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III.2. 2021 General Fund Budget and Tax Levy; Bishop CITY OF HOPKINS Memorandum To: Honorable Mayor and Council Members Mike Mornson, City Manager From: Nick Bishop, Finance Director Date: July 21, 2020 Subject: 2021 General Fund Budget and Tax Levy _____________________________________________________________________ PURPOSE To provide input and guidance for the 2021 General Fund budget and Tax Levy INFORMATION 2021 General Fund Budget Staff has been working to put together a 2021 General Fund Budget that meets the needs of the community in uncertain times. The budget being presented includes one new request to increase the contingency budget by $150,000 due to unknown impacts of COVID-19 in 2021. The requested amount is being included in the General Fund, but could be transferred to any other fund with City Council approval. The General Fund budget is balanced. Revenues and expenditures are both set at $16,003,837, a $642,121 or 4.18% increase from 2020. The general fund tax levy needed to support this budget is $13,180,276, a $701,971 or 5.62% increase from 2020. 2021 Tax Levy The 2021 Tax Levy has been prepared based on debt service needs, prior year ERP/CIP documents and initial budgets for special revenue funds. The total tax levy is $18,544,408, this is a $1,014,724 or 5.79% increase from 2020. Based on preliminary tax capacity information, city taxes on a median value home ($291,000) would be $1,929, which is a $102 or 5.59% increase from 2020. Finance Department FUTURE ACTION A virtual budget engagement meeting will be held on August 17 from 6-7:30 to receive public input on a proposed 2021 budget. Depending on input received at the public session or at this meeting from City Council additional discussions can be scheduled. A preliminary levy must be adopted by September 30th of each year. The preliminary levy is planned to be approved at the September 15th City Council Meeting. The preliminary levy will be the maximum allowable amount for 2021 and can only be reduced. A final levy must be adopted by December 31st of each year at or below the preliminary levy amount. A Truth and Taxation hearing is planned for Monday, November 30th. The final levy can be approved on December 1st or 15th. City of Hopkins DRAFT General Fund Revenue Budget For the Year Ending December 31, 2021 Department 2020 Budget 2021 Budget % Increase (Decrease) Property Taxes 12,564,305 13,265,276 5.58% Intergovernmental Revenue PERA Aid - - Local Government Aid 734,946 734,946 Intergovernmental Revenue - Other 618,000 621,000 Total Intergovernmental Revenue 1,352,946 1,355,946 0.22% Licenses, Permits & Fines Court Fines & Penalties 177,750 176,000 Building Permits & Inspections 461,300 479,300 Inspection Fines & Citations 8,000 6,000 City Clerk - Business Licenses 7,000 7,000 PD - Liquor, Animal Licenses & Penalties 102,300 97,800 Fire - Licenses & Permits 1,100 300 Public Works - Licenses & Permits 19,415 19,415 Planning & Zoning - Licenses & Permits 1,000 1,000 Total Licenses, Permits & Fines 777,865 786,815 1.15% Charges for Service Finance Department 5,500 5,500 Assessing 3,000 3,000 Inspections 105,900 103,900 Police 35,000 35,000 Fire 10,500 10,500 Public Works 4,150 3,150 Activity Center 87,000 67,500 Total Charges for Service 251,050 228,550 -8.96% Miscellaneous Revenue Franchise Fees 296,200 296,200 Miscellaneous 15,250 15,250 Finance Department 1,200 2,000 Police 2,000 500 Fire 3,500 3,500 Public Works 5,300 5,300 Activity Center 32,100 14,500 Community Development 60,000 30,000 Total Miscellaneous 415,550 367,250 -11.62% Total Revenues 15,361,716 16,003,837 4.18% City of Hopkins DRAFT General Fund Revenue Budget For the Year Ending December 31, 2021 Department 2019 Budget 2020 Budget % Increase (Decrease) City