VII. 2. 2021 Preliminary Budget and Tax Levy and Preliminary HRA/EDA Levy; BishopSeptember 15, 2020 Council Report 2020-064
APPROVE PROPOSED 2021 LEVY, PROPOSED 2021 GENERAL
FUND BUDGET AND SET BUDGET MEETING DATE
Proposed Action.
Staff recommends that the Council approve the following motion: Approve Resolution 2020-045
“Approving proposed 2021 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 2020-045 will set a maximum tax levy for 2021, will set debt levies at
amounts sufficient to pay debt service requirement taking into consideration other revenue
sources and fund reserves, approve a proposed 2021 general fund budget and set the Truth in
Taxation hearing for Monday, November 30, 2020. A decision on whether the meeting will be
held in-person or virtually does not need to be made at this time.
Overview:
The City is required to certify a proposed tax levy and submit to Hennepin County by September
30th. This will be the maximum levy for 2020 and can only be reduced. The certified levy
amount is also used for truth in taxation notices.
The City must hold a public hearing on the budget between November 25th and December 28th.
The proposed date of November 30th would allow time to consider comments heard at the public
hearing before passing a final tax levy and budget. The date does not conflict with public hearings
of Hopkins School District or Hennepin County.
A proposed tax levy and budget has been prepared and reviewed. Adoption of the final budget
will occur in December 2020 following the public hearing.
Supporting Information:
•Overview of Preliminary Tax Levy and General Fund Budget
•2021 Preliminary General Fund Budget
•2021 Tax Levy Summary
•2021 Budget Preparation Schedule
•Resolution 2020-045
________________________________________
Nick Bishop, Finance Director
Overview of Preliminary Tax Levy and General Fund Budget
A draft version of the 2021 Budget and Tax Levy was prepared by staff and presented to City
Council on July 21st. The draft included both conservative revenue estimates and decreased
expenditures. Charges for services and miscellaneous revenue have decreased from the 2020
Budget by $22,800 and $48,300, respectively. The City also hosted a virtual budget engagement
session on August 17th that reviewed the same draft version of the budget and tax levy. City
Council directed staff to make reductions before the preliminary levy is set in September. The
budget and tax levy being recommended for approval were reviewed at the September 1st City
Council meeting.
The general fund budget and tax levy will still meet the needs of the community, but does offer a
lower level of services than in 2020. The General Fund budget is balanced. Revenues and
expenditures are both set at $15,750,835, a $389,122 or 2.53% increase from 2020. The 2021
tax levy has also been revised based on the direction of City Council. The total tax levy is
$18,023,384, a $493,700 or 2.82% increase from 2020. Based on preliminary tax capacity
information, city taxes on a median value home ($291,000) will be $1,867, a $40 or 2.19%
increase from 2020.
Details regarding the budget and reductions being proposed are provided in the remainder of the
memo.
Local Government Aid (LGA) amounts were certified and published the last week in July. We
have incorporated the certified amount of $853,671 in this budget. This is an increase of
$118,725 over the draft budget previously presented and results in a reduction to the tax levy of
the same amount. Although the 2021 amounts have been certified there is still some uncertainty
surrounding the State’s budget. Projections released on July 31st project a $4.7 billion deficit
during the State’s next two-year budget period. The 2021 LGA payments are scheduled for July
2021 and December 2021 could still be impacted by the actions of the Legislature or Governor.
In the past, there have been reductions to LGA that have had a substantial impact on our
organization.
General Fund Reductions of $100,000 have been identified and removed from the budget. An
open public works superintendent position was eliminated and the supervisory aspects combined
with an existing position. Other reductions identified include reducing crack sealing on City
streets by 25%, a 20% reduction in tree re-planting and delaying all pole painting.
COVID-19 Contingency of $150,000 has been removed from the budget. This contingency
budget was included to address the financial uncertainty surrounding COVID-19 in 2021. It
could have been transferred to any of the City’s funds experiencing financial difficulty. Staff
believes funds from the Equipment Replacement Fund and Capital Improvement Fund could be
used as one-time contingency for 2021. Any additional impacts from COVID-19 could cause the
city to need to rely on existing reserves or further reductions.
