Common Council, Special Meeting (2026 Budget Presentation)

1. 0:25Evening president council president staff president Hudson. Tonight I present the proposed 2026 budget a plan that reflects our commitment and responsible fiscal management strategic investment in our community and sustainable public services. This budget is built on a foundation of careful revenue analysis, thoughtful expense management, and long-term planning to ensure that Hudson remains resilient in the face of economic and operational changes. This budget anticipates continued growth in our core core revenue sources. Real property taxes are projected to increase by nearly 4%. The sales tax collections are expected to rise modestly, reflecting the continued vitality of our local economy. While some revenues such as lodging taxes and cannabis taxes are below prior expectation, this diversified portfolio of revenue, property tax, sales, pilots, user fees, and interest relies on reliable base to fund essential
2. 1:29services. Personnel costs represent the largest portion of the city budget. To ensure that our workforce remains efficient and effective, we will continue selective attrition beginning with the hiring fees which will allow us to manage staffing levels without compromising essential services. We will also reopen conversations with our unions to ensure our agreements are sustainable by continuing to honor our commitments to city employees. In addition, we are implementing a reduction in overtime, capping in at 7% of payroll, which will help reduce operational costs without undermining public safety or central services. This budget reflects our ongoing efforts to manage the cost of capital projects responsibly. In 2026, the city anticipates over 700,000 in debt service for bond anticipation notes related to the DRRI and to the firehouse project. These projects have required shortterm borrowing because the grants are reimbursement based, meaning the city must front the funds. Since the
3. 2:33inception of these projects, the city will have spent over 2 million in short-term financing costs and COVID related delays exacerbated this cost by extending project timelines. Importantly, 2026 expected to be the final year of short-term borrowing for these projects and no significant long-term financing is anticipated. This represents a turning point in our capital planning, reducing future debt obligations and freeing resources for other community priorities. One of the significant pressures of our budget continues to be mandated retirement contributions required contributions by employees retirement system employees have increased over 650,000 since 2020 representing an 80% increase. While these costs are largely outside the city's control, they highlight the need for strategic management of both current operation and long-term financial planning. The 2026 budget is a careful balance of responsibility, investment, and
4. 3:36sustainability. We are making strategic decisions to manage costs, including selective staffing adjustments, reopening union conversations, and reducing overtime. At the same time, we are preparing to conclude short-term debt financing, which has funded critical projects, and we are navigating rising retirement obligations. This budget ensures that the city continues to provide high quality services to our residents who are positioning medicine for a financially strong and resilient future. I am confident with continued collaboration, discipline, and thoughtful planning, we can meet all these challenges while building a stronger, more vibrant country for all. Thank you. Is there something for comment? >> Yeah, I mean you can make comments. Yeah, the public hearing is really Yes. >> I didn't realize this was a public
5. 4:40hearing your presentation public hearing. I was saying this is where usually you can make comments, but feel free to Yeah. So, as you know, I have attended all of the um BA meetings, though I'm not a member of the BA. Uh, one thing that I am very concerned about is the use of $385,000 from the fund balance to balance this budget. Um, the fund balance has been going down every year for a number of years. with this use of fund balance we will be we are projecting to be below the twomon minimum recommended by the state. So that is a very serious concern. Um the cemetery we have to do transfer our funds in the cemetery every year because it does not pay for itself. That's about $400,000 this year. That's about what is said. Um, I really think it's time to look at a more sustainable and less
6. 5:46costly approach to maintaining the cemetery because that's $400,000 a year. That pretty much is what we're taking out balance here, right? Um, we use the department. We did eliminate, as Mr. Johnson has noted, uh we eliminated the vacancies, but there are still six full-time personnel looking at the property. There's a full-time secretary, a full-time cleaner, two full-time watt attendants, and a director. Uh that's just one of the departments. The senior department has only one full-time employee. I haven't gone through all of the other departments and their staffing, but my hope would be hopefully with the 385k in fun balance that and I and I did so through every single one of these meetings and I have to credit the the treasurer council for really doing a lot of very very hard work here to come to this to arrive at this budget. It was not an easy thing. uh a lot of work.
