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VII.2. Review 2020 General Fund Budget & Tax Levy; Bishop CITY OF HOPKINS Memorandum To: Honorable Mayor and Council Members Mike Mornson, City Manager From: Nick Bishop, Finance Director Date: September 3, 2019 Subject: Review 2020 General Fund Budget & Tax Levy _____________________________________________________________________ PURPOSE To review the proposed 2020 General Fund Budget and Tax Levy. INFORMATION 2020 General Fund Budget City Council and staff have been working to put together a 2020 budget based on the needs of the community and the services they have come to expect. The City Council met most recently at the August 13th Work Session and provided input for the 2020 budget. The 2020 budget being proposed is based on staff recommendations and input from City Council. The 2020 budget includes the same level of service provided within the 2019 budget and the following additions: Police Department • $56,000 – 0.50 Police Officer o Beginning on 7/1/2020 o Full-time position for 2021 and subsequent budgets • $29,359 – 0.25 DWI Officer o Continuation of grant funded position, expiring on 9/30/2020 o Proposed to be fully funded by City in 2021 • $28,111 – Joint Community Police Partnership/Multi-Cultural Liaison o Continuation of program previously funded by Hennepin County o 30% of cost paid by Hopkins, 70% paid by Hennepin County Finance Department Administration • $40,000 – Elections o Early Voting and Presidential Primaries • $30,000 – Laserfiche Form Professional o Software to work towards a paperless environment • $27,000 – Information Technology Requests o $17,000 – Enterprise Software o $10,000 – Paid Intern • $30,000 – Increased Contingency o $80,000 Total or 0.5% of General Fund Budget Public Works • $50,000 – Cartegraph EMS Software o Total cost of $75,000 shared with enterprise funds o Increased productivity and service quality for field maintenance personnel • $16,000 – Replace banners on Mainstreet and Excelsior Boulevard • $10,000 – Contracted irrigation at Cottageville Park & Shady Oak Road The General Fund budget is balanced. Revenues and expenditures are both set at $15,583,075 or an 8.14% increase from 2019. The general fund tax levy needed to support this budget is proposed at $12,700,644 or an 8.21% increase from 2019. Tax Levy & Financial Management Plan The Financial Management Plan was updated with these changes. The total tax levy being proposed is $18,032,938 or a 12.86% increase. The total levy includes significant increases for the Pavilion, Arts Center and debt payments for infrastructure improvements. City Taxes for a median value home in Hopkins would increase from $1,734 to $1,987 or $253 annually. FUTURE ACTION The preliminary levy is planned to be approved at the September 17th City Council Meeting. The preliminary levy will be the maximum allowable amount for 2020 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 meeting will occur during the December 3rd City Council Meeting and approval of the final levy is planned. City of Hopkins General Fund Revenue Budget For the Year Ending December 31, 2020 Proposed September 3, 2019 Department 2019 Budget 2020 Budget % Increase (Decrease) Property Taxes 11,821,624 12,785,664 8.15% Intergovernmental Revenue PERA Aid 20,510 - Local Government Aid 556,619 734,946 Intergovernmental Revenue - Other 590,000 618,000 Total Intergovernmental Revenue 1,167,129 1,352,946 15.92% Licenses, Permits & Fines Court Fines & Penalties 176,500 177,750 Building Permits & Inspections 440,700 461,300 Inspection Fines & Citations 8,000 8,000 City Clerk - Business Licenses 7,000 7,000 PD - Liquor, Animal Licenses & Penalties 89,100 102,300 Fire - Licenses & Permits 1,100 1,100 Public Works - Licenses & Permits 19,415 19,415 Planning & Zoning - Licenses & Permits 3,500 1,000 Total Licenses, Permits & Fines 745,315 777,865 4.37% Charges for Service Finance Department 9,750 5,500 Assessing 3,000 3,000 Inspections 104,360 105,900 Police 25,000 35,000 Fire 10,500 10,500 Public Works 4,150 4,150 Activity Center 94,000 87,000 Total Charges for Service 250,760 251,050 0.12% Miscellaneous Revenue Franchise Fees 290,000 296,200 Miscellaneous 15,250 15,250 