V.2. 2018 Budget Meeting, 2018 Tax Levy and General and Special Revenue Fund Budgets; Bishop (CR2017-141)December 5, 2016 Council Report 2017-141
2018 BUDGET MEETING,
2018 TAX LEVY AND GENERAL AND SPECIAL
REVENUE FUND BUDGETS
Proposed Action
Staff recommends adoption of the following motion: Move to Adopt Resolution 2017-086
approving the 2018 tax levy and adopting the 2018 General and Special Revenue Fund budgets.
Adoption of this motion will result in staff forwarding the appropriate documentation to
Hennepin County for inclusion on property taxes for 2018 and will approve the 2018 General and
Special Revenue Fund budgets.
Overview
The City Council and staff have held a number of meetings and work sessions during 2017 to
prepare for the 2018 general fund budget and 2018 tax levy. This evening we are taking input
from the public on the 2018 budget.
During 2017 the council reviewed and gave input related to the Capital Improvement Plan, the
Equipment Replacement Plan and updated the Financial Management Plan which along with a
series of program and budget discussions were instrumental in the development of the 2018
budgets.
The budget in its current form recommends spending in the general fund at $13,435,355 and a
total tax levy of $14,221,880. The levy includes provisions for general fund operations and debt
obligations. In addition, a proposed HRA levy of $331,337 is also being recommended.
Staff is recommending that the council adopt the resolution approving the tax levy for 2018 and
setting the 2018 general and special revenue fund budgets.
Primary Issues to Consider
• The state mandates certification of the 2018 levy to the County Auditor no later than
December 28, 2017.
Supporting Information
• Resolution 2017-086
• 2018 General Fund and Special Revenue Fund Budgets
• Power point presentation slides
• Assoc. of MN Counties – “Fourteen Reasons Why Property Taxes Vary from Year to Year”
Nick Bishop, CPA
Finance Director
Financial Impact: $13,435,355 GF Budgeted: Y/N Y
Source: Taxes & other revenues
Related Documents (CIP, ERP, etc): 2017 Budget, CIP, ERP,
Notes:
CITY OF HOPKINS
Hennepin County, Minnesota
RESOLUTION NO. 2017-086
RESOLUTION APPROVING 2018 TAX LEVY
AND ADOPTING THE 2018 GENERAL AND
SPECIAL REVEUNE FUND BUDGETS
BE IT RESOLVED BY THE COUNCIL OF THE CITY OF HOPKINS, MINNESOTA,
That the following sums of money be levied for the current year collectible in 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 34,891
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 $12,945,032
HRA/EDA Levy
Housing & Redevelopment Authority Levy $ 331,337
This levy is made based on current law and the 2018 General Fund Budget of $13,435,355.
BE IT FURTHER RESOLVED, that the following amounts are budgeted for the Special Revenue Funds:
State Chemical Assessment $60,000 TIF 2.6 Handicapped Housing Dev $6,976
Economic Development $245,700 TIF 2.11 Super Valu $1,640,240
TIF 1.2 Entertainment District $13,242 5th Avenue Flats $2,000
Parking $113,529 TIF 1.4 – Marketplace & Main $120,950
Communication (Cable TV) $285,566 Arts Center $992,908
Depot Coffee House $367,753
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 on this this 5th day of December, 2017.
