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Finance director: Hudson ended 2025 with $3.3M excess carryover; council earmarks half for infrastructure
Summary
Finance Director Jeff reported a stronger-than-expected 2025 close: general-fund ending balance $18.5M vs forecast $15.2M (≈$3.3M excess). Council ordinance earmarks 50% of excess fund balance for infrastructure; staff recommended waiting until mid-summer (post-tax filings) before committing projects and proposed a workshop to prioritize uses.
The city’s finance director told the council the 2025 fiscal year closed in better condition than feared after the loss of a large employer and other revenue shocks. Jeff reported income-tax revenue was essentially flat year-over-year (a roughly $19,000 decline, or about 0.1%), and the general fund finished at about $18.5 million versus an amended forecast near $15.2 million—leaving roughly $3.3 million of excess carryover.
Council referenced a 2024 ordinance that directs at least 50% of any excess carryover to infrastructure projects. Jeff and staff said that qualifies a broad set of categories (roads, stormwater, sidewalks/trails, utilities and fiber) and noted the city could also consider strategic uses such as shoring up long-term fire-fund needs. Staff recommended pausing large commitments until after May income-tax filings (mid-summer) so the council can see first-half performance before deciding which capital items to pull forward.
Council asked staff to return to a dedicated workshop in summer 2026 with a prioritized list of eligible infrastructure projects (including stormwater options identified by ongoing studies) and an updated five-year forecast. No expenditure decision was made at the retreat; council members expressed interest in preserving the 40% carryover policy while applying excess dollars to near-term capital priorities where possible.