Burnes Park debt service has previously been paid for with a portion of our debt levy. $150,000
of franchise fees that were previously dedicated to current park improvements will be used to
pay debt service for the 2017 project. The tax levy was planned through 2032 and this decision
could be one-time or continued. The five-year plan for the Park Dedication Fund would need
updating based on this change. Some of the upcoming work within the next 5 years includes:
rehab of deteriorated picnic shelters at Central Park, replacement of 30 year old play equipment
at Central Park-East, replacement/rehab of 35 year old picnic shelter at Shady Oak Beach, rehab
of 30 year old pavilion/concession building at Maetzold Field, rehab of 25 and 30 year old tennis
courts at Oakes and Burnes Parks.
City of Hopkins
General Fund Revenue Budget
For the Year Ending December 31, 2021
Proposed
September 15, 2020
Department 2020 Budget 2021 Budget
% Increase
(Decrease)
Property Taxes 12,564,305 12,893,552 2.62%
Intergovernmental Revenue
Local Government Aid 734,946 853,671
Intergovernmental Revenue - Other 618,000 621,000
Total Intergovernmental Revenue 1,352,946 1,474,671 9.00%
Licenses, Permits & Fines
Court Fines & Penalties 177,750 176,000
Building Permits & Inspections 461,300 479,300
Inspection Fines & Citations 8,000 6,000
City Clerk - Business Licenses 7,000 7,000
PD - Liquor, Animal Licenses & Penalties 102,300 97,800
Fire - Licenses & Permits 1,100 300
Public Works - Licenses & Permits 19,415 19,415
Planning & Zoning - Licenses & Permits 1,000 1,000
Total Licenses, Permits & Fines 777,865 786,815 1.15%
Charges for Service
Finance Department 5,500 5,500
Assessing 3,000 3,000
Inspections 105,900 103,900
Police 35,000 35,000
Fire 10,500 10,500
Public Works 4,150 3,150
Activity Center 87,000 67,500
Total Charges for Service 251,050 228,550 -8.96%
Miscellaneous Revenue
Franchise Fees 296,200 296,200
Miscellaneous 15,250 15,250
Finance Department 1,200 2,000
Police 2,000 500
Fire 3,500 3,500
Public Works 5,300 5,300
Activity Center 32,100 14,500
Community Development 60,000 30,000
Total Miscellaneous 415,550 367,250 -11.62%
Total Revenues 15,361,716 15,750,838 2.53%
City of Hopkins
General Fund Expenditure Budget
For the Year Ending December 31, 2021
Proposed
September 15, 2020
Department 2020 Budget 2021 Budget
% Increase
(Decrease)
City Council 97,630 102,095 4.57%
Administrative Services 854,893 866,311 1.34%
Finance 400,495 426,278 6.44%
Legal 175,000 200,000 14.29%
Municipal Building 404,014 390,560 -3.33%
Assessing 221,835 245,920 10.86%
City Clerk 237,513 176,656 -25.62%
Inspections 863,296 879,588 1.89%
Police 5,977,982 6,242,453 4.42%
Fire 1,483,177 1,566,528 5.62%
Public Works 3,443,017 3,469,191 0.76%
Recreation 285,279 291,339 2.12%
Activity Center 497,843 456,798 -8.24%
Planning & Zoning 222,382 233,000 4.77%
Community Development 108,160 114,921 6.25%
Tuition Reimbursement 19,200 19,200 0.00%
Contingency 50,000 50,000 0.00%
Transfer to Other Funds 20,000 20,000 0.00%
Total Expenditures 15,361,716 15,750,838 2.53%
City of Hopkins
Preliminary Tax Levy
For the Year Ending December 31, 2021
Proposed
September 15, 2020
Actual Preliminary % Increase
Purpose FY2020 FY2021 (Decrease)
General Operations
General Fund 12,479,305 12,808,552 2.64%
Capital Levy 75,000 175,000 133.33%
Arts Center 325,225 331,182 1.83%
Pavilion Fund 290,000 340,000 17.24%
Equipment Replacement 110,000 250,000 127.27%
Total General Operations 13,279,530 13,904,734 4.71%
Debt Levy 4,250,154 4,118,650 -3.09%
Total Levy 17,529,684 18,023,384 2.82%
2021 Budget Preparation Schedule
On September 15, 2020, City Council will approve the City’s preliminary budget and tax levy. The City has three months
to make modifications before a final budget and tax levy are approved on December 15, 2020. The following table
outlines the tentative schedule for discussions on important aspects of the City’s Budget.
