The city of Hillsboro recently approved its 2025-2026 fiscal year budget, which projects the city spending nearly $4.5 million more than it brings in.
According to the budget, which began July 1 and ends June 30, 2026, the city is expected to spend $11,954,800 and bring in $7,465,300, a deficit of $4,489,500. Revenues are down about $4.5 million from the 2024-2025 fiscal year, primarily because the city received about $4 million in bond proceeds last fiscal year for water and sewer main developments that it will not receive this year.
Hillsboro Board of Alderperson members voted 5-0 June 16 to approve the new budget. Alderpersons Christopher DeGeare, Terry Glass and Tim Polkinghorne were absent from the meeting.
The city expects to end the current fiscal year with $4,561,664 in its general fund balance, with $644,391 considered unrestricted funds, commonly called reserves, and the remaining $3,917,273 in restricted funds, which means they’ve been earmarked or committed for projects or other expenditures.
Operating expenses
According to the new budget, $2,133,600 has been allocated for operating expenses and $2,084,800 in employee expenses, for a total of $4,218,400 in general operating expenditures.
Hillsboro City Administrator Jason Daniel said the city currently employs 30 people across all departments, including administration, police, water, sewer and parks. During a closed July 14 Board of Alderpersons meeting, the board approved an amendment to include a 4 percent hourly pay increase for all city employees.
Daniel also said an educational stipend program and a service record matrix will be available to all city employees for the first time.
“In the past, it was only offered to the Police Department in their matrix,” he added.
Daniel said employees who have an associate degree will receive a $600 annual stipend, those with a bachelor’s degree will receive $1,200 and employees with a master’s degree will receive $1,800.
Within the new service record matrix, employees who have been with the city for one to three years are eligible for a 2 percent raise, four to six years a 2.5 percent raise, seven to 10 years a 2.75 percent raise and 10-plus years a 3 percent.
Capital projects
The newly approved budget allocates $6,950,000 for capital improvement projects.
Of that, $5.9 million will be spent on Public Works and well and water tower projects, along with $700,000 on sewer expansion.
These projects were carried over from the previous fiscal years and are partially supported by funds from the American Rescue Plan Act (ARPA) funds, as well as a water/sewer bond, Daniel said.
In December 2024, the city awarded a $4,955,988 contract to Caldwell Tanks to complete a 750,000-gallon water tank along Goldfinch Lane for the city’s water system. That same month, the city also awarded Flynn Drilling Co. $589,300 to complete a deep well project and a $1,440,900 contract to Wachter Inc. to complete a Public Works building project.
Daniel said $1.9 million in ARPA funds previously were awarded to the city from Jefferson County for the new water tower.
According to the contract for the Public Works project, it includes a prefabricated metal office/maintenance building, plus mechanical, plumbing, electrical, site work grading, access road and yard piping.
Daniel said that Flynn Drilling completed its work on Aug. 15. Caldwell will begin its work on Sept. 2 and is expected to finish it in about 18 months, and after that, Wachter will complete its part of the project.
He said additional water and sewer main improvements were completed at Hwy. B and Brickyard Road. The city awarded CE Contracting, a Ste. Genevieve, Missouri-based contractor, a $435,909 contract in January to install 1,600 feet of 8-inch water main extension and 1,000 feet of 8-inch sewer main extension.
Daniel also said the city received $187,500 in ARPA funds from Jefferson County for that project.
He said the water and sewer extension is for a new subdivision, Hawk’s Ridge Estates, to be developed by Imperial-based KAB Homes.
Although these projects total more than the $6.6 million the city budgeted this year for water and sewer improvements, some will be carried into next fiscal year, Daniel said.
“The water tower alone will take 18 months,” he added.
Other projected capital expenditures include $200,000 on transportation improvements around the city funded by part of its share of the 1/2-cent countywide tax for roads and bridges.
About $15,000 in sales tax revenue will be used on building improvements, as well as $60,000 on police equipment such as tasers, flock cameras, in-car and body cameras.