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VII.3. Adopt 2021 Tax Levy and General and Special Revenue Fund Budgets; BishopDecember 1, 2020 Council Report 2020-096 ADOPT FINAL 2021 TAX LEVY AND GENERAL AND SPECIAL REVENUE FUND BUDGETS Proposed Action Staff recommends adoption of the following motion: Move to Adopt Resolution 2020-064 approving the 2021 tax levy and adopting the 2021 General and Special Revenue Fund budgets. Adoption of this motion will result in staff forwarding the appropriate documentation to Hennepin County for inclusion on property taxes for 2021 and will approve the 2021 General and Special Revenue Fund budgets. Overview The City Council and staff have worked throughout 2020 to prepare a 2021 general fund budget and 2021 tax levy. The budget process has included community engagement sessions, a budget survey, city council meetings and work sessions. During 2020 the council reviewed and gave input related to the Capital Improvement Plan, the Equipment Replacement Plan the Financial Management Plan which along with a series of program and budget discussions were instrumental in the development of the 2021 budgets. The budget in its current form recommends spending in the general fund at $15,750,838 and a total tax levy of $17,788,384. The recommended levy has been reduced by $235,000 from the preliminary levy. In addition, a proposed HRA levy of $378,070 is also being recommended. Staff is recommending that the council adopt the resolution approving the tax levy for 2021 and setting the 2021 general and special revenue fund budgets. Primary Issues to Consider • The 2021 levy must be certified to the Hennepin County by December 28, 2020. Supporting Information • Tax Levy and Budget Overview • Resolution 2020-064 • 2021 General Fund and Special Revenue Fund Budgets • 2021 Tax Levy Summary Nick Bishop, CPA Finance Director Financial Impact: $17,788,384 Budgeted: Y/N Y Source: Taxes & other revenues Related Documents (CIP, ERP, etc): 2020 Budget, CIP, ERP, Notes: TAX LEVY AND BUDGET OVERVIEW 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. The City also hosted a virtual budget engagement session on August 17th that reviewed the same draft version of the budget and tax levy. The draft tax levy was $18,544,408, which was a $1,014,724 or 5.79% increase from 2020. City Council directed staff to make reductions before the preliminary levy was set in September. The preliminary 2021 Budget and Tax Levy was approved by City Council on September 15th, 2020. The budget and tax levy approved still met the needs of the community, but did so at a lower level of service than in 2020. The preliminary budget included reductions in the general fund and park improvements. The preliminary tax levy was set at $18,023,384, which was a $493,700 or 2.82% increase from 2020. City Council directed staff to continue to look for reductions before the final levy was approved in December. The final levy being proposed is $17,788,384 a $258,700 or 1.48% increase from 2020. This proposal includes eliminating the capital levy, reducing the equipment levy and debt service levies. The reduced levy still provides for the continuation of outstanding customer service by City workers, exceptional police and fire protection and helps maintain a vibrant, authentic downtown. City property taxes for a median value home ($291,000) in Hopkins are estimated to be $1,848 or a $22 or 1.19% increase from 2020. City property taxes for a commercial property valued at $600,000 are estimated to be $5,007 or a $248 or 5.21% increase from 2020 (based on average market value increases). The two largest areas supported by the levy are public safety and capital projects & debt. This is a breakdown of estimated City property taxes: Median Value Home ($291,000) Commercial Property ($600,000)Percentage Public Safety 703$ 1,903$ 38.0% General Government 252$ 683$ 13.6% Public Works 201$ 545$ 10.9% Parks and Recreation 140$ 379$ 7.6% Pavilion 35$ 96$ 1.9% Activity Center 35$ 95$ 1.9% Arts Center 34$ 