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2020 Budget Update; Bishop CITY OF HOPKINS Memorandum To: Honorable Mayor and Council Members Mike Mornson, City Manager From: Nick Bishop, Finance Director Date: October 8, 2019 Subject: 2020 Budget Update _____________________________________________________________________ PURPOSE To provide input and guidance for the 2020 Enterprise and Special Revenue Fund Budgets; 2020 – 2024 Equipment Replacement and Capital Improvement Plans; and 2020 tax levy. INFORMATION The attached presentation gives an overview of the Enterprise and Special Revenue Fund budgets; and Equipment Replacement and Capital Improvement Plans. FUTURE ACTION Approval of the Equipment Replacement and Capital Improvement Plans is scheduled for October 15th. The 2020 Tax Levy is scheduled for approval on December 3rd. Finance Dept. 2020 Enterprise Fund Budgets Council Work Session October 8, 2019 2020 Enterprise Budgets + Consumption based on 2018 Actual Proposing 9.00% Rate Increase Previously Planned 6.76% Water 2019 2020 %age Budget Budget Incr (Decr) Revenues 2,168,556$ 2,256,004$ 4.03% Expenditures 2,168,556$ 2,235,098$ 3.07% Revenues over (under) Expenditures -$ 20,906$ 100.00% 2020 Enterprise Budgets * Projected based on 9 months 2020 Enterprise Budgets Consumption based on 2018 Actual Proposing 4.1% Increase Previously Planned 5.57% Sewer 2019 2020 %age Budget Budget Incr (Decr) Revenues 3,119,182$ 3,052,340$ -2.14% Expenditures 3,067,143$ 3,025,741$ -1.35% Revenues over (under) Expenditures 52,039$ 26,599$ -48.89% 2020 Enterprise Budgets Previous Rate Study Water –6.76% Increase Sewer –5.57% Increase 2020 Proposal Water –9.00% Sewer –4.10% Goal is no or limited impact on utility user Previous 2020 Utility Budget Rate Study Proposal Water - Flat Rate $2.91 a month 34.92 - $2.97 a month - 35.64 Water - Consumption 5,250 gallons a month $2.97/$3.42/$3.93 Tiered Rates 200.80 - $3.03/$3.49/$4.01 Tiered Rates - 204.88 Sewer - Consumption 4,500 gallons a month $6.82/ 1,000 gallons 368.28 - $6.72/ 1,000 gallons - 363.42 604.00 603.94 2020 Enterprise Budgets No rate increases Storm Sewer 2019 2020 %age Budget Budget Incr (Decr) Revenues 793,532$ 793,532$ 0.00% Expenditures 605,940$ 621,945$ 2.64% Revenues over (under) Expenditures 187,592$ 171,587$ -8.53% 2020 Enterprise Budgets No rate increases Refuse 2019 2020 %age Budget Budget Incr (Decr) Revenues 1,009,267$ 1,006,206$ -0.30% Expenditures 965,113$ 1,008,049$ 4.45% Revenues over (under) Expenditures 44,154$ (1,843)$ -104.17% 2020 Enterprise Budgets Includes levy to provide cash for debt payments Pavilion 2019 2020 %age Budget Budget Incr (Decr) Revenues 519,383$ 781,500$ 50.47% Expenditures 635,517$ 702,256$ 10.50% Revenues over (under) Expenditures (116,134)$ 79,244$ 168.23% 2020 Special Revenue Budgets Council Work Session October 8, 2019 2020 Special Revenue Budgets Reimbursed based on actual costs Increase in part-time salaries Chemical Assessment 2019 2020 Percentage Budget Budget Incr (Decr) Revenues 60,000$ 65,000$ 8.33% Expenditures 60,000$ 65,000$ 8.33% Revenues over (under) Expenditures -$ -$ 0.00% 2020 Special Revenue Budgets Levy at maximum of $367,951 Marketing, Artstreet, Transfer to Arts Center, Alley Improvements Economic Development 2019 2020 Percentage Budget Budget Incr (Decr) Revenues 395,154$ 467,951$ 18.42% Expenditures 390,519$ 430,345$ 10.20% Revenues over (under) Expenditures 4,635$ 37,606$ 711.35% 2020 Special Revenue Budgets Monthly, quarterly & yearly rates increased by 3% Parking 2019 2020 Percentage Budget Budget Incr (Decr) Revenues 152,650$ 154,524$ 1.23% Expenditures 141,783$ 150,690$ 6.28% Revenues over (under) Expenditures 10,867$ 3,834$ -64.72% 2020 Special Revenue Budgets Planning for a decrease to cable franchise fees 2019 included expenditures for City Hall Communications 2019 2020 Percentage Budget Budget Incr (Decr) Revenues 255,235$ 238,014$ -6.75% Expenditures 482,459$ 238,656$ -50.53% Revenues over (under) Expenditures (227,224)$ (642)$ 99.72% 2020 Special Revenue Budgets Reduced revenue from rentals and cover charges Depot - Youth 2019 2020 Percentage Budget Budget Incr (Decr) Revenues 127,100$ 117,000$ -7.95% Expenditures 132,640$ 128,184$ -3.36% Revenues over (under) Expenditures (5,540)$ (11,184)$ 101.88% 2020 Special Revenue Budgets Reduced concessions revenue, part-time wages and concession supplies Limited Winter Hours (7:00 AM to 3:00 PM) Depot - Coffee Operations 2019 2020 Percentage Budget Budget Incr (Decr) Revenues 235,500$ 190,412$ -19.15% Expenditures 215,285$ 179,228$ -16.75% Revenues over (under) Expenditures 20,215$ 11,184$ -44.67% 2020 Special Revenue