human Resources to ensure efficient delivery of key services in those departments. The Proposed Budget is balanced and maintains the City’s financial reserves in accordance with Council-approved policies.

The Proposed Budget increases the position count by 3.0 full-time equivalents (FTE) from 452 to 455. Of the

3.0 FTE net increase, 2.0 FTEs are focused on maintaining critical utility infrastructure while the deletion or defunding of 2.0 FTE executive positions (in addition to the deletion of the Engineering Director position in December 2023) offsets the addition of needed support other areas.

Analysis
This staff report provides supplemental information related to the FY 2024-25 Proposed Budget, such as a summary of City Council prioritization referrals to date, an update on the Measure F Committee, and next steps in the FY2024-2025 budget process.

Fiscal Policies and Budget Guidelines
As part of the annual budget process, staff reviews the Fiscal Policies and Budget Guidelines. These policies and guidelines set the fiscal framework for the annual budget process and long-term financial decisions.

Fiscal Policies
City Fiscal Policies address the City general financial goals, with an emphasis on contingency and budgetary reserves, pension, facility, infrastructure, and Strategic Purchasing Acquisition Revenue (SPAR) fund, The City Fiscal Policies address Operating Budget, Revenues, and Expenditures; Utility Rates and Fees; Capital Budget; Debt, Reserve, and Investment; and Accounting, Auditing, and Financial Reporting. The City Debt and Investment Policies are reviewed and adopted consistent with State law requirements.

There are no recommended changes to the City Fiscal Policies in the FY2024-2025 Proposed Budget.

Budget Guidelines
The Budget Guidelines set forth the Basis of Budgeting; Budget Calendar requirements; form and content of the City Manager's Proposed Budget; adoption of the Proposed Budget by June 30; the City Manager budgetary authority; the requirement that budget amendments be approved by the City Council; budget transfers and modification procedures; automatic adjustments and re-appropriations; budget monitoring and reporting; and reserve requirements for all funds. Through adoption of this Proposed Budget, the City Council also approves the Budget Guidelines.

Available Funding for Council Consideration – Community Investment Funds As part of the annual budget process, staff identified one-time funds available that the City Council may consider during the Proposed Budget deliberations. The table below demonstrates an estimated $483,000 available for reallocation from various programs originally funded by the American Rescue Plan Act. These projects and/or programs were included in the City Council approval of Agenda Report Reallocation of American Rescue Plan Act Funds to the General Fund at its April 16, 2024 meeting, and have been or will be completed soon.

During the Proposed Budget study session on May 14, 2024, staff will seek City Council feedback on projects and/or programs to which this excess funding.

Community Investment Funds
Estimated Program
Reallocation
Amount
Beautify Milpitas $ 60,000
Emergency Management Program Assessment Study 13,000
Catalytic Converter Public Safety Initiative 134,000
Administration Funds 150,000
Unallocated Funds 126,000
Total Available for Reallocation $ 483,000

Measure F Oversight Committee
On October 6, 2020, consistent with Measure F, the City Council adopted a Resolution establishing the Measure F Oversight Committee (Committee). On March 21, 2024, the Committee reviewed and confirmed the services recommended to be maintained with Measure F funding are an allowable expenditure consistent with Measure F. The estimated Measure F revenues in the amount of $7.3 million are equivalent to 5.3% of the $137.2 million General Fund revenues estimated for FY2024-2025. At the March 21 meeting, the Committee received the following summary of services that the City can maintain with Measure F. With the new budget information for Library services, the City will adjust funding for maintaining other services.

*The extended library hours were maintained. However, library district suspended City of Milpitas financial contribution due to adequate reserves in the Library District’s budget. This is a year-by-year determination based on Library District’s budget funding status.

City Council Prioritization
The next City Council prioritization discussion is currently scheduled for June 18, 2024. As this process will occur after the Proposed Budget is finalized, it is important to be aware of the items that have been proposed for potential prioritization since the last prioritization setting process in February 2024, and scheduled for City Council discussion and potential prioritization on June 18, 2024. The Mayor and City Council may decide to reserve a portion of the potential Community Investment Fund reallocation funding for future City Council priorities.

Item Requested by Date requested Status
Catalytic Converter
Ordinance Vice Mayor Chua 2/20/2024
Scheduled for potential
prioritization on June 18, 2024
Accessory Dwelling Unit
Ordinance review Vice Mayor Chua 3/5/2024
Scheduled for potential
prioritization on June 18, 2024
Arts month potential
exhibit for
commissioners Vice Mayor Chua 3/5/2024
Scheduled for potential
prioritization on June 18, 2024
Recognize March as
National Endometriosis
month Councilmember Phan 3/5/2024
Completed at 3/19/2024 city
council meeting

Item Requested by Date requested Status
Veteran’s Banner
Program Vice Mayor Chua 3/19/2024
Scheduled for potential
prioritization on June 18, 2024
Change focus of
Community Advisory
Commission to Housing Vice Mayor Chua 4/2/2024
Scheduled for potential
prioritization on June 18, 2024
Explore increasing
stipend for Planning
Commission
Councilmember
Barbadillo 4/16/2024
Scheduled for potential
prioritization on June 18, 2024
Revisiting solicitation
ordinance
Councilmember
Barbadillo 4/16/2024
Scheduled for potential
prioritization on June 18, 2024
Tobacco ordinance
review Vice Mayor Chua 5/7/2024
Scheduled for potential
prioritization on June 18, 2024
No-smoking ordinance
review Vice Mayor Chua 5/7/2024
Scheduled for potential
prioritization on June 18, 2024
Citywide Banner
Program Vice Mayor Chua 5/7/2024
Scheduled for potential
prioritization on June 18, 2024
Escuela Parkway Traffic
Study Mayor Montano 5/7/2024
Scheduled for potential
prioritization on June 18, 2024
Next Steps
Adoption of the FY 2024-25 Budget is scheduled during a public hearing on June 4, 2024. In preparation for the public hearing, staff will bring forward any amendments to the Proposed Budget, budget- and position- related resolutions, the debt ceiling calculation, Gann Limit calculation, and request authorization for award of contracts related to the approval of the FY 2024-25 Budget.

Fiscal Impact:

The FY 2024-25 Citywide Proposed Budget of $248.4 million funds 455.0 FTEs, with the General Fund Proposed Budget estimated at $137.2 million.

California Environmental Quality Act:

This item is not a Project under CEQA in accordance with CEQA Guidelines Section 15061(b)(3) (Common Sense Exemption) as it can be seen with certainty that a general discussion of funding priorities by the City Council will not have a significant effect on the environment. Further, the item is also not a Project pursuant to CEQA Guidelines Section 15378(b)(2) as an administrative activity which is defined in the CEQA Guidelines to include the purchase of supplies and personnel related actions. It is further exempt under CEQA Guideline 15378(b)(4) as it is a government fiscal activity that does not involve a commitment to any specific project which may result in a potentially significant physical impact on the environment. Although the use of funding will be discussed for various potential projects, future environmental analysis will be conducted for the various potential projects prior to the City making any commitment or approval of any project, or it is covered by the CEQA Guideline 15061(b)(3) and/or 15378(b)(2).

Recommendation:

Receive a presentation on the FY 2024-25 Proposed City of Milpitas Operating Budget and provide feedback to staff.

Attachments:

FY 2024-25 Proposed Budget (binder edition previously distributed to City Council)

City of Milpitas
Community Vision
Milpitas will preserve its close-knit community
and rich cultural diversity as it moves with
innovation into the future by supporting
sustainable growth and development, ensuring
public safety, enhancing the environment and
natural landscape, and nurturing family and
community connections.

Organizational
Mission
The City of Milpitas is
committed to accomplishing
the community's vision by
providing fiscally sound,
superior services.

Our Values
Superior Customer Service • Open Communication • Integrity and Accountability Trust and Respect • Recognition and Celebration
ii City of Milpitas

City Council
City of Milpitas iii

Council Priority Areas
Community Wellness and Open Space
Continue to provide parks and amenities for people of all ages and abilities to enjoy higher levels of physical and mental health.

Economic Development and Job Growth
Continue to strengthen our economic foundations that support community prosperity and opportunity while ensuring a sustainable and livable city.

Environment
Promote a sustainable community and protect the natural environment.

Governance and Administration
Continue to streamline processes for enhanced service and remain committed to long- term fiscal discipline and financial stewardship.

Neighborhoods and Housing
Continue to explore innovative approaches to incentivize affordable housing projects, collaborate with key stakeholders to care for our most vulnerable populations, and support and engage neighborhoods through dedicated programs and services.

Public Safety
Continue to invest in police and fire protection, in partnership with our community.

Transportation and Transit
Continue to seek and develop collaborative solutions to meet the transportation challenges facing our community and our region.
iv City of Milpitas

Table of Contents
Community Vision, Mission and Values ........................................................... ii City Council .............................................................................................................. iii Council Priority Areas ............................................................................................ iv Letter of Transmittal ............................................................................................... v City Profile ................................................................................................................. 1 Organization Chart ...................................................................................................................... 1 History ........................................................................................................................................... 2 Demographic Profile ................................................................................................................... 3 Milpitas at a Glance .................................................................................................................... 7 FY 2025-2034 Ten-Year General Fund Financial Forecast ........................... 9 Fiscal Policies and Budget Process .................................................................. 19 Fiscal Policies .............................................................................................................................. 19 Budget Guidelines ....................................................................................................................... 24 FY 2024-25 Budget Process ............................................................................................... 28 Budget Development and Document ....................................................................................... 29 Awards .......................................................................................................................................... 34 Financial Information ............................................................................................. 37 Fund Structure ............................................................................................................................. 37 Budget Summary ......................................................................................................................... 38 Revenues and Expenditures (All Funds) ................................................................................. 40 Permanent Positions by Department ....................................................................................... 42 Revenues by Fund ...................................................................................................................... 44 Revenues by Fund (Detail) ........................................................................................................ 46 Expenditures by Fund ................................................................................................................. 56 Expenditures by Fund (Detail) ................................................................................................... 58 Expenditures by Function .......................................................................................................... 68 Operating Transfers Statement ................................................................................................. 70 ARPA Informational Schedule ................................................................................................... 77 Reserve Allocations .................................................................................................................... 75 Reserve Summary ...................................................................................................................... 76 Table of Contents
City of Milpitas

Budget Narrative and Summary .......................................................................... 85 City Council .................................................................................................................................. 85 City Manager ................................................................................................................................ 91 City Clerk ...................................................................................................................................... 103 Economic Development ............................................................................................................. 111 City Attorney ................................................................................................................................. 119 Building Safety and Housing ..................................................................................................... 129 Finance ......................................................................................................................................... 141 Fire ................................................................................................................................................. 153 Human Resources ...................................................................................................................... 163 Information Technology .............................................................................................................. 175 Planning ........................................................................................................................................ 185 Police ............................................................................................................................................. 197 Public Works ................................................................................................................................ 209 Recreation and Community Services ....................................................................................... 231 Non-Departmental ....................................................................................................................... 243 Capital Budget .......................................................................................................... 247 Capital Improvement Program Overview................................................................................. 247 Capital Improvement Program Summary ................................................................................ 250 Appendix .................................................................................................................... 251 Fund Descriptions ....................................................................................................................... 251 Revenue Descriptions ................................................................................................................ 254 Expenditure Descriptions ........................................................................................................... 257 List of Funds ................................................................................................................................. 265 List of Departments/Divisions/Functions ................................................................................. 266 List of Revenues .......................................................................................................................... 268 List of Expenditures .................................................................................................................... 272 Abbreviations and Acronyms ..................................................................................................... 275 Glossary of Terms ....................................................................................................................... 277 Index .............................................................................................................................................. 282 Table of Contents

City of Milpitas

April 26, 2024
Honorable Mayor and Members of the City Council
The City Manager’s Office is pleased to present to you the Proposed FY 2024-25 Budget in the amount of $248.4 million. The Proposed FY 2024-25 Budget will be formally presented to the Council at a special Council Study Session on May 14, 2024, and we look forward to receiving your additional consideration and input as well as feedback from the community. As the City continues to recover from the financial impacts of the worldwide COVID-19 pandemic, we remain optimistic about the future but wary of near-term economic uncertainty arising from the continued war in Ukraine, ongoing conflict in the Middle East, high interest rates, high-to-moderate inflation, growing income disparity, and the high cost of housing. Additionally, we are cognizant that rising labor costs and the expiration of a key revenue source - the Milpitas Public Services Measure (Measure F) – in FY 2028-29 will require the City to continue to maintain fiscal discipline and look for ways to simultaneously increase revenue while controlling expenses.

The Proposed FY 24-25 Budget aligns well with areas of high priority for the Milpitas community. For example, we are investing over $1.0 million in staffing and equipment to address the ongoing maintenance of our facilities, trees, parks, streets, utilities and community services. In addition, to ensure the efficient delivery of community services, this budget also includes realignments in the City Manager’s Office and development services (Building Safety, Planning, and Housing) as well as enhanced service levels in public works and infrastructure and modest investments in internal support departments (Human Resources and Finance). The result is a balanced budget that maintains Council-approved reserves and leverages City funds as well as $16.7 million in one-time funding from the Federal American Rescue Plan Act (ARPA) to support a variety of critical needs among residents and businesses in our community. Under Council direction, we will continue to apply incremental and measured strategies to maximize City resources and optimize programs and services to serve the needs of our community.

Going into this new budget year, the economic impacts of the COVID-19 pandemic continue to affect the financial condition of the City’s General Fund, which is used to pay for essential City services such as police and fire; youth, senior, and recreation services; repairing park equipment and maintaining parks and recreation centers; and internal support departments and administration. The Council’s fiscal discipline and decisive actions have helped maintain the City’s service levels in these key areas while maintaining fiscal stability. The General Fund portion of the Proposed FY2024-25 Budget is a balanced budget of $137.2 million which includes a one-time General Fund transfer of prior year reserve in the amount of $2.5 million to fund capital improvement plan (CIP) projects. Based on current assumptions, the City’s five-year forecast shows a balanced General Fund until FY 2027-28, which is a year prior to the Measure F expiration (see Table 1).

Table 1 – Five-Year General Fund Forecast ($ in millions) Revenues and other Sources $129.5 $137.2 $139.8 $145.6 $148.7 $152.3 Expenditures (129.5) (137.2) (139.5) (145.6) (151.6) (159.4) Annual Surplus/(Deficit) $0.0 $0.0 $0.3 $0.0 ($2.9) ($7.2) FY 23-24
Adopted
Budget
FY 24-25
Proposed
Budget
FY 25-26
Forecast
FY 26-27
Forecast
FY 27-28
Forecast
FY 28-29
Forecast
Letter of Transmittal
City of Milpitas v

During the FY 2024-25 Preliminary Budget Study Session held on January 30, staff projected a structurally balanced budget, modest revenue increases and a status quo service level. Since that time, more data has been provided to inform the revenue assumptions and service prioritizations through the City Council direction and community and employee engagements. This Proposed FY2024-25 budget includes modest service enhancements and funding CIP projects for $2.5 million from the General Fund designated reserves. This remains a transitional stage that allows incremental strategies to utilize City resources in a manner that optimizes services to the community.

Economic Outlook
Various factors influence our economic outlook. These include the continued war in Ukraine, ongoing conflict in the Middle East, high interest rates, high-to-moderate inflation, high housing costs, growing income disparity, and recent layoffs in the technology sector. While inflation remains high, the Federal Reserve has signaled that it will continue to adjust interest rate hikes to address inflationary pressure within the larger economy. Recent layoffs in the technology sector are especially relevant in Silicon Valley and signal continued uncertainty and concern in the local economy. Thus, the budget is conservative, taking these economic factors into consideration. Another critical variable is how societal changes from the pandemic continue to affect the economy, such as cut backs in in-person commerce or services through online shopping, a significant rise in virtual work, and a decrease in conferences and/ or leisure services. Recoveries in sales tax and hotel tax (transient occupancy tax) are encouraging; however, we are cognizant that full recovery of hotel tax revenue may be challenging and require multiple years. Overall, various economists forecast a sluggish 2024 but not a significant slow down or a deep, long-term recession. Thus, the proposed budget is conservative, taking this economic outlook into consideration.

Economic development continues to support business attraction, retention, and expansion, and the City continues to monitor key metrics such as the unemployment rate in Milpitas, which is 4.7% as of February 2024 and represents an increase from the overall unemployment rate in Milpitas of 3.9% in 2023. This compares favorably to the State of California unemployment rate of 5.6% issued by the Employment Development Department but is higher than the national rate of 3.8% issued by the U.S. Bureau of Labor Statistics. The information management and manufacturing sectors saw employment declines, with cutbacks in the publishing industries and durable goods, which include consumer electronics, appliances, medical equipment and vehicles. However, education, health services and professional development and business services experienced employment increases due to gains in professional, scientific and technical services.

FY 2024-25 Citywide Budget
The FY 2024-25 Proposed Budget includes service realignments in the City Manager’s Office and development services areas while maintaining or enhancing service levels in other key areas as compared to FY 2023-24. The FY 2024-25 citywide Proposed Budget of $248.4 million has increased $16.5 million, or 7.1%, in comparison to the Fiscal Year 2023-24 Adopted Budget of $231.9 million. This Budget proposes to increase the position count by 3.0 full-time equivalent (FTE) from 452 to 455 total FTEs. Of the 3.0 FTE net increases, 2.0 FTEs are needed to maintain critical utility infrastructure while the deletion or defunding of 2.0 FTE executive positions will offset the addition of needed support other areas. The increase in position count also includes the consolidation of the Public Works and Engineering Departments that was approved by Council on December 12, 2023, which resulted in the deletion of 1.0 FTE executive Director-level position and compensatory adjustments in other positions.

Letter of Transmittal

vi City of Milpitas

Table 2 – FY 2024-25 Funded Position Summary by City Service Area City Service Area
FY 2023-24
Adopted Budget
FY 2024-25
Proposed Budget
Changes
FY 2024-25
Proposed Budget
Public Safety 199.0 0.0 199.0
Community Development 64.0 (2.0) 62.0
Community Services and
Sustainable Infrastructure 121.0 4.0 125.0
Leadership and Strategic Support 68.0 1.0 69.0
Total 452.0 3.0 455.0
As shown in Table 3 below, the FY 2024-25 Proposed Budget is balanced with $248.4 million in revenues (including Transfers In) and $248.4 million in expenditures (including Transfers Out). The FY 2024-25 estimated revenue across all funds of $248.4 million has increased $16.5 million, or 7.1% compared to the FY 2023-24 Adopted Budget estimated revenue of $231.9 million. The FY 2024-25 estimated expenditures across all funds of $248.4 million is an increase of $16.5 million, or 7.1%, compared to FY 2023-24 adopted expenditures of $231.9 million. This is primarily due to an increase in Capital Improvement Program funding for community infrastructure, scheduled salary increases, and increases in supplies and services.

Table 3 – FY 2024-25 Citywide Budget Summary (All Funds) Citywide Revenues and other Financing Sources ($ in millions) General Fund $129.5 $137.2 5.9 %
Housing Authority 0.4 0.1 (75.0) %
Other Funds 16.8 13.7 (18.5) %
Water Fund 38.6 37.3 (3.4) %
Sewer Fund 27.3 34.0 24.5 %
Net Operating Funds Total 192.3 222.3 15.6 %
Capital Projects Funds 15.5 26.1 68.4 %
Total $231.9 $248.4 7.1 %
FY 2023-24
Adopted Budget
FY 2024-25
Proposed Budget
% Change from
Prior Year Adopted
Letter of Transmittal
City of Milpitas vii

Citywide Expenditures
Personnel Services $112.0 $120.0 7.1 %
Supplies & Contractual Services 64.8 68.7 6.0 %
Capital Outlay 2.1 1.1 (47.6) %
Operating Transfers Out 16.2 20.7 27.8 %
Subtotal 195.1 210.5 7.9 %
Capital Improvements 32.1 33.2 3.4 %
Debt Service 4.7 4.7 0.0 %
Total $231.9 $248.4 7.1 %
FY 2023-24 Adopted
Budget
FY 2024-25
Proposed Budget
% Change from Prior
Year Adopted
General Fund
The Fiscal Year 2024-25 Proposed General Fund budget of $137.2 million is balanced with $137.2 million in estimated revenues and other sources (Revenues) without the use of Contingency or Budget Stabilization Reserves. The General Fund budget also includes a one-time transfer of $2.5 million from facility replacement reserves to be used for approved CIP infrastructure projects. The Fiscal Year 2024-25 Revenues are estimated at $137.2 million (including prior year sources and transfers), an increase of $7.7 million, or 5.9 percent, in comparison to the Fiscal Year 2023-24 Revenue estimate of $129.5 million. The increase in revenue is primarily due to estimates from property tax ($4.2 million increase), sales tax including Measure F ($1.0 million increase), and transient occupancy tax ($1.2 million increase). However, due to lower federal grants to be received, the Fiscal Year 2024-25 intergovernmental estimate is $0.5 million less than Fiscal Year 2023-24. The City is also closely monitoring pending litigation related to the Educational Revenue Augmentation Fund (ERAF), which is a mechanism created by the State Legislature in 1992, to shift local tax revenues from cities, counties, and special districts to a State-controlled fund used to reduce its obligation to the schools. The City will continue to monitor the outcome of current litigation, which may reduce the City’s property tax excess ERAF revenues. The litigation involves the California School Boards Association (CSBA) vs. State Controller litigation over the guidance on charter schools.

This budget and the accompanying FY 2025-2034 Ten-Year General Fund Financial Forecast (Forecast) assume that the City’s revenues will continue to recover from the economic impacts of the COVID-19 pandemic, although we expect a longer recovery for the City transient occupancy tax revenues and a return of larger deficits in FY 2027-28 and beyond due to the currently scheduled sunset of Measure F.

Measure F Sales Tax Enhancement
With the passage of Measure F, a sales tax measure with a sunset of eight years and requiring independent audits and a citizens’ oversight committee, the voters set the foundation for the City to maintain fiscal stability and preserve basic City services over several years. Consistent with the ballot measure, the City Council established the Measure F Oversight Committee (Committee) and charged it with the responsibility to annually review projected revenues and expenditures for the funds generated by Measure F. The Committee exercises this oversight as part of the development of the budget and advises the Council on whether the recommended Measure F funded expenditures are consistent with the ballot measure. The Committee conducted an annual review of all services maintained by Measure F Funds (see Table 4 below) on March 21, 2024, and confirmed that the services recommended to be maintained with Measure F funding are an allowable expenditure consistent with Measure F. The estimated Measure F revenues in the amount of $7.3 million are equivalent to 5.4% of the $137.2 million General Fund Letter of Transmittal

viii City of Milpitas

revenues estimated for Fiscal Year 2024-2025. With this additional tax revenue, the City is able to maintain the services as summarized in the table below:

Table 4 - Services Maintained by Measure F Funds ($ in millions) Respond to 911 calls within established parameters, resolve crime, dedicate staff to traffic safety and practice community-oriented policing, and maintain necessary fleet & equipment and continue effort for Police succession planning
$2.3
Fire Stations to ensure 24/7 coverage across the City, maintain necessary fleet & equipment and create paramedic services $2.3
Services for aquatic, senior, and youth services including restored defunded positions $0.5
Services for parks, tree and facility maintenance and necessary fleet & equipment, including restored defunded positions and enhanced positions $1.8 Support local businesses in their economic recovery, retain existing business and attract new businesses $0.2
Neighborhood preservation and code enforcement $0.2
Maintain library hours which keep the Library open on weekday evenings and weekends. Library District Board suspended Milpitas contribution for FY2024-25*.
$0.0
Total Services Funding $7.3
Description of Services Maintained with Measure F Funds FY 2024-25 Budget Cost ($ Million)
*The extended library hours were maintained. However, library district suspended City of Milpitas financial contribution due to adequate reserves in the Library District’s budget. This is a year-by-year determination based on Library District’s budget funding status.

As shown in Table 5 below, Measure F sunsets effective April 1, 2029, and deficits are anticipated starting with FY 2027-28, one year prior to the sunset date. The City continues to prioritize economic development, innovation, and cost management to eliminate this forecasted deficit. Additionally, the City is currently conducting a community survey to determine whether the Milpitas community would be supportive of placing a measure on the November 2024 ballot to extend the term for Measure F.

The Fiscal Year 2024-25 General Fund proposed expenditures of $137.2 million are $7.7 million, or 5.9% higher, in comparison to the Fiscal Year 2023-24 General Fund expenditures of $129.5 million primarily due to increase in salaries and benefits ($6.4 million), services and supplies ($1.4 million), and operating transfers ($0.1 million) to stormwater fund and CIP projects. The increase in salaries is due to cost of living adjustment (COLA) per labor contracts, increase in unaccrued actuarial liability, and base budget adjustments due to inflation. There are no newly added employee benefits; however, as salaries increase, benefit costs also increase as they are directly correlated.

Risk management costs for liability and property insurance will increase approximately $0.4 million for all funds, with 69% allocated to General Fund and 31% to other funds. The plan includes the purchase of six vehicles to serve ongoing needs within the Police and Public Works Departments.

Table 5 below shows the FY 2024-2034 Ten-Year General Fund Financial Forecast. Over the ten years of the Forecast based on information available in March 2024, staff projects annual surplus and deficits between $0.3 million and -$20 million respectively. With the sunsetting of Measure F effective April 1, 2029, larger deficits are anticipated starting with FY 2027-28. Additionally, the below forecast does not include potential salary increases Letter of Transmittal
City of Milpitas ix

currently under discussion with MPOA and IAFF. The City remains cautious and concerned about the longer term economic forecast and will continue to work with the City Council on options to maintain a balanced budget in future years.

Table 5 – Ten-Year General Fund Financial Forecast ($ in millions) Revenues and other Sources $129.5 $137.2 $139.8 $145.6 $148.7 $152.3 Expenditures (129.5) (137.2) (139.5) (145.6) (151.6) (159.4) Annual Surplus/(Deficit) $0.0 $0.0 $0.3 $0.0 ($2.9) ($7.2) FY 23-24
Adopted
Budget
FY 24-25
Proposed
Budget
FY 25-26
Forecast
FY 26-27
Forecast
FY 27-28
Forecast
FY 28-29
Forecast
Revenues and other Sources $151.1 $156.1 $161.1 $166.2 $172.1 Expenditures (165.9) (173.2) (178.9) (186.0) (192.7)
Annual Surplus/(Deficit) ($14.8) ($17.1) ($17.8) ($19.8) ($20.6) FY 29-30
Forecast
FY 30-31
Forecast
FY 31-32
Forecast
FY 32-33
Forecast
FY 33-34
Forecast
American Rescue Plan Act
On March 11, 2021, President Biden signed into law the American Rescue Plan Act (ARPA), a $1.9 trillion stimulus package, to counteract the economic impacts of the COVID-19 pandemic. The bill contains a $350 billion allocation for state and local government aid including $45.5 billion allocated to metropolitan cities (pop. over 50,000), such as the City of Milpitas, utilizing a modified CDBG (Community Development Block Grant) formula. Based on this formula, our City received $16.7 million paid in two tranches - the first half was received on June 1, 2021 and the second half was received on June 9, 2022.

The U.S. Treasury issued the Interim Final Rule (IFR) on May 10, 2021, and the Final Rule on January 6, 2022, which went into effect on April 1, 2022. Council began ARPA discussions in March 2021 and adopted guidelines, investments plans, and project appropriations by August 2021. The five ARPA investment areas included:
community services, economic vitality, infrastructure, public safety, and technology. The majority of ARPA funding is directly allocated to programs with only 2.1% set aside for administration costs. Appropriation and planning for ARPA programs are ongoing processes and are reviewed and modified periodically per guidance provided by Council. On April 16, 2024, the City Council approved the reallocation of funds between the City’s remaining ARPA projects and the General Fund. Remaining ARPA dollars will be used to fund staff’s wages in various City’s Department, and an offset amount from the General Fund will be used to cover the remaining costs of the Community Projects previously funded by ARPA. As a result, all ARPA funds will be expended as of March 31, 2024.

Utility Funds
The City’s Utility Funds for the Water and Sewer utilities are balanced. On April 18, 2023 the City Council adopted Ordinance Nos. 120.50 and 208.55, adjusting water, recycled water, and sewer service charges and fees for Fiscal Years FY 2023-24 through FY 2027-28. In accordance with the rate ordinances, Water and Sewer rates will increase by approximately 6.4 percent and 4.0 percent, respectively. For a typical single-family residential household, the bi-monthly water charge will increase by $9.76 from $152.21 to $161.97; and the bi-monthly sewer charge will increase by $5.14 from $128.44 to $133.58. The combined increased cost for a typical single-family residential household will be $14.90 bi-monthly, or $89.40 annually.

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x City of Milpitas

With the increased water rates, the Water Utility is better positioned to respond to water system gaps including infrastructure repair and rehabilitation identified in the Water Master Plan. The increased water rates will also ensure sufficient funds are available to pay for projected wholesale rates from our two providers for future years. However, Staff will continue to monitor wholesale rates which may increase at a higher rate than the budget assumption consequently diminishing water fund resources for infrastructure repair. Similarly, the sewer rate increase will better position the Sewer Utility to cover anticipated funding needs for CIP projects expected to be identified in the Sewer Master Plan, and the many unknowns associated with the modernization of the San Jose/Santa Clara Regional Wastewater Facility (RWF).

Capital Improvement Program
On February 22, 2024, the City Council held a Special Study Session to consider the draft FY 2025-2029 Capital Improvement Program (CIP), and on April 16, 2024, the Council approved the proposed CIP. A summary of the CIP can be found in this document as resources from various funds are transferred to capital projects annually. The funds for the first year of the Council approved FY 2025-2029 CIP are appropriated with the approval of the FY 2024-25 budget. The FY 2024-25 Adopted Capital Improvement Program funding in the amount of $33.2 million is $1.1 million more than the FY 2023-24 Adopted CIP of $32.1 million, which includes projects across six areas:
community improvements, parks, streets, water, sewer and storm.

