Cudahy Acting Finance Director Kaye Godbey on June 3 presented the city’s preliminary fiscal year 2025–26 operating and capital budget and asked the City Council to receive and file the draft and provide feedback before the June 30 adoption deadline.

Godbey said the city’s combined all-funds revenue is proposed at about $39.99 million and the general fund beginning balance meets the city’s policy, at roughly 27% of annual expenses, above the 25% policy threshold. “This budget is required by law to be adopted in June,” Godbey told the council, adding that the presentation is preliminary and subject to revision before final adoption.

The nut graf: the draft budget keeps near-term reserves intact but relies on accounting corrections and future revenue increases to avoid projected deficits beyond FY 2026. Staff reported a deliberate shift of certain personnel costs from the general fund into special revenue and capital project funds, which reduced general fund expenditures in the draft but requires corrective accounting and steady project-related revenues to hold.

Most important details first: citywide all-fund revenues are presented conservatively and are about 7.5% lower year over year, primarily because capital projects generated revenue in FY 2025 while corresponding project expenses roll into FY 2026. General fund expenditures in the draft are roughly $15.0 million, a 16% decline from last year’s budget driven largely by reallocating staff time and costs to non-general-fund projects. Godbey explained the reallocation as an accounting correction: “We asked the departments to take a look at how they allocate their time,” she said, noting the change reduces general fund burden because many staff time is chargeable to capital and special projects.

Council members pressed for clarity on three recurring concerns: (1) the reliability of special-revenue and project funds used to reimburse personnel costs if development or grant activity slows; (2) whether the draft includes any cost-of-living adjustments (it does not — negotiations are pending); and (3) the timing and detail of the five-year forecast. Godbey and the city manager said the five-year forecast will be updated after FY 2025 year-end close and that staff will return with more detailed line-item reconciliations showing which general-fund reductions are offsets by special revenue allocations.

On revenues and remedies, staff recommended a set of options for the council to consider in future years, including updating user fees (a fee study is underway), business-license adjustments and a possible parcel tax (an ad valorem parcel/property tax) to generate recurring revenue. Godbey noted a 1% parcel tax (example figure presented by staff) would generate an estimated $2 million annually but said council should weigh political feasibility and prior local precedent.

Council discussion also touched on communication to residents: members asked that the public-facing materials clearly distinguish between (a) real service cuts and (b) accounting reallocations that shift costs to project funds, to avoid public confusion when line items show reductions in general fund spending.

Ending note: the council voted to receive and file the preliminary budget presentation and directed staff to return with requested clarifications, a revised five-year forecast after year-end closes, and improved public materials ahead of the final June 30 adoption.