7. 6:50That said, I would really like to see this going back to the departments for them to find an additional 10% because they are the best people to identify where they can cut what they can cut without uh undermining their ability to deliver the essential services that the mayor has spoken of. Um so I I would urge every member of the council to read in detail this budget to look carefully at what was submitted. We did receive all of the departmental requests and uh you know they very close look was taken at all of those requests and they were by no means met or uh but take a look take a look at the actual budget. Bear in mind 385k in fund balance that's going down again. Uh our fund balance numbers have gone down from let me pull this up 2023 was at 3.9 million then to 24 was 2.6 and now we're going to be taking another
8. 7:53and the anticipated uh minimum for 2025 with the original budget was 2.6 6 million with the amended budget of 3.5. We're down by close to 900 about around $900,000 below what where we need to be to have a two-month minimum in our funds. This is a serious concern and I would really like all of you to look at it carefully to read the details to contact members of the BEA to get clarification on line items that you may have questions about. Let's take this seriously. And that's that those are my moments. And again, I do want to say having sat through all of the BEA meetings, a great deal of work went into putting this together. It was not easy. And particularly Heather, incredible work in putting it together every single every other day, updates, and so forth. So this this was not this is not a a trivial thing that the BA has done, but we we owe it to our community to look at it carefully and to ask questions. That's all I said.
9. 8:57>> I say let me just add something to her comment. Um the senior center and the youth center are two very different programs. >> They command different attention and work and that's why the senior center only has one full-time staff and the center has built up to the amount of staff that they have now. No, I don't understand. >> Unless I missed it on the budget, what was allocated? Um, and was there a request from the rescue squad? As you know, as we know, they were asking, what was the allocation for their request? Did they request anything? How much did we allocate for the request? >> There was a determination that was made by the council for that. And I believe Margaret said that she requested information that was never um delivered to her. >> Which which which EMS services that >> Oh, yes. Yes. No, we we never got any information about the >> But what did we allocate in the budget for just the 75,000 that we will
10. 10:02>> It's actually not. >> It's not in the budget. >> I didn't by the county. >> It's a charge back from the county. So it's not into their tax bill on the >> it's not a lot of money is in this budget. >> Okay. Correct. >> Thank you. >> Yes. Uh I would like to thank the VA. You guys did a great job. Um but the figures are alarming. Uh we're at the point that we need to strategize and come up with a different plan. Uh definitely uh police department and cemetery are big um are big um it's a big load for the city. Um there are a lot of talk of uh merging with Greenport and the police. I don't know if that's even feasible. Um also I'd like to see the budget of the library. We have 400,000. We we don't even pay uh rent there. So I'm not exactly sure how the money is allocated. Um >> but
11. 11:06>> yeah, I know it it was from our but still we paid for this so we need to see that too. Um and uh I have some specific questions so I'm not sure. Um so if we go to line 3020 it says uh electrician services from 2022 it was 3500 it went up to recommended now is 38,000 is that >> I don't have the paper but what line item >> I can services 3020 >> is what electrician services 30 3020 >> uh went from uh >> 3500 >> 3500 and it's now at 38,000 for big jumps in >> so it's under equipment materials >> 25 big jump >> do you remember >> I I don't I I'm sure it was a significant equipment purchase >> and then police contracts I see under police contracts we have from 52000 went
12. 12:10up to 92,000 I don't know if you know what contracts are these list of everything that they have in part of the budget. >> I can ask do you want me to ask you later? I mean tomorrow or go straight to the police department and ask them what's better. >> You should probably go to the HPD because I all I know is the sheet of papers that they they need to send things to the contracts they need and we don't know enough about it to question it. Okay. So they'll give you much better than I can. >> Okay. And I have one more second. Um, street maintenance chips, uh, we have from 69 went up to 900,23. Um, I wonder if that's any money. If you know if that's money we're going to be getting back. >> Yeah. And anything anything like112 just chips. It's also state touring pop by potholes paid New York extreme weather recovery. Those all have offsetting revenues. So they're revenue. We actually discussed this year not putting
13. 13:12them in the initial budget at all because that's one of the reasons when people say, "Oh, the the budget's gone up million dollars every year for the past five years." Well, that's because >> state touring groups went from zero to a million dollars, >> you know. Yeah. So, but it's revenue neutral, so it has no impact on, you know, departmental expenses or the tax levy or anything like that. >> Okay. Did you know when they were going to be sitting back? >> Well, it's like everything else. You do the work and then you have to get away reimbursement. >> These are a little different. My my basic understanding from Roth is he generally likes to only do capital. So basically they send out he makes an estimate every year. It's the same estimate every year but in April or May of every year he actually gets the notice from the state. this is how much it's actually allocated to you for state tournaments and for chips and whatever. Traditionally, he has kind of done projects every other year to allow the money to build up. It's not like if you
14. 14:13don't spend that year, you don't get it. It it basically rolls over. So, generally like major capital projects based on those funds for every other year that might if you look at revenue sometimes you'll see or the expenditures you'll see that it waves. Um the other thing that I can comment on specific to state tours which is now chips used to be the biggest one by far. State tours is now but I know he very cautious with that because it's going to be used to offset whatever grants don't cover for the very street bridge. He's he's been very cautious about spending that on anything else. Um because we're going to need the money to cover whatever excess there is. Right now I don't think there's going to be but you know better safe than sorry to make sure we can cover that. [clears throat] >> I just want to say behind you. >> Sorry. >> Okay. So my questions are about the recurring 2025 uh budget. So for instance for lodging tax revenue it was