93$ 1.9% Capital Projects and Debt 448$ 1,213$ 24.2% 1,848$ 5,007$ 100.0% Public Safety is comprised of police, fire and inspection departments. In total they make up 38.0% of the levy. The Police Department’s Mission is to serve the community with Honesty, Integrity and Respect. They accomplish this through community engagement, relationship building and providing education and youth initiatives. They also responded to 23,996 calls for service in 2019. They work diligently to prevent and deter crime. The Fire Department makes a positive difference everyday by providing quality fire response, prevention services, emergency medical, hazardous materials handling and emergency preparedness. In 2019, they responded to 1,431 calls. Their average response time is 4.2 minutes. Inspections – this is the smallest department within public safety. The Inspections Department budget is mostly funded through charges for service. The 2021 budget includes revenues of $586,700 and expenditures of $879,588. The Inspections Department is 1.3% of the tax levy. Capital projects and debt is the next largest portion of the levy making up 24.2%. It supports street reconstruction, capital projects at municipal buildings and equipment purchases. The City is completing an aggressive street reconstruction plan paid for through bond issuance, special assessments and user charges for water, sewer and storm-sewer. All streets in Hopkins are planned to be reconstructed by 2030. Continuing this program ensures the future preservation of our streets and helps maintain the quality of life Hopkins residents have come to expect. In order to fully realize the benefits of Southwest Light Rail the city invested in 8th Avenue and created the Artery. The Artery is a bike, pedestrian and vehicle connection and community space between a future light rail transit station and the City’s historic downtown. The $5.7 million project leveraged $2.6 million of grants from Metropolitan Council, Hennepin County and Three Rivers Park District. The City has also invested in the Blake Road Corridor. The City is adding several pedestrian friendly amenities including: multi-use trails, landscaped boulevards and upgraded street lighting. The Road will also be upgraded to handle future traffic and development demands. The $16 million project will receive reimbursements from Hennepin County ($8 Million) and utilize Municipal State Aid of ($3 million). The City’s share of the Artery project and Blake Road reconstruction were funded with debt. They also took advantage of limited outside funding sources in order to make needed improvements. Delaying the projects would likely result in higher costs and a larger City-share of the overall cost. The Pavilion levy being proposed is $340,000 or 1.9% of the levy. In 2018, the Pavilion was upgraded and expanded. The City needed to complete a project to replace a 27-year old refrigeration system that was unreliable, developing leaks and being phased out by the EPA. The City was able to increase the scope of the project to include remodeled locker rooms, shower rooms, expanded lobby, remodeled offices, remodeled concession stand and expanded restroom facilities after receiving contributions from Hopkins School District ($1.0 Million) and Hopkins Youth Hockey Association ($1.0 Million). The project still required bond proceeds of $3.1 million to complete. The debt service for the bonds will be paid with a Pavilion levy over through 2033. The Activity Center is a separate facility that is included in the general fund budget. The general fund levy amount being used for the Activity Center is $339,043 or 1.9% of the levy. The Activity Center’s mission is to provide pathways to “Experience the Upside of Aging”. It is a gathering place for mature adults. The Arts Center levy being proposed is $331,182 or 1.9% of the total levy. The Arts Center is a premiere cultreal and artistic destination drawing over 250,000 visitors annually. The City believes that it is an excellent economic development tool that