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VII.1. Approve Proposed 2020 Levy, Proposed 2020 General Fund Budget and Set Budget Meeting Date; BishopSeptember 17, 2019 Council Report 2019-096 APPROVE PROPOSED 2020 LEVY, PROPOSED 2020 GENERAL FUND BUDGET AND SET BUDGET MEETING DATE Proposed Action. Staff recommends adoption of the following motion: Move to approve Resolution 2019-071 “Approving proposed 2020 tax levy, debt service levies at levels under those required in bond covenants, proposed general fund budget, and setting budget meeting dates”. Adoption of resolution 2019-071 will set a maximum tax levy for 2020, will set debt levies at amount sufficient to pay debt service requirements taking into consideration other revenue sources and fund reserves, and approve a proposed 2020 general fund budget. Final budget and tax levy adoption will not occur until December 2019. Overview: The City is required to certify a proposed tax levy and submit to Hennepin County by September 30th. This is the maximum levy for 2020 and can only be reduced. There is also a requirement to hold a public meeting on the budget where public comments are taken. Staff is suggesting December 3, 2019 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 it can be approved at that same meeting. A proposed general fund budget has been established and is attached for your review. Adoption of the final budget will occur in December 2019 following the public comment meeting. The City Council is charged with the authority to establish a budget for 2020 and set the preliminary levy. The Financial Management Plan has been used as a tool when considering the levy and budget. Staff is recommending that council approve the resolution setting the proposed levy for general operations; approve the levy adequate for the payment of debt, and to set budget meeting dates as set forth in this resolution. Supporting Information: • Resolution 2019-071 • 2020 Proposed General Fund Budget and Tax Levy • Financial Management Plan Update • Power point presentation ________________________________________ Nick Bishop Finance Director CITY OF HOPKINS Hennepin County, Minnesota RESOLUTION NO. 2019-071 RESOLUTION APPROVING THE PROPOSED 2020 TAX LEVY, SETTING DEBT SERVICES LEVIES AT LEVELS UNDER THOSE REQUIRED IN THE BOND COVENANTS, APPROVING THE PROPOSED 2020 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 2020 upon the taxable property in the City of Hopkins, for the following purposes. General Levy General $13,765,664 Special Levies Debt Levies 2010A GO Improvement Bonds 95,000 2012A GO Capital Improvement Bonds 225,000 2012B GO Bonds 160,000 2012B Equipment Certificates 94,710 2013A GO Bonds 91,078 2014A GO Bonds 97,000 2014B GO Refunding Bonds 670,000 2015A GO Street Reconstruction Bonds 250,000 2015B GO Tax Abatement Bonds 115,000 2016A GO Improvement Bonds 100,000 2016B GO Tax Abatement Bonds 33,841 2016C Equipment Certificates 241,395 2017A GO Street Reconstruction Bonds 973,398 2017B GO Tax Abatement Bonds 160,330 2018A GO Equipment Certificates 81,112 2018A GO Improvement Bonds 456,417 2019A GO Bonds 422,993 Subtotal Special Levies 4,267,274 Total Levy $18,032,938 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 2019 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) $ 95,000 $5,505,000 G.O. Bonds of 2012B (B2833) $ 254,710 $3,650,000 G.O. Bonds of 2013A (B2833) $ 91,078 $1,895,000 G.O. Improvement Bonds of 2014A (B2964) $ 97,000 $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) $ 100,000 $1,630,000 G.O. Tax Abatement Bonds of 2016B (B3122) $ 33,841 $11,795,000 G.O. Street Reconstruction Bonds of 2017A (B3198) $ 973,398 $6,715,000 G.O. Bonds of 2018A $ 456,417 $12,185,000 G.O. Bonds of 2019A $ 422,993 That the Proposed 2020 General Fund Budget be set at $15,583,075. That the budget meeting to discuss the 2020 budget and tax levy be set for December 3, 2019 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 17th day of September 2019. By Jason Gadd, Mayor ATTEST: Amy Domeier, City Clerk City of Hopkins General Fund Revenue Budget For the Year Ending December 31, 2020 Proposed September 17, 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 17, 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 17, 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 17, 2019 \\LISA\share\FINANCE\FMP\2020 FMP\2019 FMP V9 - September 17 Meeting (proposed) - Copy.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 17th, 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 FY2019 FY2020 (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 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% 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 October 15th City Council Meeting Approve ERP and CIP