Meeting Date Meeting Type Subject Details
October 6 Regular Meeting Financial Management Plan (FMP)
Update
-Overview of the FMP, prior tax increases and
debt
October 13 Work Session Review Capital Improvement Plan
(CIP) and Equipment
Replacement Plan (ERP)
-Park Dedication Fund
-Capital Improvement Levy (City Buildings)
-Permanent Improvement Revolving Fund
(Street Projects)
-Equipment Replacement Levy
October 20 Regular Meeting Quarterly Financial Report
November 4
(Wednesday)
Regular Meeting Budget Review -TBD
November 10 Work Session Review Special Revenue Budgets,
Activity Center Budget, Enterprise
Fund Budgets and Utility Rates
-Chemical Assessment -Activity Center
-Economic Development -Sewer
-Parking -Storm Sewer
-Communications -Refuse
-Depot -Pavilion
-Arts Center -Water
November 17 Regular Meeting Approve CIP, ERP & Utility Rates
November 30
(Monday)
Regular Meeting Truth in Taxation Hearing -Overview of 2021 Budget and Tax Levy
-Public Comment
December 1 Regular Meeting Budget Review -Final Comments from Council on Budget
December 15 Regular Meeting Approve Final Budget & Tax Levy -Last scheduled meeting to approve
CITY OF HOPKINS
Hennepin County, Minnesota
RESOLUTION NO. 2020-045
RESOLUTION APPROVING THE PROPOSED 2021 TAX LEVY, SETTING
DEBT SERVICES LEVIES AT LEVELS UNDER THOSE REQUIRED IN THE BOND
COVENANTS, APPROVING THE PROPOSED 2021 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 2021 upon the taxable property in the City of
Hopkins, for the following purposes.
General Levy General $13,904,734
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 92,925
2013A GO Bonds 88,453
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 33,316
2016C Equipment Certificates 242,445
2017A GO Street Reconstruction Bonds 975,798
2017B GO Tax Abatement Bonds 4,040
2018A GO Equipment Certificates 79,222
2018A GO Improvement Bonds 464,136
2019A GO Bonds 426,315
Subtotal Special Levies 4,118,650
Total Levy $18,023,384
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 2021 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) $ 252,925
$3,650,000 G.O. Bonds of 2013A (B2833) $ 88,453
$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) $ 33,316
$11,795,000 G.O. Street Reconstruction Bonds of 2017A (B3198) $ 975,798
$3,170,000 G.O. General Obligation Bonds of 2017B $ 4,040
$6,715,000 G.O. Bonds of 2018A $ 464,136
$12,185,000 G.O. Bonds of 2019A $ 426,315
That the Proposed 2021 General Fund Budget be set at $15,750,838.
That the budget meeting to discuss the 2021 budget and tax levy be set for November 30, 2020 at 7:00
PM in the City Council Chambers or virtually under Minn. Stat. § 13D.021.
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 15th day of September 2020.
By
Jason Gadd, Mayor
ATTEST:
Amy Domeier, City Clerk
September 15, 2020 Council Report 2020-046
APPROVE PROPOSED 2021 HRA/EDA TAX LEVY
Proposed Action
Staff recommends adoption of the following motions:
Move to approve Resolution 2020-046 Approving proposed 2021 HRA tax levy.
Overview
The City is required to certify a proposed HRA/EDA tax levy and submit it to the county by September
30th. There are levy limits for HRA/EDA levies which are based on the market value of personal and real
estate property. For Hopkins the market value is $2,203,931,800 and the allowed levy is 0.0185% of total
market value or $407,727, which would be a $39,776 or 10.81% increase from 2020. Based on the
direction of City Council, the proposed levy is $378,070, which is an increase of $10,119 or 2.75% from
2020.
A proposed Economic Development Fund budget is in the process of being prepared using the proposed
levy. This is the main income source for our economic development activities and therefore the levy
plays an important role in our continued efforts for redevelopment. When the budget is presented for
review we have the opportunity to reduce but not increase the levy at that time.
Staff is recommending that council approve the resolution setting the proposed levy for HRA/EDA
operations at $378,070.