Council 97,630 102,095 4.57% Administrative Services 854,893 867,311 1.45% Finance 400,495 426,278 6.44% Legal 175,000 200,000 14.29% Municipal Building 404,014 397,795 -1.54% Assessing 221,835 245,920 10.86% City Clerk 237,513 176,656 -25.62% Inspections 863,296 882,905 2.27% Police 5,977,982 6,248,211 4.52% Fire 1,483,177 1,566,528 5.62% Public Works 3,443,017 3,550,061 3.11% Recreation 285,279 291,339 2.12% Activity Center 497,843 459,235 -7.76% Planning & Zoning 222,382 235,382 5.85% Community Development 108,160 114,921 6.25% Tuition Reimbursement 19,200 19,200 0.00% Contingency 50,000 200,000 300.00% Transfer to Other Funds 20,000 20,000 0.00% Total Expenditures 15,361,716 16,003,837 4.18% City of Hopkins DRAFT 2021 Tax Levy Actual DRAFT % Increase Purpose FY2020 FY2021 (Decrease) General Operations General Fund 12,479,305 13,180,276 5.62% Capital Levy 75,000 175,000 133.33% Arts Center 325,225 331,182 1.83% Pavilion Fund 290,000 340,000 17.24% Equipment Replacement 110,000 250,000 127.27% Total General Operations 13,279,530 14,276,458 7.51% Debt Levy 4,250,154 4,267,950 0.42% Total Levy 17,529,684 18,544,408 5.79% 2021 Draft Budget & Tax Levy July 21, 2020 2021 General Fund Budget Reviewed Financial Management Plan at January 10, 2020 Goal Setting Retreat Budget Engagement Session held on January 21, 2020 Budget Survey conducted in March/April 2021 General Fund Budget Will be affected by COVID-19 in some way Budget being presented keeps the same levels of service as in 2020 2021 General Fund Budget Balanced Budget Revenues = Expenditures $16,003,837 4.18% Increase from 2020 2021 General Fund Budget Total General Fund Levy of $13,180,276 5.6% Increase to General Fund Levy 2021 General Fund Expenditures Additional Request $150,000 –COVID-19 Contingency Budgeted in the General Fund Could be transferred to any other fund 2021 General Fund Expenditures Budget Draft % Increase FY2020 FY2021 (Decrease) General Government 1,932,032 1,993,479 3.18% Community Services 1,653,186 1,655,784 0.16% Public Safety 7,461,159 7,814,739 4.74% Public Works 3,443,017 3,550,061 3.11% Recreation 783,122 750,574 -4.16% Other 89,200 239,200 168.16% 15,361,716 16,003,837 4.18% 2021 General Fund Expenditures 2021 General Fund Revenue Tax Levy –increased $701K or 5.6% Collections budgeted at 100%, same as in prior years No budgeted increase to Local Government Aid Other revenue categories budgeted conservatively 2021 General Fund Revenue Budget Proposed % Increase FY2019 FY2020 (Decrease) Property Taxes 12,564,305 13,265,276 5.58% Intergov't Revenue 1,352,946 1,355,946 0.22% Licenses, Permits & Fines 777,865 786,815 1.15% Charges for Service 251,050 228,550 -8.96% Misc. Revenue 415,550 367,250 -11.62% Total Revenue 15,361,716 16,003,837 4.18% 2021 General Fund Revenue Draft 2021 Tax Levy Actual DRAFT % Increase Purpose FY2020 FY2021 (Decrease) General Operations General Fund 12,479,305 13,180,276 5.62% Capital Levy 75,000 175,000 133.33% Arts Center 325,225 331,182 1.83% Pavilion Fund 290,000 340,000 17.24% Equipment Replacement 110,000 250,000 127.27% Total General Operations 13,279,530 14,276,458 7.51% Debt Levy 4,250,154 4,267,950 0.42% Total Levy 17,529,684 18,544,408 5.79% City Taxes on Median Value Home 2020 Actual Estimated Market Value as of 1/2/19 = $276,000 City Taxes -$1,827 Increase of $92 or 5.31% 2021 Draft Estimated Market Value as of 1/2/20 = $291,000 City Taxes -$1,929* Increase of $102 or 5.59% *estimated based on preliminary tax capacity information Next Steps Virtual Budget Engagement meeting on August 17 from 6-7:30 Details will be posted at: https://www.hopkinsmn.com/466/City-Budget- Process Next Steps 1st Review of ERP & CIP on August 18 1st Review of Depot, Arts Center & Pavilion Budgets on August 18 Adopt Preliminary Budget and Tax Levy on September 15