helped make Mainstreet vibrant and authentic. With this levy, the Arts Center will continue to be an asset to the Community. CITY OF HOPKINS Hennepin County, Minnesota RESOLUTION NO. 2020-064 RESOLUTION APPROVING 2021 TAX LEVY AND ADOPTING THE 2021 GENERAL AND SPECIAL REVEUNE FUND BUDGETS BE IT RESOLVED BY THE COUNCIL OF THE CITY OF HOPKINS, MINNESOTA, That the following sums of money be levied for the current year collectible in 2021 upon the taxable property in the City of Hopkins, for the following purposes. General Levy General Operations $13,679,734 Special Levies Debt Levies 2012A GO Capital Improvement Bonds 225,000 2012B GO Bonds 150,000 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 Bonds 461,417 2018A Equipment Certificates 81,941 2019A GO Bonds 426,315 2019B GO Refunding Bonds 95,000 Subtotal Special Levies 4,108,650 Total Levy $17,788,384 HRA/EDA Levy Housing & Redevelopment Authority Levy $ 378,070 This levy is made based on current law and the 2021 General Fund Budget of $15,750,838. BE IT FURTHER RESOLVED, that the following amounts are budgeted for the Special Revenue Funds: State Chemical Assessment $65,000 TIF 2.6 Handicapped Housing Dev $7,500 Economic Development $498,900 TIF 2.9 Oaks of Main $5,000 TIF 1.2 Entertainment District $15,000 TIF 2.11 Super Valu $1,750,000 Parking $154,875 5th Avenue Flats $2,000 Hopkins Race & Equity Iniative $6,000 TIF 1.4 – Marketplace & Main $185,000 Communication (Cable TV) $251,224 TIF 1.5 – Moline $925,000 Depot Coffee House $247,266 Arts Center $1,024,159 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 on this this 1st day of December, 2020. _______________________________________ Jason Gadd, Mayor ATTEST: _____________________________ Amy Domeier, City Clerk City of Hopkins General Fund Revenue Budget For the Year Ending December 31, 2021 Proposed December 1, 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 December 1, 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 Special Revnue Funds Budget For the Year Ending December 31, 2021 Proposed December 1, 2020 Revenues Fund No.2020 Budget 2021 Budget % Increase (Decrease) 203 State Chemical Assessment 65,000 65,000 0.00% 204 Economic Development 467,951 503,070 7.50% 211 TIF 1.2 Entertainment District 30,000 30,000 0.00% 214 Parking 154,524 121,500 (21.37%) 216 Hopkins Race & Equity Iniative 6,000 6,000 0.00% 217 Communications (Cable TV)238,014 243,000 2.09% 219 Depot Coffee House 307,412 233,000 (24.21%) 226 TIF 2.6 Handicapped Housing Dev.21,000 21,000 0.00% 229 TIF 2.9 Oaks of Main 1,500 1,500 0.00% 231 TIF 2.11 Super Valu 2,217,000 2,250,000 1.49% 232 5th Avenue Flats - - 0.00% 233 TIF 1.4 - Marketplace & Main 185,000 195,000 5.41% 234 TIF 1.5 - The Moline 97,000 975,000 100.00% 250 Arts Center 1,185,836 1,084,159 (8.57%) Expenditures Fund No.2020 Budget 2021 Budget % Increase (Decrease) 203 State Chemical Assessment 65,000 65,000 0.00% 204 Economic Development 430,345 498,900 15.93% 211 TIF 1.2 Entertainment District 15,000 15,000 0.00% 214 Parking 150,690 154,875 2.78% 216 Hopkins Race & Equity Iniative 6,000 6,000 0.00% 217 Communications (Cable TV)238,656 251,224 5.27% 219 Depot Coffee House 307,412 247,266 (19.57%) 226 TIF 2.6 Handicapped Housing Dev.7,500 7,500 0.00% 229 TIF 2.9 Oaks of Main 5,000 5,000 0.00% 231 TIF 2.11 Super Valu 1,750,000 1,750,000 0.00% 232 5th Avenue Flats 2,000 2,000 0.00% 233 TIF 1.4 - Marketplace & Main 180,000 185,000 2.78% 234 TIF 1.5 - The Moline 94,500 925,000 100.00% 250 Arts Center 1,125,836 1,024,159 (9.03%) Fund Fund City of Hopkins Proposed Tax Levy For the Year Ending December 31, 2021 Proposed December 1, 2020 Actual Proposed % Increase Purpose FY2020 FY2021 (Decrease) General Operations General Fund 12,479,305 12,808,552 2.64% Capital Levy 75,000 - -100.00% Arts Center 325,225 331,182 1.83% Pavilion Fund 290,000 340,000 17.24% Equipment Replacement 110,000 200,000 81.82% Total General Operations 13,279,530 13,679,734 3.01% Debt Levy 4,250,154 4,108,650 -3.33% Total Levy 17,529,684 17,788,384 1.48%