Hudson Council Narrows FY27 Options, Staff Says Preliminary Levy Should Be at Least 2.95%

Hudson City Council members and staff spent a special work session reviewing Fiscal Year 2027 budget scenarios and the effect of levy choices on the city's general fund, with staff advising the council that a preliminary levy near 2.95% is the minimum likely needed to avoid unsustainable service cuts.

Staff member Julie, who led the budget presentation, told the council the three high-level options are to keep the levy flat (which would force deep department cuts), set a modest levy (examples discussed were 1.75%) or adopt a levy large enough to fund identified increases in employee benefits and liability insurance (the working example was 2.95%). "We can't go higher than that, but we can go lower," Julie said, referring to the preliminary levy figure the county will publish; she cautioned several figures remain preliminary and must be recalculated before the March submission deadline.

The discussion centered on how accounting practices and fund structure affect headline totals. Julie explained some employee benefits and insurance costs historically coded to "general government" have been reallocated to specific funds, which alters how the deficit appears on the general fund schedule. She also walked the council through household impact sheets showing how the levy would change annual property tax bills at different assessed values.

Council members repeatedly said a flat levy is not realistic. "We just didn't find it quick enough," one council member said about dwindling reserves, and others emphasized the city has been drawing on one-time revenues and reserves for years. Several members said that with a 2.95% levy the city would still need across-the-board cuts (council estimates ranged from roughly 10% to 30% in some departmental scenarios) to reach a balanced general fund.

Department heads described constrained options for additional savings. Mary, who spoke for the library, said her board and foundation will look for ways to absorb materials costs but warned that large cuts would affect hours and staffing. Fire department representatives flagged capital repair needs (for example, aging garage doors and HVAC systems) and said modest one-time capital requests remain in the draft budget.

Staff and council also discussed intergovernmental revenue flows: road use, water and sewer funds have been reclassified as separate proprietary funds, and township payments and ambulance invoicing practices need further reconciliation. Julie noted she will research township allocation formulas and the underlying intergovernmental ("28E") language cited in the meeting to ensure revenues are properly assigned.

On capital and grant prospects, Julie said the city requested $315,000 (noted in the meeting as "STGB" in the materials) toward the Washington Street project and expects a partial award; engineering estimates separate water and sewer infrastructure from surface work, leaving the city with a remaining local match estimated at roughly $1.1 million.

Council directed staff to refine the numbers, clean up legacy GL coding issues, and return with a more precise levy and department-level reductions. Julie reminded members a preliminary levy number must be submitted by March 5 and can be lowered later but cannot be increased after publication. The council scheduled follow-up line-by-line reviews and asked department heads to identify specific non-wage reductions where possible.

No formal levy was adopted at the session. The immediate formal action recorded in the minutes was a procedural approval of the meeting agenda at the start of the session and a motion to adjourn at the end of the meeting. The council agreed to continue work on the FY27 budget in short-term follow-ups.

What's next: staff will recalculate benefits and liability cost estimates, reconcile township and ambulance revenue allocations, and present updated numbers and draft levy language for the council to consider before the March public hearing and the formal levy-setting resolution.