VII.1. Approve Proposed 2018 Levy, Proposed 2018 General Fund Budget and Set Budget Meeting Date; Bishop (2017-114)
September 19, 2017 Council Report 2017-114
APPROVE PROPOSED 2018 LEVY,
PROPOSED 2018 GENERAL FUND BUDGET
AND SET BUDGET MEETING DATE
Proposed Action
Staff recommends adoption of the following motion:
Move to approve Resolution 2017-063 “Approving proposed 2018 tax levy, debt service levies at levels under those
required in the bond covenants, proposed 2018 general fund budget, and setting budget meeting dates”.
Adoption of resolution 2017-063 will set a maximum tax levy for 2018, will set debt levies at amounts sufficient to
pay debt service requirements taking into consideration other revenue sources and fund reserves, and approve a
proposed 2018 general fund budget. Actual budget and tax levy adoption will not occur until December 2017.
Overview
The City is required to certify a proposed tax levy and submit it to the county by September 30th. There is also a
requirement to hold a public meeting on the budget where public comments are taken. Staff is suggesting December
5, 2017 as an appropriate date to discuss the budget. This will allow us to take into consideration comments from the
public prior to adopting the budget. If there are no changes to the proposed budget if can be approved at that same
meeting.
A proposed general fund budget has been established and is attached for your review. Adoption of the actual budget
will occur in December 2017 following the public comment meeting, and at that time, the final levy may not exceed
the approved proposed levy. The city council is charged with the authority to establish a budget for 2018 and set the
preliminary levy. Levy limits were removed for 2015 and have not been reinstated, however the Financial
Management Plan adopted by the Council in February 2014 was used for establishing the levy and budget.
Staff is recommending that council approve the resolution setting the proposed levy for general fund operations;
approve the levy adequate for the payment of debt, and to set budget meeting dates as set forth in the resolution.
Primary Issues to Consider
• 2018 budget concerns
• Local Government Aid
Supporting Information
• Power point presentation
• 2018 proposed general fund budget and tax levy
• Resolution 2017-xxx
____________________________________
Nick Bishop, CPA
Finance Director
Financial Impact: $ 13,435,355 Budgeted: Y/N X N Source: Taxes and other revenues
Related Documents (CIP, ERP, etc.): __2018 budget__ ______Notes: ____ ________________
Staff Analysis
• Local Government Aid (LGA)
LGA, a property tax relief program to cities, that ensures residents have access to basic services, regardless of where in
Minnesota they live, was reinstated in 2014. Our allocation was increased for 2018 by 29.5% or $125,107. We are
required to use these funds to reduce the tax levy.
• 2018 Levy
The tax levy proposed totals $14,221,880 which includes levies for the General Fund, Arts Center, Capital
Improvement Fund and bonded debt. Details are included in the attached summary of tax levy.
• 2018 Budget Analysis
The 2018 general fund budget, and the 2018 general operating tax is proposed at $13,435,355 and $10,832,657
respectively. The proposed levy based on the budget and FMP and can only be reduced from this point forward. The
general fund budget is currently proposed to increase by 4.67% over the 2017 budget and is balanced. Personnel
related expenditures include a contingency to implement a Classification and Compensation study and hire a full-time
fire marshal instead of 30 hours/week of part-time employees. New costs include, equipment, IT, office
reconfiguration, Fire Relief contribution, signage, health services and recruitment.
Because we are a service related operation, salaries and benefits compose 74% of current general fund expenditures
and the classification and compensation study along with labor negotiations may have a tremendous impact on the
budget. The council and staff will continue to work on a final budget that will allow for essential programs and
services to be accomplished. Attached to this report is a summary of 2018 general fund budget revenues by revenue
type and expenditures by department.
• 2017 Budget Meeting for the 2018 Budget and 2018 Tax Levy
The 2009 Legislature made significant changes to the truth-in-taxation (TNT) requirements, essentially abolishing the
old scheme. The new law now requires that on or before September 30th at a regularly scheduled meeting at which the
city council adopts a proposed tax levy, the city council must also announce:
• The time and place of the council’s next regularly scheduled meetings at which the budget and levy will be
discussed and must not be held before 6 pm.
• The date and time of the regularly scheduled meeting at which a final budget and levy will be determined.
• That the public will be allowed to speak at these subsequent meetings.
On or before September 30th, the time as place of regularly scheduled meetings dealing with the budget and levies must
be included in the minutes.
Therefore, staff is recommending the City Council budget meeting be set for December 5, 2017 with possible adoption
of the final budget at that same meeting.