Council Priority Areas
During the FY 2024-25 Preliminary Budget Study Session held on January 30, the City Council reviewed and confirmed its seven priority areas to guide the development of the Budget.

Community Wellness and Open Space: Continue to provide parks and amenities for people of all ages and abilities to enjoy higher levels of physical and mental health.

Economic Development and Job Growth: Continue to strengthen our economic foundations that support community prosperity and opportunity while ensuring a sustainable and livable city.

Environment: Promote a sustainable community and protect the natural environment.

Governance and Administration: Continue to streamline processes for enhanced service and remain committed to long-term fiscal discipline and financial stewardship.

Neighborhoods and Housing: Continue to explore innovative approaches to incentivize affordable housing projects, collaborate with key stakeholders to care for our most vulnerable populations, and support and engage neighborhoods through dedicated programs and services.

Public Safety: Continue to invest in police and fire protection, in partnership with our community.

Transportation and Transit: Continue to seek and develop collaborative solutions to meet the transportation challenges facing our community and our region.

Citywide Budget Process, Council Referrals, and Community Engagement The development of the annual budget is a comprehensive fiscal strategic planning process that involves overall guidance from the City Council, input from the community, and close coordination between the executive team and numerous staff budget representatives across all departments. At the January 30, 2024 meeting, Council received Letter of Transmittal
City of Milpitas xi

the preliminary FY 2025-34 ten-year General Fund financial forecast and provided feedback on prioritization of Council referrals to consider in the development of the FY2024-25 budget.

The community outreach program included a statistically valid survey, an Open Townhall online survey, a virtual community meeting (early May), and an employee townhall (April 25). In the December 2023 community engagement survey, 77% of adult voters are satisfied with the overall quality of life in Milpitas, 59% approve of City government overall, and 84% are “proud to live in Milpitas.” Furthermore, Public Safety continues to rate as residents’ top priority.

Community members were also given a hypothetical $100 budget and asked to allocate dollars based on what they considered the most important of the six Council Priority Areas the City should invest for the upcoming year. The dollars respondents allocated to each Council Priority Area shows how important, in the aggregate, a particular Priority Areas is. Based on the responses, Public Safety was ranked as the most important Council Priority Area with $25.20 of the allocations, followed by Neighborhoods and Housing ($17.40), Economic Development ($15.30), Community Wellness and Open Space ($14.30), Transportation and Transit ($14.10), and Environment ($13.70). 'Dollars' allocated to Council Priority Areas
$25.20 $17.40 $15.30 $14.30 $13.70 $14.10
Public Safety Neighborhoods
& Housing
Economic
Development
Community
Wellness &
Open Space
Environment Transportation
/ Transit
Both the Open Townhall online survey and the community research reflect a consensus among community members that things are progressing positively in Milpitas. 64.7% of respondents agree that things in Milpitas are generally headed in the right direction and indicate that the diversity, safety, geographic location, and small town feel are the reasons why they choose to live in Milpitas. In addition, maintaining 911 emergency response times and public safety services, repairing streets and fixing potholes, and tracking and investigating crime are considered top priorities of community members
Proposed Service Level Changes
This Proposed Budget includes modest service level changes that reflect the current management needs of the City; respond to prioritized City Council referrals; adds positions to support a backlog of service demands in facility and infrastructure maintenance, and invests in capital improvements. City Council referrals will be considered on an Letter of Transmittal

xii City of Milpitas

on-going basis and will be incorporated into the budget as prioritized by the Council and as funding becomes available.

The Proposed Budget includes enhanced service levels across all four City Service Areas (CSAs). The largest investment is in the Community Services and Sustainable Infrastructure CSA in the amount of $1.4 million. The second largest investment is in the Community Development CSA in the amount of $155,101. The Proposed Budget also invests $13,200 in the Public Safety CSA and reduces overall costs in the Leadership and Strategic Support CSA by $84,792 as a result of realignment of functions. Importantly, the costs associated with new positions or service enhancements are largely offset by the defunding or deletion of two executive-level positions (Deputy City Manager and Director of Building Safety and Housing) and other organizational changes. This adds to the budget savings created by the deletion of a third executive-level position (Engineering Director) in December 2023 when the Council approved merging the Engineering and Public Works Departments.

Community Services and Sustainable Infrastructure $1,423,037 (Information Technology, Public Works, Recreation & Community Services) Service Level Changes

1. Public Works Facilities Maintenance Staffing Enhancement ($205,190) This action will add 1.0 FTE Equipment Maintenance Worker III position ongoing to the Facility Maintenance section. The Facility Maintenance section maintains 23 buildings totaling 454,655 square feet. Current industry standards for staffing for facility maintenance is 1 technician for every 50,000 square feet. The maintenance section is currently staffed with 5-FTE’s (1-Equipment Maintenance Worker III, 1-Equipment Maintenance Worker II, and 3-Maintenance Worker II).

2. Transit Area Specific Plan Administrative Support ($232,450) This action funds 1.0 FTE Management Analyst ongoing to support the projects funded by the Transit Area Specific Plan (TASP) developer impact fees and assist in updates to the infrastructure plan and impact fees in the expanded TASP, now called the Milpitas Metro Plan. This position will track all revenues and expenditures associated with developer impact fees in both the old TASP area and the new Milpitas Metro area to ensure timely and effective use of the funds as well as compliance with current legislation related to impact fees.

3. Public Works Utility Maintenance Staffing Enhancement ($346,870) This action will add an additional 2.0 FTE Water System Operator ongoing that will initially serve in a succession planning initiative with the eventual transfer to oversight and operations of the City's new drinking water wells. The City's Drinking Water System is regulated by the State's Division of Drinking Water and is required to have operations staff with a Distribution System Level 5 certification. Currently, the Utility Maintenance division has 3 operators with D5 certification. Two of these three operators will be eligible to retire in 2024. These staff have been with the City for more than 28 years each. Succession planning will be essential to ensure that the more than 50 years of institutional knowledge of the City's drinking water system can be transferred to new/existing staff to ensure that the City can continue to operate the System in a way that protects public health and is in compliance with State and Federal requirements. The position will create capacity within the section to allow for job shadowing, system documentation, and operational manual updates.

4. Facilities Division Maintenance Supplies Enhancement ($50,000) This action will provide an increase to the Facilities maintenance supplies budget will provide more accurate funding for the on-going maintenance needs for City facilities. In FY 2022/23, a total of $194,030 was expended from the Facilities maintenance supply budget (FY 2022/23 Approved Budget $159,300).

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City of Milpitas xiii

5. Parks Division Maintenance Supplies Enhancement ($30,000) The action will provide an increase to the Parks maintenance supplies budget will provide the required funding for necessary maintenance needs for 36 City parks. In FY 2022/23, a total of $72,151 was expended from the Parks maintenance supply budget (FY 2022/23 Approved Budget $36,720).

6. Contract Classes Enhancement ($190,000)
This action would fund ongoing Contract Classes that have experienced sustained and substantial growth in the past fiscal year with a projected expansion of approximately 40-45% for FY23 -24 (from the previous FY). A mid-year budget adjustment of $190,000 for FY23/24 was requested in this area to meet the current FY contract class demand. In FY 24-25, approximately 40 classes are projected to be added to meet the demand from the Milpitas community including youth, teen, and adult class offerings in the new year.

The proposed service level increase request of $190,000 will allow staff to meet contract class enrollment increase trends as well as accommodate increased class fees and associated contract instructor payments in FY24-25. This proposal is offset with revenues in amount of $292,000.

7. Senior Nutrition Meals Enhancement ($6,444)
This action funds the ongoing Senior Nutrition Program at the Barbara Lee Senior Center, which provides a valuable service to the older adult community in Milpitas. The Senior Nutrition Program is a joint partnership with the County of Santa Clara and is contracted in FY23/24 to offer 88 meals per day for 241 service days to ensure food security to our senior adults.

The Senior Nutrition Program additionally meets the wellness and health benefits of positive socialization and connection to fellow seniors. This environment encourages and supports those important health benefits to seniors.

Since July 1, 2023, the Senior Nutrition Program has sustained a waitlist on average of 4-5 participants per day above the contracted amount of 88 participants per day. The proposal to add $6,443.50 to this service level would accommodate an additional 4 meals per day for the 241 service days in FY24/25. This proposal is offset with revenues in amount of $950.

8. Curtner After the Bell After School Program Enhancement ($128,267) This action will fund the Recreation and Community Services Department request for additional monies to expand the After the Bell (ATB) after-school program for the 2024-2025 school year by re-instating programs at Curtner Elementary School to provide ongoing, needed childcare services to 90 students from kindergarten to sixth grade. This proposal is offset with revenues in amount of $226,800.

9. Public Works Vehicle Enhancement ($133,816)
This action funds two utility vehicles (2025 Ford F-250), one of which is to be assigned to a Water System Operator (WSO) in order for this staff member to be able to travel around the city to perform well maintenance activities and other functions in support of the water distribution system. The other vehicle is to be assigned to the Cross Connection Specialist which was approved in the FY 23/24 budget. At that time, staff had inadvertently omitted to request a vehicle for the position.

10. Public Works Trees & Landscape Maintenance Equipment Enhancement ($100,000) This action funds one chipper in support of the tree-trimming operation and to better facilitate emergency tree and stump grinding work. This additional piece of equipment will also aid in the deployment of a secondary tree-trimming operation in order to more quickly respond to service requests by the community.

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xiv City of Milpitas

Community Development CSA $155,101
(Building Safety, Economic Development & Strategic Initiatives, Housing, Planning) Service Level Changes

1. Affordable Housing Ordinance ($70,000, one-time)
This action provides $70,000 one-time basis for consultant support for revisions to the Affordable Housing Ordinance. At the December 5, 2023, City Council meeting, Mayor Montano requested that staff explore the possibility of amending the Affordable Housing Ordinance to increase the level of affordable housing required from 15% to 20% and/or other changes that could entice additional low income housing development.

To amend the ordinance’s affordability requirement staff would need to hire a consultant. The consultant would conduct community roundtables, stakeholder interviews, and/or other outreach events to gauge feedback on various alternatives. Additionally, the consultant would create a financial feasibility document to present to the City Council as part of the final policy analysis.

2. Housing Supplies and Materials Budget Enhancement ($1,000) This action funds $1,000 Supplies and Materials budget on an ongoing basis to the Housing division budget as part of the elimination of the Building Safety and Housing department to ensure that the Housing team can continue to procure appropriate supplies and materials.

3. Housing Division Travel and Training Budget Enhancement ($3,000) This action provides $3,000 on an ongoing basis for training. The current training budget for the housing team only covers 3.0 FTE and does not cover the additional funding needed for the additional administrative analyst that was funded for the Rent and Mortgage Relief Program oversight in Fiscal Year 2002-2003. With the increased costs of training and travel and a new hire, an increase to this budget line is required.

4. Planning Department Part-time Staff Assistant ($53,794, one-time) This action provides funding for a part-time staff assistant (one-time). The Staff Assistant will support the training and onboarding of new staff and ensure adequate coverage and service levels during periods of transition and unexpected vacancies within the department. Many customers find it more convenient and are now accustomed to conducting business remotely rather than coming to City Hall. This has resulted in significant added workload and increased response times because of the need to juggle increased phone calls and email messages with other work such as meetings, staff report preparation, and project coordination.

5. Planning Department Records Specialist Intern ($27,307) This action changes the previously funded one-time funded Records Specialists Intern into an ongoing funded position. The Planning Department maintains current and historic records related to land development, census and demographics, zoning determinations, long-range planning, etc. Many of these records are legal documents related to Planning entitlements and must be accessible to the public. The records for larger, complex projects are often voluminous and may include paper files, digital files, and exhibits. The department also maintains a library of reference materials related to planning, zoning, and land development. With frequent staff turnover going back a decade or more, the Department files have not been well maintained, and the volume of disorganized files increases significantly each year. Future staff and members of the public will find it increasingly difficult to research files and quickly access critical information due to poor housekeeping and records management. As a best practice, current and historic records should be available online for greater transparency and accessibility. There is an immediate and acute need in the Planning Department for a Records Specialist dedicated specifically to purging, Letter of Transmittal
City of Milpitas xv

organizing, and establishing protocols for a shared system for records management, retention, and access.

Regular staff does not have adequate time to develop this type of system on a department-wide basis - a person with specialized skills in records management is needed to drive the process.

Public Safety CSA $13,200
(Fire (except Fire Prevention) and Police)
Service Level Changes

1. FirstTwo Software ($7,200)
This action will fund the ongoing purchase of FirstTwo, which is a public safety software that Police Department patrol, investigations, and dispatch staff utilize to get in touch with people through publicly available contact and identity information. The software streamlines the process by which department staff accesses contact information associated with physical locations. Staff can do this by inputting an address or clicking on a digital map. Having this information readily available helps dispatchers and officers make important notifications during emergencies (such as a fire or other critical incident); helps reunite lost individuals with their family members; and assists officers and detectives locate and contact potential witnesses and victims during calls for service and criminal investigations.

2. LeadsOnline CellHawk Software ($6,000)
This action will fund the ongoing purchase of a modern web-based software system called CellHawk to assist with gathering evidence and investigating crimes. The Criminal Investigations Bureau of the Police Department uses different methods to gather evidence and investigate crimes. With the advancement of technology, many of these investigations involve analyzing complex mobile device records that are acquired after a search warrant is issued. Formerly, the department’s Crime Analyst and detectives sifted through this data manually, which took up a significant amount of staff time. However, with the purchase of a modern web-based software system called CellHawk, they can quickly and easily map, connect, and analyze digital location evidence. In addition, this software produces a clear visual representation of evidence that is easy to understand in court. After implementing, testing, and evaluating the software, detectives and the Crime Analyst have been able to significantly reduce the time spent on analyzing mobile device data from days and weeks to just minutes and hours. This has allowed them to successfully evaluate digital evidence while also being able to focus their efforts on additional important investigations.

Leadership and Strategic Support CSA ($84,792)
(City Council, City Manager, City Attorney, City Clerk, Finance, Human Resources,) Service Level Changes

1. Finance Department Staffing Enhancement – Purchasing ($100,870) This action would convert an existing 0.5 Temporary Buyer to 1.0 FTE Buyer on an ongoing basis. The current temporary buyer in FY23-24 budget includes 49 hours per week already. This proposal includes benefit costs only. Additional capacity is needed in this function to ensure that the Finance Department can efficiently, accurately, and fairly administer the City’s procurement policies in a timely manner to meet the needs of all City departments.

2. Human Resources Department Staffing Enhancement - Recruitment ($154,149) This action would fund 1.0 FTE Human Resources Analyst to replace an existing part-time Analyst who works remotely. Additional capacity is needed in this function to ensure that the Human Resources Letter of Transmittal

xvi City of Milpitas

Department can attract efficiently, accurately, and fairly administer the City’s hiring policies in a timely manner to meet the needs of all City departments and attract new talent to the City.

3. City Attorney Internship Program ($17,587 one-time)
This action will fund a summer law clerk position. The law clerk would conduct research and make recommendations on document templates and Municipal Code updates. This will allow timely completion of discrete long-term projects and help build the Milpitas brand within the municipal law bar.

4. City Manager's Office Realignment (-$181,550)
This action realigns positions within the City Manager’s Office executive leadership to realize cost savings to support the City’s general fund forecast challenges on an ongoing basis. This realignment would result in defunding the Deputy City Manager position (-$370,025), reclassifying the Economic Development Director position to Director of Economic Development & Strategic Initiatives ($32,558), and creating a new temporary benefited Senior Special Projects Associate position ($155,917). Given economic realities, defunding the Deputy City Manager position will allow the City to re-evaluate the long-term need for this position in light of other city priorities. The significant level of work associated with the Deputy City Manager position will be distributed amongst the City Manager’s Office and executive leadership team staff. In particular, the Director of Economic Development & Strategic Initiatives will take over legislative activities and certain strategic policy work that is closely aligned with business attraction, revenue generation, and the City’s fiscal sustainability. In addition, the current, part-time Senior Special Projects Associate position would continue in an unbenefited role to assist with policy analysis of key City Council strategic initiatives such as, but not limited to, the Senior Discount program, American Rescue Plan Act funding, Charter City analysis, grant program and other priority initiatives.

5. Development Services Realignment (-$433,223)
This action realigns the Building Safety, Code Enforcement and Housing functions into more appropriate work areas within the City as opposed to being combined into one department to provide for more efficient and effective service delivery to our customers on an ongoing basis. This action would result in the deletion of the Building Safety & Housing Department. With the exception of the Building Safety & Housing Director, all staff and budget from this department will be shifted as follows: (1) Building Safety staff and budget will be shifted to the City Manager’s Office in a new “Office of Building Safety;” (2) Housing staff and budget will be shifted to the City Manager’s Office in a new “Office of Housing;” (3) Code Enforcement staff and budget will be shifted to the Planning Department.

Additionally, the following position changes will be made: (1) The vacant Building Safety & Housing (BSH) Director position will be deleted (-$288,940); (2) The Housing Authority Administrator position will be reclassified to Housing Official in recognition of the higher-level responsibility this position will have with the deletion of the BSH Director position ($38,414), and; (3) a vacant Building Inspector position (1.0 FTE) will be deleted due to decreased building inspection volume (-$182,697).

6. Human Resources – Citywide Training Enhancement ($25,000) This action will provide ongoing funding of $25,000 dedicated to training and professional development of City staff. The government sector continues to experience challenges in attracting and retaining the next generation. While retirements continue (leaving knowledge and experience gaps), there are now more than five generations in our workplace and many in mid-level supervisory and leadership positions who are critical to organizational success and in retain our employees (Gallup) and yet may not have the skills to support their success. In general, government has lagged behind the private sector in investment in employees and yet the next generation is looking for many things from employers, one of which is growth opportunities (training and professional development).

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City of Milpitas xvii

7. Grant Consultant Annual Services ($50,000)
This action will fund $50,000 ongoing for consultant support for the City in identifying and seeking grant opportunities that match with the highest priority needs of our community. The consultant will coordinate closely with City Departments, review master plans, budgets and community priority surveys and work with city staff to target key grant opportunities for capital and operational needs.

8. Business License Contractual Services ($111,528, net $0) This action would will enhance services provided by the City to the business community by funding HdL Companies to provide full business license service and administration. This will streamline the business licensing process by making everything available online in a user-friendly format. HdL would administer full business license services to the new and existing businesses in the City of Milpitas and will allow Fiscal Services staff to focus on other customer service needs and projects. The cost of this proposal is cost neutral.

9. Finance Fiscal Services Enhancement ($40,847)
This action restores 0.5 FTE Water Meter Technician (Temporary) - 20 hours per week in the Fiscal Services section of Finance Department on an ongoing basis. In FY24 Adopted Budget, City defunded 0.5 part-time FTE Water Meter Technician (Temporary) for Fiscal Services Reorganization. Upon further evaluation, Water Meter Technician position was highly skilled with specific water meter knowledge, and it is difficult to train office staff to complete that level of work.

10. Senior Discount Community Survey ($30,000, one-time) This action will fund $30,000 one-time for a survey of local businesses to help determine options and alternatives for a potential citywide senior discount. In June 2023 the Mayor and City Council prioritized the review of a potential citywide senior discount for Milpitas residents. If a program is ultimately approved by the City Council additional funds will be required for program implementation.

Amendments to Fiscal Policies and Budget Guidelines
As part of the annual budget process, staff reviews the Fiscal Policies and Budget Guidelines, which can be found in a separate section of this budget document. These policies and guidelines set the fiscal framework for the annual budget process and long-term financial decisions. Below please find a summary of the Fiscal Policies and Budget Guidelines, which will be presented for Council consideration on May 14, 2024.

Changes to Fiscal Policies
The City’s Fiscal Policies are organized in the following categories: General Financial Goals; Operating Budget, Revenue, and Expenditure Policies; Utility Rates and Fees; Capital Budget Policies; Debt, Reserve, and Investment Policies; and Accounting, Auditing, and Financial Reporting Policies. The City Council has also adopted separate debt and investment policies consistent with State law.

This Proposed Budget is balanced and remains focused on sound City fiscal policies and protecting existing reserves. These reserves provide some flexibility on an operating surplus, if any, and consistent with Council direction, continue to fund the City’s Strategic Property Acquisition Reserve (SPAR). Staff does not propose any changes to the Fiscal Policies as part of the FY24-25 budget.

Reserves
This budget protects the City’s reserves and balance sheet position by not utilizing the contingency reserve, budget stabilization reserve, future year deficit reserve, ERAF litigation contingency (ERAF Reserve), nor PERS stabilization reserve to fund FY 2024-25 appropriations. General Fund facility replacement reserves are proposed to Letter of Transmittal

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fund specific CIP facility maintenance projects in the FY2024-25, in accordance with the purpose of the reserves.

Specifically, as of the audited FY2023 reserve balances, the City will retain $94.4 million of General Fund reserves as shown below in the “committed” category of $17.0 million and “unassigned” category of $44.7 million and Section 115 Pension Irrevocable Trust of $32.7 million* (as of 6/30/2023), which is held separately in a trust fund. Table 6 below summarizes the Audited Comprehensive Financial Report (ACFR) for the General Fund balance and considers the footnote for the Section 115 Trust (effective June 30, 2023), which is presented separately from the General Fund in the ACFR. The proposed General Fund 10-year forecast currently does not include the final costing for MPOA and IAFF labor negotiations result. In order fund potential increases, the City may have to utilize the future year deficit reserve and PERS stabilization reserve to balance the budget in outyears if needed.

Table 6 – General Fund – Fund Balance FY2017-18 to FY2022-23 (Audited balances, $ in Millions) Nonspendable:

Loan receivable $0.0 $0.0 $0.0 $0.0 $0.0 $0.0
Prepaids, materials, supplies and deposits $0.7 $0.7 $0.6 $0.6 $0.7 $0.7 Property held for resale $4.2 $4.2 $4.2 $4.2 $4.2 $4.2
Advance to Other Funds $5.2 $5.3 $5.4 $0.0 $0.0 $0.0
Subtotal Nonspendable $10.1 $10.2 $10.2 $4.8 $4.9 $4.9
Committed to:

PERS stabilization† $29.9 $33.9 $33.9 $2.8† $5.1* $6.1 Artificial turf replacement $0.8 $1.0 $1.2 $1.4 $1.7 $1.9 Technology replacement $1.0 $2.0 $2.0 $2.0 $2.0 $2.0
Facilities replacement $2.0 $7.0 $7.0 $7.0 $7.0 $7.0
Subtotal Committed $33.7 $43.9 $44.1 $13.2 $15.8* $17.0 Assigned to:

Change in investment market values $0.0 $0.0 $1.1 $0.0 $0.0 $0.0 Uninsured claims payable $2.8 $2.8 $2.0 $2.3 $2.3 $2.8
Contracts $1.2 $3.1 $3.0 $2.4 $2.5 $3.6
Other assigned $0.0 $0.0 $0.0 $1.8 $1.2 $0.5
General government capital projects $4.6 $0.0 $0.0 $0.0 $0.0 $0.0 Subtotal Assigned $8.6 $5.9 $6.1 $6.5 $6.1 $6.9
Unassigned:

General Fund Contingency Reserve $0.0 $0.0 $17.3 $18.3 $18.5 $19.8 Budget stabilization $4.0 $9.5 $17.1 $18.3 $18.5 $19.8
Future deficit $0.0 $0.0 $0.0 $1.5 $1.5 $1.5
ERAF Reserve $0.0 $0.0 $0.0 $1.2 $1.2 $2.3
‡SPAR (Strategic Property Acquisition Revenue) $0.0 $0.0 $0.0 $0.0 $0.0 $0.7 Unassigned $36.5 $31.2 $0.0 $0.2 $0.3 $0.7
Subtotal Unassigned $40.5 $40.7 $34.4 $38.3 $40.0 $44.7 Total fund balances $92.9 $100.7 $94.8 $62.8 $66.8 $73.5 ($ in Million) FY2018 FY2019 FY2020 FY2021 FY2022 FY2023 *For the General Fund, Water and Sewer Funds, the Section 115 Pension Trust market value was $30.6 million on June 30, 2022. †General Fund of $33.9 million of PERS stabilization was put into a Section 115 Pension Trust on June 30, 2021 at Council’s direction. ‡SPAR (Strategic Property Acquisition Revenue) was established in FY23-24 budget to support long-term revenue opportunities for strategic property acquisition and development. See Reserve Policies statement no. 57.

Letter of Transmittal
City of Milpitas xix

Major Development Activities in the City
Milpitas Metro Specific Plan – The Milpitas City Council unanimously adopted the Milpitas Metro Specific Plan (Metro Plan) on February 7, 2023. The Metro Plan updates the original 20-year Transit Area Specific Plan (TASP) and incorporates changes to address current and future economic and social conditions that have evolved since the original plan was adopted in 2008. As described in the Plan document: “The Milpitas Metro area is a unique and vital hub in Silicon Valley. It is a major transportation crossroads, including transit stops served by BART, VTA light rail, and bus, and it includes major roadways and highway access. It is also emerging as Milpitas’s densest urban center, featuring new multifamily development, a range of shopping opportunities, and a planned Innovation District.

Milpitas Metro will be an urban, future-forward center that supports a balanced mix of housing, retail, and employment uses; provides safe multimodal connections and public spaces; and is distinguished by urban design standards that create a visually memorable environment.” The expansion of the Metro Plan area eastward toward Interstate 680 will include approximately 75 acres on both sides of Montague Expressway for future development of an Innovation District. This area will focus primarily on technology and research and development that provides employment opportunities and revenue generation for the City. The Office of Economic Development will commence business attraction efforts focused on artificial intelligence, biosciences, and automotive technology sectors. In preparation for targeted business attraction efforts, staff is developing the Innovation District Branding Initiative in partnership with local marketing firm Navajo Company. This area may also include some existing and future housing in a mixed-use environment within proximity to jobs and transit. The Metro Plan also envisions future hotel and hospitality uses within the Innovation District as demand emerges. In addition, the Metro Plan recognizes the great potential for future evolution of the 99-acre Great Mall site into a wider range of mixed uses. The Plan anticipates that both the City and the property owner of the Great Mall will want to plan in more detail how future redevelopment of the Great Mall could occur in the best interests of both parties, retaining commercial services and enhancing the value of this land, such that a comprehensive Development Agreement (DA) would be a likely path to follow up on how to implement the Metro Plan in that area following Metro Plan adoption. The Metro Plan establishes a framework articulating the initial expectations of the City relative to the redevelopment of the site and will serve as a strong foundation for a future Development Agreement.

Finally, the Metro Plan recognizes the great value of the Milpitas Transit Center and its connection to regional BART service to support significant commercial and employment development. The Metro area, particularly with the eastward boundary expansion of the Innovation District, can add significant capacity to the original commercial opportunity by adding more commercial/ employment space. It is anticipated that such development could bring new high-paying jobs to the City, particularly providing new opportunities for Milpitas residents. Significant job growth near new and existing residential development can also be expected to reduce VMT and enhance the City’s overall fiscal and environmental sustainability.

The City is preparing an update to the Transit Area Development Impact Fee (TADIF) based on changes in property valuations and the proposed public improvements in the Metro Plan. The TADIF will be used to fund public improvements such as streets, utilities, pedestrian facilities, and parks and open space as the Metro area continues to redevelop. The City is also creating new zoning districts to implement the land use designations identified in the Metro Plan and facilitate redevelopment.

Gateway-Main Street Specific Plan (Midtown Specific Plan Update) – In March 2002, the Milpitas City Council adopted the Milpitas Midtown Specific Plan to establish a framework for redevelopment of the City’s historic Main Street and adjacent areas along the Calaveras Blvd. corridor between Main Street and Interstate 880. The overall strategy for the Midtown area was to create a mixed-use community that includes high-density, transit-oriented housing and a central community “gathering place” while maintaining needed retail and commercial service uses.

The original Midtown Plan was amended in 2008 concurrent with adoption of the Transit Area Specific Plan.

Letter of Transmittal

xx City of Milpitas

In October 2021, the City of Milpitas and a team of consultants from Ascent Environmental teamed up to kick off the long-awaited update of the Midtown Specific Plan. This effort has identified four primary focus areas: South Main Street between Sinnott Lane and Curtis Ave., the area surrounding the Serra Way and South Main Street intersection, Calaveras Blvd. between I-880 and S. Abbott Ave., and the I-880 frontage along Abbott Ave and Thompson Court. These four inter-related areas form an important gateway into the City via Highway 237 and South Main Street, and the updated Midtown Plan has been rebranded as the Milpitas Gateway-Main Street Specific Plan in recognition of the significance of this area as a primary entrance to the City. The Gateway-Main Street Plan will establish the types, locations, and intensities of land uses to be accommodated within each focus area. A variety of uses will be allowed, including entertainment, retail, civic, cultural, office, and high-density mixed-use residential in a compact, walkable, and unique centralized setting. Work is well underway on the Plan with completion of the existing conditions report, analysis of the area’s urban form, a detailed market study, community outreach, and preferred Plan strategies. The Draft Plan and environmental analysis are in progress. The Plan’s estimated completion date is Fall 2024.

Economic Development Strategy – Economic Development and Job Growth is a key City Council priority, which is vital to the health of the local economy and revenue generation. The City Council adopted the Economic Development Strategy and Implementation Actions report (EDS) on May 5, 2020, to serve as Milpitas’ road map to grow and diversify the City’s economy, support businesses and workers, and improve quality of life in the community. The EDS is a five-year strategy and implementation action plan that is 69% complete in four years.

The Office of Economic Development has executed several implementation actions of the EDS. Accomplishments include business attraction, retention and expansion with Amazon, Apple, Asteelflash, BD Biosciences, Falcon X, Flex, The Great Mall of Milpitas, Torrent Labs, and Turner Construction. The Office of Economic Development has commenced the Innovation District Branding Initiative with a project scope including naming concept, brand development and messaging, marketing and promotional materials, and a website dedicated to the Innovation District.