Supporting Information
• Resolution 2020-046
____________________________________
Nick Bishop, Finance Director
CITY OF HOPKINS
Hennepin County, Minnesota
RESOLUTION NO. 2020-046
RESOLUTION APPROVING THE
PROPOSED 2021 HRA TAX LEVY
BE IT RESOLVED BY THE COUNCIL OF THE CITY OF HOPKINS, MINNESOTA,
That the following sum be levied for 2021 upon the taxable property in the City of Hopkins,
for the following purposes.
HRA/EDA Levy
Housing & Redevelopment Authority Levy $ 378,070
That the levy is under the maximum allowable based on 0.01850% of market value as
allowed by law for the City’s Economic Development purposes.
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 15th day of September 2020.
By
Jason Gadd, Mayor
ATTEST:
Amy Domeier, City Clerk
2021 Preliminary Budget & Tax
Levy
September 15, 2020
2021 Budget & Tax Levy
Reviewed Financial Management Plan at
January 10, 2020 Goal Setting
Budget Engagement Session held on January
21, 2020
Budget Survey conducted in March/April
2021 Budget & Tax Levy
1st Draft Budget & Tax Levy Presented to City
Council on July 21, 2020
Budget Engagement Session held on August
17, 2020
City Council directed staff to make reductions
to 1st Draft of Budget & Tax Levy on August
18, 2020
2021 Budget & Tax Levy
2nd Draft Budget & Tax Levy Presented to City
Council on September 1st, 2020
Preliminary Budget and Tax Levy
recommended for approval on September
15th, 2020 (tonight)
No changes since September 1st, 2020
2021 Budget & Tax Levy
Will be affected by COVID-19 in some way
Budget being presented will still meets needs
of community, but does offer lower level of
service than in 2020
2021 General Fund Budget
Balanced Budget
Revenues = Expenditures
$15,750,838
2.53% Increase from 2020
2021 General Fund Revenues
Local Government Aid amounts have been
certified and included in budget
Increase of $118,725 over draft budget presented
on July 21, 2020
Total of $853,671, a 16.2% increase over 2020
2021 General Fund Revenues
Local Government Aid (Continued)
State is projecting a $4.7 billion deficit during next
biennium (7/1/2021 –6/30/2023)
Certified amount can still be impacted by the
actions of Legislature or Governor
2021 General Fund Revenues
Other revenue categories budgeted
conservatively
Charges for services decreased by $22,800 from
2020 Budget
Miscellaneous revenue decreased by $48,300
from 2020 Budget
2021 General Fund Revenues
Total General Fund Levy of $12,808,552
2.64% Increase to General Fund Levy
2021 General Fund Revenue
Budget Proposed % Increase
FY2020 FY2021 (Decrease)
Property Taxes 12,564,305 12,893,552 2.62%
Intergov't Revenue 1,352,946 1,474,671 9.00%
Licenses, Permits & Fines 777,865 786,815 1.15%
Charges for Service 251,050 228,550 -8.96%
Misc. Revenue 415,550 367,250 -11.62%
Total Revenue 15,361,716 15,750,838 2.53%
2021 General Fund Revenue
2021 General Fund Expenditures
General Fund Reductions -$100,000
Open public works superintendent position was
eliminated
Creates ongoing savings after 2021 budget
2021 General Fund Expenditures
General Fund Reductions -$100,000
(continued)
25% reduction in crack sealing on City Streets
20% reduction in tree re-planting
No pole painting in 2020
Further reductions to supplies, training and other
expenses
2021 General Fund Expenditures
COVID-19 Contingency Reduction -$150,000
New request was removed from the Budget
City still has a $50,000 contingency budget, which
is consistent with 2020
2021 General Fund Expenditures
COVID-19 Contingency Reduction -$150,000
(continued)
Equipment Replacement or Capital Improvement
Funds could be used as one-time contingency
Additional impacts from COVID-19 could come
from existing reserves of further reductions
2021 General Fund Expenditures
Budget Proposed % Increase