Finance Department 5,100 1,200 Police 2,000 2,000 Fire 3,500 3,500 Public Works 5,300 5,300 Activity Center 14,500 32,100 Community Development 90,000 60,000 Total Miscellaneous 425,650 415,550 -2.37% Total Revenues 14,410,478 15,583,075 8.14% City of Hopkins General Fund Revenue Budget For the Year Ending December 31, 2020 Proposed September 3, 2019 Department 2019 Budget 2020 Budget % Increase (Decrease) City Council 96,131 97,630 1.56% Administrative Services 797,580 894,893 12.20% Finance 351,173 400,495 14.04% Legal 175,000 175,000 0.00% Municipal Building 392,396 404,014 2.96% Assessing 226,682 221,835 -2.14% City Clerk 183,243 237,513 29.62% Inspections 818,588 863,296 5.46% Police 5,609,105 6,063,341 8.10% Fire 1,399,178 1,483,177 6.00% Public Works 3,221,137 3,509,017 8.94% Recreation 269,279 285,279 5.94% Activity Center 463,416 497,843 7.43% Planning & Zoning 217,372 222,382 2.30% Community Development 101,498 108,160 6.56% Tuition Reimbursement 18,700 19,200 2.67% Contingency 50,000 80,000 60.00% Transfer to Other Funds 20,000 20,000 0.00% Total Expenditures 14,410,478 15,583,075 8.14% September 3, 2019 Actual Proposed % Increase Purpose FY2019 FY2020 (Decrease) General Operations General Fund 11,736,624 12,700,664 8.21% Capital Levy 100,000 75,000 -25.00% Arts Center 257,500 400,000 55.34% Pavilion Fund 40,383 300,000 642.89% Equipment Replacement 230,000 290,000 26.09% Total General Operations 12,364,507 13,765,664 11.33% Debt Levy Debt Previously Issued 3,613,429 3,844,281 6.39% Debt Issued in 2019 - 422,993 100.00% Total Debt Levy 3,613,429 4,267,274 18.09% Total Levy 15,977,936 18,032,938 12.86% City of Hopkins 2020 Proposed Levy City of Hopkins Financial Management Plan Update Executive Summary Proposed September 3, 2019 \\LISA\share\FINANCE\FMP\2020 FMP\2019 FMP V8 - September 3 Meeting (council input).xls 2019 2020 2021 2022 2023 Tax Levy Final Projected General Fund 11,736,624 12,384,194 13,616,176 14,457,448.58 15,308,478.30 Capital Improvements 100,000 75,000 75,000 75,000 75,000 Arts Center 257,500 400,000 700,000 1,000,000 1,000,000 Pavilion 40,383 300,000 300,000 300,000 450,000 Debt Service 3,613,429 4,267,274 4,572,819 4,679,815 4,007,560 Equipment Fund 230,000 290,000 250,000 250,000 250,000 Total City Levy 15,977,936 17,716,468 19,513,995 20,762,263 21,091,039 % Increase 12.35%10.88%10.15%6.40%1.58% Additions from January 11th Goal Setting - 0.25 DWI Officer - 29,359 122,662 129,610 133,857 Enterprise Software - 17,000 29,500 49,000 51,500 I.T. Intern - 10,000 10,500 11,000 11,500 Elections Staffing, Presidential Primary, Etc.- 40,000 10,000 41,200 10,300 Additional Contingency - 30,000 40,000 50,000 75,000 Additions from Current Budget Cycle 1 Police Officer, starting 7/1/2020 - 56,000 115,464 123,783 127,855 Cartegraph OMS Software - 50,000 - - - Laserfiche Forms - 30,000 - - - JCPP Multi-Cultural Liaison - 28,111 29,517 30,992 32,542 Banners on Mainstreet/Excelsior - 16,000 - - - Contracted Irrigation - 10,000 10,300 10,600 11,000 Levy Required - 316,470 367,943 446,185 453,554 Total City Levy w/ Additions 15,977,936 18,032,938 19,881,938 21,208,448 21,544,593 % Increase 12.35%12.86%10.25%6.67%1.58% 2019 2020 2021 2022 2023 Final Projected General Fund 1,274 1,362 1,492 1,582 1,669 Capital Improvements 11 8 8 8 8 Arts Center 28 44 77 109 109 Pavilion 4 33 33 33 49 Debt Service 392 469 501 512 437 Equipment Fund 25 32 27 27 27 Total City Levy per Home 1,735 1,948 2,138 2,272 2,299 $ Increase 226 214 189 134 27 Additions from January 11th Goal Setting 0.25 DWI Officer - 4 15 16 17 Enterprise Software - 2 4 6 6 I.T. Intern - 1 1 1 1 Elections Staffing, Presidential Primary, Etc.