Staff also hosted a successful seventh annual Manufacturing Day event in partnership with KLA, Flex and the Milpitas Unified School District. More than 100 guests including students, teachers, City and school district officials and community members participated in facility tours, product and process demonstrations, and professional development Q&A sessions to educate and inform high school students about manufacturing careers. Staff led and developed a panel discussion for the International Council of Shopping Centers’ (ICSC) annual deal making conference in Monterey promoting thought leadership and best practices for retail development. Staff also created a webinar series in partnership with ICSC and the northern California chapter of the American Planning Association.

This four-part series examined contemporary retail land use activities and how local zoning codes can adapt to them.

The Office of Economic Development. staff approved five Storefront Improvement Grant Program applications totaling $185,000 in eligible grant-funded exterior improvements to commercial buildings on Main Street as part of the City’s Economic Vitality Investment Framework actions.

Residential Development – The City continues to process new development projects in FY 2023-24. The City entitled significant multi-family residential projects, including a 206-unit residential development at 1355 California Circle. The project includes 131 market-rate townhomes and 75 affordable apartment units. Within the Metro area, the City also entitled a 100 percent affordable 116-unit apartment development at 1300 South Main Street. The project includes a mix of studios and one-, two-, and three-bedroom units and will also provide 39 parking spaces in a parking garage. The Planning Department is also reviewing a proposal for a 43-unit townhouse development at 1905 Tarob Court, which will include 13 ground-floor accessory dwelling units (ADUs). The project includes a mix of two-, three-, and four-bedroom units and will also provide 109 parking spaces, including two-car garages for each townhome. The project is significant because it includes the connector street between Tarob Court with Sango Letter of Transmittal
City of Milpitas xxi

Court, which will eventually connect to a new bridge over Penitencia Creek and create a direct connection from this neighborhood to the Milpitas Transit Center.

New Business Development – The following technology and advanced manufacturing businesses have moved to, are in the process of moving, or have expanded in Milpitas: Apple (production studio), Corsair Gaming , BD Biosciences, Commonwealth Fusion Systems, KLA+, TDK, Headway Technologies, Tarana Wireless, Ascenx, Trace3 and Global4PL. As of March 2024, BD Biosciences has welcomed approximately 500 employees onsite, and a total of 850 employees are expected by August 2024. These Milpitas businesses have created new jobs and generate sales tax revenues through business-to-business relationships.

Non-residential Development – In FY 2023-24, the City approved several new non-residential development projects. In November 2023, the Planning Commission approved a time extension to allow the development of a 130,665-square-foot hotel at 1851 McCarthy Boulevard. In February 2023, the City approved a new 293,000-square foot warehouse-distribution facility on a 14-acre site at 475-525 Sycamore Lane in the Southwest Employment area.

Following the demolition of the existing office buildings in January 2024, the project is currently under construction.

This new development should attract multiple advanced manufacturing businesses looking to relocate or expand in Santa Clara County.

Conclusion
The Proposed FY 2024-25 Budget appropriately maintains and realigns priority service areas to address the current needs of the Milpitas community and the need of the City as an organization. We remain committed to supporting our community and maintaining fiscally sound policies to fund City reserves, continue long-term planning and investing in City economic development. This balanced budget provides funding for a portfolio of essential City services and infrastructure improvements. Throughout this process, we have faithfully sought Council, community, and employee feedback to inform budget priorities.

This budget could not be accomplished without the tremendous work of the Executive Leadership Team and their staff. I am especially thankful to the Budget Team, including Acting Finance Director Gabrielle Tsang and Budget Manager Christine Nguyen, as well as the entire Finance Department for their dedication, professionalism, and expertise in the development and publication of the FY 2024-25 Proposed Budget. Above all, I greatly appreciate the foresight, leadership, and direction of Mayor Montano and our dedicated City Council members, in pursuing a collaborative and successful budget process. With your guidance and support, Milpitas is poised for fiscal stability and continued success as we face the year ahead, however, we remain cautious and concerned about the longer term economic forecast and will continue to work with the City Council on options to maintain a balanced budget in future years.

Respectfully submitted,
Ned P. Thomas, AICP
City Manager
Letter of Transmittal

xxii City of Milpitas

Organization Chart
*Community Development includes Fire Prevention (Fire Dept.), Land Development (Public Works Dept.), and Office of Economic Development & Strategic Initiatives (City Manager’s Office).

FY2024-25 Proposed Organization Department changes
City Profile
City of Milpitas 1

History
Before roads were carved and houses were built,
Milpitas and its surrounding areas were home to
Native Americans in the Costanoan and Ohlone tribes.

Living off the bounty of the land around San Francisco
Bay, the Costanoans and the Ohlones prospered for
hundreds of years long before Mexican or Spanish
immigrants came to conquer the land.

In the 18th century, Spanish explorers surveyed the
land and were the first to give Milpitas its name - milpa - or little cornfields. Three large ranches began, and
two families, the Alvisos and the Higueras, built
adobes in the mid-1800s which still stand today.

The José Alviso Adobe principal residence of Rancho Milpitas as it appeared in 1940. (Photo by Willis Foster, Library of Congress Historic American Buildings Survey collection).

In 1850, the California Gold Rush began, and
“American” settlers started taking over the region. In
1852, a settler from Ireland, Michael Hughes, built the first redwood-framed house in what is now Milpitas.

Soon after, the first school was built, and by 1857,
Milpitas had a hotel, general store and a post office.

Fruit orchards began to spring up in the 1870s, and
later the region was known for its hay growing. The
population continued to grow into the 1880s and
settlers numbered over 1,500. But by the turn of the
century, only about a third of those people remained.

Populations would remain low until shortly after World
War II, when Western Pacific Railroad bought a 300
acre industrial park within the city and Ford Motor
Company announced it would shift its manufacturing
plant from Richmond (just north of Oakland) to
Milpitas. The population grew to 825. Sewer and water
service, and fire protection were set up shortly after, as was one of the country’s first integrated housing
communities.

On January 26, 1954, the city was officially
incorporated, after fighting off annexation attempts by neighboring San Jose. Ten years later, population
grew to 7,000.

Following the computer firm boom of the 1980s and
the opening of one of the nation’s largest malls in
1994, the city is now home to 81,067 residents1.

Alviso Adobe Park is one of Milpitas’ hidden gems –
perfect for a family or small group outing to discover
the past. Built on the site of the 1837 José Maria Alviso Adobe, today this peaceful special purpose park
celebrates and preserves the community’s ranching
and agriculture roots with historic farm outbuildings,
public art, interpretive signage, heritage trees, fruit trees, flowers and wildlife visitors. There is an
interpretive exhibit – If These Walls Could Talk – that tells the adobe’s story through a dynamic visual and
audio presentation that helps visitors learn about the
adobe’s significance both locally and regionally.

History courtesy of: The Milpitas Post
City Profile
2 City of Milpitas

Demographic Profile
Population
Once a small agricultural town and later a stopover point for travelers between Oakland and San Jose, Milpitas has blossomed into one of the world’s premier computer and semiconductor producers. Residents of the burgeoning city of 81,067 are part of family-centered communities that embrace cultural diversity, quality schooling, and conveniently located neighborhood parks and shopping centers.1 The table below reflects City population based upon data from Department of Finance.

Population
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
60,000
65,000
70,000
75,000
80,000
85,000
Development
Incorporated in 1954 with 825 residents, Milpitas is
located at the southern tip of the San Francisco Bay
and in Silicon Valley. The City covers 13.6 square
miles, with grassy foothills and picturesque Mount
Hamilton to the east and the Santa Clara Valley floor
to the west. The city is located in Santa Clara County, home to approximately 1.9 million residents. To the
north is the city of Fremont. To the south lies San
Jose, the third largest city in California. As of 2024, Milpitas had an existing inventory of approximately

15.3 million square feet of office, R&D, and
manufacturing space.1 This inventory is flexible and
includes a diversity of building types and sizes, which can accommodate businesses in need of different
types of spaces. About 6.7 million square feet of
warehouse and distribution space existed in Milpitas
in 2019.2
Milpitas has a large and diverse offering of retail
stores and restaurants, mostly concentrated in
suburban-style shopping centers. As of 2024, Milpitas
had nearly 5 million square feet of retail, of which
three quarters was located in retail centers of different sizes and trade areas.2 Milpitas has an ethnically
diverse array of retail and restaurants, and a
significant portion of retail in Milpitas is specialized in Asian products. Milpitas has major regional retail
destinations that attract shoppers from beyond the
city. The largest centers are the Great Mall, a 1.4
million square feet super-regional mall, and McCarthy
Ranch, a 415,000 square feet power retail center.2
City Profile
City of Milpitas 3

Employment
With over 40,700 jobs3 and 38,800 employed residents, Milpitas is a jobs rich community.4 The two largest employers in Milpitas are Cisco Systems with approximately 3,000 employees and KLA with over 2,500 employees.4 Other major employers include Amazon, Flex LTD, Headway Technologies, and Milpitas Unified School District. Several of these top employers have made Milpitas their corporate headquarters location. The largest percentage of the Milpitas workforce, approximately 25%, are employed in professional, scientific, and management, and administrative and waste management, 24% in manufacturing, and approximately 15% in educational services, and health care and social assistance. Approximately 8% work in retail trade while 6.2% are employed in arts and entertainment.5
The City’s largest own-source revenue is property tax. Top ten property tax payers are shown below:6

Principal Property Tax Payers: Fiscal Year 2023-24
Taxpayers Taxable
Assessed Value1
% of Total City
Assessed Value

1. KLA Tencor Corporation $565,688,668 2.44%

2. Cisco Technology Inc 520,695,642 2.24%

3. Headway Technologies Inc. 367,013,914 1.58%

4. Milpitas Mills LP 360,394,095 1.55%

5. Sandbox Expansion LLC 228,703,699 0.99%

6. McCarthy Center Holdings LLC 214,696,475 0.93%

7. Milpitas-District 1 Owner LLC 196,855,292 0.85%

8. MG Eleanor Apartments LLC 192,150,000 0.83%

9. WH Silicon Valley VI LP 183,321,200 0.79%

10. Amalfi Milpitas LLC 179,562,301 0.77%
Total $3,009,081,286 13%
1 The total City assessed valuation for fiscal year 2023-24 is $23,204,772,090.

Source: California Municipal Statistics, Inc.

Community
At 20 feet above sea level, Milpitas’ mild climate averages 59 degrees, with gentle winds from the northwest and little more than 13 inches of rain expected in a typical year. Milpitas’ neighborhoods are dotted with over 20,000 households and well-placed parks. Thirty-seven city parks are maintained by Milpitas, including one dog park and 21 tennis courts. The City provides a multitude of outstanding recreational opportunities, including aquatics, cultural arts and theater, sports leagues and activities, youth programming, and senior activities and services. Milpitas’ median household income is $169,460.7
City Profile
4 City of Milpitas

Housing5
Close to 63.7 percent of Milpitians own their own home. The median gross rent in Milpitas is $2,762. The median price of a single family residence as of January 2024 in Milpitas is $1,400,000. About 21.9 percent of the city's population are under 18 years of age. About 78 percent of the population are 18 years and over. About 12 percent of residents are 65 years and over.

Median Home Price (in thousands)
$ (thousands)
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 200
400
600
800
1,000
1,200
1,400
1,600
Education
The Milpitas Unified School District operates ten elementary schools (K-6), two middle schools (7-8), two high schools (9-12), one continuation high school, and one adult education school. The district employs over 500 individuals on a full-time basis to serve approximately 10,000 students as a Pre K-12 grade school system.8 School Enrollment
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
9,800
10,000
10,200
10,400
City Profile
City of Milpitas 5

Facts About Our Residents
According to the latest Census Bureau American Community Survey (ACS) Five-Year Estimate, 67.5 percent of residents are Asian with Asian Indians at 21.3 percent, Chinese at 15 percent, Filipino at 12.6 percent, Vietnamese at 12.3 percent and Other Asian at 6.3 percent. 14.2 percent are White; Hispanic or Latino is at 13.9 percent; Black or African American is at 3.2 percent; American Indian and Alaska Native is at 0.6 percent; Native Hawaiian and Pacific Islander is at 0.2 percent; Other Race is at 6.8 percent and those who identify as belonging to two or more races is 7.4 percent.

67.5%

14.2%

13.9%

7.4%

6.8%
Black or African
American, 3.2%
American Indian
& Alaska Native, 0.6%
Native Hawaiian
& Pacific Islander, 0.2%
Asian
White
Hispanic or Latino
Two or more races
Other
Black or African
American
American Indian
& Alaska Native
Native Hawaiian
& Pacific Islander
Asian, 67.5% =
Asian
Indians

21.3% Chinese
15%
Filipino

12.6%
Vietnamese

12.3%Other
Asian

6.3%
Note: The race and ethnicity population numbers are acquired from two data sets. Currently, the Hispanic/Latino/Spanish option is separated out from the general race question.

Government
The bustling general law city is supervised by a council- manager form of government. The Milpitas City Council is the flagship decision making body that appoints members to many commissions that serve in advisory capacities. The mayorship is an elected position, as are all the council seats. Mayors serve two-year terms; council members have four-year terms.

The City Council makes the ultimate planning and policy decisions for residents, and oversees the city’s budget. The five members carry out twice a month public meetings. At these times, the public is able to provide comments.

The Council’s meetings are held the first and
third Tuesdays of each month at 7:00 p.m. in the
Milpitas City Hall, 455 E. Calaveras Blvd.

There are 12 Advisory Commissions and one
Oversight Committee on which residents can
participate - the Planning Commission, Arts
Commission, Youth Advisory Commission,
Library and Education Advisory Commission and
Senior Advisory Commission, to name a few.
1July 1, 2023 population data from Department of Finance 2City of Milpitas Economic Development Strategy and Implementation Actions Report (May 2020) 3The decline is due to different reporting methodology. In prior budgets, a different data set was used that included jobs held by non-Milpitas residents.
4California Employment Development Department
52021 ACS 5-Year Estimates Data Profiles
6HdL Coren & Cone
72022 American Community Survey One-Year Estimates (https://data.census.gov/all?q=milpitas+median+household+income) 8https://dq.cde.ca.gov/dataquest/
City Profile
6 City of Milpitas

Milpitas at a
Glance

Date of Incorporation:

January 26, 1954
Form of Government:

Council-Manager
Population (estimated*) 81,067
Land area (Square Miles) 13.6
Miles of Streets 308
Number of Street Lights 4,584
Fire Protection
Number of Stations 4
Number of Firefighters 66
Fire Apparatus 13
Number of Fire Hydrants 2,308
Police Protection
Number of Stations 1
Number of Substations 1
Number of Sworn Officers 94
Number of Crossing Guard
Locations 34
Number of Police Patrol
Vehicles 30
Employees - FY 24 Budget
Permanent 455
Temporary (FTE) 63.3
*July 1, 2023 population provided by Department of
Finance.

Water Utility
Number of Customers
Residential 14,704
Commercial 2,425
Recycled Water 248
Average Daily Consumption
(in million gallons)
Potable Water 6.5
Recycled Water 0.72
Miles of Water Mains 183
Sewer Utility
Miles of Sanitary Sewers 160
Miles of Storm Drains 112
Public Schools Serving the
Community
Elementary Schools 10
Middle Schools 2
High Schools 2
San José City College
in collaboration with the MUSD and
San José Evergreen Community
College district
1 Parks and Recreation
Acres of Parkland 164.59
Number of Parks 37
Number of Playgrounds 35
Number of Tennis Courts 25
Number of Swimming Pools 3
Map
The City of Milpitas is located near
the southern tip of San Francisco
Bay, forty-five miles south of San
Francisco. Milpitas is often called
the “Crossroads of Silicon Valley”
with most of its 13.63 square miles
of land situated between two major
freeways (I-880 and I-680), State
Route 237, and a county
expressway.

A light rail line opened for service in
2004 and an extension of BART,
including a major multi-model
station opened for service in June
2020.

City Profile
City of Milpitas 7

City Profile
8 City of Milpitas

FY 2025-2034 Ten-Year General Fund Financial Forecast
Staff develops a Ten-Year General Fund Financial Forecast to highlight long-term impacts of projected revenues and expenditures primarily to enhance the City's fiscal long-term stability and pension costs management. When the California Public Employees Retirement System (CalPERS) changes the actuarial assumptions of the pension portfolio, such as lowering the interest earning or demographic assumptions, such changes become fully effective seven years after CalPERS Board approval. In addition, Measure F is an eight-year tax measure, consequently, long-term forecasts provide an invaluable planning tool to understand the fiscal implications of today’s budget actions and are an indication of sound fiscal planning and strategy.

The table below shows the FY 2025-2034 Ten-Year General Fund Financial Forecast starting with the FY 2024-25 Proposed Budget. Over the ten years of the Forecast based on information available in March, staff projects annual surplus and deficits between $0.3 million and -$20.6 million. Deficits are anticipated to start in FY 2027-2028 and increasing significantly after the April 1, 2029 sunset of Measure F. Therefore, to prevent service reductions, the City continues with economic development, cost management and innovations. The table below also includes the information on the City’s current year Adopted Budget for FY 2023-24. Revenues and other Sources includes taxes, fees, overhead charges and use of reserves, as applicable. Uses include personnel and non-personnel expenditures, debt service and contributions to reserves, as applicable.

Table 1 – FY 2025-2034 Ten-Year General Fund Financial Forecast - Overview ($ in millions) Revenues and Other
Sources $129.5 $137.2 $139.8 $145.6 $148.7
Expenditures (129.5) (137.2) (139.5) (145.6) (151.6)
Annual
Surplus/(Deficit) $0.0 $0.0 $0.3 $0.0 ($2.9)
FY 23-24 Adopted
Budget
FY 24-25 Proposed
Budget
FY 25-26
Forecast
FY 26-27
Forecast
FY 27-28
Forecast
Revenues and Other
Sources $152.3 $151.1 $156.1 $161.1 $166.2 $172.1
Expenditures (159.4) (165.9) (173.2) (178.9) (186.0) (192.7) Annual
Surplus/(Deficit) ($7.2) ($14.8) ($17.1) ($17.8) ($19.8) ($20.6) FY 28-29
Forecast
FY 29-30
Forecast
FY 30-31
Forecast
FY 31-32
Forecast
FY 32-33
Forecast
FY 33-34
Forecast
The following sections discuss the year-over-year changes between the FY 2023-24 Adopted Budget and the FY 2024-25 Proposed Budget as well as assumptions embedded in the FY 2025-2034 Ten-Year General Fund Financial Forecast for major revenue and expenditure categories.

Ten-Year General Fund Financial Forecast
City of Milpitas 9

Revenues and Other Sources
Table 2 – FY 2025-2034 Ten-Year General Fund Financial Forecast – Revenues and Other Sources ($ in millions)
Revenues/Sources
Property Taxes $46 $50.3 $52.2 $54.1 $56.1
Sales & Use Tax 28.9 29.6 30.2 30.9 31.5
Sales Tax – Measure F 7.0 7.3 7.5 7.7 7.8
Transient Occupancy Tax 11.8 13.0 13.7 14.1 14.5
Licenses, Permits & Fines 8.7 9.2 10.0 10.3 10.7
Charges for Services 8.1 7.9 8.1 8.3 8.6
Franchise Fees 5.8 6.0 6.2 6.3 6.5
Use of Money and Property 0.4 1.2 1.2 1.2 1.3
Other Taxes 1.1 1.1 1.2 1.2 1.2
Intergovernmental 0.8 0.3 0.3 0.3 0.3
Other Revenues 0.4 0.3 0.3 0.3 0.3
Operating Transfers In 8.1 8.5 9.0 9.4 9.8
Facility & Technology Reserves 2.4 0.0 0.0 1.4 0.0 Total Revenues/Sources $129.5 $137.2 $139.8 $145.6 $148.7 FY 23-24
Adopted
Budget
FY 24-25
Proposed
Budget
FY 25-26
Forecast
FY 26-27
Forecast
FY 27-28
Forecast
Revenues/Sources
Property Taxes $58.9 $61.1 $63.4 $66.3 $68.8 $72.0 Sales & Use Tax 32.3 33.1 33.9 34.7 35.6 36.5
Sales Tax – Measure F 6.0 0.0 0.0 0.0 0.0 0.0
Transient Occupancy Tax 15.0 15.4 15.9 16.3 16.8 17.3 Licenses, Permits & Fines 11.1 11.5 11.9 12.3 12.8 13.2 Charges for Services 8.8 9.1 9.4 9.6 9.9 10.2
Franchise Fees 6.7 6.9 7.1 7.4 7.6 7.8
Use of Money and Property 1.3 1.3 1.4 1.4 1.5 1.5 Other Taxes 1.2 1.3 1.3 1.3 1.3 1.4
Intergovernmental 0.3 0.3 0.3 0.3 0.3 0.3
Other Revenues 0.3 0.3 0.3 0.3 0.4 0.4
Operating Transfers In 10.3 10.8 11.3 11.0 11.2 11.5 Other Reserves 0.0 0.0 0.0 0.0 0.0 0.0
Total Revenues/Sources $152.3 $151.1 $156.1 $161.1 $166.2 $172.1 FY 28-29
Forecast
FY 29-30
Forecast
FY 30-31
Forecast
FY 31-32
Forecast
FY 32-33
Forecast
FY 33-34
Forecast
Ten-Year General Fund Financial Forecast
10 City of Milpitas

Property tax revenues are estimated to be $50.3 million in FY 2024-25, an increase of $4.2 million, or 9.2%, compared to the FY 2023-24 Adopted Budget of $46.0 million. Excess ERAF (Educational Revenue Augmentation Fund) of $3.4 million was included for FY 2024-25. Due to recent ERAF litigation, there is a 30% contingency on the ERAF revenue source as a conservative approach. Excess ERAF is the mechanism that moves state funds through the County system. The California Legislature created the Educational Revenue Augmentation Fund in 1991 to reduce state general fund spending on schools, therefore a portion of property tax revenue goes to ERAF to support local school districts. The Excess ERAF formula for allocation to cities is based on various factors, mainly the countywide property tax growth, Redevelopment Agency assets sale, department of education’s local control funding formula, school districts attendance rate, and special education charges. Staff develops the Property Tax revenue estimates based on information provided by the City’s property tax consultant and the County of Santa Clara. For FY 2025-26, staff has built in a slight increase of property tax revenue estimates returning to historical annual growth rates over the remainder of the Forecast at 3.75% for secured property tax and 3.0% for ERAF.

Property Tax - Excess ERAF – The dispute over the residual property tax source entitled "excess ERAF" revenue continues to be litigated in the Court of Appeals in the matter of California School Boards Assoc., et al. v. Yee, etc. (Case No. C096838) as related to the State Controller’s guidance on Charter School allocations. The trial Court found in favor of the State Controllers and the intervening Counties, and it entered judgment in their favor on June 24, 2022. The California School Board Assoc. filed a timely appeal. The matter before the Court of Appeals has been fully briefed, but has not yet been set for oral argument. Staff will continue to monitor and provide updates.

Proposition 13 limits the base property tax rate to 1% of the assessed value and an annual increase of the assessed value at the lesser of 2% or the California consumer price index (CCPI). Based on a 10-year average, staff estimated that the California consumer price index in the San Francisco/San Jose metropolitan area will likely increase at a rate of 2 to 5% in each of the next five years and therefore the 2% limit of Proposition 13 will apply.

Added assessed valuation from new housing and the reassessment of existing properties with change of ownerships are factored into the forecast.

Allocation of Property Tax 1% Base Rate
The chart below shows the allocation of the property tax 1% base rate to all the taxing entities within the jurisdiction.

The City's share is approximately 16.2% of the 1% base rate.

Chart 1: Property Tax Allocation by Percent among various Governmental Entities K-12 School Districts

40.1%
City

16.2%
Community College

6.5%
County
14%
County School Service

3.2%
ERAF K-12/College

14.8%
Special Districts

5.2%
Ten-Year General Fund Financial Forecast
City of Milpitas 11

Sales tax revenue is projected to be $29.6 million in FY2024-25, an increase of $0.7 million, or 2.4% compared to FY2023-24 Adopted Budget of $28.9 million. The FY2024-25 Proposed Budget is approximately status quo to the Amended Budget revenue estimate – with a slight increase of $0.7 million, or 2.4%. State and local governments are in post-Covid recovery, and consumer spending is assumed to return to more sustained levels. A growth rate of about 2.5% is projected for the remainder of the Forecast. The projected increase is mostly based on estimates from the City’s sales tax consultant.

The chart below shows the allocation of sales tax rate among the taxing jurisdictions. The City's share of the total sales tax rate is one percentage point.

Chart 2: 9.375% Sales Tax Allocation by Percentage Points among various Governmental Entities Allocation of Sales Tax
State General Fund, 3.94%
Milpitas (Bradley-Burns), 1.00%
Milpitas Measure F, 0.25%
County
Public Safety
(Prop 172), 0.50%
County Realignment
(Mental Health/Welfare/
Public Safety), 1.56%
Countywide
Transportation
Fund, 0.25%
Santa Clara County
Transit District (SCCT), 0.50%
Santa Clara County
Valley Transportation
Authority (SCVT), 0.50%
Santa Clara County VTA Bart
Operating & Maintenance Transactions
and Use Tax (SVTB), 0.13%
Santa Clara County
Retail Transactions and
Use Tax (SCCR), 0.13%
Silicon Valley Transportation
Solutions Tax (SVTS), 0.50%
Santa Clara County
Joint Powers Transaction
Tax (JPBT), 0.13%
Ten-Year General Fund Financial Forecast
12 City of Milpitas

Measure F ¼ Cent Local Sales Tax, approved by the voters of the City of Milpitas in November 2020 with an eight- year sunset clause, is projected to be $7.3 million in FY2024-25. At the February 20th City Council meeting, the City Council approved the increase of the FY2023-24 revenue estimate for Measure F sales tax in amount of $0.3 million, or 4.3%, from $7.0 million to $7.3 million due to conservative growth. The City of Milpitas Public Services Measure is a general tax to provide funding to maintain the City’s finances and services, including: police and fire protection, 9-1-1 emergency response, and natural disaster preparation; youth, senior, and recreation services; repairing park equipment and maintaining parks and recreation centers; and attracting and retaining local businesses. Measure F has an 8-year sunset provision and is effective April 1, 2021 through March 31, 2029.

Transient Occupancy Tax (TOT), or Hotel/Motel tax Revenues, is projected to be $13.0 million in FY2024-25, an increase of $1.2 million, or 10.3% compared to FY2023-24 Adopted Budget of $11.8 million. With a post-COVID recovery economy, travel is resuming and demonstrated in hotel and lodging. It’s not certain how the Pandemic may alter business travel and the impacts on hotel and lodging in the long-term. TOT revenue estimates are projected to increase about 5% in FY25-26 which assumes continued revenue recovery and then growth of 3.0% for the remainder of the Forecast.

Licenses and permits consist of building permits and fire permits which are primarily construction related. The estimated revenue for licenses and permits, for the FY 2024-25 estimated revenue is $9.2 million. It is projected to increase by $0.06 million, or 0.8% from $9.16 million to $9.23 million in comparison to the FY 2023-24 Amended Budget (an increase of $0.6 million, or 6.6%, from the FY2023-24 Adopted revenue estimates of $8.7 million). The estimated revenue reduction is primarily due to the current declining trends for building permits in comparison to prior years. While plan check revenues are holding steady, construction of projects and therefore related fees (i.e. building permit fees) are not reaching current year FY 2023-24 budget estimations. With the current slower economic outlook, the FY 2024-25 Proposed Budget conservatively assumes the construction delays and lower building permit revenues. The forecast for FY2025-26 and FY2026-27 assumes significant revenue recovery and then it is projected to increase between 3.5% to 3.8% for the remainder of the Forecast.

Charges for Services are primarily user fees, including charges for private development related services, engineering fees and recreation service charges. The FY 2024-25 estimated revenue from Charges for Services is $7.9 million, a decrease of $0.04 million, or 0.5%, to FY 2023-24 amended revenue estimates of $7.9 million (a decrease of $0.2 million, or 2.9%, from the FY 2023-24 adopted revenue estimates of $8.1 million). The decrease is primarily related to Recreation programs, specifically the partnership with the State for After-The-Bell program(s) sites being reduced and thus less students being served. Charges for Services is projected to increase 2.8% for the remainder of the forecast. As demand for recreation services increases over the next few years, associated program expenditures will adjust accordingly.

Franchise Fees are a regulatory fee charged to utility companies for the privilege of doing business in the City of Milpitas (i.e.: garbage franchise fee, gas and electric franchise fee). The FY 2024-25 estimated revenue from Franchise Fees is $6.0 million, an increase of $0.2 million, or 3.1%, compared to FY 2023-24 Adopted Budget revenue estimates of $5.8 million. Franchise Fees are projected to increase an average of 3.0% for the remainder of the Forecast.

Use of Money and Property includes interest earnings on the City’s cash pool. The City expects an increase in interest earnings from the FY 2023-24 estimate of $0.4 million to $1.2 million in FY 2024-25.This uptick in interest income is primarily due to 1) the quick rise in market rates over the past year as a result of tighter Fed policy designed to combat inflation; and 2) the management of the City’s diversified portfolio of fixed income assets that has taken advantage of this shift in the market while providing safety and liquidity.

Other Taxes include real estate transfer tax (approximately $0.7 million), business license tax (approximately $0.3 million) and motor-vehicle-in-lieu (approximately $80,000). The FY 2024-25 estimated revenue from Other Taxes is $1.1 million. When real estate transfers ownership (i.e. via existing real estate sales and/or newly constructed real Ten-Year General Fund Financial Forecast
City of Milpitas 13

estate sales), it generates a transfer tax revenue to the City. Average annual increases of 2.8% are projected for the remainder of the Forecast.

Intergovernmental represents the revenue account for federal and state grants. The FY2024-25 estimated revenue for Intergovernmental is $0.3 million, a decrease of $0.5 million, or 63.5%, from FY2023-24 Adopted Budget of $0.8 million. The variability of the revenue depends upon the award of competitive grants, which the forecast does not include, to be conservative.