FY2020 FY2021 (Decrease)
General Government 1,932,032 1,985,244 2.75%
Community Services 1,653,186 1,650,085 -0.19%
Public Safety 7,461,159 7,808,981 4.66%
Public Works 3,443,017 3,469,191 0.76%
Recreation 783,122 748,137 -4.47%
Other 89,200 89,200 0.00%
15,361,716 15,750,838 2.53%
2021 General Fund Expenditures
2021 Tax Levy
Burnes Park Debt Service -$150,000
Reduction to the debt levy
Redirect franchise fees previously dedicated to
ongoing park improvements
Tax levy is planned through 2032
One-time or continued
2021 Tax Levy
Burnes Park Debt Service -$150,000 (continued)
Current five year plan includes:
Central Park –Rehab of deteriorated picnic shelters
Central Park –Replace/rehab 30 year old play equipment
Shady Oak Beach –Replace/rehab 35 year old picnic shelter
Maetzold Field –rehab 30 year old pavilion/concession
building
Oakes Park –rehab 25 year old tennis courts
Burnes Park –rehab 30 year old tennis court
Proposed 2021 Tax Levy
Actual Preliminary % Increase
Purpose FY2020 FY2021 (Decrease)
General Operations
General Fund 12,479,305 12,808,552 2.64%
Capital Levy 75,000 175,000 133.33%
Arts Center 325,225 331,182 1.83%
Pavilion Fund 290,000 340,000 17.24%
Equipment Replacement 110,000 250,000 127.27%
Total General Operations 13,279,530 13,904,734 4.71%
Debt Levy 4,250,154 4,118,650 -3.09%
Total Levy 17,529,684 18,023,384 2.82%
City Taxes on Median Value Home
2020 Actual
Estimated Market Value as
of 1/2/19 = $276,000
City Taxes -$1,827
Increase of $92 or 5.31%
2021 Draft
Estimated Market Value as
of 1/2/20 = $291,000
City Taxes -$1,867*
Increase of $40 or 2.19%
*estimated based on preliminary tax
capacity information
Truth in Taxation Hearing
Setting the Date and Time
Monday, November 30th at 7:00 PM
Truth in Taxation statement will direct
taxpayers to www.Hennepin.us.tntmeetings
City of Hopkins will have a unique webpage listed
with meeting details
Either in-person or link to virtual meeting space
Review 2021 HRA Levy
September 1, 2020
Review 2021 HRA Levy
Main revenue source for the City’s Economic
Development Fund
Levy Limits are in place for this levy of
0.01850% of the City Estimated Market Value
Review 2021 HRA Levy
Maximum allowable levy is $407,727, a
$39,776 or 10.81% increase from 2020
Proposed levy is $378,070, a $10,119 or 2.75%
increase from 2020
Preliminary and can be reduced
Review 2021 HRA Levy
Option 2: Approve a levy of $378,070, a
$10,119 or 2.75% increase from 2020
Allows some flexibility in Economic Development
Fund
Preliminary and can be reduced
Next Steps
Meeting Date Meeting
Type
Subject Details
October 6 Regular
Meeting
Financial Management
Plan (FMP) Update
-Overview of the FMP, prior tax
increases and debt
October 13 Work
Session
Review Capital
Improvement Plan (CIP)
and Equipment
Replacement Plan (ERP)
-Equipment Replacement Levy
-Park Dedication Fund
-Capital Improvement Levy (City
Buildings)
-Permanent Improvement Revolving
Fund (Street Projects)
October 20 Regular
Meeting
Quarterly Financial Report
Next Steps
Meeting Date Meeting
Type
Subject Details
November 4
(Wednesday)
Regular
Meeting
Budget Review -TBD
November 10 Work
Session
Review Special Revenue
Budgets,Activity Center
Budget, Enterprise Fund
Budgets and Utility Rates
-Chemical
Assessment
-Economic
Development
-Parking
-Communications
-Depot
-Arts Center
-Activity
Center
-Water
-Sewer
-Storm Sewer
-Refuse
-Pavilion
November 17 Regular
Meeting
Approve CIP, ERP & Utility
Rates
November 30
(Monday)
Regular
Meeting
Truth in Taxation Hearing -Overview of 2021 Budget & Tax Levy
-Public Comment
Next Steps
Meeting Date Meeting
Type
Subject Details
December 1 Regular
Meeting
Budget Review -Final Comments from Council on
Budget
December 15 Regular
Meeting
Approve Final Budget & Tax
Levy
-Last scheduled meeting to approve