Continued Discussion of 2019 Budget, Equipment Replacement Plan and Capital Improvement Plan; Bishop
CITY OF HOPKINS
Memorandum
To: Honorable Mayor and Council Members
Mike Mornson, City Manager
From: Nick Bishop, Finance Director
Date: September 11, 2018
Subject: Continued Discussion of 2019 Budget, Equipment Replacement Plan and
Capital Improvement Plan
_____________________________________________________________________
PURPOSE
To provide continued input and guidance for the 2019 Budget, Equipment Replacement
Plan and Capital Improvement Plan.
INFORMATION
2019 Tax Levies
The total levy being proposed for 2019 is $16,042,936. This represents a 12.8%
increase from the 2018 levy. The general operation levy includes amounts for general
fund, capital improvements, Arts Center, Pavilion and Equipment replacement. Debt
being paid with tax levy has been issued for street improvements, equipment
purchases, city owned facilities and Burnes Park.
There are 8 new requests that directly affect the 2019 tax levy:
• General Fund
o $57,250 – New Parks and Forestry Worker
Estimated cost of $71,250 and reduction in part time salary of
$14,000
o $37,500 – Fire Tables and Chairs
One time increase
o $25,000 – Comprehensive Plan Implementation
One time increase
o $5,000 – Four hours per week part time worker at Activity Center
o $5,000 – Additional transfer to Depot
Finance Department
• Equipment Replacement
o $50,000 – Patching Automation Software
One-time purchase of software, annual maintenance costs of
$10,000
o $19,390 – E-Mail Threat Protection
One time increase
o $19,000 – VPN Software/Equipment
One time increase
2019 – 2023 Equipment Replacement Plan
The 2019 purchases funded through the equipment replacement fund increased by
$82,990 from the 2018 – 2022 Plan. The IT department added approximately $90,000
of initial software costs for VPN, E-Mail and Patching Automation (detailed in previous
section). The Police Department increased the costs of squad/body cameras by
$20,000, which was offset by $115,000 of savings in 2018.
The previously proposed tax levy of $250,000 in 2019 is adequate for this level of
expenditures. The Equipment Replacement Fund is projected to end 2019 with a
working capital balance of $41,007.
2019 – 2023 Capital Improvement Plan
The 2019 capital improvement purchases increased by $3,408,100 from the 2018 –
2022 Plan. The largest difference is the addition of the City Hall project, a net increase
of $4,042,000. The Capital Improvement fund added a $25,000 project to paint the
public works building. The Pavilion fund added a $28,000 request for a sound system.
The Capital Improvement fund has a proposed tax levy of $100,000 in 2019. It is
projected to end 2019 with a working capital balance of $205,853.
The Pavilion fund has a proposed tax levy of $40,383. It is projected to end 2019 with a
working capital balance of ($80,335). It would continue to have a positive net position.
Financial Management Plan
The Financial Management Plan was updated with the 8 new requests highlighted in
the attached form. City Taxes for a home in Hopkins would increase from $1,446 to
$1,649 or $203 annually.
FUTURE ACTION
A preliminary levy must be adopted by September 30th of each year. The preliminary
levy is planned to be approved at the September 18th City Council Meeting. The
preliminary levy will be the maximum amount for 2019, but can 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 meeting will occur during the December 4th
City Council Meeting and approval of the final levy is planned.