9/14/2017
1
2018 Preliminary
Levy and Budget
September 19th, 2017
Truth in Taxation Process
Council adopts proposed levy and budget by
September 30th of each year
Council sets budget meeting date for
discussion and to receive public comment
Budget Meeting – Tuesday, December 5
th
Budget approval December 5th or 19th
Parcel specific notices mailed by Hennepin
County
9/14/2017
2
2018 Proposed General Fund Budget
Balanced Budget
Revenues = Expenditures
$13,435,355
4.7% Increase from 2016
2018 Proposed General Fund Expenditures
Additions for 2018:
Contingency for Classification and Compensation
Study Implementation
Full‐time Fire Marshall replacing 30 hour/week of
part‐time employees
Equipment, IT, Furniture, Office Reconfiguration,
Fire Relief Contribution, Signage, Health Services
and Recruitment
9/14/2017
3
2018 Proposed General Fund Expenditures
Budget Proposed % Increase
FY2017 FY2018 (Decrease)
General Government 1,491,936 1,603,149 7.45%
Community Services 1,518,257 1,431,560 -5.71%
Public Safety 6,271,634 6,343,084 1.14%
Public Works 2,800,932 2,912,055 3.97%
Recreation 667,781 682,307 2.18%
Other 84,772 463,200 446.41%
12,835,312 13,435,355 4.67%
2018 Proposed General Fund Expenditures
General
Government,
11.9%
Community
Services,
10.7%
Public Safety,
47.2%
Public Works,
21.7%
Recreation,
5.1%
Other, 3.4%
9/14/2017
4
2018 Proposed General Fund Revenue
Tax Levy – increased $466K or 4.5%
Local Government Aid – increased $125K
Inspections Revenue – increased $91K
2018 Proposed General Fund Revenue
Budget Proposed % Increase
FY2017 FY2018 (Decrease)
Property Taxes 10,366,666 10,832,657 4.50%
Intergov't Revenue 1,028,426 1,173,933 14.15%
Licenses, Permits & Fines 707,225 785,465 11.06%
Charges for Service 192,850 222,850 15.56%
Misc. Revenue 540,145 420,450 -22.16%
Total Revenue 12,835,312 13,435,355 4.67%
9/14/2017
5
2018 Proposed General Fund Revenue
Property
Taxes, 80.6%
Intergov't
Revenue, 8.7%
Licenses,
Permits &
Fines, 5.8%
Charges for
Service, 1.7%Misc. Revenue,
3.1%
Proposed 2018 Levy
Actual Proposed % Increase
Purpose FY2017 FY2018 (Decrease)
General Operations
General Fund 10,281,666.00 10,747,657.00 4.53%
Capital Levy 310,000.00 75,000.00 -75.81%
Arts Center Levy 250,000.00 250,000.00 0.00%
Total General Operations 10,841,666.00 11,072,657.00 2.13%
9/14/2017
6
Proposed 2018 Levy
Actual Proposed % Increase
Purpose FY2017 FY2018 (Decrease)
Debt Levy
Debt Issued Prior to 2017 2,103,366.00 2,082,375.00 -1.00%
Debt Issued in 2017 - 1,066,848.00 100.00%
Total Debt Levy 2,103,366.00 3,149,223.00 49.72%
Proposed 2018 Levy
*Blake Road, 8th Avenue ARTery Project &
Burnes Park Improvements
Actual Proposed % Increase
Purpose FY2017 FY2018 (Decrease)
Debt Levy
Debt Issued Prior to 2017 2,103,366.00 2,082,375.00 -1.00%
Debt Issued in 2017* - 1,066,848.00 100.00%
Total Debt Levy 2,103,366.00 3,149,223.00 49.72%
9/14/2017
7
Proposed 2018 Levy
Tax Increases of $150 to Average Home
General Operations ‐ $40
Debt Levy ‐ $110 (Blake Road, ARTery, Burnes Park)
Actual Proposed % Increase
Purpose FY2017 FY2018 (Decrease)
Total Levy 12,945,032.00 14,221,880.00 9.86%
Next Steps ‐ Levy
Adopt proposed budget and levy during this
Meeting
Certify to County by September 30th
Parcel Specific Notices mailed by County
Hold Public Meeting on budget and levy at the
December 5th Council Meeting
Final Certification to County due on December
28th
9/14/2017
8
Next Steps – 2018 Budgets
Utility Rate Increase Discussion – Oct/Nov
CIP/ERP – Nov/Dec
Enterprise and Special Revenue Fund Budgets
– Oct/Nov/Dec
City of Hopkins
General Fund Revenue Budget
For the Year Ending December 31, 2018
Proposed
September 19, 2017
Department 2017 Budget 2018 Budget
% Increase
(Decrease)
Property Taxes 10,366,666 10,832,657 4.50%