15. 15:16expected to bring approximately $750,000 whereas we only brought in we stayed around $400,000. Uh similarly for cannabis tax we were looking expected revenue was 235 and we brought in approximately 60,000. So approximately I don't know if you can answer this question here but where are we with fund balance now? Will we need to dip into fund balance for 2025 before we even get into 2026? >> It's hard to answer that question because until end of the year, we don't really know everything. I mean, absolutely, some of the revenue projections are not going to come in as promised. So, that's a downside. On the other hand, you know, may instituted a hiring freeze, so there's going to be some headcount in for the rest of 2025 that isn't going to be filled. So, there's a cost savings on that side. Um, you know, we did get our third quarter sales tax in and it's actually the highest amount that we've ever received for quarterly sales tax. So, that's another plus, but it's hard to forecast it. I mean, I do not think personally
16. 16:20that we can expect a significant increase to the fund balance at the end of 2025. I think it's possible there might be a level of decrease, but that's the best I can do. Fair enough. Right. [clears throat] And the projections for larger cannabis tax for 2026. Um how is approximately is that calculated? >> Um basically you'll look especially if you look at cannabis tax you'll see that forecast for 26 is substantially lower than 25 right >> and that's based on trends. So basically we looked at where we were year to date and extrapolated it out and added like maybe a little extra to assume there's going to be some growth. um for lodging tax. We basically looked at um like the same thing and then made an additional allowance because we should because we will definitely have a new hotel because Pocketbook is actually already opened. Um, and potentially I don't even think we took the other one into consideration, but the one is it or right? I mean, they're making a lot of
17. 17:24progress there. So, I would anticipate I'd be shocked if they weren't open at some point in 2026. >> Um, those are basically the assumptions made on that front. I I just to point out one thing that Heather said in response to Vicki and your question about the contracts which is why I would like this back to the to the department. >> Yeah, >> the police department has the details on on those contracts and and those costs. It is the department and the department heads who can look at this and go through it carefully and see where if at all they can make some cuts or savings. it really has to come at the grassroots level for that. The other request that I want to make and this I'm making to you Tom and to you Johnson um with a 3.9% increase in property taxes which is one of the assumptions in this budget. I hope that this year there will be not just a last year we had a public hearing where the public could speak. I would
18. 18:26really like to see a detailed comprehensive presentation of this budget to the residents of Hudson so they can understand it. They can understand how it was built, what decisions had to be made and they can understand why the taxes are going up. I think we owe that to the residents and I hope that we can schedule that meeting not just as a public hearing for people to respond but a robust presentation of how this budgets developed. that that's request from the council before I go to the public. Yeah, loyals in Kenny. I had privilege of attending most. I think I missed two of the BEA meetings and uh as you can see um Heather does a very incredible job and she's a valuable aspect of the whole budget process. We're all very privileged that we have someone of this caliber here and that she attends to and has what's in her
19. 19:30brain and what she knows about the finances is invaluable [clears throat] to the city and uh we're very much well well uh well off because of people like Heather and their work and their good work. Um I agree with Margaret about the sending it back and then if there's going to be more more cuts then let the departments kind of come up with it. Um, now I did look at the 2017 budget and that was just a little under 16 million. So it looks like we're coming No, I'm sorry. It was a 2020 budget that was a little under 16 million. And it looks like we're coming in right around that spot. And if I remember correctly, I think they started uh before before the BEA started cutting things like like the uh extra garbage truck and the street sweeper which were big big expenses that were asked for those were cut. We were
20. 20:33up to around 19 million on on request somewhere around there. Yeah. So there were substantial cuts. There were substantial cuts that the the BA did in order to bring it down to this point. And I watched the deliberations. I think I missed two of the meetings and everyone was well considered, you know, and with a regard for, you know, making sure the city ran efficiently and and that everything was tended to. Um, now, as you know, when it comes to the library, I'm a I'm a big fan of the library and I was looking at the older older budgets. In 2017 though, the library got $120,000. Then in 18 it was raised to 250 and this is referendum granted referendum. 1950 somewhere like 21 or 22 went to three and then 350 and four where this is the second year where it's at four. Now I've been advocating that the library extend its hours
21. 21:36[clears throat] to return its hours to the precoid level. Right, Tom? I mean this has been on the way think I I requested you know that that I resolution that wasn't forwarded by the president about about prevailing upon the library to actually you know go back just I'm not even asking that they extend their hours just go back to the way it was so that may be something that we can prevail upon them and then they have kind of a restrictive policy on the computers so there's like so they get more money and they limited the services. Now all they're really asking for is we get our library back. It's a simple thing, Tom. It's a simple thing. I know it's dear to my heart. Uh I think that's about all I got to say. Maybe we can prevail on the library to you and reconsider its its stance on limited services.
