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Coldwater holds public hearing on 2025–26 budget as Headlee rollback trims revenue
Summary
The council held a public hearing on the fiscal 2025–26 budget; staff reported an estimated $197,000 projected deficit influenced by a Headlee rollback that reduced the city’s millage rate and by adjustments to capital projects and bond-related levies.
The Coldwater City Council held a public hearing Monday on the fiscal year 2025–26 budget, during which staff described a projected general-fund deficit of about $197,000 and explained factors behind the shortfall.
Tom (city staff) told the council the proposed budget would show a deficit of about $197,000 in the context of an approximately $13 million total budget. He said the Headlee rollback reduced the city’s millage rate from 11.56 to roughly 11.44, costing the city about $55,000 in recurring revenue.
Tom explained the Headlee mechanism (the Headlee rollback) adjusts local levy capacity when taxable-value growth outpaces inflation; the city saw several commercial property sales that became uncapped and raised taxable value, triggering the rollback calculation. “That takes our tax revenue down about $55,000,” he said.
Staff also described capital-schedule changes that largely offset each other: a recreation-center flooring project was moved from the current fiscal year to 2027, reducing planned spending by roughly $115,000 in the near term; digital police-body-camera funding was advanced from 2027 into 2026 to maintain capital spending levels. Combined adjustments and the Headlee effect left the budget near the previously discussed deficit level.
On the road bond, Tom said the city will issue $5.1 million in road bonds and will levy 1.45 mills for the bond instead of the 1.52 mills estimated for the ballot due to updated taxable-value figures. He said the combined millage changes equal roughly a $15 annual impact on the average city house when converted to dollars.
The public hearing remained open for comments; none were received. City staff said they will return to the council at the next meeting with formal adoption of the budget.