Operating Transfers In are mainly reimbursements from other funds for the staff support and administrative services provided by the General Fund. These costs are determined through a methodological allocation process (known as the Cost Allocation Plan, or CAP). Net transfers into the General Fund will increase in conjunction with operating expenditure increases, an average of 3.6% annually over the Forecast period. Operating Transfers are projected to be $8.5 million in FY 2024-25, an increase of $0.3 million, or 4.3%, compared to FY 2023-2024 Adopted Budget revenues estimates of $8.1 million.

Expenditures
Table 3 – FY 2025-2034 Ten-Year General Fund Financial Forecast - Expenditures ($ in millions) Expenditures
Salaries $60.7 $62.7 $64.7 $66.6 $68.7
Benefits 38.7 43.0 44.8 47.1 49.6
Services & Supplies 25.1 26.6 27.7 29.3 30.6
Debt Services 1.2 1.3 1.2 1.3 1.5
Capital Outlay 0.5 0.3 0.4 0.4 0.4
Operating Transfers Out 3.2 3.3 0.8 0.8 0.8
Total Expenditures $129.5 $137.2 $139.5 $145.6 $151.6 FY 23-24
Adopted
Budget
FY 24-25
Proposed
Budget
FY 25-26
Forecast
FY 26-27
Forecast
FY 27-28
Forecast
Expenditures
Salaries $70.8 $72.9 $75.1 $77.4 $79.8 $82.2
Benefits 53.3 55.8 58.3 59.4 62.1 63.5
Services & Supplies 32.6 34.3 36.7 38.9 41.9 44.9 Debt Services 1.5 1.7 1.8 1.8 0.8 0.8
Capital Outlay 0.4 0.4 0.4 0.4 0.4 0.5
Operating Transfers Out 0.8 0.9 0.9 0.9 0.9 0.9
Total Expenditures $159.4 $165.9 $173.2 $178.9 $186.0 $192.7 FY 28-29
Forecast
FY 29-30
Forecast
FY 30-31
Forecast
FY 31-32
Forecast
FY 32-33
Forecast
FY 33-34
Forecast
Ten-Year General Fund Financial Forecast
14 City of Milpitas

Salaries and Benefits is projected to increase due to scheduled salary increases along with related benefit increases. The overall FTE increases by net of 3 FTEs to 455 FTE. Of the $6.3 million salaries and benefits increase, it is primarily related to scheduled cost of living adjustment and associated benefits and increase in unaccrued actuarial liability due to CalPERS loss of 6.1% in fiscal year 2022. Based upon current contracts, the scheduled COLA are as follows: MEA (4%), PROTECH (4%), MidCon (3% 7/1/2024), IAFF/UNREP Fire (3% 1/1/2025, pending negotiation), MPOA/UNREP Police (3% 7/1/2024, pending negotiation), UNREP MISC (3% 7/1/2024, estimated). COLA for these groups for FY 2024-2025 are subject to change pending finalization of negotiations.

The California Public Employees Retirement System (CalPERS) annually provides member agencies with an actuarial valuation of member agencies’ pension plans. The City has two pension plans with CalPERS, the Safety Plan for sworn Police and Fire Department employees and the Miscellaneous Plan for non-sworn employees working in all City Departments. For FY 2024-25, the City budget reflects pension contribution costs based on the most recent actuarial valuation available by CalPERS dated July 2023. These valuations are based on data, including payroll data, as of June 30, 2022. Often, due to increased positions and granted salary increases per MOUs with the City’s bargaining units, the budgeted payroll data is higher than CalPERS' assumption in its valuations.

In Fiscal Year 2015-16, CalPERS started to change its pension contribution methodology for agencies. Agencies are being charged a flat fee for the unfunded accrued liability (UAL), which is not based on a percent of payroll, and the normal cost of the pension benefit, which is based on a percent of payroll. Normal cost is the percentage of payroll that is required to fully fund the annual cost of service for the upcoming fiscal year for active employees only. Unlike normal costs, UAL represents outstanding funding needed for services provided by active or former City employees.

The UAL is impacted when current plan benefit, demographic assumptions (retiree longevity), or assumed rate of investment earnings change, or when CalPERS does not meet or exceed its investment earnings target.

The charts below were part of the report prepared by Foster and Foster, the City’s actuary. With a 50% probability, the City’s Sworn Plan contribution percentages will peak in just over 8 years at 74.5% of payroll; similarly, the City’s Miscellaneous Plan contribution percentages will peak in just over 8 years at 44.6% of payroll. In Fiscal Year 2021-22, CalPERS experienced lower than expected return of -6.1%. Consequently, the return increased overall unfunded accrued liability (UAL) for out years, increasing contribution rates. Actual Fiscal Year 2023 CalPERS investments results have not been published as of the date of this report. Currently, the retirement plan has three tiers based on the hire date of the employee. Tier 1 consists of employees hired before October 9, 2011. Tier 2 consists of employees hired on or after October 9, 2011. Lastly, PEPRA (Public Employees' Pension Reform Act), applies to employees hired on or after January 1, 2013. Tier 1 and 2 retiree benefits are significantly more costly than the PEPRA tier because PEPRA has a much lower pensionable compensation cap. Accordingly, as the chart for both pension plan shows, due to the demographic changes of the plans’ population over the next 30 years as Tier 1 and 2 member population declines, the pension contributions as a percent of payroll are expected to decline substantially.

Ten-Year General Fund Financial Forecast
City of Milpitas 15

Chart 3: Miscellaneous and Safety Plans Contribution Projections as a Percent of Payroll (Foster and Foster, January 2024)
Pension Contribution Projection - Percent of Pay
39% 41% 45% 43% 43% 41% 37%
33%
25% 22%
10% 10% 10% 10% 9% 9%

66.7% 70%
74% 75% 74% 71%
66%
59%
47%
40%
15% 14% 14% 14% 14%14%
Miscellaneous Pension Plan Safety Pension Plan
25/2626/2727/2828/2929/3030/3131/3232/3333/3434/3535/3636/3737/3838/3939/4040/4141/4242/4343/4444/4545/4646/4747/4848/4949/5050/5151/5252/5353/5454/55 0%
25%
50%
75%
100%
On March 3, 2020, the City Council reviewed the City's Pension Actuarial Report and directed staff to return to City Council with the necessary documents for the establishment of a 115 Pension Trust to invest reserve funds set aside to pay future pension obligations. After a competitive procurement process and a detailed legal review, staff brought forward a plan for Council consideration and awarded the contract to PFM to establish a Section 115 Trust with the $33.9 million CalPERS reserve. The charts below were prepared by Bartel & Associates to demonstrate scenarios where annual withdrawal from Section 115 Trust is used to stabilize contribution rates to smooth out the peak years for Miscellaneous and Safety plans.

Chart 4: Payment to 115 Trust - Miscellaneous Contribution Rate Projection (Foster and Foster, January 2024)
Payment to 115 Trust - Miscellaneous. Contribution Rate Projection

34.5%

38.7% 41.0%

44.6% 43.0% 42.5% 40.7%

36.9%

32.8%

24.6% 22%34.5%

38.7% 38.2% 38.2% 38.2% 38.2% 38.2% 36.9%

32.8%

24.6% 22%
Target Contribution Rate 50th Percentile
23/24 24/25 25/26 26/27 27/28 28/29 29/30 30/31 31/32 32/33 33/34 34/35 35/36 36/37 37/38 38/39 39/40 40/41 41/42 42/43 43/44

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

50.0%
Ten-Year General Fund Financial Forecast
16 City of Milpitas

Chart 5: Payment to 115 Trust - Safety Contribution Rate Projection With EE Cost Sharing (Foster and Foster, January 2024)
Payment to 115 Trust - Safety. Contribution Rate Projection With Employee Cost Sharing

60.5%

66.7% 69.6%

74.4% 74.5% 73.8% 71.1%

65.7%

59.1%

47.2%

40.4%

60.5%

66.7% 65.2% 65.2% 65.2% 65.2% 65.2% 65.7%

59.1%

47.2%

40.4%
Target Contribution Rate 50th Percentile
23/24 24/25 25/26 26/27 27/28 28/29 29/30 30/31 31/32 32/33 33/34 34/35 35/36 36/37 37/38 38/39 39/40 40/41 41/42 42/43 43/44

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%
Services and Supplies costs are anticipated to be $26.6 million in FY 2024-25, an increase of $1.4 million, or

5.6%, compared to FY 2023-24 adopted budget of $25.1 million. This increase is primarily in the areas of PLAN JPA premium, base increases due to high inflation and proposed enhanced services. An average annual increase of 3% is projected for the remainder of the Forecast but consumer price index (CPI) may increase given the current inflationary economic conditions. There are also fluctuations of cost increases every other year due to election costs that are incurred by the City. The City may experience more fluctuations due to labor shortage, supply chain challenges and inflation.

Debt Service The City issued Lease Revenue Bonds in the principal amount of $18.4 million authorized by Council on October 20, 2020 to fund the Fire Station #2 Construction Project and Energy Efficiency projects with ENGIE Services. This Forecast assumes annual General Fund debt service to be approximately $1.3 million annually starting in FY 2024-25, which is partially offset with assumed energy cost savings from the energy efficiency projects.

Capital Outlay consists of the purchase of equipment (primarily vehicle, large equipment and computers) with an estimated replacement value greater than $5,000. Annually, departmental budgets are funded and charged for ongoing equipment replacement charges. These charges are based on the anticipated replacement cost for existing equipment. However, annually the General Fund supplements these costs with an additional amount. For FY 2024-25, a total of six vehicles (3 Public Works vehicles, 3 Police vehicles) are budgeted and $0.3 million additional funds from the General Fund are used to augment the Equipment and Vehicle Replacement Fund. On average, for the remainder of Forecast period, $360,000 of supplemental funding is anticipated to be budgeted annually based on historical trends.

Operating Transfers Out consists of transfers to the Information Technology Equipment Fund ($300,000) per the current Fiscal Policies. This budget continues the annual transfer to the Storm Drain Fund for FY 2024-25 of $0.5 million. For FY2024-25, there is a one-time transfer of $2.5 million from General Fund Facility Reserves to fund CIP projects (City Hall Air Handlers Replacement).

Ten-Year General Fund Financial Forecast
City of Milpitas 17

Ten-Year General Fund Financial Forecast
18 City of Milpitas

Fiscal Policies
General Financial Goals

1. To maintain a financially viable City that can maintain an adequate level of municipal services.

2. To maintain financial flexibility in order to be able to continually adapt to local, regional, and national economic change.

3. To maintain and enhance long-term the sound fiscal condition of the City.

Operating Budget Policies

4. The City will adopt a balanced budget by June 30th of each year.

5. An annual base operating budget will be developed by accurately and realistically projecting revenues and expenditures for the current and forthcoming fiscal year.

6. During the annual budget development process, the existing base budget will be thoroughly examined to assure cost effectiveness and need of the services or programs provided.

7. Once the City Council has adopted the budget, the Administration will track revenues and expenditures closely and will bring forward budget adjustment recommendations at Mid-Year, as needed.

8. Annual operating budgets will include the cost of operations of capital projects.

9. The City will avoid balancing the current budget at the expense of future budgets, unless the use of reserves is expressly authorized by the City Council.

10. The City’s operating budget will be prepared on a basis consistent with generally accepted accounting principles (GAAP) except that encumbrances are considered budgetary expenditures in the year of the commitment to purchase and capital project expenditures are budgeted on a project length basis.

Revenue Policies

11. The City will try to maintain a diversified and stable revenue system to avoid over-reliance on any one revenue source.

12. Revenue estimates are to be accurate and realistic, sensitive to local, regional, and national economic conditions.

13. The City will estimate its annual revenues by an objective, analytical process utilizing trend, judgmental, and statistical analysis, as appropriate.

14. User fees will be reviewed annually for potential adjustments to recover the full cost of services provided, except when the City Council determines that a subsidy is in the public interest. To maintain cost recovery, annually, staff shall bring forward the Master Fee Schedule as part of the budget process with an escalation to reflect increases in staff cost.

15. The City will actively pursue federal, state, and other grant opportunities when deemed appropriate. Before accepting any grant, the City will thoroughly consider the implications in terms of ongoing obligations that will be required in connection with acceptance of said grant.

16. One-time revenues will be used for one-time expenditures only including capital outlay and reserves.

Expenditures Policies

17. The City will maintain levels of service, as approved by the City Council, to provide for the public well-being and safety of the residents of the community.

Fiscal Policies and Budget Process
City of Milpitas 19

18. Employee benefits and salaries will be maintained at competitive levels.

19. Fixed assets will be maintained and replaced as necessary, minimizing deferred maintenance.

20. The City will develop and use technology and productivity enhancements that are cost effective in reducing or avoiding increased personnel costs.

Utility Rates and Fees

21. Water and sewer utility customer rates and fees will be reviewed annually as part of the budget process and adjusted as needed to ensure full cost recovery.

22. All utility enterprise funds will be operated in a manner similar to private enterprise. As such, the City will set fees and user charges for each utility fund at a level that fully supports the total direct and indirect cost of the activity, including depreciation of assets, overhead charges, and reserves for unanticipated expenses and capital projects.

Capital Budget Policies

23. The City will develop an annual Five-Year Capital Improvement Program (CIP) with the goal to develop and maintain infrastructure in support of existing residences and businesses and future anticipated development.

24. The CIP will identify the estimated full cost of each project which includes administration, design, development and implementation, and operating costs once the projects are completed.

25. The CIP will identify potential funding sources for each proposed capital project, prior to submitting proposed projects to the City Council for approval. When appropriate, the CIP will seek other funding sources such as State and Federal funds, private funds and leverage these funding sources with public money to help meet the highest priority community needs.

26. The City Council will provide funding for the first year of the Five-Year CIP as a component of the annual operating budget and appropriate funding at the project level. Funding for future projects identified in the Five- Year CIP may not have been secured and/or legally authorized and is therefore subject to change.

27. Each CIP project will be assigned to a project manager whose responsibilities are to monitor all phases of the project to ensure timely completion of the project and compliance with the project budget and all regulations and laws.

Debt Policies

28. The City will limit long-term debt to only those capital improvements or long-term liabilities that cannot be financed from current revenue sources.

29. The City will utilize debt financing for projects which have a useful life that can reasonably be expected to exceed the period of debt service for the project.

30. The City will utilize conservative financing methods and techniques so as to obtain the highest practical credit ratings (if applicable) and the lowest practical borrowing costs.

31. The City may utilize inter-fund loans rather than outside debt to meet short-term cash flow needs.

32. The City will not issue long-term debt to finance operating expenses and routine maintenance expenses.

Investment Policies

33. The Finance Director/City Treasurer will annually render an investment policy for the City’s cash pool for City Council’s review no later than the beginning of the Fiscal Year and recommend modifications as appropriate.

The review will take place at a public meeting and the policy shall be adopted by resolution of the City Council.

34. City funds and investment portfolio will be managed in a prudent and diligent manner with emphasis on safety, liquidity, and yield, in that order.

Fiscal Policies and Budget Process
20 City of Milpitas

35. Reports on the City’s investment portfolio and cash position shall be developed by the Finance Director/City Treasurer and reviewed by the City Council quarterly.

36. Generally Accepted Accounting Principles require that differences between the costs of the investment portfolio and the fair value of the securities be recognized as income or losses in a government’s annual financial report. These variances shall not be considered as budgetary resources or uses of resources unless the securities are sold before maturity or the values of the investments are permanently impaired.

37. The City has set up an Other Post Employment Benefits (OPEB) Trust Fund to prefund its retiree medical benefit to eligible former employees with the California Employers' Retiree Benefit Trust (CERBT). Bi-annually, the City shall engage an actuary to provide the City with an actuarial valuation. Working with the actuary, staff shall review the assumed interest earnings, investment strategy, and other factors to ensure the long-term health of the fund.

38. Per the pension valuation provided by the City’s actuary, the City’s pension costs will continue to rise during the next ten plus years. The City set aside and invested the CalPERS Rate Stabilization Reserve funds in the City of Milpitas Section 115 Pension Trust Fund in order to invest funds with moderate risk achieving a 3% to 6% investment earnings goal during the next 5 to 10 years to mitigate the rising pension costs. The City may use the trust funds to fund either the annual actuarially determined pension contribution amounts, pay down unfunded pension liabilities with CalPERS, or reduce the length of pension cost amortization schedules with CalPERS.

Reserve Policies

39. The City will fund the following reserves as follows with any General Fund audited year end operating surplus after the General Fund Contingency Reserve and General Fund Budget Stabilization Reserve requirements are met and pension budgetary surplus are allocated to the PERS Rate Stabilization Reserve. • Part I
◦ Contingency Reserve (Policy Statement #41)
◦ General Fund Budget Stabilization Reserve (Policy Statement #42) • Part II (any remaining balance)
◦ Pension budgetary surplus allocated to the PERS Rate Stabilization Reserve (Policy Statement #43)
• Part III (any remaining balance)
◦ Artificial Turf Replacement ($230,000) (Policy Statement #54) • Part IV (any remaining balance)
◦ 30% to the General Government Capital Improvement Fund (Policy Statement #56); ◦ 20% to Storm Drain Fund;
◦ 10% to the Affordable Housing Community Benefit Fund (Fund 216); ◦ 10% to Transportation/Transit (Fund 310);
◦ 15% to Technology Replacement Fund;
◦ 10% to SPAR (Strategic Property Acquisition Revenue) Fund (Policy #57); and ◦ 5% Unassigned

40. The City will periodically review and update reserve guidelines, to ensure that the City has sufficient reserve balances to adequately provide for emergencies, economic uncertainties, unforeseen operating or capital needs, economic development opportunities, and cash flow requirements.

41. The City will maintain a Contingency Reserve of at least 16.67% or two months of the annual operating expenditures in the General Fund to be used only in the case of dire need as a result of physical or financial emergencies and disasters as determined by the City Council. Any use of the General Fund Contingency Reserve shall require a majority vote by the City Council through the adoption of the Operating Budget or by appropriation action during the fiscal year. The City Council will set the reserve amount annually after the Fiscal Policies and Budget Process
City of Milpitas 21

results of the prior fiscal year’s Comprehensive Annual Financial Report are known. The replenishment of this reserve may also be incorporated into the annual Adopted Operating Budget if resources are available to replenish the reserve.

42. The City will maintain a General Fund Budget Stabilization Reserve with a target of 16.67%, or two months, of annual operating expenditures. The purpose of this reserve is to provide budget stability when there are fluctuations that result in lower than projected revenues and/or higher than projected expenditures that cannot be rebalanced within existing budget resources in any given fiscal year. This reserve is intended to provide a buffer, or bridge funding, to protect against reducing service levels when these fluctuations occur. This reserve will be funded only after General Fund Contingency Reserve requirements have been met. Any use of the General Fund Budget Stabilization Reserve shall require a majority vote by the City Council through the adoption of the Operating Budget or by appropriation action during the fiscal year. The City Council will set the reserve amount annually after the results of the prior fiscal year’s Comprehensive Annual Financial Report are known. The replenishment of this reserve may also be incorporated into the annual Adopted Operating Budget if resources are available to replenish the reserve.

43. The City will maintain in the General Fund and the Water and Sewer Utility Enterprise Funds or in a Section 115 Trust a Public Employees Retirement (PERS) Rate Stabilization Reserve. The City’s actuary has determined that the General Fund portion of the Unfunded Actuarial Liability for the Miscellaneous Retirement Plan is 84.9% and for the Water and Sewer Utility Enterprise Funds portion of the Unfunded Actuarial Liability for the Miscellaneous Retirement Plan is 8.5% and 6.6%, respectively. The contributions to the PERS Rate Stabilization Reserve from the Utility Funds shall be consistent with the General Fund contributions. However, the General Fund portion of any pension savings shall only be allocated to the PERS Rate Stabilization Reserve after the General Fund Contingency Reserve and the General Fund Budget Stabilization Reserve requirements have been met. The Utility Funds’ portion of any pension savings shall only be allocated to the PERS Rate Stabilization Reserve after the Capital Reserve and Rate Stabilization Reserve (RSR) requirements in the Water and Sewer utility funds have been met.

44. Annually, the City will endeavor to transfer $500,000 from the General Fund to the Storm Drain Fund to replace and repair storm drain infrastructure.

45. The City will maintain a retiree medical benefits account established by an irrevocable trust and fund the annual actuarially determined contribution. Any savings resulting from the budgeting methodologies shall be used to pay off the actuarial unfunded liability.

46. The City will maintain a General Liability and Workers’ Compensation Claims Reserve of at least $2 million in the General Fund, which will be reviewed for adjustments annually. As part of closing out a fiscal year, any Workers' Compensation savings in the General Fund may be allocated to this General Fund reserve and any Workers' Compensation savings in the Utility Funds may be allocated to a Workers' Compensation Claims Reserve established for each utility fund.

47. The City will maintain a Rate Stabilization Reserve (RSR) in the Water and Sewer utility enterprise funds with a goal of at least 16.67% or two months of the respective annual operating expenditures after the Capital Reserve requirements have been met. The RSR shall be used to mitigate the effects of occasional shortfalls in revenue or unanticipated expenditures that cannot be rebalanced within existing budgeted resources in any given fiscal year. Revenue shortfalls may result from a number of events such as weather factors (wet weather or drought events and natural disasters), increased water conservation, and poor regional economic conditions. The Rate Stabilization Reserves should be used to assist in smoothing out revenue variability resulting from these factors and ensure that adequate resources are available during such times that might otherwise require large rate increases to utility customers. The City Council will set the reserve amounts annually after the results of the prior fiscal year’s Comprehensive Annual Financial Report are known. The RSR funding will be phased within five years, or sooner, as part of the fiscal year-end closing process.

Thereafter, the replenishment of these reserves may also be incorporated into the annual Adopted Operating Budget if resources are available to replenish the reserves.

48. The City will maintain capital reserves in the Water and Sewer utility enterprise funds to provide for future capital projects and unanticipated emergencies, such as water main break repairs, pump station repairs. The Fiscal Policies and Budget Process
22 City of Milpitas

City will attempt to maintain a capital reserve of approximately 30% of the annual operating and maintenance expenses for the Water utility fund and 25% of the annual operating and maintenance expenses for the Sewer utility fund. The City Council will set the reserve amounts annually after the results of the prior fiscal year’s Comprehensive Annual Financial Report are known.

49. In addition, the City will maintain Infrastructure Replacement Funds for both water and sewer utilities. The goal is to accumulate at least $2 million a year from each utility fund to set-aside for replacement of infrastructure as the infrastructure reaches the end of its useful life after Capital Reserve, the Rate Stabilization Reserve, and CalPERS Rate Stabilization Reserve requirements have been met.

50. Reserve levels for Debt Service Funds will be established and maintained as prescribed by the bond covenants authorized at the time of debt issuance.

51. The City will maintain a capital reserve in an Equipment Replacement Fund, set up as an internal service fund, to enable the timely replacement of vehicles and depreciable equipment as cost. The City will maintain a minimum fund balance of at least 30% of the replacement costs for equipment accounted for in this fund.

52. Annually, the City will endeavor to transfer $300,000 from the General Fund to the Technology Replacement Fund set aside in a reserve with a target of $5 million. This reserve shall be used to accrue funding for technology projects such as the major rehabilitation or replacement of the City’s technology infrastructure or new technology initiatives.

53. The City will maintain a capital reserve for Facilities Replacement with a target of $10 million. This reserve shall be used to accrue funding for major rehabilitation or replacement of City facilities (buildings/structures).

Eligible uses of this reserve may include both the direct funding of public facility improvements and the servicing of related debt. The City Council will set the reserve amount annually after the results of the prior fiscal year’s Comprehensive Annual Financial Report are known. The replenishment of this reserve may also be incorporated into the annual Adopted Operating Budget as resources are available to replenish the reserve.

54. The City will maintain a capital reserve for Artificial Turf Replacement with a target of $2 million and an annual set-aside amount of at least $230,000 until the target is reached. This reserve shall be used to accrue funding for the normal depreciation expense of the City’s artificial turf fields over their useful life. Eligible uses of this reserve may include the replacement of the City’s artificial turf fields so as to eliminate large spikes in capital expenses and normalize annual costs. The City Council will set the reserve amount annually after the results of the prior fiscal year’s Comprehensive Annual Financial Report are known. The replenishment of this reserve may also be incorporated into the annual Adopted Operating Budget as resources are available to replenish the reserve.

55. The City may direct any loan repayments from the former Redevelopment Agency and residual property tax distributions from the Redevelopment Property Tax Trust Fund to a General Government Capital Improvement Fund to address the funding needs of capital improvement projects.

56. The City may direct 30% of any General Fund audited year end operating surplus to a General Government Capital Improvement Fund to address the funding needs of capital improvement projects after General Fund Contingency and General Fund Budget Stabilization reserve requirements have been met and pension budget surplus are allocated to the PERS Rate Stabilization Reserve (Policy Statement #43).

57. The City may direct 10% of any General Fund audited year end operating surplus to the SPAR Fund to support strategic property acquisition, development and long-term revenue opportunities after General Fund Contingency and General Fund Budget Stabilization reserve requirements have been met and pension budget surplus is allocated to the PERS Rate Stabilization Reserve (Policy Statement #43).

Accounting, Auditing, and Financial Reporting Policies

58. The City’s accounting and financial reporting systems will be maintained in conformance with generally accepted accounting principles (GAAP) as they apply to governmental accounting.

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City of Milpitas 23

59. An annual audit will be performed by an independent public accounting firm with the subsequent issuance of a Comprehensive Annual Financial Report, within six months of the close of the previous fiscal year.

60. Quarterly financial reports and status reports will be submitted to the City Council within six weeks after the end of each Quarter and be made available to the public. The report will provide an analysis of budgeted versus actual revenues and expenditures, on a year-to-date basis. At the minimum, the report shall include the status of the General Fund and Water and Sewer utility fund revenues and expenditures.

Budget Guidelines
Through the adoption of the annual operating budget, the City Council approves the funding of City services and estimates of resources available to fund the City’s services. Through adoption of this budget, the City Council also approves these budget guidelines providing certain responsibilities and authority to the City Manager to adjust the budget given fluctuations in revenues. These budget guidelines provide sufficient flexibility to make budget adjustments during the year, provided these adjustments do not materially alter the general intent of the City Council approved budget, and establish adequate controls through budget monitoring and periodic reporting.

Annually, the City Council establishes Council Priority Areas regarding service levels to provide guidance to management in preparing the adopted budget. This budget reflects the City Council Priority Areas. Through its legislative authority, the Council approves and adopts the budget by resolution.

The City Manager is responsible for proposing to the City Council a balanced budget which is consistent with the Council’s service level priorities and sound business practices. A Balanced Budget is defined as a budget where the anticipated operating revenues and other financing resources including carryover of outstanding encumbrances from prior year are equal to or exceed operating expenditures. The City Manager is also responsible for establishing a system for the preparation, execution, and control of the budget which provides reasonable assurances that the intent of Council priorities is met.

The Finance Director is responsible for developing the operating budget on behalf of the City Manager, synchronizing the operating budget with the annual capital plan, developing a ten-year General Fund Financial Forecast, establishing budget and fiscal policy, providing periodic budget status reports to the City Manager and the City Council, and developing internal monthly budget management reports for the Department Heads to facilitate control and compliance with the budget.

The Department Heads are responsible for assisting in the development of annual budgets and monitoring their respective budgets for compliance with the intent of Council priorities to ensure that appropriations of the aggregate total of the department are not exceeded.

Summary of Budget Guidelines

1. Basis of Budgeting
City budgets are adopted on a basis consistent with generally accepted accounting principles (GAAP) except that encumbrances are considered budgetary expenditures in the year of the commitment to purchase, and capital project expenditures are budgeted on a project length basis rather than a fiscal year. For all governmental funds, revenues and expenditures are budgeted on a modified accrual basis. For all proprietary funds, revenues and expenditures are budgeted on an accrual basis.

2. Budget Calendar
The Finance Director publishes a budget preparation calendar to the Department Heads and to the City Council at the beginning of the budget process each year. The calendar sets forth, at a minimum, dates for the following:
• Review of service level priorities by the City Council at an annual Planning Session. • Review and update of the Master Fee Schedule.

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24 City of Milpitas

• Community Engagement and Outreach.
• Engagement and Outreach for City employees.
• Capital Improvement Projects Budget.
• Presentation of the City Manager's Proposed Budget to the City Council, which shall be no later than the second week in May.

3. Form and Content of the City Manager's Proposed Budget The Ten-Year General Fund Financial Forecast and the City Manager's Proposed Budget shall be presented in a form which facilitates the City Council to determine and review, as applicable:
• Alignment of the proposed service level changes to City Council priorities as established at the annual Planning Session.
• Projected revenues by major category; based on an updated Master Fee Schedule. • Operating expenditures by major category.
• Historical and proposed authorized staffing levels.
• Department and Office Proposed budgets as follows:
◦ Service level descriptions.
◦ Summary of accomplishments and initiatives.
◦ Performance and workload measures.
◦ Expenditure comparison with the preceding year's budget and two years of actual results. ◦ Authorized staffing comparison with the preceding three years. ◦ Budget reconciliation from the prior fiscal year to the Proposed Budget. ◦ Recommendations for service level changes with a detailed description, performance outcome, and impact statement if the recommendation is not funded.
• Capital improvement appropriations by project.
• A schedule showing General Fund Revenue and Expenditure projection for the next nine years.

4. Adoption of the Budget
The City Council will adopt the budget by resolution no later than June 30th of the previous fiscal year, setting forth the amount of appropriations and authority of the City Manager to administer the adopted budget. Unless otherwise directed, all funds that are presented in the operating budget document are subject to Council approval of appropriations.

5. Budget Authority of the City Manager
The City Manager shall have the authority to make revisions involving transfers from the appropriated Unanticipated Expenditure Reserve account less than or equal to the aggregate amount of amount adopted within the budget in any one fiscal year ($1,300,000 in FY 2024-25, or approximately 1% of total General Fund appropriations), provided that the Council is notified in writing of the revision, giving the reason, the amount of the revision and the year-to- date total amount of revisions as part of the quarterly financial reports.