- 5 1 5 1 Additional Contingency - 4 5 6 9 Additions from Current Budget Cycle 1 Police Officer, starting 7/1/2020 - 7 14 15 16 Laserfiche Forms - 6 - - - Cartegraph OMS Software - 4 - - - JCPP Multi-Cultural Liaison - 3 4 4 4 Banners on Mainstreet/Excelsior - 2 - - - Contracted Irrigation - 1 1 1 1 Additional Levy per Home - 39 46 55 56 Total Tax Levy per Home 1,735 1,987 2,183 2,327 2,356 $ Increase 226 253 196 144 28 Taxes for Median Value Home 5 year average = $169 5 year average = $158 2020 General Fund Budget & Tax Levy September 3rd, 2019 Truth in Taxation Process Valuation Valuation notice is mailed to each property owner in March for taxes due the following year Includes market value and classification Completed by Hennepin County for properties in Hopkins Truth in Taxation Process Proposed Taxes City Council adopts proposed levy and budget by September 30th of each year Hennepin County mails Truth-In-Taxation notice to each property owner in November Proposed taxes Meeting dates for Truth-In-Taxation hearings Truth in Taxation Process Final Taxes Council holds Truth-In-Taxation meeting for discussion and to receive public comment Budget Meeting –Tuesday, December 3rd Budget approval December 3rd or 17th Hennepin County mails final tax statement in March of year it is due 2020 Proposed General Fund Budget Balanced Budget Revenues = Expenditures $15,583,075 8.14% Increase from 2019 2020 Proposed General Fund Expenditures Additions for 2020: Police 1 full-time officer starting 7/1/2020 Continue DWI Officer program on 10/1/2020 o Grant program to expire on 9/30/2020 Continue Joint Community Police Partnership –Multi- Cultural Liaison o Previously funded by Hennepin County, now split 30%/70% between City/County 2020 Proposed General Fund Expenditures Additions for 2020: Administration Elections –Part-Time Salary Increases o Early Voting and Presidential Primaries Laserfiche Forms Professional I.T. Enterprise Security Software I.T. Paid Intern Additional Contingency 2020 Proposed General Fund Expenditures Additions for 2020: Public Works Cartegraph OMS Software Replace Banners on Mainstreet and Excelsior Boulevard Contracted Irrigation at Cottageville Park and Shady Oak Road 2020 Proposed General Fund Expenditures Budget Proposed % Increase FY2018 FY2019 (Decrease) General Government 1,812,280 1,972,032 8.81% Community Services 1,547,383 1,653,186 6.84% Public Safety 7,008,283 7,546,518 7.68% Public Works 3,221,137 3,509,017 8.94% Recreation 732,695 783,122 6.88% Other 88,700 119,200 34.39% 14,410,478 15,583,075 8.14% 2020 Proposed General Fund Expenditures 2020 Proposed General Fund Revenue Tax Levy –increased $964K or 8.2% Local Government Aid –increased $178K or 32.0% 2020 Proposed General Fund Revenue Budget Proposed % Increase FY2018 FY2019 (Decrease) Property Taxes 11,821,624 12,785,664 8.15% Intergov't Revenue 1,167,129 1,352,946 15.92% Licenses, Permits & Fines 745,315 777,865 4.37% Charges for Service 250,760 251,050 0.12% Misc. Revenue 425,650 415,550 -2.37% Total Revenue 14,410,478 15,583,075 8.14% 2020 Proposed General Fund Revenue Proposed 2020 Levy Actual Proposed % Increase Purpose FY2019 FY2020 (Decrease) General Operations General Fund 11,736,624.00 12,700,664.00 8.21% Capital Levy 100,000.00 75,000.00 -25.00% Arts Center 257,500.00 400,000.00 55.34% Pavilion Fund 40,383.00 300,000.00 100.00% Equipment Replacement 230,000.00 290,000.00 100.00% Total General Operations 12,364,507.00 13,765,664.00 11.33% Proposed 2020 Levy 2019 Street Project (Cambridge/Oxford) City Hall –also funded through Franchise Fees City portions of Blake Road City portions of Southwest Light Rail Actual Proposed % Increase Purpose FY2019 FY2020 (Decrease) Debt Previously Issued 3,613,429.00 3,844,281.00 6.39% Debt Issued in 2019 - 422,993.00 100.00% 3,613,429.00 4,267,274.00 18.09% Proposed 2020 Levy $253 increase for a median value home General Operations -$175 Debt Levy -$78 Actual Proposed % Increase Purpose FY2019 FY2020 (Decrease) Total Levy 15,977,936.00 18,032,938.00 12.86% Next Steps -Levy Adopt proposed budget and levy on September 17th Certify to County by September 30th Parcel Specific Notices mailed by County Hold Public Meeting on budget and levy at the December 3rd Council Meeting Final Certification to County due on December 31st Next Steps –2020 Budgets October 8th Work Session Review Special Revenue & Enterprise Budgets 2nd Review of ERP and CIP -TBD 2020 Preliminary HRA/EDA Levy September 3rd, 2019 2020 Preliminary HRA/EDA Levy Must adopt a preliminary levy by September 30th Economic Development Fund budget is currently being prepared 2020 Preliminary HRA/EDA Levy Asking for approval of the maximum amount of $367,951 .0185% of total market value, $1,988,925,000 Will be opportunity to reduce, but not increase