Budgets Balanced Budget in 2020 Coffee Operations has been negatively affected by SWLRT Construction Depot 2019 2020 Percentage Budget Budget Incr (Decr) Revenues 362,000$ 307,412$ -15.08% Expenditures 347,925$ 307,412$ -11.64% Revenues over (under) Expenditures 14,075$ -$ -100.00% 2020 Special Revenue Budgets Preliminarily includes $400,000 Tax Levy Could reduce by $134,775 to maintain a balanced budget Arts Center 2019 2020 Percentage Budget Budget Incr (Decr) Revenues 988,582$ 1,260,611$ 27.52% Expenditures 1,005,600$ 1,125,836$ 11.96% Revenues over (under) Expenditures (17,018)$ 134,775$ 891.96% 2020 –2024 Equipment Replacement Plan Council Work Session October 8, 2019 Overview 5 year plan, updated annually Equipment Replacement Fund included in Financial Management Plan Overview Arts Center, HRA/Dow Towers, and Enterprise Funds are included Directly Funded Overview Funding Sources User Department Charges $581,591 in 2020, a 9% increase o 99.88% in General Fund o 0.06% in Economic Development and Communications Funds $280,000 Tax Levy in 2020 Overview Funding Sources Equipment Certificates $590,000 issued in 2018 $1,600,000 included in 2023 Proposed 2020 Projects 2020 projects total $791,000 Information Technology -$244,500 Forestry -$195,100 Streets -$170,000 Police -$117,400 Building/Equipment Services $35,000 Fire -$29,000 Proposed 2020 Increases 2020 increases total $99,276 Project removed or delayed -$153,924 Project added or advanced -$243,200 Proposed 2020 Increases Information Technology Mobile Computer Lab -$10,000 (Cancelled) Emergency Management Preparedness Employee Training Will look for grant funding Windows 10 Enterprise Software -$21,000 Bureau of Criminal Apprehension will require for Police Proposed 2020 Increases Wheel Loader -$170,000 Would replace a 1990 Loader & 1989 Grader with 20 year useful lives Building Services Truck -$35,000 Would replace a 2006 Ford F-250 with 12 year useful life Riding Mower -$13,900 Would replace a 2004 Toro with 6 year useful life Proposed 2020 Ending balance in Equipment Replacement Fund of $19,000 Proposed 2021 -2024 Financial Software in 2021 –over $300,000 (Cancelled) Fire Quick Attack Pumper/Rescue Delayed from 2022 to 2023 Cost increased from $314,500 to $525,000 New style of truck that will better serve Hopkins 2020 –2024 Capital Improvement Plan Council Work Session October 8, 2019 Overview 5 year plan, updated annually Integrated with Financial Management Plan Overview Funds Included in FMP: Arts Center Capital Improvement Park Dedication Permanent Improvement Revolving Pavilion Directly Funded Water Sanitary Sewer Storm Sewer Refuse Arts Center $106,350 of projects in 2020 Fund would be balanced with a $265,225 Tax Levy Capital Improvement Funding Sources Tax Levy, $100,000 in 2020 Franchise Fees, $360,000 in 2020 Bond Proceeds, none planned Capital Improvement $107,250 of projects in 2020 Police, Activity Center and Fire Hall Projected to end 2020 with $175,000 fund balance Park Dedication Funding Sources Franchise Fees, $295,300 in 2020 Dedication Fees, Cold Storage in 2020? Bond Proceeds, nothing in 2020 Park Dedication $300,500 of payments in 2020 Capital Projects of $183,500 Valley Park Picnic Shelter, Shady Oak Beach improvements and Downtown Park rehab Bond Payments of $110,000 Cottageville, Valley & Oakes Park Skate Park Contribution of $7,000 End 2020 with negative balance in fund Park Dedication Cottageville Park Phase II Name changed to Minnehaha Creek Overlook $60,000 of design work in 2020 Asking for $230,000 of support outside franchise fees Park Dedication Downtown Park Rehab $40,000 of design work in 2020 Asking for $200,000 of support outside franchise fees in 2021 Permanent Improvement Funding Sources Bond Proceeds, $9.1 Million in 2020 Paid by tax levy, special assessments and transfers from Water, Sewer, & Storm Sewer Funds Grant funding received in prior years Permanent Improvement Previously included projects First ½ of Interlachen Street Project $8.57M Pedestrian & Bicycle Access, Street Rehabilitation and Sign Management -$395K Permanent Improvement New projects Central Business District Lighting -$100,000 City Street Lighting Upgrade -$110,000 11th Ave S Retaining Wall Removal & Slope Grading -$150,000 (will be delayed) Hopkins Crossroads Trail Segments -$100,000 Pavilion Funding sources User fees, $481,500 budgeted in 2020 Tax levy, $300,000 in 2020 Pavilion $185,000 of projects requested in 2020 Indoor Turf -$90,000 Indoor Lighting -$12,000 Pavilion/Central Park Sound System -$83,000 Core System/Infrastructure -$29K Indoor Rink -$23K Outdoor Rink -$4K Warming House -$23K Circulation Area -$3K