_______________________________________
Molly Cummings, Mayor
ATTEST:
_____________________________
Amy Domeier, City Clerk
City of Hopkins
General Fund Revenue Budget
For the Year Ending December 31, 2018
Adopted
December 5, 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
Adopted
December 5, 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%
City of Hopkins
General Fund Expenditure Budget
For the Year Ending December 31, 2018
Adopted
December 5, 2017
Department 2017 Budget 2018 Budget
% Increase
(Decrease)
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%
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%)
City of Hopkins
General Fund Expenditure Budget
For the Year Ending December 31, 2018
Adopted
December 5, 2017
Department 2017 Budget 2018 Budget
% Increase
(Decrease)
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%
City of Hopkins
Special Revnue Funds Budget
For the Year Ending December 31, 2018
Adopted
December 5, 2017
Revenues
Fund No.2017 Budget 2018 Budget
% Increase
(Decrease)
203 State Chemical Assessment 60,000 60,000 0.00%
204 Economic Development 396,200 402,037 1.47%
211 TIF 1.2 Entertainment District 31,000 30,000 (3.23%)
214 Parking 144,500 150,500 4.15%
217 Communications (Cable TV)269,200 269,200 0.00%
219 Depot Coffee House 348,000 352,000 1.15%
226 TIF 2.6 Handicapped Housing Dev.19,024 21,000 10.39%
231 TIF 2.11 Super Valu 2,408,000 2,408,000 0.00%
232 5th Avenue Flats - - 0.00%
233 TIF 1.4 - Marketplace & Main 120,950 125,000 3.35%
250 Arts Center 935,734 975,626 4.26%
Expenditures
Fund No.2017 Budget 2018 Budget
% Increase
(Decrease)
203 State Chemical Assessment 60,000 60,000 0.00%
204 Economic Development 210,449 245,700 16.75%
211 TIF 1.2 Entertainment District 13,242 13,242 0.00%
214 Parking 110,928 113,529 2.34%
217 Communications (Cable TV)289,747 285,566 (1.44%)
219 Depot Coffee House 343,036 367,753 7.21%
226 TIF 2.6 Handicapped Housing Dev.6,976 6,976 0.00%
231 TIF 2.11 Super Valu 1,790,665 1,640,240 (8.40%)
232 5th Avenue Flats 2,000 2,000 0.00%
233 TIF 1.4 - Marketplace & Main 120,950 120,950 0.00%
250 Arts Center 1,234,505 992,908 (19.57%)
Fund
Fund
11/30/2017
1
Public Meeting for the
2018 Levy & Budget
December 5th, 2017
Purpose of this Meeting
Discuss and Review the City’s Budget and how
it impacts your taxes
Discuss the City’s Tax Levy
Will NOT address individual property
valuations
11/30/2017
2
Taxation Process
Set Preliminary Levy on September 9th
Proposed Tax Notices were mailed on
November 13th
Public Meeting for Final Levy and Budget –
Tonight/December 5th
Adopt Final Budget and Levy
Planned for Tonight/December 5th
Must be passed before December 28th
General Fund Expenditures
Contingency for Classification and
Compensation Study still included
Wages only set for non union employees
Full‐time Fire Marshall replacing 30
hour/week of part‐time employees
11/30/2017
3
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%
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%
11/30/2017
4
General Fund Revenues
Tax Levy – increased $466K or 4.5%
Local Government Aid – increased $125K
Inspections Revenue – increased $91K
General Fund Revenues
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%
11/30/2017
5
General Fund Revenues
Property
Taxes,
80.6%
Intergov't
Revenue,
8.7%
Licenses,
Permits &
Fines, 5.8%
Charges for
Service,
1.7%
Misc.
Revenue,
3.1%
2018 Debt Service Levy
Issued debt in 2017 to pay for Burnes Park
Improvements, 8th Avenue Artery Project and
a portion of Blake Road
11/30/2017
6
2018 Tax Levy
Actual Proposed % Increase
Purpose FY2017 FY2018 (Decrease)
General Operations
General Fund 10,281,666 10,747,657 4.53%
Capital Levy 310,000 75,000 -75.81%
Arts Center Levy 250,000 250,000 0.00%
Total General Operations 10,841,666 11,072,657 2.13%
Total Debt Levy 2,103,366 3,149,223 49.72%
Total Levy 12,945,032 14,221,880 9.86%
Residential Property Tax Changes
7.8% of
homeowners,
Decrease
16.41% of
homeowners,
Increase .1% ‐
4.9%
38.19% of
homeowners,
Increase 5.0% ‐ 9.9%
17.76% of
homeowners, Increase
10.0% ‐ 14.9%
9.83% of
homeowners,
Increase 15.0% ‐
19.9%
10.01% of
homeowners
Increase over 20.0%
11/30/2017
7
Residential Property Tax Changes
Year
Payable Decrease
Increase
.1% - 4.9%
Increase
5.0% - 9.9%
Increase
10.0% - 14.9%
Increase
15.0% - 19.9%
Increase
over 20.0%
2018 7.80% 16.41% 38.19% 17.76% 9.83% 10.01%
2017 37.62% 32.28% 23.21% 6.20% 0.33% 0.36%
2016 14.28% 5.99% 15.62% 32.11% 17.78% 14.22%
Impact on a Median Valued Home
Year Payable Value Tax Rate Taxes Increase
2018 243,000 66.342% 1,446 150
2017 233,000 63.078% 1,296 90
2016 207,000 63.998% 1,206 63
2015 206,000 61.008% 1,143 128
2014 183,000 62.601% 1,015 3
* 5 Year Average is $87
11/30/2017
8
Where your taxes go
24‐hour police and fire protection
Emergency medical service
Street, sidewalk and trail maintenance and improvements
Snow plowing
Hopkins Activity Center
Hopkins Center for the Arts
Boulevard and forestry program
Park maintenance and improvements
Planning and economic development
A publication of the Association of Minnesota Counties
THE MARKET VALUE OF A PROPERTY MAY CHANGE.