Intergovernmental Revenue
PERA Aid 20,510 20,510
Local Government Aid 423,916 549,023
Intergovernmental Revenue - Other 584,000 604,400
Total Intergovernmental Revenue 1,028,426 1,173,933 14.15%
Licenses, Permits & Fines
Court Fines & Penalties 176,500 176,500
Building Permits & Inspections 385,660 463,900
Inspection Fines & Citations 8,000 8,000
City Clerk - Business Licenses 7,050 7,050
PD - Liquor, Animal Licenses & Penalties 95,600 95,600
Fire - Licenses & Permits 3,800 3,800
Public Works - Licenses & Permits 27,115 27,115
Planning & Zoning - Licenses & Permits 3,500 3,500
Total Licenses, Permits & Fines 707,225 785,465 11.06%
Charges for Service
Finance Department 9,750 9,750
Assessing 3,000 3,000
Inspections 74,850 87,850
Police 33,000 33,000
Fire 3,000 15,000
Public Works 2,750 2,750
Activity Center 66,500 71,500
Total Charges for Service 192,850 222,850 15.56%
Miscellaneous Revenue
Franchise Fees 290,000 290,000
Miscellaneous 20,250 15,250
Finance Department 5,100 5,100
Elections 20,000 -
Police 2,000 2,000
Fire 3,500 3,500
Public Works 4,600 4,600
Activity Center 10,000 10,000
Planning 94,695 -
Community Development 90,000 90,000
Total Miscellaneous 540,145 420,450 -22.16%
Total Revenues 12,835,312 13,435,355 4.67%
City of Hopkins
General Fund Expenditure Budget
For the Year Ending December 31, 2018
Proposed
September 19, 2017
Department 2017 Budget 2018 Budget
% Increase
(Decrease)
City Council 82,898 103,559 24.92%
Administrative Services
Administration 199,194 244,868
Personnel 96,364 61,406
Wellness 2,500 2,550
Information Services 331,590 373,359
Total Administrative Services 629,648 682,183 8.34%
Finance
General Accounting 188,954 190,381
Payroll 82,809 82,847
Utility Billing 10,895 10,950
Total Finance 282,658 284,178 0.54%
Legal 150,000 150,000 0.00%
Municipal Building 343,282 379,764 10.63%
History Center 3,450 3,465 0.43%
Receptionist 43,044 - -100.00%
Assessing 222,643 222,826 0.08%
City Clerk
City Clerk 110,120 69,568
Elections 58,935 83,900
Total City Clerk 169,055 153,468 -9.22%
Inspections
Building Code Inspections 290,272 301,747
Fire Inspections 42,025 42,120
Heating & Plumbing Inspections 99,552 101,242
Housing Inspections 185,796 190,052
Misc. Community Inspections 89,246 91,536
Vacant Property Management 4,927 4,927
Total Inspections 711,818 731,624 2.78%
Police
Police Administration 494,817 514,172
Patrol 3,396,561 3,379,591
SWAT 81,272 81,931
Reserves 20,788 20,897
Investigations 496,984 494,629
Metro Drug Task Force 138,146 143,756
Outreach 116,303 116,380
Reception-Records 286,140 286,370
Systems Management 64,091 65,500
Total Police 5,095,102 5,103,226 0.16%
City of Hopkins
General Fund Expenditure Budget
For the Year Ending December 31, 2018
Proposed
September 19, 2017
Department 2017 Budget 2018 Budget
% Increase
(Decrease)
Fire 1,176,532 1,239,858 5.38%
Public Works
PW Building 54,109 64,444
Equipment Services 125,648 130,323
Administration 62,165 62,261
Engineering 148,278 160,324
Street & Alleys 1,114,847 1,118,497
Snow & Ice Removal 224,106 221,327
Parks 784,337 855,515
Forestry 287,442 299,364
Total Public Works 2,800,932 2,912,055 3.97%
Recreation
Playground 22,755 22,762
Ice Rink 31,618 31,636
Park Service 27,162 27,173
Joint Recreation 169,500 172,000
Skate Park 8,819 8,833
Total Recreation 259,854 262,404 0.98%
Activity Center
Community Use 335,497 343,861
Maintenance 72,430 76,042
Total Activity Center 407,927 419,903 2.94%
Planning & Zoning 246,877 196,774 -20.29%
Community Development 124,820 126,868 1.64%
Tuition Reimbursement 15,200 18,200 19.74%
Contingency 54,572 430,000 687.95%
Transfer to Other Funds 15,000 15,000 0.00%
Total Expenditures 12,835,312 13,435,355 4.67%
9/19/2017
Purpose 2015 2016 2017