Additionally, the City Manager shall have the authority to:
• Amend and/or transfer appropriations among departments and projects within any one fund, provided that the amount of the amended appropriation is $100,000 or less; • Amend the budget for grant interest earned to update the grant budget revenue(s) and associated grant appropriation(s).
• Accept grants or donations up to $100,000 or less (monetary and non-monetary based upon market value), increase department revenues and appropriations accordingly and execute related agreements as long as no Fiscal Policies and Budget Process
City of Milpitas 25

matching funds are required, and/or departments do not require additional funding for ongoing maintenance costs or future replacement costs.
• Reasonably deviate from the budgeted personnel allocation schedule provided that at no time the number of permanent funded positions or personnel cost appropriations authorized by the City Council is exceeded; • Hire full-time employees in overstrength positions for no more than one year as long as appropriations are not exceeded to ensure adequate staffing levels for sworn positions, to facilitate training of new employees in critical positions by the outgoing incumbents, or to respond to urgent staffing needs; and • Add/delete positions or to move positions between departments to respond to organizational needs, as long as the number of permanent funded positions and the approved personnel cost appropriations remain the same.

Prior approval of the City Council is required for changes that:
• Increase the overall appropriation level within any one Fund. • Transfer or reallocate appropriations between different Funds. • Cause an increase or decrease in funded authorized position counts in the Adopted Budget. • Cause the aggregate amount of contract change orders to exceed 15 percent of the contract amount and/or exceed prior approved appropriation levels for the subject contract. • Cause transfers from unanticipated expenditure reserve to exceed the aggregate amount of $1,300,000 during the fiscal year.
• Result in changes not consistent with the purpose and intent of the Budget as adopted. • Require an appropriation action from any unassigned fund balances or reserves.

6. Budget Amendments by the City Council
At City Council meetings, the City Council may from time to time approve expenditures and identify funding sources not provided for in the adopted budget including those expenditures funded through unassigned fund balances or reserves.

7. Budget Transfers and Modification Procedures
Procedures to implement budget transfers or budget modifications are detailed in Standard Operating Procedure No. 21-1, subject to any changes by the Budget Resolution.

8. Automatic Adjustments and Reappropriations
Outstanding encumbrances at prior fiscal year-end will automatically be carried over to current year’s budgets.

Unspent appropriations that are authorized and funded by grant revenues or donations from prior fiscal year will automatically be carried over to current year’s budgets. Unspent City funded grant appropriations from prior fiscal year will automatically be carried over to the current year’s budgets.

Incomplete multiple year project (capital improvement project) balances will automatically be appropriated.

Any unused non-salary and benefits-related appropriations, subject to the approval of the City Manager, at the end of the fiscal year may be re-appropriated for continued use in the subsequent fiscal year. Furthermore, any outstanding contract and/or purchase order obligations (or encumbrances) remaining at the end of FY 2023-24 are subject to carry over into FY 2024-25.

Fiscal Policies and Budget Process
26 City of Milpitas

9. Budget Monitoring and Reporting
Monthly Financial Reports - The Director of Finance will prepare and make available a monthly budget report including actual expenditures and encumbrances for distribution to the City Manager and Department Heads, to facilitate monitoring of the budget.

Quarterly Financial Status Reports - The Director of Finance will periodically prepare financial status reports for presentation to the City Council. At the minimum, the report shall include the status of the General Fund revenues and expenditures; Water and Sewer utility fund revenues and expenditures; and document any use of the appropriated Unanticipated Expenditure Reserve; and report the acceptance of any grants and donations as authorized in these budget guidelines.

Annually, as part of the 4th Quarter Financial Status Report, the Director of Finance shall report on all active grants and grants closed out during the fiscal year including the purpose of the grant, the granting agency, the grant amount awarded, remaining grant funds, and grant activities completed or underway.

10. Reserves
Various unallocated reserves are desired in each of the City's funds to protect the City in emergencies, economic uncertainties, and to finance unforeseen opportunities and/or requirements. Key reserve policies for various funds are described in detail in the document entitled "City of Milpitas Fiscal Policies".

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City of Milpitas 27

City of Milpitas FY 2024-2025 Budget Process
Fiscal Policies and Budget Process
28 City of Milpitas

Budget Development and Document
Annual Budget Development
Every year the City Council adopts a Budget and Financial Plan for the next fiscal year, (the City's fiscal year runs from July 1 of one year through June 30 of the next year). Through the adoption of the annual budget, the City Council approves the funding of City services and estimates of resources available to fund the City’s services. The budget is also developed based on the following:
• The City Council’s Priority Area and other City Council directives. • The City's ten-year General Fund Financial Forecast, which is updated annually and presented to the City Council prior to the release of the proposed budget.
• Input from the Community through surveys and community meetings. • Service level prioritization as identified by the City Manager. • Availability and sustainability of revenues.
• Legal mandates.
• Prioritization criteria outlined in the capital budget.

In the fall of each year, staff develops the base budget for the upcoming fiscal year and the ten-year General Fund Financial Forecast based on available information. The base budget reflects the Council approved service level with updated costs. As part of developing the base budget for the upcoming fiscal year, staff projects the revenues and expenditures for the next 10 fiscal years to develop the Forecast. The ten-year General Fund Financial Forecast projects whether the City will experience budget shortfalls or surpluses in the next fiscal year and thereafter.

The annual public budget development process begins in January with a review of City Council Priority Areas and the presentation of the ten-year General Fund Financial Forecast. Through surveys and community meetings, staff engages the community for input into budget priorities. In May, based on the input from City Council and the community, the City Manager publishes the proposed budget for the upcoming year. During May and June, the City Council holds study sessions and public hearings prior to adopting the annual budget. The City Council adopts the Proposed Budget as it may be amended based on discussion or direction during the budget hearings. In summer, the City publishes its Adopted Budget. For the Fiscal Year 2024-25 budget development process, please review the timeline and steps shown on the previous page.

Understanding the Budget Document
The operating budget document includes city-wide information as well as information specific to each fund and each department. The City receives revenue from numerous different sources, many of which have restrictions on how they can be used. Separate funds are established to account for the different types of revenues and allowable uses of those revenues. The annual budget information is available after the publication of the annual Adopted Budget, which occurs in July or August. At this time, staff also publishes a Budget-in-Brief document and the annual budget will also be available on Open Budget, which is described below. In the Appendix, the City lists all fund names by fund type.

General Fund: This is the primary fund used to account for all general revenues of the City (e.g. property, sales, transient occupancy and utility user taxes). In general, these funds are allocated at the discretion of the City Council. This revenue is used to support citywide services such as public safety, community services, planning and community environment, and administrative support services. Some activities in the General Fund, such as building inspection and recreation functions, are also intended to be substantially self-supporting through fees for services charged to individuals. In areas where specific benefit for a service can be identified to specific individuals, the City has a policy of charging a fee to offset the cost of providing the service.

Enterprise Funds: These funds are established to function as self-supporting operations wherein expenditures are entirely offset by fees or charges for services. These funds are used to account for specific services which are funded directly by fees and charges to users. In Milpitas, Enterprise Funds include the Water Fund and the Sewer Fund. The intent is that these two funds be completely self-supporting and not be subsidized by any general Fiscal Policies and Budget Process
City of Milpitas 29

revenue or taxes. The utility bills sent to each household and business in the community charge for the cost of providing water and sewer customer services.

Internal Service Fund: This type of fund is established to account for a variety of business services provided by one City department (or division) to other City departments. The City's main internal service fund, the Equipment Management Fund, provides vehicle and fleet maintenance services that are provided to all City departments through an internal service fund. Departments are charged for these services based on their respective utilization.

Capital Projects Funds: Revenues and expenses for capital projects are accounted for in separate funds. A capital improvement is usually a large construction project such as the resurfacing of City streets, the development of park land, the construction of an overpass, the installation of a traffic signal, or the acquisition of land and construction or remodeling of a public building. The City's Capital Improvement Funds include Street Improvement Fund, the Park Fund, General Government Fund, and Storm Drain Fund Construction Fund.

Special Revenue Funds: These funds are used to account for the proceeds of revenues that are designated for specific or restricted uses. These funds include gas tax funds from the State, federal revenue for Justice Assistance Grants, and Lightning and Maintenance District funds.

Budgets and Budgetary Accounting
The City’s budget is adopted on a basis consistent with generally accepted accounting principles (GAAP) except that encumbrances are considered budgetary expenditures in the year of the commitment to purchase, and capital project expenditures are budgeted on a project length basis.

The legal level of budgetary control or authorized appropriations is exercised at the departmental level for those funds which have annually adopted budgets such as the General Fund, Enterprise Funds, Special Revenue Funds and Capital Improvement Funds. Finance is responsible for ensuring that appropriations are not exceeded during the fiscal year.

Appropriations automatically lapse at the end of the fiscal year unless an encumbrance exists, with the exception of balances remaining in the capital project accounts and grant accounts at the end of the fiscal year. These balances are carried forward to the following fiscal year until the project is completed.

Prop 4 - Appropriations Limit
The City establishes an appropriations limit by resolution consistent with the State Constitution, each year during the budget process, which commences after the beginning of each fiscal year. The appropriation base is adjusted each year by changes in population, cost of living and transfers of financial responsibility. As shown in the Financial Information section of the Adopted Budget document, the City has not exceeded its annual Appropriations Limit for the last ten years and in any single fiscal year since this requirement was approved by the voters in 1979.

Budget Amendments
The operating budget is subject to supplemental appropriations throughout its term in order to provide flexibility to meet changing needs and conditions consistent with the Council approved Budget Guidelines. Per the Guidelines, the City Manager is authorized to amend and/or transfer appropriations among departments and projects within any one fund, provided that the amount of the amended appropriation is $100,000 or less as well as other authorizations related to positions. Otherwise, any other budget amendment which changes the total appropriation for a department or fund requires Council approval.

Examples of these amendments include but are not limited to:
• The acceptance of additional grant money which might become available; • The number of positions approved in the Budget;
• The appropriation of additional funding if expenditures are projected to exceed budgeted amounts; or • The re-appropriation of monies from one fund to another.

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30 City of Milpitas

Basis of Accounting
Basis of accounting refers to when revenues and expenditures are recognized in the accounts and reported in the financial statements, regardless of the measurement that is applied. All governmental funds and agency funds are accounted for using the modified accrual basis of accounting. Fund revenues are recognized when they become measurable and available as net current assets. Measurable means the amount of the transaction can be determined and available means the amount is collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period.

Those revenues susceptible to accrual are property and sales taxes and interest revenue. Transient Occupancy Tax, forfeitures, licenses, permits, and miscellaneous revenue are not susceptible to accrual because they are not measurable until received in cash. Revenues not considered earned but received are accounted for as revenue collected in advance.

Expenditures are also generally recognized under the modified accrual basis of accounting. An exception to this rule is principal and interest on general long-term debt, which is not recognized until it is due. Financial resources usually are appropriated in funds responsible for repaying debt in the period in which maturing debt principal and interest must be paid.

All proprietary funds are accounted for using the accrual basis of accounting. Their revenues are recognized when they are earned, and their expenses are recognized when they are incurred. Revenues for services provided but not billed at the end of the fiscal year are not material and are not accrued.

Cost Accounting
The City uses cost accounting to determine the proper allocation to recover costs for services provided. For each City service or program, in addition to direct staff support and appropriations for supplies and services, it also receives support from the administrative staff and benefits from centralized services such as equipment maintenance. These indirect costs (also known as administrative and overhead costs) need to be allocated to each major service or program in order to determine the full cost of providing City services. Similarly, the centralized service costs also need to be allocated to various operating funds. Centralized service costs are typically budgeted and advanced by the General Fund. Cost allocation is necessary to ensure that each of these operating funds share the administrative and overhead costs equitably.

Department Information
The Budget Narrative and Summary section of the budget document summarizes the service delivery and budgetary information for each department as follows: Mission Statement, Description, and Services highlight the purpose and functions for each department.

Organizational Chart: this functional organizational chart depicts full-time equivalent (FTE) positions, which report to a department director and identifies any position changes such as additions, deletions, or reclassifications; position moves from one department to another; and temporary positions.

Accomplishments: identifies the department’s noteworthy accomplishments over the past 12 to 18 months and their alignment to Council Priority Areas.

Initiatives: highlights the major work plan items for the department for the upcoming Fiscal Year and their alignment to Council Priority Areas.

Performance and Workload Measures: lists key department performance measures and identifies key quantifiable department outputs.

Budget Summary: summarizes key expenditure data for the department for several fiscal years by function, if applicable, and expenditure categories.

Staffing: lists all full-time equivalent (FTE) positions for the department for several fiscal years by function, if applicable, and by classifications. Positions were defunded as part of the FY 2020-21 Mid-Year and FY 2021-22 Proposed Budget process and they are noted in the staffing tables and footnotes.

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City of Milpitas 31

Budget Reconciliation: outlines the major base budget and service level changes from the previously adopted budget to the newly presented proposed or adopted budget. Base budget reconciliation changes include deletion of one-time expenditures, updated salary and benefits cost in accordance with the salary and benefits structure approved the City Council, or addition of ongoing expenditures as approved by the City Council. The service level change table itemizes service level changes and related expenditures.

Service Level Changes: describes service level changes compared to the prior fiscal year in alignment with the dominant Council Priority Area identified with one of the icons below; the anticipated performance impact as it relates to Quality, Cost, Cycle Time, Customer Satisfaction, and Sustainability with the icons identified below; and the impact, if the service level change is not funded.

Council Priority Areas Icons:

Community Wellness
and Open Space
Continue to provide parks and amenities for people of all ages and abilities to enjoy higher levels of physical and mental health.

Economic Development
and Job Growth
Continue to strengthen our economic foundations that support community prosperity and opportunity while ensuring a sustainable and livable city.

Environment Promote a sustainable community and protect the natural environment.

Governance and
Administration
Continue to streamline processes for enhanced service and remain committed to long-term fiscal discipline and financial stewardship.

Neighborhoods
and Housing
Continue to explore innovative approaches to incentivize affordable housing projects, collaborate with key stakeholders to care for our most vulnerable populations, and support and engage
neighborhoods through dedicated programs and services.

Public Safety Continue to invest in police and fire protection, in partnership with our community.

Transportation
and Transit
Continue to seek and develop collaborative solutions to meet the transportation challenges facing our community and our region.

Performance Impact Icons:

Cost
Cycle Time
Customer Satisfaction
Quality
Sustainability
Fiscal Policies and Budget Process
32 City of Milpitas

Open Budget
In order to facilitate understanding and transparency of the budget document, the City presents budget information through OpenGov, an online tool that provides users with different views of the City’s budget data by fund, department, revenues, and expenditures. The tool can be accessed by visiting www.milpitasca.opengov.com. The City invites you to use the online tool to:
• Search the current year’s budget and financial data.
• View trends in revenues and expenditures over time.
• Drill down into expenses by department or account type. • Display the data as graphs or charts.
• Download into Excel.
• Share with friends using email or social media.
• Send comments directly to the City online.

How Does it Work?
Governmental budgets are composed of funds, departments, and accounts. Using a pull-down filter, you can choose the combination you want to explore.

By clicking on one these icons, you can choose whether you want to display graphs showing changes over the years, a pie chart for a single year, or download portions into Excel.

You can also cut and paste any illustration into another document, send it to friends using email or X, or post it on Facebook!

Note: On the OpenGov portal, numbers may appear slightly different due to rounding.

Fiscal Policies and Budget Process
City of Milpitas 33

Fiscal Policies and Budget Process
34 City of Milpitas

Fiscal Policies and Budget Process
City of Milpitas 35

Fiscal Policies and Budget Process
36 City of Milpitas

Fund Structure
Accrual Basis of Budgeting

Basis of Budgeting
City budgets are adopted on a basis
consistent with generally accepted
accounting principles ( GAAP) except
that encumbrances are considered
budgetary expenditures in the year of
the commitment to purchase, and
capital project expenditures are
budgeted on a project length basis
rather than a fiscal year. For all
governmental funds, revenues and
expenditures are budgeted on a
modified accrual basis for all proprietary
funds, revenues and expenditures are
budgeted on an accrual basis.

Accrual Basis is a basis of accounting
in which transactions are recognized at
the time they are incurred, as opposed
to when cash is received and spent.

Modified Accrual Basis is a basis of
accounting in which revenues are
recognized when measurable and
available and expenditures are recorded
when the related fund liability is
incurred.

Financial Information
City of Milpitas 37

Budget Summary Grand Total General Fund(1)
Estimated Revenues
Property Taxes .......................................................................................................... $50,091,338 $50,091,338 Sales Taxes ............................................................................................................... 36,902,855 36,902,855 Transient Occupancy Tax ........................................................................................ 13,032,550 13,032,550 Licenses, Permits & Fines ....................................................................................... 10,121,049 9,231,118 Charges For Services .............................................................................................. 73,425,189 7,957,721 Franchise Fees ......................................................................................................... 6,110,422 5,990,422 Use of Money & Property ........................................................................................ 5,102,337 1,179,201 Other Taxes ............................................................................................................... 5,535,399 1,135,518 Intergovernmental Revenue .................................................................................... 4,546,763 399,201 Other Revenue .......................................................................................................... 21,794,146 288,309 Operating Transfers In ............................................................................................. 20,670,767 8,478,722 sub-total 247,332,815 134,686,955
Other Financing Sources
(Increase) Decrease in Fund Balance ................................................................... 1,969,836 2,500,000 (Increase) Decrease in CIP Reserve ..................................................................... (931,516) 0 Other Financing Sources ......................................................................................... 0 0 sub-total 1,038,320 2,500,000
TOTAL $248,371,138 $137,186,955
Budgeted Appropriations
Personnel Services .................................................................................................. $120,006,125 $105,755,307 Non-Personnel Expenditures .................................................................................. 68,672,590 26,550,094 Capital Outlay ............................................................................................................ 1,117,844 278,709 Operating Transfers Out .......................................................................................... 20,670,767 3,345,645 sub-total 210,467,326 135,929,755
Capital Improvements .............................................................................................. 33,172,962 0 Debt Service .............................................................................................................. 4,730,850 1,257,200 sub-total 37,903,812 1,257,200
TOTAL $248,371,141 $137,186,955
Fund Balance
Fund Balance 7/01/2024 ......................................................................................... 312,760,708 64,810,766 Net Changes in Fund Balance ................................................................................ (1,038,319) (2,500,000) TOTAL $311,722,389 $62,310,766
Restricted ................................................................................................................... $33,389,810 $0 Restricted for CIP ..................................................................................................... 110,842,644 0 Committed for CIP .................................................................................................... 74,150,280 0 Committed, Artificial Turf .......................................................................................... 1,900,000 1,900,000 Committed, Technology ........................................................................................... 4,500,000 4,500,000 Committed, Facilities ................................................................................................ 2,000,000 2,000,000 Committed for PERS ................................................................................................ 14,342,943 6,072,492 Unassigned, Unrestricted ........................................................................................ 4,286,178 1,631,720 Committed, Workers' Compensation ..................................................................... 2,914,954 2,914,954 Future Deficit Reserve ............................................................................................. 1,452,576 1,452,576 ERAF Reserve .......................................................................................................... 2,322,866 2,322,866 Capital Reserve, Unassigned ................................................................................. 12,886,810 Contingency Reserve, Unassigned ....................................................................... 19,758,079 19,758,079 Budget (Rate) Stabilization, Unassigned .............................................................. 26,975,248 19,758,079 TOTAL $311,722,390 $62,310,766
(1) General Fund, Abandon Vehicle Abatement Fund, 1452 S. Main St Fund and administration funds of the former Redevelopment Agency. (2) Other Funds include Community Benefit Fund, Community Facility District Funds, Community Planning Fee Fund, Gas Tax Fund, Equipment Replacement Fund, Housing and Community Development Fund, Information Technology Replacement Fund, Law Enforcement Grant Funds, Light & Landscape Maintenance District Funds, Measure B Fund, Permit Automation Fund, Public Art Fund, and Solid Waste Services Fund. The decrease in Fund Balance is mostly attributed to changes in Solid Waste Services and Housing Authority Fund.

Financial Information
38 City of Milpitas

Housing Authority Other Funds (2) Capital Projects(3) Water Fund(4) Sewer Fund(5) $0 $0 $0 $0 $0
0 0 0 0 0
0 0 0 0 0
0 889,931 0 0 0
80,000 3,849,999 0 36,716,936 24,820,533
0 120,000 0 0 0
37,241 529,259 1,636,847 871,521 848,268
0 4,399,881 0 0 0
0 670,000 3,477,562 0 0
0 6,250,717 14,704,412 249,418 301,290
0 345,645 11,846,400 0 0
117,241 17,055,432 31,665,221 37,837,875 25,970,091 207,546 3,405,668 0 3,409,240 (7,552,618)
0 (45,174) (9,217,721) 2,390,195 5,941,184
0 0 0 0 0
207,546 3,360,494 (9,217,721) 5,799,435 (1,611,434) $324,787 $20,415,926 $22,447,500 $43,637,310 $24,358,657 $0 $5,713,143 $257,938 $4,871,593 $3,408,144
324,787 3,398,110 20,600 28,558,943 9,820,056
0 619,210 0 174,816 45,109
0 10,685,466 644,000 3,725,508 2,270,148
324,787 20,415,929 922,538 37,330,860 15,543,457
0 0 21,524,962 5,260,000 6,388,000
0 0 0 1,046,450 2,427,200
0 0 21,524,962 6,306,450 8,815,200
$324,787 $20,415,929 $22,447,500 $43,637,310 $24,358,657 2,478,877 37,133,431 102,366,336 56,382,820 49,588,478 (207,546) (3,360,494) 9,217,721 (5,799,435) 1,611,434 $2,271,331 $33,772,937 $111,584,057 $50,583,385 $51,199,912 $2,271,331 $31,118,479 $0 $0 $0
0 0 68,368,926 20,745,580 21,728,138
0 0 43,215,131 21,483,503 9,451,646
0 0 0 0 0
0 0 0 0 0
0 0 0 0 0
0 0 0 1,097,481 7,172,970
0 2,654,458 0 0 0
0 0 0 0 0
0 0 0 0 0
0 0 0 0 0
4,922,712 7,964,098
0 0 0 0 0
0 0 0 2,334,109 4,883,060
$2,271,331 $33,772,937 $111,584,057 $50,583,385 $51,199,912 (3) Capital Projects include Street Improvement Fund, Park Improvement Funds, General Government Capital Improvement Fund, Storm Drain Capital Improvement Fund and Transit Area Impact Fee Fund.
(4) Water Fund includes Water Maintenance & Operations Fund, 2019 Water Bonds Fund, Water CIP Fund, Water Line Extension Fund, and Water Infrastructure Replacement Fund.
(5) Sewer Fund includes Sewer Maintenance & Operations Fund, 2019 Wastewater Bonds Fund, Sewer Fund CIP, Treatment Plant Construction Fund and Sewer Infrastructure replacement Fund.

Financial Information
City of Milpitas 39

FY 2024-25 Revenues
(All Funds)
$248.4 Million
Property Taxes
$50,091,338
Intergovernmental Revenue
$4,546,763
Sales Taxes
$36,902,855
Transient Occupancy Tax
$13,032,550
Licenses, Permits & Fines
$10,121,049
Use of Money & Property
$5,102,337
Other Taxes
$5,535,399
Charges For Services
$73,425,189
Franchise Fees
$6,110,422
Other Revenue
$21,794,146
Operating Transfers In
$20,670,767
Net Use of Reserves
$1,038,320
*$248.4 Million revenue excludes changes in fund balance and/or CIP reserve of $1.1 million and interfund transfers of $18.8 million.

Financial Information
40 City of Milpitas

FY 2024-25 Expenditures
(All Funds)
$248.4 Million
City Manager
$2,282,984
Building Safety and Housing
$8,512,471
Fire
$31,176,575
Recreation
$6,981,057
City Attorney
$1,273,882
Finance
$7,392,088
Information Technology
$5,556,020
Police
$43,701,759
Planning
$2,550,974
Economic Development
$1,284,930Public Works
$26,788,842
City Clerk
$634,488
Non-Departmental
$48,354,554
Engineering
$5,056,607
City Council
$631,378
Capital Improvement Projects
$33,172,962
Human Resources
$2,348,798
Transfers Out
$20,670,767
Financial Information
City of Milpitas 41

Funded Permanent Positions by Department
Adopted
Budget
21-22
Change
from the
prior FY
Adopted
Budget
22-23
Change
from the
prior FY
Adopted
Budget
23-24
Change
from the
prior FY
Proposed
Budget
24-25
Change
from the
prior FY
City Council 5.00 0.00 5.00 0.00 5.00 0.00 5.00 0.00 City Manager 5.50 (0.50) 5.50 0.00 6.00 0.50 5.00 (1.00) City Clerk 2.50 (0.50) 2.50 0.00 3.00 0.50 3.00 0.00 Economic Development 3.00 0.00 3.00 0.00 4.00 1.00 4.00 0.00 City Attorney 0.00 (1.00) 3.00 3.00 3.00 0.00 3.00 0.00 Building Safety and
Housing 31.00 (2.00) 31.00 0.00 30.00 (1.00) 28.00 (2.00) Finance 28.50 (1.00) 29.50 1.00 29.00 (0.50) 30.00 1.00 Fire 77.00 (6.00) 82.00 5.00 82.00 0.00 82.00 0.00 Human Resources 6.00 (1.00) 7.00 1.00 7.00 0.00 8.00 1.00 Information Technology 12.00 (1.00) 13.00 1.00 14.00 1.00 14.00 0.00 Planning 9.00 (1.00) 9.00 0.00 9.00 0.00 9.00 0.00 Police 124.00 (2.00) 127.00 3.00 128.00 1.00 128.00 0.00 Public Works 97.00 (2.00) 106.00 9.00 114.00 8.00 118.00 4.00 Recreation and
Community Services 15.00 (5.75) 17.00 2.00 18.00 1.00 18.00 0.00 TOTAL 415.50 (23.75) 440.50 25.00 452.00 11.50 455.00 3.00 Funded Permanent Positions
455 FTEs - All Funds
Fiscal Years Adopted Budget
FTEs
FTEs Population
10-11 11-12 12-13 13-14 14-15 15-16 16-17 17-18 18-19 19-20 20-21 21-22 22-23 23-24 24-25 100
150
200
250
300
350
400
450
500
550
50,000
55,000
60,000
65,000
70,000
75,000
80,000
85,000
90,000
*Population is based upon US Census estimates except in FY2019-20 the Official US Census was published, in FY2021-22 US Census republished an estimate with a decline, and subsequently population is estimated based upon 10-year US Census growth factor. **Great Recession occurred in FY 2009-10 and Redevelopment Agency Dissolution (RDA) occurred in FY 2012-13.

Financial Information
42 City of Milpitas

All Permanent Positions by Department*
Adopted
Budget
21-22
Change
from the
prior FY
Adopted
Budget
22-23
Change
from the
prior FY
Adopted
Budget
23-24
Change
from the
prior FY
Proposed
Budget
24-25
Change
from the
prior FY
City Council 5.00 0.00 5.00 0.00 5.00 0.00 5.00 0.00 City Manager 6.00 0.00 6.00 0.00 6.00 0.00 6.00 0.00 City Clerk 3.00 0.00 3.00 0.00 3.00 0.00 3.00 0.00 Economic Development 3.00 0.00 3.00 0.00 4.00 1.00 4.00 0.00 City Attorney 0.00 (1.00) 3.00 3.00 3.00 0.00 3.00 0.00 Building Safety and
Housing 33.00 0.00 33.00 0.00 32.00 (1.00) 30.00 (2.00) Finance 29.50 0.00 29.50 0.00 29.00 (0.50) 30.00 1.00 Fire 82.00 (1.00) 83.00 1.00 83.00 0.00 83.00 0.00 Human Resources 7.00 0.00 7.00 0.00 7.00 0.00 8.00 1.00 Information Technology 13.00 0.00 13.00 0.00 14.00 1.00 14.00 0.00 Planning 9.00 (1.00) 9.00 0.00 9.00 0.00 9.00 0.00 Police 126.00 0.00 127.00 1.00 128.00 1.00 128.00 0.00 Public Works 100.00 1.00 108.00 8.00 115.00 7.00 119.00 4.00 Recreation and
Community Services 20.75 0.00 20.75 0.00 20.75 0.00 20.75 0.00 TOTAL 437.25 (2.00) 450.25 13.00 458.75 8.50 462.75 4.00 *This table includes 7.75 positions that, while still authorized by the Mayor and City Council as part of the City's staffing portfolio, have been defunded in order to balance the City's budget. These positions will be considered for re-instatement on an annual basis based upon funding availability and staffing needs.

All Permanent Positions
462.75 FTEs - All Funds
Fiscal Years Adopted Budget
FTEs
FTEs Population
10-11 11-12 12-13 13-14 14-15 15-16 16-17 17-18 18-19 19-20 20-21 21-22 22-23 23-24 24-25 100
150
200
250
300
350
400
450
500
550
50,000
55,000
60,000
65,000
70,000
75,000
80,000
85,000
90,000
**Population is based upon US Census estimates except in FY2019-20 the Official US Census was published, in FY2021-22 US Census republished an estimate with a decline, and subsequently population is estimated based upon 10-year US Census growth factor. **Great Recession occurred in FY 2009-10 and Redevelopment Agency Dissolution (RDA) occurred in FY 2012-13.