• Each parcel of property is assessed at least once every five years and a sales ratio study
is done to determine if the property is assessed similarly to like properties. If not, the
Commissioner of Revenue may issue an ‘order’ that would affect the taxable value of a
parcel.
• Additions and improvement made to a property generally increases its market value.
THE MARKET VALUE OF OTHER PROPERTIES IN
YOUR TAXING DISTRICT MAY CHANGE, SHIFTING
TAXES FROM ONE PROPERTY TO ANOTHER.
• If the market value of a property increases more or less than the average increase or
decrease in a taxing district, the taxes on that property will also change.
• New construction in a taxing district increases the tax base and will affect the district’s tax
rate.
THE STATE GENERAL PROPERTY TAX MAY CHANGE.
• The state legislature directly applies a State General Property Tax to commercial/industrial
and season/recreational property classes.
Fourteen Reasons
WHY PROPERTY TAXES VARY
FROM YEAR TO YEAR
A publication of the Association of Minnesota Counties
THE CITY BUDGET AND LEVY MAY CHANGE.
• Each year, cities review the needs and wants of their citizens and how to meet those needs
and wants. This is called ‘discretionary spending’ in the city budget. Also included in the
budget is non-discretionary spending which is required by state and federal mandates
and court decisions and orders.
THE TOWNSHIP BUDGET AND LEVY MAY CHANGE.
• Each March, townships set the levy and budget for the next year.
THE COUNTY BUDGET AND LEVY MAY CHANGE.
• Each year, counties review the needs and wants of their citizens and how to meet those
discretionary needs and wants. In addition, also included in the county budget is non-
discretionary spending which is required by state and federal mandates and court
decisions and orders. As much as sixty to eighty-five percent of the county expenditures
are used to deliver mandated services.
THE SCHOOL DISTRICT’S BUDGET AND LEVY MAY
CHANGE.
• The Legislature determines basic funding levels for K-12 education and mandates services
that schools must perform. On average, approximately seventy percent of school costs
are paid by the state.
• Local school districts set levies for purposes including safe school and community
education, etc.
A SPECIAL DISTRICT’S BUDGET AND LEVY MAY
CHANGE.
• Special districts such as the Metropolitan Council, hospital districts, watershed districts,
drainage districts, etc. set levies to balance their budgets.
SPECIAL ASSESSMENTS MAY BE ADDED TO YOUR
PROPERTY TAX BILL.
• Water lines, curb and gutter, and street improvements that directly benefit your property
may be funded, in whole or in part, through a special assessment that is added to your tax
bill.
A publication of the Association of Minnesota Counties
VOTERS MAY HAVE APPROVED A SCHOOL, CITY/
TOWNSHIP, COUNTY, OR SPECIAL DISTRICT
REFERENDUM.
• Local referendums may be held for local government construction projects, excess operating
levies for schools or many other purposes.
• Referendum levies may be spread on the market value or the tax capacity of a property
depending on process and type of referendum levy.
FEDERAL AND STATE MANDATES MAY HAVE CHANGED.
• Both the state and federal governments require local governments to provide certain services
and follow certain rules. These mandates often require an increase in the cost and level of
service delivery.
AID AND REVENUE FROM THE STATE AND FEDERAL
GOVERNMENTS MAY HAVE CHANGED.
• Each year the state legislature reviews and adjusts the level of funding for a variety of aids
provided to local governments including Local Government Aid and County Program Aid.
The formulas for how aid is determined and distributed among local governments may have
changed.
• While direct aid and revenue from the federal government to local governments has declined
greatly in recent years, federal revenue continues to be a key portion of the local government
revenue stream and that revenue stream may have changed.
THE STATE LEGISLATURE MAY HAVE CHANGED THE
PORTION OF THE TAX BASE PAID BY DIFFERENT
TYPES OF PROPERTIES.
• A change in class rates will require a change in the tax rate to raise the same amount of money.