General Levy
General Fund 9,224,729$ 9,711,951$ 10,281,666$
Capital Levy 53,000 125,000 310,000
Arts Center 85,000 140,000 250,000
Pavilion 65,000 65,000 -
PERA Levy 35,500 - -
Total General Levy 9,463,229$ 10,041,951$ 10,841,666$
B2679 2010A GO Improvement Bonds 82,194 79,437 81,472
B2832 2012A GO CIP Bonds 220,000 220,000 220,000
B2833 2012B GO Bonds 70,000 141,970 140,000
B2833 2012B Equipment Certificates 96,285 96,285 94,605
B2883 2013A GO Bonds 75,000 - 93,388
B2964 2014A GO Bonds 88,471 87,993 97,000
B2983 2014B GO Refunding (formerly 2007A & B) 882,894 881,975 821,625
B3031 2015A GO SROP Bonds - 264,261 264,576
2015B GO Tax Abatement - 135,957 139,792
B3123 2016A GO Improvement Bonds - - 111,413
B3122 2016B Tax Abatement Bonds - - 39,495
B3141 2016C Equipment Certificates - - -
B3198 2017A SROP Bonds - - -
2017B Tax Abatement Bonds - - -
Subtotal - Debt Levies 1,514,844 1,907,878 2,103,366
TOTAL LEVIES 10,978,073$ 11,949,829$ 12,945,032$
Tax Capacity Rate (per HC rate cards)61.008% 63.988% 62.985%
Chnge from prior year
CITY OF HOPKINS
ANALYSIS OF TAX LEVY
CITY OF HOPKINS
Hennepin County, Minnesota
RESOLUTION NO. 2017-063
RESOLUTION APPROVING THE PROPOSED 2018 TAX LEVY, SETTING
DEBT SERVICES LEVIES AT LEVELS UNDER THOSE REQUIRED IN THE BOND
COVENANTS, APPROVING THE PROPOSED 2018 BUDGET, AND
SETTING BUDGET MEETING DATE
BE IT RESOLVED BY THE COUNCIL OF THE CITY OF HOPKINS, MINNESOTA,
That the following sums be levied for 2018 upon the taxable property in the City of Hopkins,
for the following purposes.
General Levy General $11,072,657
Special Levies
Debt Levies
2010A GO Improvement Bonds 80,000
2012A GO Capital Improvement Bonds 220,000
2012B GO Bonds 120,000
2012B Equipment Certificates 90,000
2013A GO Bonds 80,000
2014A GO Bonds 90,000
2014B GO Refunding Bonds 670,000
2015A GO Street Reconstruction Bonds 250,000
2015B GO Tax Abatement Bonds 115,000
2016A GO Improvement Bonds 90,000
2016B GO Tax Abatement Bonds 39,495
2016C Equipment Certificates 242,484
2017A GO Street Reconstruction Bonds 900,000
2017B GO Tax Abatement Bonds 166,848
Subtotal Special Levies 3,149,223
Total Levy $14,221,880
That based upon staff analysis of specials assessments currently levied for Permanent
Improvement Bonds, alternative revenue sources for the Capital Improvement Bonds and Equipment
Certificates, and available reserves within all debt service funds listed below, that the debt service
levies for 2018 for the following issues be levied at amounts less than that provided by the bond
covenants.
Net Debt
Bond Issue Service Levy
$2,710,000 G.O. Improvement Bonds of 2010A (B2679) $ 80,000
$5,505,000 G.O. Bonds of 2012B (B2833) $ 210,000
$3,650,000 G.O. Bonds of 2013A (B2833) $ 80,000
$1,895,000 G.O. Improvement Bonds of 2014A (B2964) $ 90,000
$6,345,000 G.O. Refunding Bonds of 2014B (B2983) $ 670,000
$4,100,000 G.O. Street Reconstruction bonds of 2015A (B3031) $ 250,000
$2,940,000 G.O. Tax Abatement Bonds of 2015B $ 115,000
$4,335,000 G.O. Improvement Bonds of 2016A (B3123) $ 90,000
$1,630,000 G.O. Tax Abatement Bonds of 2016B (B3122) $ 34,981
$11,795,000 G.O. Street Reconstruction Bonds of 2017A (B3198) $ 900,000
$3,170,000 G.O. Tax Abatement Bonds of 2017B $ 166,848
That the Proposed 2017 General Fund Budget be set at $13,435,355.
That the budget meeting to discuss the 2017 budget and tax levy be set for December 5, 2017 at 7:00
pm in the City Council Chambers.
BE IT FURTHER RESOLVED that the City Clerk is hereby ordered and directed to transmit a certified
copy of this resolution to the County Auditor of Hennepin County, Minnesota.
Adopted by the City Council of the City of Hopkins this 19th day of September 2017.
By
Molly Cummings, Mayor
ATTEST:
Amy Domeier, City Clerk