22. 22:39Thank you. Anyone else from the public or parking heads? >> I had a question about the graveyard and might sound really stupid, so apologies in advance. Since there are soldiers buried there, I thought there was federal money that came to that. Is that completely wrong? >> I didn't answer that. >> Did anybody answer that? >> I thought it was fally protected land. And so because it was federal protective because of the American military that there would be that there'd be federal money to enforce it. >> I think it's if it's a federal cemetery >> that us have the right to it, >> right? Well, it's a good question to look into, but I I I think it has to have a certain percentage of of federal or something to it. But I can look into it. >> We have He's going to do a presentation in an hour or so, so we can ask him a question. Yeah, >> thank you.
23. 23:45>> Crystal board. Um, I would just encourage VA and the council to find a balanced budget that the council can improve. I think it's a really bad thing to start the year with the budget that's in deficit. Um, things come up unexpectedly throughout the year. We all know that expenses that the city doesn't anticipate to make that deficit balloon even more. So just encourage you all to to find that balanced budget whether it's cuts, whether it's finding money from some place like Greenport to kick into the services that they use here in Hudson. But I would encourage you all to find a balanced budget. >> Thank you. Anyone else for the public? >> Just want to clarify one last. Sorry. Yep. >> I mean both parts, the old park and the department's revolution and war soldiers and modern recent cemetery as much. >> Thank you. [clears throat] >> Anyone else?
24. 24:49Have there been zero business received over the years? >> I think so. I think that is correct. I mean that's an area where you could actually represent your >> um is there a copy of the budget available or either paper or online for the public? >> I can post one tomorrow morning. >> Thank you. Um, Heather, uh, I know you're going to discuss it later on, but since everybody's here, then people may be leaving. Uh, how much have we collected up to now from the back taxes? Uh, we've collected about $890,000. Uh, the list has gone from 151 properties down to 76. Uh, so the outstanding balance is still about $2 million, shockingly enough. Literally four properties of half of that. Four properties is a million
25. 25:53dollar. >> It's a million dollars. Yeah. >> And I think you're listing them later on. We're going to hear about 34. >> Well, just at that level, but I can also publish the revis. >> So, these four properties are not the ones we were doing installments, >> correct? >> They're not they're going to >> not at this time. >> Okay. at this at some point uh we I think >> uh the attorney sent a second letter, right? >> Haven't done that yet. >> Oh, yes. >> Because we've been waiting, but there was the confusion of the second installment agreement. So, uh the plan was to issue a new demand letter along with information about the existing and the new installment agreement. We can't do that until after the public hearing, I believe, is now scheduled for the 12th, I believe. Um, so shortly after that, the attorney will be sending out a letter with a one sheet that explains the two different payment plan options as well as a brochure from housing resources that's offering free uh foreclosure advisory counseling. So, we want to make sure we're giving them
26. 26:55those tools. >> And do we charge interest? >> Oh, yeah. Every month. >> Okay. Oh, yeah. Every month by law. It's not >> Okay. But those four properties, uh, I assume they're wellto-do people to own that. I don't know who JRs but uh we can definitely charge interest which is what is the percentage >> 1% a month >> 1% they're regulated by state okay not the city um so so it'll be a demand letter last time I think we gave them another 15 or 30 days and after the second round is done um housing resources is also going to send out their own letter in addition to having the brochure they're going to send out a letter directly to the people again authoring their counseling services. So, I'm going to provide them with the list information for that. Um, and then basically after uh that second period of time is over is when we're going to start the actual legal foreclosure proceedings which starts with publishing the list with the county clerk and um ordering title searches and the title searches the expense of those gets put
27. 27:57onto the people's property as well. Um and then you know all legal requirements a lot of communication that has to happen. >> So and these are not affecting our these will affect our receivables but not exactly the budget because the these are receivables of past tax of past budgets in that has not been collected >> in terms of tax revenue. It has no impact on revenue at all. revenue for the entire levy is recognized January 1st in the budget. >> Exactly. >> What will impact the budget though is um the collection of interest. So there's regular interest on property tax. As most of you, I think know we also are required by law to collect delinquent school taxes on behalf of the school. Um after two years become the city's responsibility in full. We make the school whole. After two years, we make the county whole after one year. and the city end up owning all of the receivables. Um, we've already seen a bit of a spike in those numbers, I think, for and there's