OTHER STATE LAW CHANGES MAY ADJUST THE TAX
BASE.
• Fiscal disparities, personal property taxes on utility properties, limited market value, and tax
increment financing are example of laws that affect property taxes.
CATEGORICAL AID: Aid given to a local unit of government to be used only
for a specific purpose.
CIRCUIT BREAKER: See “Property Tax Refund.”
CLASS RATES: The percent of market value set by state law that establishes
the property’s tax capacity subject to the property tax.
COUNTY PROGRAM AID: State property tax relief aid to counties, distributed
with a formula based on needs (households on foodstamps, age of the
population, number of serious crimes) and tax base equalization for counties
with smaller tax bases.
EDUCATION AID: The total amount of state dollars paid for K-12 education.
This aid is paid to the school districts.
FISCAL DISPARITIES: A program in the Twin Cities metropolitan area and on
the iron range in which a portion of the commercial and industrial property
value of each city and township is contributed to a tax base sharing pool. Each
city and township then receives a distribution of property value from the pool
based on market value and population in each city.
GENERAL PURPOSE AID: Aid given to units of government to be used at their
own discretion. Examples are Local Government Aid and County Program Aid.
HIGHWAY AID: Motor fuels tax and license tab money the state distributes
to counties, cities and townships for highways and bridges.
HOMESTEAD: A residence occupied by the owner.
INDIVIDUAL INCOME TAX: A state tax on the income of residents and non-
residents with Minnesota sources of income that is deposited into the state
general fund.
LEVY: The imposition of a tax, associated with the property tax.
LEVY LIMIT: The amount a local unit of government is permitted to levy for
specific services under state law.
LIMITED MARKET VALUE: A state imposed limit on property value increases
for the purpose of calculating property taxes.
LOCAL GOVERNMENT AID (LGA): A state government revenue sharing
program for cities with low property wealth or high service burdens that is
intended to provide an alternative to the property tax.
LOCAL SALES TAX: A local tax, authorized by the state, levied on the sale of
goods and services to be used for specific purposes by the local government.
LOCAL TAX RATE: The tax rate usually expressed as a percentage of tax
capacity, used to determine the property tax due on a property.
MARKET VALUE: An assessor’s estimate of what property would be worth
if it were sold.
MARKET VALUE AGRICULTURE CREDIT: A state credit to reduce the property
tax paid by agricultural homesteads to the local taxing jurisdiction.
MARKET VALUE HOMESTEAD CREDIT: The Market Value Homestead Credit
(MVHC) program was eliminated during the 2011 Special Session for taxes
payable in 2012 and beyond. The credit was replaced with a market value
exclusion (defined below). This guide describes the (MVHC) reimbursement
program. The program was designed to provide state-paid property tax relief
to owners of certain qualifying homestead property.
MARKET VALUE HOMESTEAD EXCLUSION: The exclusion reduces the taxable
value of qualifying homesteads. Despite the decreased taxable value, taxes
will increase on most properties including apartments and businesses and
is independent of any action taken by local governments. The exclusion
provides for a portion of each home’s market value to be excluded from its
value for property tax calculations. The amount of value excluded is directly
proportional to the MVHC the home received under the old law. In this way,
each home contributes a smaller amount to each taxing jurisdiction’s tax
base. The tax rate tends to be a little higher because of the reduced tax base,
which is why taxes increase for the other types of property. The tax burden
on any given homestead could be lesser or greater depending upon the mix
of properties in the jurisdiction and the level of the tax rate.
PROPERTY TAX: A tax levied on any kind of property.
PROPERTY TAX REFUND: A partial property tax refund program for those
who have property taxes out of proportion with their income. This program
is available to homeowners and renters.
SALES RATIO STUDY: A study conducted by the
Department of Revenue of open market property sales, which is then
compared to local assessments to ensure that local assessments adequately
reflect the market.
STATE GENERAL PROPERTY TAX: A state-imposed property tax on commercial,
industrial, and seasonal recreational properties.
STATE SALES TAX: A state tax (6.5%) levied on the sale of goods and services
that is deposited into the state general fund.
TAX CAPACITY: The valuation of property based on market value and class
rates, on which property taxes are determined.
Revised October 2014
Glossary of Terms
Association of Minnesota Counties
125 Charles Avenue
Saint Paul, MN 55103-2108
Main Line/Switchboard: 651.224.3344 Fax: 651.224.6540
www.mncounties.org