2019 Proposed Budget
September 11, 2018
\\lisa\share\FINANCE\BUDGET 2019\8-13-2018 Work Session\2019 Proposed Budget.xlsx
Actual Proposed % Increase
Purpose FY2018 FY2019 (Decrease)
General Operations
General Fund 10,747,657.00 11,736,624.00 9.20%
Capital Levy 75,000.00 100,000.00 33.33%
Arts Center 250,000.00 257,500.00 3.00%
Pavilion Fund - 40,383.00 100.00%
Equipment Replacement - 250,000.00 100.00%
Total General Operations 11,072,657.00 12,384,507.00 11.85%
Debt Levy
Street Improvements 1,610,000.00 2,055,420.00 27.67%
Equipment Certificates 332,484.00 414,735.00 24.74%
City Owned Facilities*1,039,891.00 1,024,366.00 -1.49%
Burnes Park 166,848.00 163,908.00 -1.76%
Total Debt Levy 3,149,223.00 3,658,429.00 16.17%
Total Levy 14,221,880.00 16,042,936.00 12.80%
*Police Station, Fire Hall, Public Works Building
City of Hopkins
2019 Proposed Levy
City of Hopkins
Financial Management Plan Update
Executive Summary
September 11, 2018
2019 Proposed Budget
\\lisa\share\FINANCE\FMP\2019 FMP\Hopkins FMP 2019 V3.xls
2018 2019
Tax Levy Budget Proposed
General Fund 10,747,657 11,606,874
Capital Improvements 75,000 100,000
Arts Center 250,000 257,500
Pavilion - 40,383
Debt Service 3,149,223 3,658,429
Equipment Fund - 161,610
Total City Levy 14,221,880 15,824,796
% Increase 9.86%11.27%
Additional Changes and Requests
Parks and Forestry Worker - 57,250
Fire Tables and Chairs - 37,500
Comprehensive Plan Implementation - 25,000
Activity Center Part Time Worker - 5,000
Transfer to Depot - 5,000
Patching Automation Software-ERP - 50,000
E-Mail Threat Protection-ERP - 19,390
VPN Software-ERP - 19,000
Levy Required - 218,140
Total City Levy w/ Additions 14,221,880 16,042,936
% Increase 9.86%12.80%
2018 2019
Budget Proposed
General Fund 1,093 1,191
Capital Improvements 8 10
Arts Center 25 26
Pavilion - 4
Debt Service 320 375
Equipment Fund - 17
Total City Levy per Home 1,446 1,624
$ Increase 150 178
Additional Iniatives to Consider
Parks and Forestry Worker - 7
Fire Tables and Chairs - 4
Comprehensive Plan Implementation - 3
Activity Center Part Time Worker - 1
Transfer to Depot - 1
Patching Automation Software-ERP - 6
E-Mail Threat Protection-ERP - 2
VPN Software-ERP - 2
Additional Levy per Home - 25
Total Tax Levy per Home 1,446 1,649
$ Increase 150 203
Taxes for Median Value Home
2019 Proposed Budget/CIP/ERP
Council Work Session
September 11th, 2018
Tax Levy for General Operations
Actual Proposed % Increase
Purpose FY2018 FY2019 (Decrease)
General Operations
General Fund 10,747,657.00 11,736,624.00 9.20%
Capital Levy 75,000.00 100,000.00 33.33%
Arts Center 250,000.00 257,500.00 3.00%
Pavilion Fund - 40,383.00 100.00%
Equipment Replacement - 250,000.00 100.00%
Total General Operations 11,072,657.00 12,384,507.00 11.85%
General Fund Tax Levy
Total Levy of $11,736,624
New Requests for 2019
$57,250 –Parks & Forestry Worker
$37,500 –Fire Hall Tables & Chairs
$25,000 –Comprehensive Plan Implementation
$5,000 –Part Time Help at Activity Center
$5,000 –Transfer to Depot Youth Operations
Capital Levy
Total Levy of $100,000
No change from FMP
Funds projects at City owned buildings other that
City Hall Upgrade
2019 Projects at Activity Center and Public Works
Fund also includes: City Hall, Fire Hall and Police Station
Arts Center Levy
Total Levy of $257,500
3% Increase from 2018
Part of plan to eliminate deficit by 2024
Pavilion Fund Levy
Total of $40,383
Previously included in FMP
Interest Payments on Tax Abatement Bonds
Principal payments begin in 2020
Equipment Replacement Levy
Total of $250,000
Would fund three IT Requests
Patching Automation Software -$50,000
E-Mail Threat Protection -$19,390