Financial Information
City of Milpitas 43

Revenues by Fund
100 General Fund ..................................................... $118,854,472 $128,469,687 $126,975,672 $134,506,955 103 1452-1474 S. Main ........................................... 87,916 96,494 77,000 80,000 105 Abandon Veh Abatement ................................. 131,758 128,940 80,000 100,000 106 Short Term Disability ........................................ 61,162 0 0 0 109 Utility Rate Assistance ..................................... 93,447 468,428 0 0 150 Redevelopment Administration ....................... 15,973 0 0 0 211 Hetch Hetchy Ground Lease ........................... 10,049 20,909 41,727 23,668 213 Public Art Fund-Nonrestricted ......................... 183,212 95,645 31,027 17,599 214 Community Planning Fee Fund ...................... 268,874 544,413 337,700 207,204 215 Community Benefit Fund ................................. 3,228 64,385 10,608 6,019 216 Affordable Housing Fund ................................. 1,314,306 910,369 148,231 84,077 217 Affordable Housing Unrestricted .................... 314,701 744,007 69,032 39,155 221 Gas Tax Fund .................................................... 1,801,314 4,812,345 2,400,276 2,357,229 225 SB1 Road Maintenance & Rehab .................. 1,607,552 1,862,882 2,027,406 2,120,238 235 95-1 Lighting/Lscape Dist ................................ 417,674 432,768 455,793 495,800 236 98-1 Lighting/Lscape Dist ................................ 69,029 77,766 91,977 89,413 237 05 Community Fclty Dist .................................. 1,410,555 1,595,078 1,342,549 1,724,134 238 08 Community Fclty Dist .................................. 2,736,063 3,087,674 3,174,117 3,749,732 250 HCD Fund .......................................................... 1,232,162 581,154 647,982 650,000 251 HCD Loan .......................................................... 261,109 0 0 0 261 Supplemental Law Enforcement .................... 51,876 132,109 109,266 5,256 262 State Asset Seizure .......................................... 186 156 310 176 263 Federal Asset Seizure ...................................... 155 1,021 1,824 1,034 267 Federal Grants Police Department ................ 145,721 45,763 0 0 268 State Grants Police Department ..................... 79,423 50,625 9,627 5,460 269 Grants Fire Department ................................... 16,569 38,887 0 0 280 Solid Waste Services ....................................... 176,302 2,081,164 176,517 1,320,316 295 Housing Authority .............................................. 942,506 689,874 165,658 117,241 310 Street Fund ........................................................ 338,921 771,428 0 75,657 311 Street CIP ........................................................... 9,038,948 4,153,967 5,810,000 6,317,562 312 Traffic Impact Fee ............................................. 0 0 0 0 314 Vehicle Registration Fee .................................. 971,677 471,322 0 504,171 315 Calaveras Widening Impact Fee .................... 80,877 4,521 0 1,245 316 Montague Widening Impact Fee .................... 0 0 0 0 Fund Number/Description 2021-22
Actual
2022-23
Actual
2023-24
Adopted
2024-25
Proposed
Financial Information
44 City of Milpitas

317 Milpitas Business Park Impact Fee ................ 0 0 0 0 320 Park Improvement Fund .................................. 1,562,596 73,953 0 83,287 321 Park Improvement CIP ..................................... 1,016,795 438,647 755,000 130,000 322 Midtown Park Fund ........................................... 8,365 672,982 0 21,909 330 General Government ........................................ 1,105,726 4,903,141 0 373,690 331 General Government CIP ................................ 20,936,741 5,552,064 9,961,100 13,318,400 334 2020 Fire Station Bonds .................................. 6,665 21,666 0 0 340 Storm Drain Development ............................... 1,613,527 228,083 306,332 78,317 341 Storm Drain CIP ................................................ 145,000 200,000 1,958,000 950,000 342 Storm Drain General Fund .............................. 4,403 1,433,883 500,000 513,718 350 Transit Area Impact Fee Fund ........................ 6,336,725 1,613,364 6,984,000 15,689,265 351 Transit Area Impact Fee CIP Fund ................. 3,400,000 0 8,000 809,000 400 Water M & O Fund ............................................ 31,029,403 31,290,575 34,177,434 33,556,620 401 Water CIP ........................................................... 11,263,154 0 3,571,000 5,260,000 402 Water Line Extension Fund ............................. 456,516 498,452 1,105,631 308,110 403 2019 Water Bonds ............................................ 36,619 69,436 0 0 405 Water Infrastructure Replacement ................. 7,026,041 3,714,727 4,325,064 3,973,145 450 Sewer M & O Fund ........................................... 21,715,502 25,313,518 23,826,215 25,161,275 451 Sewer CIP .......................................................... 15,011,440 0 10,068,000 6,388,000 452 Treatment Plant Construction ......................... 662,710 592,146 1,557,988 381,181 453 2017 Sewer Refunding Bonds ........................ 0 0 0 0 454 2019 Sewer Bonds ........................................... 17,423 9,844 0 0 455 Sewer Infrastructure Replacement ................ 7,156,740 357,295 753,936 427,635 500 Equipment Replacement Fund ....................... 3,875,914 3,381,895 3,612,663 3,477,344 505 Information Technology Replacement ........... 897,121 1,384,131 342,366 324,030 506 Permit Automation Fund .................................. 511,081 411,447 413,309 357,548 TOTAL $ 278,513,924 $ 234,595,030 $ 248,410,337 $ 266,181,815 Less Interfund Operating Transfers* (21,923,000) (18,849,000) (Increase) Decrease of Reserves 5,381,996 1,038,319
TOTAL BUDGET SUMMARY REVENUES $ 231,869,333 $ 248,371,138 Fund Number/Description 2021-22
Actual
2022-23
Actual
2023-24
Adopted
2024-25
Proposed
*Interfund Operating Transfers are transfers within the same fund group on the Budget Summary Financial Information
City of Milpitas 45

GENERAL FUND (100)

PROPERTY TAXES
3010 Secured & Unsecured ........................................... $22,036,593 $24,358,604 $24,290,084 $26,190,300 3013 Vehicle License Fee .............................................. 8,841,568 9,545,088 9,926,800 10,497,900 3014 Educational Revenue Augmentation Fund ........ 3,938,170 3,804,718 2,487,100 3,359,538 3051 Redevelopment Property Tax Trust Fund .......... 7,942,534 9,502,011 9,319,870 10,043,600 sub-total 42,758,865 47,210,421 46,023,854 50,091,338

SALES TAXES
3110 Sales and Use Tax ................................................. 26,608,048 30,128,378 27,740,006 28,402,000 3111 Public Safety Sales and Use Tax ........................ 1,154,762 1,131,424 1,137,554 1,160,305 3113 Measure F Sales Tax ............................................. 6,601,464 7,215,906 6,991,000 7,340,550 sub-total 27,762,810 38,475,708 35,868,560 36,902,855

OTHER TAXES
3120 Real Estate Transfer Tax ...................................... 957,985 626,302 715,484 735,518 3140 Business License Tax ............................................ 320,623 333,988 312,676 320,000 3511 Motor Vehicle In-Lieu ............................................ 87,410 84,066 60,426 80,000 sub-total 1,366,018 1,044,356 1,088,586 1,135,518

FRANCHISE FEES
3131 Electric Franchise .................................................. 1,450,797 1,681,812 1,716,085 1,800,000 3132 Gas Franchise ........................................................ 321,066 393,044 420,343 427,809 3133 Garbage Franchise-Commercial ......................... 2,929,983 3,171,086 3,090,440 3,342,613 3138 CATV Franchise ..................................................... 485,940 443,780 585,000 420,000 sub-total 5,187,786 5,689,722 5,811,868 5,990,422

TRANSIENT OCCUPANCY TAX
3150 Transient Occupancy Tax ..................................... 8,012,647 11,189,757 11,811,236 13,032,550 sub-total 8,012,647 11,189,757 11,811,236 13,032,550

LICENSES, PERMITS, AND FINES
3210 Building Permit & Inspection Fees ...................... 6,579,802 3,911,650 4,509,000 4,511,450 3217 Building Plan Review Fees .................................. 2,014,445 1,946,601 2,000,000 2,330,000 3220 Fire Permit & Inspection Fees ............................. 1,478,231 1,073,154 1,064,500 1,089,000 3240 Fire Annual Permit & Inspection Fees ................ 826,845 870,174 789,013 917,868 3260 Other Licenses & Permits ..................................... 48,427 48,575 47,500 47,000 3300 Fines & Forfeits ...................................................... 336,052 441,036 252,007 335,800 sub-total 11,283,802 8,291,190 8,662,020 9,231,118

USE OF MONEY AND PROPERTY
3430 Investment Interest ................................................ 193,112 590,349 414,000 1,179,201 3770 Sale of Property, Plant, & Equipment ................. 117,522 4,201 0 0 sub-total 310,634 594,550 414,000 1,179,201
Revenues by Fund (Detail) 2021-22
Actual
2022-23
Actual
2023-24
Adopted
2024-25
Proposed
Financial Information
46 City of Milpitas

INTERGOVERNMENTAL
3550 Federal Contributions ............................................ 2,241,025 483,775 340,728 0 3560 State Contributions ................................................ 413,257 1,077,102 150,000 0 3570 County Contributions ............................................. 143,835 280,957 229,844 279,201 3580 Other Restricted Grants ........................................ 38,767 43,794 20,000 20,000 sub-total 2,836,884 1,885,628 740,572 299,201

CHARGES FOR CURRENT SERVICES
3600 General Government Service Charges .............. 564,104 676,047 455,290 732,985 3610 Engineering Service Charges .............................. 801,051 856,024 1,458,500 1,138,000 3630 Fire Service Charges ............................................ 278,806 589,476 474,500 450,600 3640 Police Service Charges ........................................ 1,098,482 1,131,754 1,053,471 1,137,020 3650 Recreation Service Charges ................................ 2,360,242 2,671,826 3,951,764 3,887,116 3660 Building Service Charges ..................................... 2,428 9,363 23,500 6,000 3680 Planning Service Charges .................................... 502,489 503,903 617,000 526,000 sub-total 5,608,794 6,512,527 8,034,025 7,877,721

OTHER REVENUE
3710 Development .......................................................... 136,899 154,755 189,425 188,309 3740 Reimbursements .................................................... 0 7,474 0 0 3750 Donations ................................................................ 46,700 0 100 0 3790 Miscellaneous Other Revenue ............................ 184,598 232,213 200,000 100,000 sub-total 368,197 394,442 389,525 288,309

OPERATING TRANSFERS IN
3806 Op Trfs in from Solid Waste Service ................... 138,558 157,997 136,505 182,066 3809 Op Tfrs in Street Improv Fund ............................. 0 0 0 0 3812 Op Trfs in from Water Fund .................................. 2,571,407 2,687,393 2,869,298 3,038,508 3815 Op Trfs in from Sewer Fund ................................. 1,482,966 1,444,196 1,503,623 1,583,148 3819 Op Trfs in from Other ............................................ 2,560,000 2,879,042 3,172,000 3,675,000 3822 Op Trfs in from General Gov't Fund .................... 0 0 450,000 0 3826 Op Trfs in from Measure I TOT Fund .................. 0 0 0 0 3852 Appn Tfr in from General Gov't Fund .................. 0 0 0 0 sub-total 6,752,931 7,168,628 8,131,426 8,478,722
TOTAL (100) 112,249,368 128,456,929 126,975,672 134,506,955 1452-1474 S. MAIN (103)
3430 Investment Interest ................................................ 10,239 16,992 0 0 3600 General Government Service Charges .............. 77,677 79,502 77,000 80,000 TOTAL (103) 87,916 96,494 77,000 80,000
Revenues by Fund (Detail) 2021-22
Actual
2022-23
Actual
2023-24
Adopted
2024-25
Proposed
Financial Information
City of Milpitas 47

ABANDON VEH ABATEMENT (105)
3570 County Contributions ............................................. 130,099 128,940 80,000 100,000 3899 Op Trfs in from Subsidiary CIP Fund .................. 1,659 0 0 0 TOTAL (105) 131,758 128,940 80,000 100,000
SHORT TERM DISABILITY (106)
3899 Op Trfs in from Subsidiary CIP Fund .................. 61,162 0 0 0 TOTAL (106) 61,162 0 0 0
UTILITY RATE ASSISTANCE (109)
3430 Investment Interest ................................................ 3,857 8,341 0 0 3790 Miscellaneous Other Revenue ............................ 89,590 460,087 0 0 3899 Op Trfs in from Subsidiary CIP Fund .................. 0 0 0 0 TOTAL (109) 93,447 468,428 0 0
REDEVELOPMENT ADMINISTRATION (150)
3899 Op Trfs in from Subsidiary CIP Fund .................. 15,973 0 0 0 TOTAL (150) 15,973 0 0 0
HETCH HETCHY GROUND LEASE (211)
3430 Investment Interest ................................................ 10,049 20,909 41,727 23,668 TOTAL (211) 10,049 20,909 41,727 23,668
PUBLIC ART FUND-NONRESTRICTED (213)
3430 Investment Interest ................................................ 7,048 15,069 31,027 17,599 3710 Development .......................................................... 176,164 80,576 0 0 TOTAL (213) 183,212 95,645 31,027 17,599
COMMUNITY PLANNING FEE FUND (214)
3430 Investment Interest ................................................ 3,683 6,217 12,700 7,204 3680 Planning Service Charges .................................... 265,191 302,712 325,000 200,000 TOTAL (214) 268,874 308,929 337,700 207,204
COMMUNITY BENEFIT FUND (215)
3430 Investment Interest ................................................ 3,228 4,385 10,608 6,017 3710 Development .......................................................... 0 60,000 0 2 TOTAL (215) 3,228 64,385 10,608 6,019
AFFORDABLE HOUSING FUND (216)
3430 Investment Interest ................................................ 44,833 72,183 148,231 84,077 3710 Development .......................................................... 1,083,650 786,631 0 0 3819 Op Trfs in from Other ............................................ 0 0 0 0 3831 Appn Transfers in from General Fund ................ 0 0 0 0 TOTAL (216) 1,128,483 858,814 148,231 84,077
Revenues by Fund (Detail) 2021-22
Actual
2022-23
Actual
2023-24
Adopted
2024-25
Proposed
Financial Information
48 City of Milpitas

AFFORDABLE HOUSING FUND UNRESTR. (217)
3434 Investment Interest ............................................... 19,475 27,504 69,032 39,155 TOTAL (217) 19,475 27,504 69,032 39,155
GAS TAX FUND (221)
3430 Investment Interest ................................................ 11,609 43,199 77,647 44,042 3540 Gas Tax ................................................................... 1,789,607 2,057,753 2,322,629 2,313,187 3802 Op Trfs in from Gas Tax Fund .............................. 0 0 0 0 3809 Op Tfrs in Street Improv Fund ............................. 98 848,458 0 0 TOTAL (221) 1,801,314 2,949,410 2,400,276 2,357,229 SB1 ROAD MAINTENANCE & REHABILITATION
(225)
3434 Road Maintenance & Rehabilitation ................... 47,186 24,966 0 33,544 3549 Road Maintenance & Rehabilitation ................... 1,557,260 1,830,348 2,027,406 2,086,694 TOTAL (225) 1,604,446 1,855,314 2,027,406 2,120,238 95-1 LIGHTING/LSCAPE DIST (235)
3430 Investment Interest ................................................ 698 1,716 2,507 1,422 3720 Special Assessments ............................................ 396,992 409,692 430,902 471,051 3801 Op Trfs in from General Fund .............................. 19,984 21,360 22,384 23,327 TOTAL (235) 417,674 432,768 455,793 495,800
98-1 LIGHTING/LSCAPE DIST (236)
3430 Investment Interest ................................................ 381 9,427 19,932 11,306 3720 Special Assessments ............................................ 48,042 47,833 50,612 55,789 3801 Op Trfs in from General Fund .............................. 20,606 20,506 21,433 22,318 TOTAL (236) 69,029 77,766 91,977 89,413
05 COMMUNITY FCLTY DIST (237)
3430 Investment Interest ................................................ 15,883 23,142 42,549 24,134 3720 Special Assessments ............................................ 1,394,672 1,571,936 1,300,000 1,700,000 TOTAL (237) 1,410,555 1,595,078 1,342,549 1,724,134 08 COMMUNITY FCLTY DIST (238)
3430 Investment Interest ................................................ 2,670 7,822 2,117 1,201 3720 Special Assessments ............................................ 2,733,393 3,079,852 3,172,000 3,748,531 TOTAL (238) 2,736,063 3,087,674 3,174,117 3,749,732 HCD FUND (250)
3550 Federal Contributions ............................................ 1,232,162 581,154 647,982 650,000 TOTAL (250) 1,232,162 581,154 647,982 650,000
Revenues by Fund (Detail) 2021-22
Actual
2022-23
Actual
2023-24
Adopted
2024-25
Proposed
Financial Information
City of Milpitas 49

HCD LOAN (251)
3430 Investment Interest ................................................ 42 0 0 0 TOTAL (251) 42 0 0 0
SUPPLEMENTAL LAW ENFORCEMENT (261)
3430 Investment Interest ................................................ 2,308 3,775 9,266 5,256 3560 State Contributions ................................................ 49,568 128,334 100,000 0 TOTAL (261) 51,876 132,109 109,266 5,256
STATE ASSET SEIZURE (262)
3430 Investment Interest ................................................ 186 156 310 176 3560 State Contributions ................................................ 0 0 0 0 TOTAL (262) 186 156 310 176
FEDERAL ASSET SEIZURE (263)
3430 Investment Interest ................................................ 155 1,021 1,824 1,034 TOTAL (263) 155 1,021 1,824 1,034
FEDERAL GRANTS POLICE DEPARTMENT (267)
3550 Federal Contributions ............................................ 145,721 45,763 0 0 TOTAL (267) 145,721 45,763 0 0
STATE GRANTS POLICE DEPARTMENT (268)
3430 Investment Interest ................................................ 4,214 3,968 9,627 5,460 3560 State Contributions ................................................ 75,209 46,657 0 0 TOTAL (268) 79,423 50,625 9,627 5,460
GRANTS FIRE DEPARTMENT (269)
3550 Federal Contributions ............................................ 16,569 0 0 0 3570 County Contributions ............................................. 0 38,887 0 0 TOTAL (269) 16,569 38,887 0 0
SOLID WASTE SERVICES (280)
3139 County-wide AB 939 Fee ...................................... 149,936 98,933 150,000 120,000 3219 Building Misc Fees & Permits .............................. 0 0 0 889,931 3430 Investment Interest ................................................ 10,825 16,158 26,517 15,041 3560 State Contributions ................................................ 8,195 95,209 0 20,000 3610 Engineering Service Charges .............................. 0 0 0 0 3670 Utility Charges ........................................................ 6,925 19,732 0 0 3740 Reimbursements .................................................... 0 0 0 0 3790 Miscellaneous Other Revenue ............................ 0 0 0 275,344 3822 Op Trfs in from General Gov't Fund .................... 0 0 0 0 TOTAL (280) 175,881 230,032 176,517 1,320,316
HOUSING AUTHORITY (295)
3430 Investment Interest ................................................ 654,117 446,176 65,658 37,241 3600 General Government Service Charges .............. 100,509 81,496 100,000 80,000 3770 Sale of Property, Plant, & Equipment ................. 0 87,063 0 0 TOTAL (295) 754,626 614,735 165,658 117,241
Revenues by Fund (Detail) 2021-22
Actual
2022-23
Actual
2023-24
Adopted
2024-25
Proposed
Financial Information
50 City of Milpitas

STREET FUND (310)
3430 Investment Interest ................................................ 43,667 61,180 0 75,657 3790 Miscellaneous Other Revenue ............................ 0 0 0 0 3831 Appn Transfers in from General Fund ................ 295,254 710,248 0 0 TOTAL (310) 338,921 771,428 0 75,657
STREET CIP (311)
3560 State Contributions ................................................ 155,316 1,660,442 2,700,000 2,177,562 3570 County Contributions ............................................. 1,046,620 401,811 0 0 3710 Development .......................................................... 0 0 0 0 3802 Op Trfs in from Gas Tax Fund .............................. 1,585,568 378,026 900,000 620,000 3810 Op Trfs in from Park Improvement ...................... 0 0 0 0 3815 Op Trfs in from Sewer Fund ................................. 0 0 0 0 3819 Op Trfs in from Other ............................................ 82,220 1,713,688 1,500,000 2,000,000 3822 Op Trfs in from General Gov't Fund .................... 100,000 0 0 0 3824 Op Trfs in Transit Area Fund ................................ 0 0 0 0 3826 Op Trfs in from Measure I TOT Fund .................. 0 0 0 0 3849 Other Appn Transfers In ........................................ 0 0 0 0 3899 Op Trfs in from Subsidiary CIP Fund .................. 1,652,736 0 710,000 1,520,000 TOTAL (311) 4,622,460 4,153,967 5,810,000 6,317,562 TRAFFIC IMPACT FEE (312)
3430 Investment Interest ................................................ 0 0 0 0 3710 Development .......................................................... 0 0 0 0 3899 Op Trfs in from Subsidiary CIP Fund .................. 0 0 0 0 TOTAL (312) 0 0 0 0
VEHICLE REGISTRATION FEE (314)
3430 Investment Interest ................................................ 8,918 5,172 0 4,171 3570 County Contributions ............................................. 962,759 466,150 0 500,000 3809 Op Tfrs in Street Improv Fund ............................. 0 0 0 0 3822 Op Trfs in from General Gov't Fund .................... 0 0 0 0 3829 Op Trfs in from Vehicle Registration Fee ........... 0 0 0 0 TOTAL (314) 971,677 471,322 0 504,171
CALAVERAS WIDENING IMPACT FEE (315)
3430 Investment Interest ................................................ 2,703 1,114 0 1,245 3710 Development .......................................................... 78,174 3,407 0 0 TOTAL (315) 80,877 4,521 0 1,245
MONTAGUE WIDENING IMPACT FEE (316)
3430 Investment Interest ................................................ 0 0 0 0 TOTAL (316) 0 0 0 0
MILPITAS BUSINESS PARK IMPACT FEE (317)
3430 Investment Interest ................................................ 0 0 0 0 TOTAL (317) 0 0 0 0
Revenues by Fund (Detail) 2021-22
Actual
2022-23
Actual
2023-24
Adopted
2024-25
Proposed
Financial Information
City of Milpitas 51

PARK IMPROVEMENT FUND (320)
3430 Investment Interest ................................................ 57,162 73,953 0 83,287 3712 Park Development Fees ....................................... 1,505,434 0 0 0 3822 Op Trfs in from General Gov't Fund .................... 0 0 0 0 3824 Op Trfs in Transit Area Fund ................................ 0 0 0 0 3899 Op Trfs in from Subsidiary CIP Fund .................. 0 0 0 0 TOTAL (320) 1,562,596 73,953 0 83,287
PARK IMPROVEMENT CIP (321)
3815 Op Trfs in from Sewer Fund ................................. 0 0 0 0 3822 Op Trfs in from General Gov't Fund .................... 0 0 0 0 3824 Op Trfs in Transit Area Fund ................................ 0 0 0 0 3831 Appn Transfers in from General Fund ................ 0 0 0 0 3852 Appn Transfers in from General Gov't ................ 75,000 0 0 0 3899 Op Trfs in from Subsidiary CIP Fund .................. 135,000 0 755,000 130,000 TOTAL (321) 1,016,795 438,647 755,000 130,000
MIDTOWN PARK FUND (322)
3430 Investment Interest ................................................ 8,365 16,989 0 21,909 3710 Development .......................................................... 0 655,993 0 0 3899 Op Trfs in from Subsidiary CIP Fund .................. 0 0 0 0 TOTAL (320) 8,365 672,982 0 21,909
GENERAL GOVERNMENT (330)
3430 Investment Interest ................................................ 130,702 335,807 0 373,690 3801 Op Trfs in from General Fund .............................. 0 0 0 0 3809 Op Tfrs in Street Improv Fund ............................. 0 0 0 0 3810 Op Trfs in from Park Improvement ...................... 9,516 328,004 0 0 3822 Op Trfs in General Government .......................... 0 0 0 0 3823 Op Trfs in Storm Drain Fund ................................ 0 3,844 0 0 3831 Appn Transfers in from General Fund ................ 590,508 3,830,745 0 0 3899 Op Trfs in from Subsidiary CIP Fund .................. 375,000 0 0 0 3982 Capital Leases ........................................................ 0 0 0 0 TOTAL (330) 1,105,726 4,498,400 0 373,690
GENERAL GOVERNMENT CIP (331)
3560 State Contributions ................................................ 315,000 342,972 250,000 600,000 3580 Other Restricted Grants ........................................ 134,158 700,702 0 0 3710 Development .......................................................... 200,000 0 0 0 3801 Op Trfs in from General Fund .............................. 0 0 2,400,000 2,500,000 3802 Op Trfs in from Gas Tax Fund .............................. 608,947 595,000 1,715,000 2,110,000 3803 Op Trfs in from Gas Tax Fund .............................. 261,000 142,500 50,000 50,000 3809 Op Tfrs in Street Improv Fund ............................. 0 0 0 0 3810 Op Trfs in from Park Improvement ...................... 0 500,000 900,000 150,000 3815 Op Trfs in from Sewer Fund ................................. 0 0 0 325,000 Revenues by Fund (Detail) 2021-22
Actual
2022-23
Actual
2023-24
Adopted
2024-25
Proposed
Financial Information
52 City of Milpitas

3817 Op Trfs in from Equipment Replacement ........... 161,131 0 0 0 3819 Op Trfs in from Other ............................................ 1,362,485 924,000 404,000 2,674,000 3824 Op Trfs in Transit Area Fund ................................ 78,000 144,000 144,000 144,000 3827 Op Trfs in from LLMD Fund .................................. 4,000 11,000 89,100 98,400 3847 Appn Transfers in from Equipment ..................... 0 0 0 0 3849 Other Appn Transfers In ........................................ 0 1,786 0 0 3899 Op Trfs in from Subsidiary CIP Fund .................. 17,646,963 0 4,009,000 4,342,000 TOTAL (331) 20,771,684 3,361,960 9,961,100 13,318,400 2020 FIRE STATION BONDS (334)
3970 Bond Proceeds ....................................................... 0 0 0 0 TOTAL (331) 0 0 0 0
STORM DRAIN DEVELOPMENT (340)
3430 Investment Interest ................................................ 32,674 63,824 0 78,317 3710 Development .......................................................... 550,092 164,259 306,332 0 3831 Appn Transfers in from General Fund ................ 885,761 0 0 0 3899 Op Trfs in from Subsidiary CIP Fund .................. 145,000 0 0 0 TOTAL (340) 1,613,527 228,083 306,332 78,317
STORM DRAIN CIP (341)
3815 Op Trfs in from Sewer Fund ................................. 0 0 0 0 3822 Op Trfs in from General Gov't Fund .................... 0 200,000 0 350,000 3852 Appn Transfers in General Government ............ 145,000 0 0 0 3899 Op Trfs in from Subsidiary CIP Fund .................. 0 0 1,958,000 600,000 TOTAL (341) 145,000 200,000 1,958,000 950,000
STORM DRAIN GENERAL FUND (342)
3434 Op Trfs in from Sewer Fund ................................. 4,430 11,963 0 13,718 3801 Op Trfs in from General Fund .............................. 0 0 500,000 500,000 TOTAL (342) 4,430 11,963 500,000 513,718
TRANSIT AREA IMPACT FEE FUND (350)
3430 Investment Interest ................................................ 422,635 868,430 0 984,853 3710 Development .......................................................... 5,914,090 728,766 6,984,000 14,704,412 3812 Op Trfs in from Water Fund .................................. 0 0 0 0 3899 Op Trfs in from Subsidiary CIP Fund .................. 0 0 0 0 TOTAL (350) 6,336,725 1,597,196 6,984,000 15,689,265 TRANSIT AREA IMPACT FEE CIP FUND (351)
3570 County Contributions ............................................. 0 0 0 0 3710 Development .......................................................... 0 0 0 0 3899 Op Trfs in from Subsidiary CIP Fund .................. 3,400,000 0 8,000 609,000 TOTAL (351) 3,400,000 0 8,000 809,000
WATER M & O FUND (400)
3430 Investment Interest ................................................ 194,927 523,553 428,455 585,286 3550 Federal Contributions ............................................ 148,601 0 0 0 Revenues by Fund (Detail) 2021-22
Actual
2022-23
Actual
2023-24
Adopted
2024-25
Proposed
Financial Information
City of Milpitas 53

3580 Other Restricted Grants ........................................ 56,846 59,084 0 0 3620 Public Works Service Charges ............................ 0 0 0 0 3670 Utility Charges ........................................................ 30,241,457 30,647,787 33,748,979 32,971,334 3790 Miscellaneous Other Revenue ............................ 379,560 59,517 0 0 3981 Contributions-Proprietary Fund ........................... 0 0 0 0 3809 Op Trfs in from Street Fund .................................. 0 0 0 0 3899 Op Trfs in from Subsidiary CIP Fund .................. 0 0 0 0 TOTAL (400) 31,021,391 31,289,941 34,177,434 33,556,620 WATER CIP (401)
3810 Op Trfs in from Park Improvement ...................... 0 0 0 0 3824 Op Trfs in Transit Area Fund ................................ 0 0 0 0 3899 Op Trfs in from Subsidiary CIP Fund .................. 11,263,154 0 3,571,000 5,260,000 TOTAL (401) 11,263,154 0 3,571,000 5,260,000
WATER LINE EXTENSION FUND (402)
3430 Investment Interest ................................................ 28,551 50,884 103,476 58,692 3710 Development .......................................................... 418,344 437,947 1,002,155 249,418 3790 Miscellaneous Other Revenue ............................ 9,621 9,621 0 0 3812 Op Trfs in from Water Fund .................................. 0 0 0 0 3899 Op Trfs in from Subsidiary CIP Fund .................. 0 0 0 0 TOTAL (402) 456,516 498,452 1,105,631 308,110
2019 WATER BONDS (403)
3970 Bond Proceeds ....................................................... 0 0 0 0 TOTAL (403) 0 0 0 0
WATER INFRASTRUCTURE REPLACEMENT (405)
3430 Investment Interest ................................................ 95,164 190,311 401,167 227,543 3670 Utility Charges ........................................................ 3,633,708 3,422,345 3,923,897 3,745,602 3899 Op Trfs in from Subsidiary CIP Fund .................. 3,195,098 0 0 0 TOTAL (405) 6,923,970 3,612,656 4,325,064 3,973,145 SEWER M & O FUND (450)
3430 Investment Interest ................................................ 22,025 321,169 286,967 340,742 3435 Gain/Loss on Investments .................................... 254,038 254,038 0 0 3670 Utility Charges ........................................................ 21,330,793 24,698,395 23,539,248 24,820,533 3550 Federal Contributions ............................................ 100,623 0 0 0 3580 Other Restricted Grants ........................................ 0 0 0 0 3790 Miscellaneous Other Revenue ............................ 0 0 0 0 3809 Op Trfs in from Street Fund .................................. 11 0 0 0 3899 Op Trfs in from Subsidiary CIP Fund .................. 0 0 0 0 TOTAL (450) 21,707,490 25,273,602 23,826,215 25,161,275 SEWER CIP (451)
3899 Op Trfs in from Subsidiary CIP Fund .................. 15,011,440 0 10,068,000 6,388,000 TOTAL (451) 15,011,440 0 10,068,000 6,388,000
Revenues by Fund (Detail) 2021-22
Actual
2022-23
Actual
2023-24
Adopted
2024-25
Proposed
Financial Information
54 City of Milpitas