28. 29:02also a third number. So, there's interest on the school tax bills, there's interest on the the city and county tax bills. There's also a a small fee that the city tags on to the school uh bills basically because we're responsible for electing them. Um, so those three items would all have an impact on the budget and I expect um I think for for all three of those line items we're already at uh the 2025 estimated budget number and that's with two more months to go another demand letter coming out. And then we also every November after we get the delinquent school tax filed into the system, we send out um my office sends out a letter to any property that has any bad taxes at all on it. So generally when those go out, we see a nice prompt in terms of people coming in and paying off their tax bills too. So interest penalties will impact the budget tax revenue. >> And who's paying the legal fees in the end? If No, I'm saying if there is a
29. 30:04foreclosure and the um the person that owes the money, isn't that supposed to pay the legal fee during the to the extent that we can identify specific work associated with the foreclosure, we will try and add that onto the tax bill? We will add when we pay for the title surges, we will add that. We don't have to pocket for it, but it'll get added to that property to the extent that we can identify the legal expenses and apply them against the property. So, we'll do so. It's um a little challenging because at what point do you you know when you start with 150 properties and you end up down to 15. At what point are you out of the new expenses? That's a determination that would have to be made. Um there's also no way as far as I know to add any other expenses including you know the time of my office and how much time we're spending on this. Um, and it didn't used to be, it didn't used to be such a problem because, you know, we would take over the property and then we would sell the property and if once the taxes were paid and the water sewer were paid and all the other things were paid, if there's anything left over, it was the
30. 31:06cities. They've changed that law in 2023, there was a federal court ruling that said you have to basically give the money back, which is fine, except they there's no clarity in terms of these issues. So, for example, in my opinion, if you know, if we're spending, you know, 100 bananas, we should be able to figure out what the cost of that is and add that across all the properties, too. But there doesn't seem to be any uh guidance on that. And as far as I know, there isn't any specific like no municipality has tried to, you know, do that and then either got dinged or said, "I didn't know." That's that's a perfectly acceptable plan. And I think we're going to be just able to start that. >> Yeah. >> So, Great. Thank you. You're welcome. >> On the subject to just heard you, um I know a lot of municipalities have tax lean setups. Does that something that's uh a possibility? >> Well, that's basically what we're doing through the portion.
31. 32:07>> And so would we possibly anticipate some some money coming in from that in in 26? Is that a possibility? No, because as I just said before saying that any additional funds over what was owed on the property and any directly application expenses go back to the property >> then if you're selling a lean and there's interest on any further questions Are the school admits soon? >> It's for the two months that we are holding paying it off on a monthly basis until we meet them until after two years. It's 5% once we paid once it uh once it is paid in full to the school and it becomes the city's ownership of
32. 33:10the receivable. It changes to 1% like everything else. >> Oh, council members, can I have a motion uh introduction second to receive the mayor's budget message and the BEA's resolution with proposed budget for 2026? >> This is just to receive correct second. >> Okay. All those in favor signify by saying I >> I opposed. Okay. A public hearing on proposed budget will be held on Wednesday, November 19th at 5:00 pm. Can I now have a introduction and second to return this special meeting? Tom, are you planning to schedule a presentation of the budget to the people beyond just a public hearing? Will there actually be a presentation on explanation of the budget to the residents? Last year, that did not happen.
33. 34:12>> Um, I think you could do that. Um, in the meantime, can we adjourn this meeting? >> Motion second. Second. >> Oh. >> Yeah. >> Hi. >> Hi. Anyone? >> Okay. This president I mean special meeting is different. Stay tuned for the uh special meeting at 5:45.

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