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MINUTES
<br />
<br />City Council-Midyear Budget Review
<br />Hugo City Hall Council Chambers
<br />Monday, September 15, 2025
<br />5:30 p.m.
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<br />Mayor Weidt called the meeting to order at 5:30 p.m.
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<br />PRESENT: Krull, Miron, Petryk, Strub, Weidt
<br />ABSENT: None
<br />STAFF PRESENT: City Administrator Bryan Bear, Finance Director Anna Wobse, Fire Chief
<br />Jim Compton, Public Works Director Scott Anderson, Community Development Director Rachel
<br />Juba, City Clerk Michele Lindau
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<br />Finance Director Anna presented the City of Hugo’s preliminary 2026 budget and tax levy. For
<br />Pay 26, Hugo is projected to see a 5% increase in estimated market value. The city continues to
<br />follow its long-standing flat tax rate policy, where tax collections adjust based on property
<br />values.
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<br />The 2026 levy was prepared using the same tax rate as Pay 25, proposing a levy of $13,567,000,
<br />a 5.6% increase over 2025, without increasing the urban tax rate. Of this amount, $990,753 is
<br />for debt service. Non-general fund levies total $2,713,516 and support the Street CIP, Equipment
<br />Fund, Stormwater Fund, Special Parks Fund, and the Firefighters Relief Fund. The General
<br />Fund remains the largest component of the budget, funding core city services such as public
<br />works, public safety, utilities, and building maintenance.
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<br />The 2026 General Fund budget was proposed to increase by $728,162 due to inflation, wages,
<br />rising benefit costs, and investment in city operations. Included in the budget was 26 regular
<br />full-time employees and three vacant positions. A salary increase of 4.4% was proposed. This
<br />was made up of a 3% cost of living, 1% matrix increase, and .44% to absorb the MN Paid Leave
<br />premiums. Health insurance premiums increased by 14.95%. Thirteen new unfunded mandates
<br />by the state were projected to increase premiums by 5%. The proposed budget also included
<br />vision insurance which is offered to employees of comparable cities. The Fire Department
<br />budget accommodated officer salary increases, firefighter retention incentives, and funding for
<br />increased rescue call volume. New initiatives include funding for future software upgrades, a
<br />reclamite road preservation program, and the 2050 Comp Plan update.
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<br />The proposed budget maintained conservative revenue forecasting, budgeted permit revenue for
<br />just 50 housing starts and excluded investment earnings due to market unpredictability. The city
<br />continued to benefit from the state’s fiscal disparities program, which would contribute
<br />$1,124,330 million in 2026 and cover over 8% of the 2026 levy.
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<br />With the median home value rising 2.95% to $408,700, the average city property tax will
<br />increase by about $42. Hugo’s tax rate remains in the mid-range among Washington County
<br />cities. Staff emphasized that Hugo does not impose additional service fees such as stormwater or
<br />franchise fees, which many nearby cities use to raise revenue. These fees are often not reflected
<br />in tax comparisons, meaning Hugo residents may pay less overall despite similar or higher
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