TREATMENT PLANT CONSTRUCTION (452)
3430 Investment Interest ................................................ 55,337 54,111 140,851 79,891 3710 Development .......................................................... 607,373 538,035 1,417,137 301,290 TOTAL (452) 662,710 592,146 1,557,988 381,181
2017 SEWER REFUNDING BONDS (453)
3430 Investment Interest ................................................ 0 0 0 0 TOTAL (453) 0 0 0 0
2019 SEWER BONDS (454)
3970 Bond Proceeds ....................................................... 0 0 0 0 TOTAL (454) 0 0 0 0
SEWER INFRASTRUCTURE REPLACEMENT (455)
3430 Investment Interest ................................................ 215,762 357,295 753,936 427,635 3899 Intrafund Trf In-Parent/Child ................................. 6,940,978 0 0 0 TOTAL (455) 7,156,740 357,295 753,936 427,635
EQUIPMENT REPLACEMENT FUND (500)
3430 Investment Interest ................................................ 71,885 158,682 312,663 177,344 3610 Engineering Service Charges .............................. 600 0 0 0 3620 Public Works Service Charges ............................ 3,227,255 3,145,354 3,300,000 3,300,000 3670 Utility Charges ........................................................ 0 0 0 0 3770 Sale of Property, Plant and Equipment .............. 80,616 12,326 0 0 3790 Miscellaneous Other Revenue ............................ 1,696 65,533 0 0 3981 Contributions-Proprietary Fund ........................... 0 0 0 0 3822 Op Trfs in from General Gov't Fund .................... 0 0 0 0 TOTAL (500) 3,382,052 3,381,895 3,612,663 3,477,344 INFORMATION TECHNOLOGY REPLACEMENT (505)
3430 Investment Interest ................................................ 6,613 18,758 42,366 24,030 3801 Op Trfs in from General Fund .............................. 300,000 300,000 300,000 300,000 TOTAL (505) 306,613 318,758 342,366 324,030
PERMIT AUTOMATION FUND (506)
3430 Investment Interest ................................................ 4,492 4,710 13,309 7,549 3601 General Government Service Charges .............. 506,589 406,737 400,000 350,000 TOTAL (506) 511,081 411,447 413,309 357,549
TOTAL REVENUES $ 265,045,540 $ 224,400,616 $ 247,910,337 $ 266,181,816 Less Interfund Operating Transfers* (21,923,000) (18,849,000) (Increase) Decrease of Reserves 5,381,996 1,038,319
TOTAL BUDGET SUMMARY REVENUES $ 231,369,333 $ 248,371,138 Revenues by Fund (Detail) 2021-22
Actual
2022-23
Actual
2023-24
Adopted
2024-25
Proposed
*Interfund Operating Transfers are transfers within the same fund group on the Budget Summary Financial Information
City of Milpitas 55

100 General Fund ........................................................ $112,275,224 $122,026,892 $129,199,524 $136,896,652 103 1452-1474 S. Main ................................................ 28,578 34,010 54,000 12,900 105 Abandon Veh Abatement ..................................... 129,884 150,467 10,000 10,000 109 Utility Rate Assistance .......................................... 15,170 308,016 256,700 256,700 150 Redevelopment Administration ........................... 16,302 11,358 12,447 10,703 211 H-Hetch Ground Lease ......................................... 37,014 35,789 39,000 43,100 213 Public Art Fund-Nonrestricted ............................. 326,000 143,957 50,000 50,000 214 Community Planning Fee Fund ........................... 839,370 529,185 265,175 383,456 215 Community Benefit Fund ...................................... 8,890 6,110 0 0 216 Affordable Housing Fund ...................................... 947,553 926,027 1,153,116 1,088,924 221 Gas Tax Fund ......................................................... 2,194,515 973,026 2,615,000 2,730,000 222 Measure B .............................................................. 0 0 0 0 225 SB1 Road Maintenance & Rehab ....................... 82,220 1,713,687 1,500,000 2,000,000 235 95-1 Lighting/Lscape Dist ..................................... 266,593 321,160 446,457 495,800 236 98-1 Lighting/Lscape Dist ..................................... 32,523 36,197 72,044 89,413 237 05 Community Fclty Dist ...................................... 1,336,098 1,775,574 1,704,769 1,972,596 238 08 Community Fclty Dist ...................................... 2,675,489 2,940,669 3,242,630 3,749,732 250 HCD Fund ............................................................... 1,232,162 581,154 647,982 650,000 251 HCD Loan ............................................................... 8,841 0 0 0 261 Supplemental Law Enforcement ......................... 51,416 132,649 0 0 262 State Asset Seizure ............................................... 60,000 0 30,000 30,000 263 Federal Asset Seizure ........................................... 0 0 30,000 30,000 267 Justice Assistance Grant ...................................... 145,721 46,763 0 0 268 Justice Assistance Grant 2009 ............................ 75,208 47,747 0 0 269 Grant Fund ............................................................. 16,569 38,887 0 0 280 Solid Waste Services ............................................ 694,706 840,157 963,432 1,320,316 295 Housing Authority .................................................. 7,074,576 549,928 431,639 324,787 310 Street Fund ............................................................. 109 848,458 210,000 1,020,000 311 Street CIP ............................................................... 8,962,287 8,007,294 5,810,000 6,317,562 314 Vehicle Registration Fee ...................................... 219,745 0 500,000 500,000 317 Milpitas Business Pk Impact Fe .......................... 0 0 0 0 320 Park Improvement Fund ....................................... 44,516 883,454 1,655,000 280,000 321 Park Improvement CIP ......................................... 6,024,411 3,330,967 755,000 130,000 322 Midtown Park Fund ............................................... 450,000 0 0 0 330 General Government ............................................ 3,860,946 435,484 4,459,000 4,692,000 Expenditures by Fund 2021-22
Actual
2022-23
Actual
2023-24
Adopted
2024-25
Proposed
Financial Information
56 City of Milpitas

331 General Government CIP ..................................... 15,810,287 9,402,736 9,961,100 13,318,400 334 2020 Fire Station Bonds ....................................... 14,106,017 0 0 0 340 Storm Drain Development .................................... 0 3,844 1,400,000 500,000 341 Storm Drain CIP ..................................................... 1,032,517 1,441,653 1,958,000 950,000 342 Storm Drain General Fund ................................... 0 0 558,000 100,000 350 Transit Area Impact Fee Fund ............................. 6,978,000 573,660 197,659 1,031,538 351 Transit Area Impact Fee CIP Fund ..................... 2,518,369 1,036,711 8,000 809,000 400 Water M & O Fund ................................................ 29,896,673 28,103,451 33,817,170 36,965,860 401 Water CIP ............................................................... 9,084,311 5,210,314 3,571,000 5,260,000 402 Water Line Extension Fund .................................. 0 0 0 180,000 403 2019 Water Bonds ................................................. 9,173,153 0 0 0 405 Water Infrastructure Replmnt ............................... 3,160,546 1,311,850 4,817,450 6,491,450 450 Sewer M & O Fund ................................................ 20,051,556 17,354,230 17,049,605 17,608,657 451 Sewer CIP ............................................................... 13,576,431 6,432,907 10,068,000 6,388,000 452 Treatment Plant Construction .............................. 0 0 500,000 1,849,000 454 2019 Wastewater Bonds ...................................... 6,394,195 0 0 0 455 Sewer Infrastrture Repmnt ................................... 8,833,730 262,000 9,770,000 4,901,000 500 Equipment Mgnt Fund .......................................... 2,706,887 2,850,881 3,276,846 3,311,479 505 Information Tec Replmt ......................................... 154,905 43,216 250,000 2,200,000 506 Permit Automation Fund ....................................... 897,873 732,440 476,587 271,112 TOTAL $ 294,508,086 $ 222,434,959 $ 253,792,332 $ 267,220,137 Less Interfund Operating Transfers* (21,923,000) (18,849,000)

TOTAL BUDGET SUMMARY
EXPENDITURES $ 231,869,332 $ 248,371,141
Expenditures by Fund 2021-22
Actual
2022-23
Actual
2023-24
Adopted
2024-25
Proposed
*Interfund Operating Transfers are transfers within the same fund group on the Budget Summary Financial Information
City of Milpitas 57

Expenditures by Fund (Detail)
GENERAL FUND (100)
City Council ........................ $386,978 $244,400 $0 $0 $0 $0 $631,378 City Manager ...................... 1,686,273 509,800 0 0 0 0 2,196,073 City Clerk ............................ 594,488 40,000 0 0 0 0 634,488 Economic Development ... 1,051,827 179,664 0 0 0 0 1,231,491 City Attorney ....................... 831,242 382,900 0 0 0 0 1,214,142 Building Inspection ............ 2,400,452 49,003 0 0 0 0 2,449,455 Building Safety
Administration .................... 368,915 7,000 0 0 0 0 375,915 Housing and
Neighborhood Svcs .......... 902,758 689,370 0 0 0 0 1,592,128 Permit Center ..................... 808,077 14,000 0 0 0 0 822,077 Plan Review ....................... 1,548,282 13,600 0 0 0 0 1,561,882 Design & Construction ...... 1,754,505 53,105 0 0 0 0 1,807,610 Engineering
Administration .................... 309,277 24,110 0 0 0 0 333,387 Land Development ............ 1,659,270 171,400 0 0 0 0 1,830,670 Traffic Engineering ............ 627,176 122,635 0 0 0 0 749,811 Finance Administration ..... 2,143,222 362,228 0 0 0 0 2,505,450 Finance Operations .......... 2,112,723 63,701 0 0 0 0 2,176,424 Fiscal Services-Utilities .... 285,275 228,428 0 0 0 0 513,703 EMS Transport Services .. 0 67,000 0 0 0 0 67,000 Fire Administration ............ 2,088,940 87,878 0 0 0 0 2,176,818 Fire Prevention .................. 2,867,212 31,998 0 0 0 0 2,899,210 Fire Prevention
Administration .................... 1,110,476 60,391 0 0 0 0 1,170,867 Office of Emergency
Management ...................... 257,744 39,500 0 0 0 0 297,244 Operations Division ........... 21,572,323 2,952,705 0 0 0 0 24,525,028 Human Resources ............ 1,686,856 661,942 0 0 0 0 2,348,798 Information Technology .... 3,261,738 1,873,667 0 0 0 0 5,135,405 Long Range Planning ....... 41,361 0 0 0 0 0 41,361 Planning .............................. 1,951,995 78,150 0 0 0 0 2,030,145 Communications ................ 4,320,336 332,469 0 0 0 0 4,652,805 Community Relations ....... 1,095,936 35,400 0 0 0 0 1,131,336 Crossing Guards ............... 0 830,147 0 0 0 0 830,147 Investigations ..................... 5,122,720 478,132 0 0 0 0 5,600,852 Patrol Services .................. 23,791,676 1,150,936 0 0 0 0 24,942,612 Personnel & Training ........ 837,041 268,300 0 0 0 0 1,105,341 Police Administration ........ 2,139,163 16,371 0 0 0 0 2,155,534 Records .............................. 1,341,431 270,499 0 0 0 0 1,611,930 Traffic .................................. 1,500,459 100,743 0 0 0 0 1,601,202 FUND/FUNCTION Personal
Services
Supplies
Contractual
Services
Capital
Outlay
Debt
Service
Capital
Improvement
s
Operating
Transfers
Out
Total
Financial Information
58 City of Milpitas

Compliance ........................ 69,920 318,003 0 0 0 0 387,923 Facilities Maintenance ...... 2,415,555 1,347,014 0 0 0 0 3,762,569 Park Maintenance ............. 152,865 1,438,567 0 0 0 0 1,591,432 Public Works
Administration .................... 838,182 112,101 0 0 0 0 950,283 Solid Waste Services ........ 8,000 0 0 0 0 0 8,000 Street Maintenance ........... 1,341,323 600,399 0 0 0 0 1,941,722 Trees & Landscape Mnt .. 1,173,746 631,488 0 0 0 0 1,805,234 Utility Maintenance ............ 968,716 193,560 0 0 0 0 1,162,276 Aquatics .............................. 428,492 16,940 0 0 0 0 445,432 General Classes ................ 118,251 497,874 0 0 0 0 616,125 Marketing ............................ 227,566 122,567 0 0 0 0 350,133 Performing Arts .................. 91,941 96,530 0 0 0 0 188,471 Recreation Administration 1,946,728 130,533 0 0 0 0 2,077,261 Senior Services ................. 476,362 299,664 0 0 0 0 776,026 Social Services .................. 138,762 30,500 0 0 0 0 169,262 Special Events ................... 259,461 323,184 0 0 0 0 582,645 Sports & Fitness ................ 636,928 52,378 0 0 0 0 689,306 Youth Programs ................. 866,812 219,584 0 0 0 0 1,086,396 Equipment to be
Depreciated ........................ 0 0 278,709 0 0 0 278,709 Non-Departmental ............. (882,153) 7,357,036 0 0 0 0 6,474,883 Transfers Out ..................... 0 0 0 0 0 3,345,645 3,345,645 sub-total (100) 105,735,604 26,279,494 278,709 1,257,200 0 3,345,645 136,896,652 1452-1474 S. MAIN (103)
1452 S. Main Street
Properties ........................... 0 12,900 0 0 0 0 12,900 sub-total (103) 0 12,900 0 0 0 0 12,900
ABANDON VEHICLE ABATEMENT (105)
Traffic .................................. 10,000 0 0 0 0 0 10,000 sub-total (105) 10,000 0 0 0 0 0 10,000
UTILITY RATE ASSISTANCE (109)
Non-Departmental ............. 0 256,700 0 0 0 0 256,700 sub-total (109) 0 256,700 0 0 0 0 256,700
REDEVELOPMENT ADMINISTRATION (150)
Finance Administration ..... 908 0 0 0 0 0 908 Finance Operations .......... 8,213 0 0 0 0 0 8,213 Non-Departmental ............. 0 1,000 0 0 0 0 1,000 City Manager ...................... 171 0 0 0 0 0 171 Fiscal Services-Utilities .... 411 0 0 0 0 0 411 sub-total (150) 9,703 1,000 0 0 0 0 10,703
FUND/FUNCTION Personal
Services
Supplies
Contractual
Services
Capital
Outlay
Debt
Service
Capital
Improvement
s
Operating
Transfers
Out
Total
Financial Information
City of Milpitas 59

HETCH HETCHY GROUND LEASE (211)
Non-Departmental ............. 0 43,100 0 0 0 0 43,100 sub-total (211) 0 43,100 0 0 0 0 43,100
PUBLIC ART FUND-NONRESTRICTED (213)
Recreation Administration 0 0 0 0 0 0 0
Transfers Out ..................... 0 0 0 0 0 50,000 50,000 sub-total (213) 0 0 0 0 0 50,000 50,000
COMMUNITY PLANNING FEE FUND (214)
Long Range Planning ....... 234,370 0 0 0 0 0 234,370 Planning .............................. 149,086 0 0 0 0 0 149,086 Non-Departmental ............. 0 0 0 0 0 0 0
Transfers Out ..................... 0 0 0 0 0 0 0 sub-total (214) 383,456 0 0 0 0 0 383,456
AFFORDABLE HOUSING FUND (216)
City Manager ...................... 31,740 27,500 0 0 0 0 59,240 Planning .............................. 96,012 0 0 0 0 0 96,012 Building Safety
Administration .................... 25,411 0 0 0 0 0 25,411 City Attorney ....................... 0 21,630 0 0 0 0 21,630 Economic Development ... 53,439 0 0 0 0 0 53,439 Finance Operations .......... 108,185 0 0 0 0 0 108,185 sub-total (216) 969,794 119,130 0 0 0 0 1,088,924 GAS TAX FUND (221)
Transfers Out ..................... 0 0 0 0 0 2,730,000 2,730,000 sub-total (221) 0 0 0 0 0 2,730,000 2,730,000
SB1 ROAD MAINT & REHAB (225)
Transfers Out ..................... 0 0 0 0 0 2,000,000 2,000,000 sub-total (225) 0 0 0 0 0 2,000,000 2,000,000
95-1 LIGHTING/LSCAPE DIST (235)
Land Development ............ 400 96,379 0 0 0 0 96,779 Public Works
Administration .................... 6,961 0 0 0 0 0 6,961 Street Maintenance ........... 39,851 0 0 0 0 0 39,851 Trees & Landscape Mnt ... 170,856 106,353 0 0 0 0 277,209 Transfers Out ..................... 0 0 0 0 0 75,000 75,000 sub-total (235) 218,068 202,732 0 0 0 75,000 495,800 FUND/FUNCTION Personal
Services
Supplies
Contractual
Services
Capital
Outlay
Debt
Service
Capital
Improvement
s
Operating
Transfers
Out
Total
Financial Information
60 City of Milpitas

98-1 LIGHTING/LSCAPE DIST (236)
Land Development ............ 400 5,500 0 0 0 0 5,900 Street Maintenance ........... 474 0 0 0 0 0 474 Trees & Landscape Mnt ... 31,143 28,496 0 0 0 0 59,639 Transfers Out ..................... 0 0 0 0 0 23,400 23,400 sub-total (236) 32,017 33,996 0 0 0 23,400 89,413 05 COMMUNITY FCLTY DIST (237)
Park Maintenance ............. 333,791 100,121 0 0 0 0 433,912 Public Works
Administration .................... 165,869 0 0 0 0 0 165,869 Street Maintenance ........... 285,421 0 0 0 0 0 285,421 Trees & Landscape Mnt ... 895,953 183,941 0 0 0 0 1,079,894 Non-Departmental ............. 0 7,500 0 0 0 0 7,500 sub-total (237) 1,681,034 291,562 0 0 0 0 1,972,596 08 COMMUNITY FCLTY DIST (238)
Park Maintenance ............. 0 69,332 0 0 0 0 69,332 Non-Departmental ............. 0 5,400 0 0 0 0 5,400 Transfers Out ..................... 0 0 0 0 0 3,675,000 3,675,000 sub-total (238) 0 74,732 0 0 0 3,675,000 3,749,732 HCD FUND (250)
Housing and
Neighborhood Svcs .......... 0 643,000 0 0 0 0 643,000 Non-Departmental ............. 0 7,000 0 0 0 0 7,000 sub-total (250) 0 650,000 0 0 0 0 650,000
STATE-ASSET SEIZURE (262)
Investigations ..................... 0 0 30,000 0 0 0 30,000 sub-total (262) 0 0 30,000 0 0 0 30,000
FEDERAL ASSET SEIZURE (263)
Investigations ..................... 0 0 30,000 0 0 0 30,000 sub-total (263) 0 0 30,000 0 0 0 30,000
SOLID WASTE SERVICES (280)
Solid Waste ........................ 870,689 258,395 0 0 0 0 1,129,084 City Manager ...................... 0 9,166 0 0 0 0 9,166 Transfers Out ..................... 0 0 0 0 0 182,066 182,066 sub-total (280) 870,689 267,561 0 0 0 182,066 1,320,316 FUND/FUNCTION Personal
Services
Supplies
Contractual
Services
Capital
Outlay
Debt
Service
Capital
Improvement
s
Operating
Transfers
Out
Total
Financial Information
City of Milpitas 61

HOUSING AUTHORITY (295)
Housing and
Neighborhood Svcs .......... 0 233,100 0 0 0 0 233,100 1432 S. Main Street
Properties ........................... 0 34,300 0 0 0 0 34,300 City Attorney ....................... 0 8,240 0 0 0 0 8,240 Non-Departmental ............. 0 49,147 0 0 0 0 49,147 sub-total (295) 0 324,787 0 0 0 0 324,787
STREET IMPROVEMENT (310)
Transfers Out ..................... 0 0 0 0 0 1,020,000 1,020,000 sub-total (310) 0 0 0 0 0 1,020,000 1,020,000
STREET CIP (311)
Capital Improvement
Projects ............................... 0 0 0 0 6,317,562 0 6,317,562 Transfers Out ..................... 0 0 0 0 0 0 0 sub-total (311) 0 0 0 0 6,317,562 0 6,317,562
VEHICLE REGISTRATION FEE (314)
Transfers Out ..................... 0 0 0 0 0 500,000 500,000 sub-total (314) 0 0 0 0 0 500,000 500,000
PARK IMPROVEMENT FUND (320)
Transfers Out ..................... 0 0 0 0 0 280,000 280,000 sub-total (320) 0 0 0 0 0 280,000 280,000
PARK IMPROVEMENT CIP (321)
Capital Improvement
Projects ............................... 0 0 0 0 130,000 0 130,000 Transfers Out ..................... 0 0 0 0 0 0 0 sub-total (321) 0 0 0 0 130,000 0 130,000
MIDTOWN PARK FUND (322)
Transfers Out ..................... 0 0 0 0 0 0 0 sub-total (322) 0 0 0 0 0 0 0
GENERAL GOVERNMENT (330)
Transfers Out ..................... 0 0 0 0 0 4,692,000 4,692,000 sub-total (330) 0 0 0 0 0 4,692,000 4,692,000
FUND/FUNCTION Personal
Services
Supplies
Contractual
Services
Capital
Outlay
Debt
Service
Capital
Improvement
s
Operating
Transfers
Out
Total
Financial Information
62 City of Milpitas

GENERAL GOVERNMENT CIP (331)
Capital Improvement
Projects ............................... 0 0 0 0 13,318,400 0 13,318,400 Transfers Out ..................... 0 0 0 0 0 0 0 sub-total (331) 0 0 0 0 13,318,400 0 13,318,400
2020 FIRE STATION BONDS (334)
Transfers Out ..................... 0 0 0 0 0 0 0 sub-total (334) 0 0 0 0 0 0 0
STORM DRAIN DEVELOPMENT (340)
Transfers Out ..................... 0 0 0 0 0 500,000 500,000 sub-total (340) 0 0 0 0 0 500,000 500,000
STORM DRAIN CIP (341)
Capital Improvement
Projects ............................... 0 0 0 0 950,000 0 950,000 Transfers Out ..................... 0 0 0 0 0 0 0 sub-total (341) 0 0 0 0 950,000 0 950,000
STORM DRAIN GENERAL FUND (342)
Transfers Out ..................... 0 0 0 0 0 100,000 100,000 sub-total (342) 0 0 0 0 0 100,000 100,000
TRANSIT AREA IMPACT FEE FUND (350)
Debt Service ...................... 0 0 0 0 0 0 0 Engineering
Administration .................... 232,450 0 0 0 0 0 232,450 Finance Administration ..... 25,488 0 0 0 0 0 25,488 City Attorney ....................... 0 20,600 0 0 0 0 20,600 City Manager ...................... 0 0 0 0 0 0 0 Transfers Out ..................... 0 0 0 0 0 753,000 753,000 sub-total (350) 257,938 20,600 0 0 0 753,000 1,031,538 TRANSIT AREA IMPACT FEE CIP FUND (351)
Capital Improvement
Projects ............................... 0 0 0 0 809,000 0 809,000 sub-total (351) 0 0 0 0 809,000 0 809,000
WATER M & O FUND (400)
Land Development ............ 0 0 0 0 0 0 0
Finance Administration ..... 0 0 0 0 0 0 0
Finance Operations .......... 0 0 0 0 0 0 0
Fiscal Services-Utilities .... 870,656 380,518 0 0 0 0 1,251,174 Compliance ........................ 195,951 87,014 0 0 0 0 282,965 FUND/FUNCTION Personal
Services
Supplies
Contractual
Services
Capital
Outlay
Debt
Service
Capital
Improvement
s
Operating
Transfers
Out
Total
Financial Information
City of Milpitas 63

City Attorney ....................... 0 9,270 0 0 0 0 9,270 Public Works
Administration .................... 832,147 264,764 0 0 0 0 1,096,911 Street Maintenance ........... 83,903 0 0 0 0 0 83,903 Utility Engineering ............. 774,537 181,853 0 0 0 0 956,390 Utility Maintenance ............ 2,039,183 799,665 41,000 0 0 0 2,879,848 Non-Departmental ............. 75,216 26,823,692 0 0 0 0 26,898,908 Transfers Out ..................... 0 0 133,816 0 0 3,363,508 3,497,324 sub-total (400) 4,871,593 28,555,943 174,816 0 0 3,363,508 36,965,860 WATER CIP (401)
Capital Improvement
Projects ............................... 0 0 0 0 5,260,000 0 5,260,000 Transfers Out ..................... 0 0 0 0 0 0 0 sub-total (401) 0 0 0 0 5,260,000 0 5,260,000
WATER LINE EXTENSION FUND (402)
Transfers Out ..................... 0 0 0 0 0 180,000 180,000 sub-total (402) 0 0 0 0 0 180,000 180,000
2019 WATER BONDS (403)
Transfers Out ..................... 0 0 0 0 0 0 0 sub-total (403) 0 0 0 0 0 0 0
WATER INFRASTRUCTURE REPLACEMENT (405)
Debt Service ...................... 0 0 0 1,046,450 0 0 1,046,450 Non-Departmental ............. 0 3,000 0 0 0 0 3,000 Transfers Out ..................... 0 0 0 0 0 5,442,000 5,442,000 sub-total (405) 0 3,000 0 1,046,450 0 5,442,000 6,491,450 SEWER M & O FUND (450)
Fiscal Services-Utilities .... 481,347 320,785 0 0 0 0 802,132 Finance Administration ..... 0 0 0 0 0 0 0
Compliance ........................ 126,034 35,393 0 0 0 0 161,427 Public Works
Administration .................... 726,473 61,619 0 0 0 0 788,092 Street Maintenance ........... 71,918 0 0 0 0 0 71,918 Utility Engineering ............. 578,045 108,458 0 0 0 0 686,503 Utility Maintenance ............ 1,349,111 481,150 0 0 0 0 1,830,261 Debt Service ...................... 0 0 0 2,427,200 0 0 2,427,200 Non-Departmental ............. 75,216 8,803,484 45,109 0 0 0 8,923,809 Transfers Out ..................... 0 0 0 0 0 1,908,148 1,908,148 sub-total (450) 3,408,144 9,820,056 45,109 2,427,200 0 1,908,148 17,608,657 FUND/FUNCTION Personal
Services
Supplies
Contractual
Services
Capital
Outlay
Debt
Service
Capital
Improvement
s
Operating
Transfers
Out
Total
Financial Information
64 City of Milpitas

SEWER CIP (451)
Capital Improvement
Projects ............................... 0 0 0 0 6,388,000 0 6,388,000 Transfers Out ..................... 0 0 0 0 0 0 0 sub-total (451) 0 0 0 0 6,388,000 0 6,388,000
TREATMENT PLANT CONSTRUCTION (452)
Transfers Out ..................... 0 0 0 0 0 1,849,000 1,849,000 sub-total (452) 0 0 0 0 0 1,849,000 1,849,000
2019 WASTEWATER BONDS (454)
Transfers Out ..................... 0 0 0 0 0 0 0 sub-total (454) 0 0 0 0 0 0 0
SEWER INFRASTRUCTURE REPLACEMENT (455)
Transfers Out ..................... 0 0 0 0 0 4,901,000 4,901,000 sub-total (455) 0 0 0 0 0 4,901,000 4,901,000
EQUIPMENT MGNT FUND (500)
Compliance ........................ 0 10,000 0 0 0 0 10,000 Finance Administration ..... 0 0 0 0 0 0 0
Operations ......................... 0 0 24,408 0 0 0 24,408 Investigations ..................... 0 0 0 0 0 0 0 Patrol Services .................. 0 0 0 0 0 0 0 Building Inspection ............ 0 0 0 0 0 0 0
Trees & Landscape
Maintenance ...................... 0 0 0 0 0 0 0 Design & Construction ...... 0 0 0 0 0 0 0
Street Maintenance ........... 0 0 0 0 0 0 0
Utility Maintenance ............ 0 0 0 0 0 0 0
Fleet Maintenance ............ 1,281,694 1,188,057 98,000 0 0 0 2,567,751 Public Works
Administration .................... 215,788 0 0 0 0 0 215,788 Equipment to be
Depreciated ........................ 0 0 186,802 0 0 0 186,802 Non-Departmental ............. 0 306,730 0 0 0 0 306,730 sub-total (500) 1,497,482 1,504,787 309,210 0 0 0 3,311,479 INFORMATION TECH REPLMT (505)
Information Technology .... 0 0 250,000 0 0 0 250,000 sub-total (505) 0 0 250,000 0 0 1,950,000 2,200,000 FUND/FUNCTION Personal
Services
Supplies
Contractual
Services
Capital
Outlay
Debt
Service
Capital
Improvement
s
Operating
Transfers
Out
Total
Financial Information
City of Milpitas 65

PERMIT AUTOMATION FUND (506)
Permit Center ..................... 0 42,000 0 0 0 0 42,000 Plan Review ....................... 42,496 0 0 0 0 0 42,496 Fire Prevention
Administration .................... 0 16,000 0 0 0 0 16,000 Information Technology .... 18,105 152,510 0 0 0 0 170,615 Transfers Out ..................... 0 0 0 0 0 0 0 sub-total (506) 60,601 210,510 0 0 0 0 271,111
TOTAL EXPENDITURES 120,006,123 68,672,590 1,117,844 4,730,850 33,172,962 39,519,767 267,220,141 Less Interfund Operating
Transfers* 0 0 0 0 0 (18,849,000) (18,849,000)