VPN Software/Equipment -$19,000
Overview of Tax Levy
*Police, Fire, Public Works
Actual Proposed % Increase
Purpose FY2018 FY2019 (Decrease)
Debt Levy
Street Improvements 1,610,000.00 2,055,420.00 27.67%
Equipment Certificates 332,484.00 414,735.00 24.74%
City Owned Facilities*1,039,891.00 1,024,366.00 -1.49%
Burnes Park 166,848.00 163,908.00 -1.76%
Total Debt Levy 3,149,223.00 3,658,429.00 16.17%
Overview of 2019 Debt Payments
Total Debt Service of $6,979,267
Principal Payments of $5,050,000
Interest Payments of $1,929,267
Sources of 2019 Debt Payments
Tax Levy 3,658,429.00
Special Assessments 489,087.00
Tax Increment 1,358,000.00
Water/Sewer/Storm/Refuse Funds 1,178,000.00
Park Improvement Fund 110,000.00
Interest Earned 9,500.00
Capitalized Interest 212,471.00
Total Collected for Debt Payments 7,015,487.00
2019 –2023 Equipment Replacement Plan
2018 Reductions
$115,000 Police Video Data Server
2019 Additions
Patching Automation Software -$50,000
E-Mail Threat Protection -$19,390
VPN Software/Equipment -$19,000
Increase for Squad/Body Cameras -$20,000
2019 –2023 Equipment Replacement Plan
Includes $250,000 Levy in 2019
Does not include interfund loans
2019 projected ending working capital
balance of $41,007
2019 –2023 Capital Improvement Plan
2019 Additions
Capital Improvements
$4,395,000 –City Hall
o $4,245,000 –Capital Improvement Fund
o $150,000 –Communications Fund
$25,000 –Paint Public Works Building
Pavilion Fund
$28,000 –Sound System
2019 –2023 Capital Improvement Plan
Capital Improvement Fund
Includes $100,000 Levy in 2019
2019 projected ending working capital balance of
$205,853
2019 –2023 Capital Improvement Plan
Pavilion Fund
Includes $40,383 Levy in 2019
2019 projected ending working capital balance of
($80,335)
Would have positive net position
Pavilion revenues exceed costs of sales, service &
administration, but not 100% of depreciation
2018 2019
Tax Levy Budget Proposed
General Fund 10,747,657 11,606,874
Capital Improvements 75,000 100,000
Arts Center 250,000 257,500
Pavilion - 40,383
Debt Service 3,149,223 3,658,429
Equipment Fund - 161,610
Total City Levy 14,221,880 15,824,796
% Increase 9.86%11.27%
2018 2019
Tax Levy Budget Proposed
Additional Changes and Requests
Parks and Forestry Worker - 57,250
Fire Tables and Chairs - 37,500
Comprehensive Plan Implementation - 25,000
Activity Center Part Time Worker - 5,000
Transfer to Depot - 5,000
Patching Automation Software-ERP - 50,000
E-Mail Threat Protection-ERP - 19,390
VPN Software-ERP - 19,000
Levy Required - 218,140
Total City Levy w/ Additions 14,221,880 16,042,936
% Increase 9.86%12.80%
2018 2019
Budget Proposed
General Fund 1,093 1,191
Capital Improvements 8 10
Arts Center 25 26
Pavilion - 4
Debt Service 320 375
Equipment Fund - 17
Total City Levy per Home 1,446 1,624
$ Increase 150 178
Taxes for Median Value Home
2018 2019
Budget Proposed
Additional Iniatives to Consider
Parks and Forestry Worker - 7
Fire Tables and Chairs - 4
Comprehensive Plan Implementation - 3
Activity Center Part Time Worker - 1
Transfer to Depot - 1
Patching Automation Software-ERP - 6
E-Mail Threat Protection-ERP - 2
VPN Software-ERP - 2
Additional Levy per Home - 25
Total Tax Levy per Home 1,446 1,649
$ Increase 150 203
Taxes for Median Value Home
Other Updates-Parking
Parking Rate Increase
Part of Fee Schedule on September 18th Agenda
Renew Gallery Flats Lease in 2019
2018 2019
%
Increase
Daily 3$ 3$ 0.00%
Monthly 35$ 36$ 2.86%
Quarterly 83$ 85$ 2.41%
Annual 268$ 276$ 2.99%
Overnight/ Residential 32$ 35$ 9.38%
Electric - Quarterly 90$ 100$ 11.11%
Electric - Annual 320$ 350$ 9.38%
Questions or Comments