TOTAL BUDGET

SUMMARY

EXPENDITURES
$120,006,123 $68,672,590 $ 1,117,844 $4,730,850 $33,172,962 $20,670,767 $248,371,141 FUND/FUNCTION Personal
Services
Supplies
Contractual
Services
Capital
Outlay
Debt
Service
Capital
Improvement
s
Operating
Transfers
Out
Total
Financial Information
66 City of Milpitas

Financial Information
City of Milpitas 67

Expenditures by Function
City Council .......................... $631,378 $0 $0 $0 $0 $631,378 City Manager ........................ 2,196,244 0 9,167 9,167 68,406 2,282,984 City Clerk .............................. 634,488 0 0 0 0 634,488 Economic Development ..... 1,231,491 0 0 0 53,439 1,284,930 City Attorney ......................... 1,214,142 8,240 9,270 0 42,230 1,273,882 Building Inspection .............. 2,449,455 0 0 0 0 2,449,455 Building Safety
Administration ...................... 375,915 0 0 0 25,411 401,326 Housing and
Neighborhood Svcs ............. 1,592,128 233,100 0 0 1,368,007 3,193,235 Permit Center ....................... 822,077 0 0 0 42,000 864,077 Plan Review ......................... 1,561,882 0 0 0 42,496 1,604,378 Design & Construction ........ 1,807,610 0 0 0 0 1,807,610 Engineering Administration 333,387 0 0 0 232,450 565,837 Land Development .............. 1,830,670 0 0 0 102,679 1,933,349 Traffic Engineering .............. 749,811 0 0 0 0 749,811 Finance Administration ....... 2,506,358 0 0 0 25,488 2,531,846 Finance Operations ............. 2,184,637 0 0 0 108,185 2,292,822 Fiscal Services-Utilities ....... 514,114 0 1,251,174 802,132 0 2,567,420 EMS Transport Services ..... 67,000 0 0 0 0 67,000 Fire Administration ............... 2,176,818 0 0 0 0 2,176,818 Fire Prevention ..................... 2,899,210 0 0 0 0 2,899,210 Fire Prevention
Administration ...................... 1,170,867 0 0 0 16,000 1,186,867 Office of Emergency
Management ........................ 297,244 0 0 0 0 297,244 Operations Division ............. 24,525,028 0 0 0 24,408 24,549,436 Human Resources ............... 2,348,798 0 0 0 0 2,348,798 Information Technology ...... 5,135,405 0 0 0 420,615 5,556,020 Long Range Planning ......... 41,361 0 0 0 234,370 275,731 Planning ................................ 2,030,145 0 0 0 245,098 2,275,243 Communications .................. 4,652,805 0 0 0 0 4,652,805 Community Relations .......... 1,131,336 0 0 0 0 1,131,336 Crossing Guards .................. 830,147 0 0 0 0 830,147 Investigations ....................... 5,600,852 0 0 0 60,000 5,660,852 Patrol Services ..................... 24,942,612 0 0 0 0 24,942,612 Personnel & Training ......... 1,105,341 0 0 0 0 1,105,341 Police Administration ........... 2,155,534 0 0 0 0 2,155,534 Records ................................. 1,611,930 0 0 0 0 1,611,930 Traffic ..................................... 1,611,202 0 0 0 0 1,611,202 Compliance ........................... 387,923 0 282,965 161,427 10,000 842,317 Function General
Fund(1)
Housing
Authority
Water
Fund(2)
Sewer
Fund(3)
Other
Funds(4) Total
Financial Information
68 City of Milpitas

Facilities Maintenance ........ 3,762,569 0 0 0 0 3,762,569 Fleet Maintenance ............... 0 0 0 0 2,567,751 2,567,751 Park Maintenance ............... 1,591,432 0 0 0 503,244 2,094,676 Public Works
Administration ...................... 950,283 0 1,096,911 788,092 388,618 3,223,904 Solid Waste Services .......... 8,000 0 0 0 1,129,084 1,137,084 Street Maintenance ............. 1,941,722 0 83,903 71,918 325,746 2,423,289 Trees & Landscape Mnt .... 1,805,234 0 0 0 1,416,742 3,221,976 Utility Engineering ............... 0 0 956,390 686,503 0 1,642,893 Utility Maintenance .............. 1,162,276 0 2,879,848 1,830,261 0 5,872,385 Aquatics ................................ 445,432 0 0 0 0 445,432 General Classes .................. 616,125 0 0 0 0 616,125 Marketing .............................. 350,133 0 0 0 0 350,133 Performing Arts .................... 188,471 0 0 0 0 188,471 Recreation Administration .. 2,077,261 0 0 0 0 2,077,261 Senior Services .................... 776,026 0 0 0 0 776,026 Social Services .................... 169,262 0 0 0 0 169,262 Special Events ..................... 582,645 0 0 0 0 582,645 Sports & Fitness ................. 689,306 0 0 0 0 689,306 Youth Programs ................... 1,086,396 0 0 0 0 1,086,396 1432 S. Main Street
Properties ............................. 0 34,300 0 0 0 34,300 1452 S. Main Street
Properties ............................. 12,900 0 0 0 0 12,900 Debt Service ......................... 1,257,200 0 1,046,450 2,427,200 0 4,730,850 Equipment to be
Depreciated .......................... 278,709 0 133,816 45,109 186,802 644,436 Non-Departmental ............... 6,732,583 49,147 26,901,908 8,878,700 369,730 42,932,068 Capital Improvement
Projects ................................. 0 0 5,260,000 6,388,000 21,524,962 33,172,962 Transfers Out* ...................... 3,345,645 0 3,725,508 2,270,148 11,329,466 20,670,767 TOTAL $ 137,186,955 $ 324,787 $ 43,637,310 $ 24,358,657 $ 42,863,427 $ 248,371,141 * Interfund Transfers Out are excluded from this schedule Function General
Fund(1)
Housing
Authority
Water
Fund(2)
Sewer
Fund(3)
Other
Funds(4) Total
(1) General Fund, Abandon Vehicle Abatement Fund, 1452 S. Main St Fund and administration funds of the former Redevelopment Agency.
(2) Water Fund includes Water Maintenance & Operations Fund, 2019 Water Bonds Fund, Water CIP Fund, Water Line Extension Fund, and Water Infrastructure Replacement Fund.
(3) Sewer Fund includes Sewer Maintenance & Operations Fund, 2019 Wastewater Bonds Fund, Sewer Fund CIP, Treatment Plant Construction Fund and Sewer Infrastructure replacement Fund. (4) Other Funds include Community Benefit Fund, Community Facility District Funds, Community Planning Fee Fund, Gas Tax Fund, Equipment Replacement Fund, Housing and Community Development Fund, Information Technology Replacement Fund, Law Enforcement Grant Funds, Light & Landscape Maintenance District Funds, Measure B Fund, Permit Automation Fund, Public Art Fund, Solid Waste Services Fund, Street Improvement Fund, Park Improvement Funds, General Government Capital Improvement Fund, Storm Drain Capital Improvement Fund, and Transit Area Impact Fee Fund.

Financial Information
City of Milpitas 69

Operating Transfers Statement
From the General Fund To the Information Technology Replacement Fund for:

IT Equipment Replacement 300,000
sub-total 300,000
From the General Fund To the LLMD 95-1 Fund for:

General Benefit Contribution 23,327
sub-total 23,327
From the General Fund To the LLMD 98-1 Fund for:

General Benefit Contribution 22,318
sub-total 22,318
From the General Fund To the Storm General Fund for:

Contribution to Storm Drain 500,000
sub-total 500,000
From the General Fund To the General Government CIP for:

City Hall Air Handlers Replacement (3494) 2,500,000
sub-total 2,500,000
From the Public Art Fund To the General Government CIP for:

Public Art Project (3489) 50,000
sub-total 50,000
From the Gas Tax Fund To the General Government CIP for:

Annual Sidewalk, Curb & Gutter Repair (3426) 890,000
Annual Street Light, Signal, and Signage (3440) 1,220,000 sub-total 2,110,000
From the Gas Tax Fund To the Street CIP for:

Street Pavement Restriping (4295) 300,000
ADA Curb Ramp Transition Program (4283) 320,000
sub-total 620,000
Origin and Purpose of Transfer Transfer
Distribution
Financial Information
70 City of Milpitas

From the SB1 RMRA To the Street CIP for:

Street Resurfacing Project 2024-25 (4300) 2,000,000
sub-total 2,000,000
From the 95-1 Light &
Landscape Maint D
To the General Government CIP for:

McCarthy Blvd. LLMD Improvement 95-1 (3402) 75,000
sub-total 75,000
From the 98-1 Light &
Landscape Maint D
To the General Government CIP for:

Sinclair LLMD Improvements 98-1 (3411) 23,400
sub-total 23,400
From the 2008 Community Facility
Dist
To the General Fund for:

Operating Cost Reimbursement 3,675,000
sub-total 3,675,000
From the Solid Waste Services
Fund
To the General Fund for:

Operating Cost Reimbursement 182,066
sub-total 182,066
From Street Improvement Fund To the Street CIP Fund for:

Traffic Signal Installation (4301) 100,000
Traffic Studies & Minor Improvements (4288) 420,000
Traffic Management Enhancements 2021 (4302) 500,000
sub-total 1,020,000
From the Vehicle Registration Fee
Fund*
To the Street CIP Fund for:

Street Resurfacing Project 2024-25 (4300) 500,000
sub-total 500,000
From the Park Improvement Fund* To the General Government CIP for:

Sinnott Park Renovation (3471) 100,000
Citywide Park Rehabilitation (3424) 50,000
sub-total 150,000
From the Park Improvement Fund* To the Subsidiary CIP Fund for:

Minor Sports Courts Rehabilitation (5113) 130,000
sub-total 130,000
Origin and Purpose of Transfer Transfer
Distribution
Financial Information
City of Milpitas 71

From the Storm Drain Fund* To the Storm Drain CIP
Main Street Flood Study (3724) 500,000
sub-total 500,000
From the Storm Drain General
Fund*
To the Storm Drain CIP
On-Call Storm Maintenance & Repair Services (3719) 100,000 sub-total 100,000
From the General Government* To the General Government CIP for:

Sports Center ADA & Drainage Improvements (3468) 300,000 Financial System Enterprise Resource Planning (3466) 950,000 Utility Undergrounding 2017 (3425) 100,000
On-Call Facilities Maintenance & Repair Services (3462) 400,000 Murphy Park Renovation (3470) 250,000
City Building Improvements (3406) 1,140,000
GIS Development and Data Collection (3496) 95,000
HVAC Repairs and Upgrades (3499) 355,000
Railroad Quiet Zone Feasibility Study (3485) 500,000
Capital Improvement Program Administration (3490) 252,000 sub-total 4,342,000
From the General Government
To the Storm Drain CIP
City Parking Lot Rehabilitation Program (3716) 350,000 sub-total 350,000
From the Transit Area Impact Fee
Fund*
To the Subsidiary CIP Fund for:

Land/Right-of-Way Value Determination (2010) 9,000
Lower Penitencia Creek Pedestrian Bridge (2005) 600,000 sub-total 609,000
From the Transit Area Impact Fee
Fund
To the General Government CIP for:

Capital Improvement Program Administration (3490) 144,000 sub-total 144,000
From the Water M&O Fund To the General Fund for:

Operating Cost Reimbursement 3,038,508
sub-total 3,038,508
Origin and Purpose of Transfer Transfer
Distribution
Financial Information
72 City of Milpitas

From the Water M&O Fund To the General Government CIP for:

Human Resources Information System (3467) 75,000
Financial System Enterprise Resource Planning (3466) 250,000 sub-total 325,000
From the Water Line Extension
Fund* To the Subsidiary CIP Fund for:

Hydrant Replacement Program (7110) 180,000
sub-total 180,000
From the Water Infrastructure
Replacement
To the General Government CIP for:

Capital Improvement Program Administration (3490) 162,000 GIS Development and Data Collection (3496) 200,000
sub-total 362,000
From the Water Infrastructure
Replacement*
To the Subsidiary CIP Fund for:

On-Call Water Maintenance & Repair Services (7137) 350,000 Reservoir Cleaning (7112) 600,000
Well Upgrade Project (7076) 1,500,000
Asset Renewal and Replacement Program (7141) 500,000
Pinewood Well Facility Rehabilitation Project (7147) 500,000 Pressure Reducing Facilities Relocation Project (7148) 465,000 Sunnyhills Turnout Rehabilitation Project (7149) 1,165,000 sub-total 5,080,000
From the Sewer M & O Fund To the General Fund for:

Operating Cost Reimbursement 1,583,148
sub-total 1,583,148
From the Sewer M & O Fund To the General Government CIP for:

Human Resources Information System (3467) 75,000
Financial System Enterprise Resource Planning (3466) 250,000 sub-total 325,000
From the Sewer Treatment Fund* To the Subsidiary CIP Fund for:

SJ/SC Regional Waste Water Facility (6118) 1,849,000
sub-total 1,849,000
Origin and Purpose of Transfer Transfer
Distribution
Financial Information
City of Milpitas 73

From the Sewer Infrastructure
Replacement
To the General Government CIP for:

GIS Development and Data Collection (3496) 200,000
Capital Improvement Program Administration (3490) 162,000 sub-total 362,000
From the Sewer Infrastructure
Replacement*
To the Subsidiary CIP Fund for:

On-Call Sewer Maintenance & Repair Services (6134) 100,000 Minor Sewer Projects (6126) 50,000
Sewer Pump Station Rehab. Program (6124) 925,000
SJ/SC Regional Waste Water Facility (6118) 2,091,000
Sanitary Sewer CCTV Inspections & Improvements (6135) 433,000 Force A Main Project (6137) 940,000
sub-total 4,539,000
From Technology Replacement
Fund
To the General Government CIP for:

Midtown Area Parks (3484) 150,000
Human Resources Information System (3467) 200,000
Technology Projects (3427) 100,000
Land Management Software Replacement (3502) 1,500,000
sub-total 1,950,000
TOTAL TRANSFERS $39,519,767
Note: *Interfund Transfers, within the same fund group, are not included in the Budget Summary.

Origin and Purpose of Transfer Transfer
Distribution
Financial Information
74 City of Milpitas

Utility Funds Reserve Allocation
Financial Information
City of Milpitas 75

General Fund Reserves Summary
Per Annual Comprehensive Financial Statement
Fiscal Year 2018-19 to 2022-23
Nonspendable:

Loan receivable $0.0 $0.0 $0.0 $0.0 $0.0
Prepaids, materials, supplies and deposits $0.7 $0.6 $0.6 $0.7 $0.7 Property held for resale $4.2 $4.2 $4.2 $4.2 $4.2
Advance to Other Funds $5.3 $5.4 $0.0 $0.0 $0.0
Subtotal Nonspendable $10.2 $10.2 $4.8 $4.9 $4.9
Committed to:

PERS stabilization* $33.9 $33.9 $2.8* $5.1* $6.1*
Artificial turf replacement $1.0 $1.2 $1.4 $1.7 $1.9
Technology replacement $2.0 $2.0 $2.0 $2.0 $2.0
Facilities replacement $7.0 $7.0 $7.0 $7.0 $7.0
Subtotal Committed $43.9 $44.1 $13.2* $15.8* 17.0*
Assigned to:

Change in investment market values $0.0 $1.1 $0.0 $0.0 $0.0 Uninsured claims payable $2.8 $2.0 $2.3 $2.3 $2.8
Contracts $3.1 $3.0 $2.4 $2.5 $3.6
Other assigned $0.0 $0.0 $1.8 $1.2 $0.5
General government capital projects $0.0 $0.0 $0.0 $0.0 $0.0 Subtotal Assigned $5.9 $6.1 $6.5 $6.1 $6.9
Unassigned:

General Fund Contingency Reserve $0.0 $17.3 $18.3 $18.5 $19.8 Budget stabilization $9.5 $17.1 $18.3 $18.5 $19.8
Future deficit $0.0 $0.0 $1.5 $1.5 $1.5
ERAF Reserve $0.0 $0.0 $0.0 $1.2 $2.3
‡SPAR (Strategic Property Acquisition
Revenue) $0.0 $0.0 $0.0 $0.0 $0.7
Unassigned $31.2 $0.0 $0.2 $0.3 $0.7
Subtotal Unassigned $40.7 $34.4 $38.3 $40.0 $44.7
Total fund balances $100.7 $94.8 $62.8 $66.8 $73.5
($ in Million) FY2019 FY2020 FY2021 FY2022 FY2023
*$33.9 million of PERS stabilization are put into a Section 115 Pension Trust on June 30, 2021 at Council’s direction. ‡SPAR (Strategic Property Acquisition Revenue) was established in FY23-24 budget to support long-term revenue opportunities for strategic property acquisition and development. See Reserve Policies statement no. 57.

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American Rescue Plan Act (ARPA) Funds
The American Rescue Plan Act (ARPA) of 2021 is a $1.9 trillion economic stimulus bill that provides $350 billion through the Coronavirus State and Local Fiscal Recovery Fund (SLFRF) program for states, municipalities, counties, tribes, and territories to support the response to and recovery from the Covid-19 public health emergency. Funds have successfully been deployed in Milpitas to support families and businesses struggling with its public health and economic impacts; maintain vital public services, even amid declines in revenue resulting from the pandemic; and build a strong, resilient, and equitable recovery by making investments that support long-term growth and opportunity. The City’s ARPA allocation was $16,736,815, and per U.S. Treasury rules, all funds must be appropriately encumbered by December 31, 2024, with all funds to be expended by December 31, 2026.

In June 2021, the City Council established an ARPA Investment Framework that includes both Fiscal Guidelines and Five Investment Areas. The Fiscal Guidelines include:

Council began ARPA discussions in March 2021 and adopted guidelines, investments plans and project appropriations by August 2021. Specifically, in June 2021, Council approved the ARPA Investment Framework including the Fiscal Guidelines and Five Investment Areas. Fiscal Guidelines include the following:

1. Identify and promote other ARPA or State funding sources to the extent possible before dedicating local ARPA funds.

2. Use one-time ARPA funds for one-time expenditures such as investment in infrastructure or technology with minimum ongoing operating costs.

3. Avoid ongoing General Fund commitments with additional programs and positions.

4. Avoid creating a structural budget deficit if restoring any reduced services.

5. Leverage regional agencies, non-profit partners, and existing programs to maximize efficiency in delivering programs and services.

In August 2021, the City Council approved (and later expanded) funding for 25 programs within the ARPA Investment Plan. In addition, the Council authorized the City Manager to proceed with appropriation actions and contract approvals, up to the approved amount for each program approved by Council, once staff confirmed compliance with all applicable ARPA procurement, contracting, and reporting requirements.

On April 16, 2024 the City Council approved the reallocation of funding within the ARPA Fund and the General Fund to ensure completion of the programs in the ARPA Investment Plan previously approved by Council. As part of this relocation, all remaining ARPA funding is planned to be allocated to staffing salaries and fully expended as of March 31, 2024. General Fund dollars have been reallocated to the investment areas described further below to ensure that funding remains available for the previously committed program areas.

The Five Investment areas, which will now be funded with General Fund dollars are: Community Services, Economic Vitality, Infrastructure, Public Safety, and Technology, and available funding is allocated as follows:

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City of Milpitas 77

Milpitas Funding Investments ($16.7 million)
Technology improvements
$2,110,000

12.7%
ARPA Administrative Costs
$350,000

2.1%
Community Services
$2,637,344

15.9%
Economic Vitality
$3,931,600

23.7%
Infrastructure
$5,061,815

30.5%
Public Safety
$2,520,000

15.2%
Table 1: Summary of Investment Plan – as of April 28, 2024 Community Services
1 Rent and Mortgage Relief $1,100,000
2 Social Services – mental health services, services for domestic violence and abuse victims and LGBTQ plus community $500,000
3 Financial Assistance to low and moderate income residents for utility payments and childcare costs $575,000
4a Beautify Milpitas program $100,000
4b Weed Abatement $90,000
5 Homeless Outreach and Assessment $100,000
6 Public Works Maintenance Staffing $172,344
Subtotal $2,637,344
Economic Vitality
7 Small Business Assistance Grant Program $1,565,100
8 Hotel Assistance Grant Program $130,000
9 Accessory Dwelling Unit program $990,000
10 Storefront Improvement Grant Program $365,000
11 Community Events $125,000
No. Program/Activity Approved
Appropriation
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12 Workforce Development Program $300,000
13 Limited term Economic Development Specialist Position $330,000 14 Business Improvement District $126,500
Subtotal $3,931,600
Infrastructure
15 Parks Rehabilitation $4,386,815
16 Public Safety Facilities’ Rehabilitation $250,000
17 Mobile Emergency Operations Center (MEOC) $425,000
Subtotal $5,061,815
Public Safety
18 Public Safety Staffing (Two Police Officers and Four Firefighter positions for one year) $1,200,000 19 Fire Pumper Truck $920,000
20 Emergency Management Program Assessment Study $200,000 21 Catalytic Converter Public Safety Initiative $200,000 Subtotal $2,520,000
Technology
22 Human Resources Information System $1,100,000
23 Cybersecurity Programs and Training $300,000
24 Technology Infrastructure $710,000
Subtotal $2,110,000
Administration
25 Funds Administration $350,000
Subtotal $350,000
Recommendation for Unassigned Allocation
26 Funds - Unallocated $126,056
Subtotal $126,056
Grand Total $16,736,815
No. Program/Activity Approved
Appropriation
Financial Information
City of Milpitas 79

ARPA Programs

1. Rent and Mortgage Relief
Eligible Milpitas households at or below 120% of the Area Median Income (AMI) may receive up to $5,000 in rent relief. Eligible Milpitas households at or below 150% of the AMI may receive up to $15,000 for mortgage relief. The $1,100,000 budget is divided into four categories: (1) $216,125 for mortgage relief, (2) $648,375 for rent relief, (3) $150,000 for a 3-year limited term staff analyst, and (4) $85,500 for a program administrator firm called FORWARD. . Due to the State’s expansive mortgage relief program, the City’s mortgage relief program remained open for one year but had no eligible applicants. As the rent relief program continued to be successful, and 90% of its funds were spent by April 2024, the mortgage relief funds were transferred over to the rent relief program per City Council direction.

2. Social Services – Mental Health, Domestic Violence, LGBTQ+ This allocation has provided a variety of social services, such as mental health counseling and support services to the LGBTQ+ community and at-risk youth as well as victims of domestic violence and abuse.

3. Low-income Assistance – Utility Bills, Childcare
This program provides financial assistance to low- to moderate-income households for childcare and water utility payments. All childcare subsidy monies should be expended by approximately November 2024. Water utility payment assistance enrollment is low, despite multiple campaigns to inform the residents.

4. Beautify Milpitas and Weed Abatement
The City has provided staffing support and materials for one clean-up day each month and a National Clean-Up Day once a year. The Beautify Milpitas Program is jointly organized by the Public Works Department and Recreation and Community Services. While the Public Works Department purchases and assembles litter pick-up kits, Recreation coordinates monthly Beautification Litter Pick-Up park clean-ups. The litter kits are composed of a Beautify Milpitas tote bag that is filled with: garbage and recycling bags, Milpitas branded gloves, an instruction sheet, a waiver liability form, and a litter pick-up stick. In addition to the park clean-ups, litter kits are distributed at various events throughout the year, and upon request. Litter kits have been requested by school classes, environmental clubs, churches, and businesses hosting staff volunteer litter pick-ups. In the past 2 years, 1500 kits have been ordered, and approximately 1050 have been distributed. Besides the litter pick-up kits, Public Works also assembles graffiti removal kits, which can be borrowed from the Lend-A-Tool program. The graffiti removal kit comes with: Milpitas branded gloves, graffiti removal solvent, a sponge, rags, and safety glasses.

Seasonal staff was hired to perform weed and brush abatement throughout the city. The Public Works Department manages the weed abatement program for all City owned properties, undeveloped parkland medians, and along roadways to reduce fire hazards. All funds in this program have been expended.

5. Homeless Outreach and Assessment
The City partnered with the Santa Clara County Office of Supportive Housing (OSH) and the County’s Homeless Engagement and Access Team (HEAT) to provide direct outreach, assessment, and case management services to the City’s unhoused residents. From March 2021 through December 2023, the HEAT team made 428 outreach contacts, assessed 294 Financial Information
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individuals, and enrolled 270 clients. The ARPA allocation also allowed the City to fund its 2023 homeless outreach and assessment program.

6. Public Works - Maintenance Staffing
This allocation allowed the City to supplement Public Works service levels by adding additional positions in Fiscal Year 2023-24.

7. Small Business Assistance Grant Program
Approximately $1,570,000 in ARPA grants were disbursed to provide financial assistance to 343 businesses impacted by the Covid-19 pandemic. Every business that was deemed eligible received grant funds. While all business sectors were eligible, the Council gave priority to fitness facilities, childcare centers, and home-based childcare. Restaurants/food and beverage, personal services, childcare centers, education services, fitness studios, and health care were the business sectors that were highly represented. The grant funds were used for mortgage, rent, utilities, operations, maintenance, recruitment, and safety equipment. An additional $70,000 from the Hotel Assistance Grant Program was redirected to this Small Business Assistance Grant Program.

8. Hotel Assistance Grant Program
Milpitas is home to twenty hotels which serve the Silicon Valley region. The local lodging industry plays a significant multiplier role in the local economy. During the pandemic, hotels suffered tremendous loss in revenues and jobs. The Department of Treasury has determined that aid to impacted industries such as tourism, travel, and hospitality take place to restore these industries to pre-pandemic levels. The ARPA grant funds have been disbursed and the program is complete. Thirteen hotels in Milpitas applied for the ARPA funds, and each received $10,000 for a total of $130,000. The City Council allocated a total of $200,000 of ARPA funds for the Hotel Assistance Grant Program. Since 13 hotels received $10,000 grants, the remaining $70,000 was redirected to the ARPA funded Small Business Assistance Grant Program by City Council approval.

9. Accessory Dwelling Unit (ADU) program
The ARPA allocation subsidizes permit fees to incentivize the building of new accessory dwelling units (ADUs) and encourage the legalization of unpermitted ADUs through the ADU Incentive Program and the Safe ADU Legalization Program. These ADU programs can provide housing options, foster economic growth through increased construction activity, and increase property values. Since the inception of these programs, the City has accepted permit submittals for 144 ADUs. Of that amount, 68 are in plan review, 10 have been approved for issuance, 41 permits have been issued, 4 have been issued but withdrawn (plan review fees paid by ARPA prior to withdrawal), and 21 final inspections have been completed. All the funds allocated for this program will be expended if the applicants currently in the plan check phase move into the building permit phase. At this time, staff has paused subsidizing new ADU permits since all ARPA funds will be expended with the applications submitted through January 2024.

10. Storefront Improvement Grant Program
The Storefront Improvement Grant Program is intended to spur Main Street revitalization and economic vitality. Grant funds subsidize exterior building and site improvements including painting, landscaping, exterior lighting, permanent signage and more. Council allocated $365,000 in ARPA funds, $75,000 of which is for the City’s contracted design professional to provide design services to eligible projects. Approximately $185,000 is planned for approved projects while the reaming $105,000 will be allocated for future eligible projects.

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City of Milpitas 81

11. Community Events
Funds were used to hire a program coordinator and to host events, including Earth Day, Family Campout, Lantern Festival, ArtWalk, Dia de Los Muertos, and Holi Festival in 2023 and 2024.

12. Workforce Development Program
Funds were dispersed to multiple organizations to address workforce development, including the following organizations for the first funding round: (1) Milpitas Youth Force to support low-income youth for two summer programs ($110,000), (2) First 5 Santa Clara County for a pilot early childhood education teacher apprenticeship program ($40,000), (3) Rising Sun Center for Opportunity Climate Careers to develop a program addressing climate change by employing local youth to provide energy efficiency services ($10,000), and (4) Build It Green for a Certified Green Building Professional (CGBP) training program that introduced green building and construction concepts to residents ($10,000). The remaining $18,000 from the previous Milpitas Youth Force programs will be utilized for the 2024 summer program as stated in the October 17, 2023 City Council agenda report.

In the second round of funding, grants were disbursed to two organizations: (1) the Milpitas Unified School District’s Adult Education Career Training Center to support workforce development programming and education services ($30,000) and (2) the SEMI Foundation to support hands-on learning using Science, Technology, Engineering, and Mathematics (STEM) Kits benefiting local youth in workforce development and education services ($44,750). The Adult Education Career Center program has started, and the STEM kits program will be launched soon.

13. Limited-term Economic Development Specialist
This position is currently occupied by a part-time Senior Special Projects Associate to assist with implementation of the ARPA Economic Vitality investment areas.

14. Business Improvement District
Staff is assessing the feasibility of establishing a business improvement district on Main Street by hosting stakeholder meetings to define needs, establish the study area boundaries, and prepare a Feasibility and Assessment Report with findings and recommendations. The formation of a Property-Business Improvement District (PBID) involves levying a special assessment or fee on properties located within the defined boundary area. These assessments are collected by the local government and pooled together to fund improvements and services beyond those already provided by the City that benefit the businesses or properties, and the overall community. The Phase 1 feasibility report for a PBID is under staff review and will be presented to the City Council in the near future. If a majority of property owners vote to establish a PBID, the Phase 2 Management Plan and Petition Process Implementation could proceed with the remaining $66,724 in the contract. If Phase 2 does not move forward, staff anticipates using the balance of funds for Main Street revitalization.

15. Parks Rehabilitation – Engineering & Public Works
This project provides for design and construction to address health and safety repairs and short- term improvements at 20 City-owned parks. The first phase included nine parks aimed at addressing failed pour-in-place play surfaces, replacing sand with engineered wood fiber, and replacing aging playground equipment components at Cerano, John McDermott, O’Toole Elm, Parc Metro Central, Parc Metro East, Pinewood, Selwyn, Sunnyhills Albert Augustine Jr.

Memorial, and Tom Evatt parks. Phase 1 of the Parks Rehabilitation was essentially completed Financial Information
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