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2023 General Fund Budget and Tax Levy; Bishop CITY OF HOPKINS Memorandum To: Honorable Mayor and Council Members Mike Mornson, City Manager From: Nick Bishop, Finance Director Date: July 12, 2022 Subject: 2023 General Fund Budget and Tax Levy _____________________________________________________________________ PURPOSE To provide input and guidance for the 2023 General Fund budget 2023 Tax Levy and General Fund surplus. INFORMATION 2023 General Fund Budget Staff has been working to put together a 2023 General Fund Budget that meets the needs of the community and maintain service levels. The 2023 General Fund Budget being presented includes two additional full time employees: • Building Inspector – $116,000 o Funded through increased revenues o Budget request from Chief Building Official is attached • Fire Command Officer - $110,000 o Funded through general fund tax levy o Budget request from Fire Chief is attached The General Fund budget is balanced. Revenues and expenditures are both set at $17,240,140, a $1,066,520,116 or 6.59% increase from 2022. The general fund tax levy needed to support this budget is $13,980,371, a $760,632 or 5.75% increase from 2022. Finance Department 2023 Tax Levy The 2023 Tax Levy has been prepared based on debt service needs, prior year ERP/CIP documents, preliminary equipment requests and initial budgets for special revenue funds and market conditions. The levy being presented relies on the use of a general fund surplus to pay for capital projects at the Activity Center, Hopkins History Center (907 Mainstreet), Pavilion and street lighting upgrades. The total tax levy is $18,860,814, this is a $720,714 or 3.97% increase from 2022. Based on preliminary tax capacity information, city taxes on a median value home ($361,000) would be $2,219, which is a $217 increase from 2022. General Fund Surplus The City is projected to have a surplus in the general fund of $1,196,479 at the end of 2022. The City has three main options for what to do with the surplus: 1. Maintain for cashflow, contingencies or emergencies 2. Use for an already existing request 3. Use for a new project or initiative City Council discussed possible options for the surplus at the June 14th work session. Based on input from the work session, use of the surplus for existing projects has been incorporated into the draft tax levy. The attached summary gives an overview of available options. FUTURE ACTION A budget engagement session will be held on August 15 from 6-7 PM at City Hall. Details will be posted on the City’s website: https://www.hopkinsmn.com/466/City-Budget- Process. A preliminary levy must be adopted by September 30th of each year. The preliminary levy is planned to be approved at the September 6th City Council Meeting. The preliminary levy will be the maximum allowable amount for 2023 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 is planned for Wednesday, November 30th. The final levy is planned to be approved at the December 6th City Council Meeting. City of Hopkins General Fund Revenue Budget For the Year Ending December 31, 2023 DRAFT July 12, 2022 Department 2022 Budget 2023 Budget % Increase (Decrease) Property Taxes 13,304,739 14,065,371 5.72% Intergovernmental Revenue Local Government Aid 880,066 932,904 Intergovernmental Revenue - Other 622,000 705,000 Total Intergovernmental Revenue 1,502,066 1,637,904 9.04% Licenses, Permits & Fines Court Fines & Penalties 176,000 176,000 Building Permits & Inspections 475,500 557,000 Inspection Fines & Citations 2,500 3,000 City Clerk - Business Licenses 7,000 8,000 PD - Liquor, Animal Licenses & Penalties 98,300 101,800 Fire - Licenses & Permits 2,300 4,000 Public Works - Licenses & Permits 19,415 19,415 Planning & Zoning - Licenses & Permits 1,000 1,000 Total Licenses, Permits & Fines 782,015 870,215 11.28% Charges for Service Finance Department 5,500 5,500 Assessing 3,000 3,000 Inspections 109,400 175,450 Police 35,000 35,000 Fire 10,500 10,500 Public Works 3,150 3,150 Activity Center 90,000 94,300 Total Charges for Service 256,550 326,900 27.42% Miscellaneous Revenue Franchise Fees 296,200 296,200 Miscellaneous 15,250 20,250 Finance Department 3,000 3,000 Police 500 500 Fire 3,500 3,500 Public Works 5,300 5,300 Activity Center 4,500 11,000 Total Miscellaneous 328,250 339,750 3.50% Total Revenues 16,173,620 17,240,140 6.59% City of Hopkins General Fund Expenditure Budget For the Year Ending December 31, 2023 DRAFT July 12, 2022 Department 2022 Budget 2023 Budget % Increase (Decrease) City Council 104,699 105,851 1.10% Administrative Services 912,950 1,016,731 11.37% Finance 462,665 488,794 5.65% Legal 225,000 225,000 0.00% Municipal Building 380,901 380,832 -0.02% Assessing 244,158 256,089 4.89% City Clerk 219,803 245,466 11.68% Inspections 904,960 1,062,119 17.37% Police 6,417,543 6,958,766 8.43% Fire 1,616,824 1,688,390 4.43% Public Works 3,509,559 3,632,027 3.49% Recreation 295,475 306,993 3.90% Activity Center 466,388 486,192 4.25% Planning & Zoning 204,784 170,842 -16.57% Community Development 118,711 126,848 6.85% 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 16,173,620 17,240,140 6.59% City of Hopkins Tax Levy For the Year Ending December 31, 2023 DRAFT July 12, 2022 Actual Draft % Increase Purpose FY2022 FY2023 (Decrease) General Operations General Fund 13,219,739 13,980,371 5.75% Capital Levy 50,000 - -100.00% Arts Center 339,317 347,697 2.47% Pavilion Fund 418,000 340,000 -18.66% Equipment Replacement - 250,000 100.00% Permanent Improvement 110,000 - 100.00% Total General Operations 14,137,056 14,918,068 5.52% Debt Levy 4,003,044 3,942,746 -1.51% Total Levy 18,140,100 18,860,814 3.97% CITY OF HOPKINS Memorandum To: Honorable Mayor and Council Members Mike Mornson, City Manager From: Ari Lenz, Assistant City Manager Christopher Kearney, Chief Building Official Date: July 12, 2022 Subject: Budget request for new inspector _____________________________________________________________________ PURPOSE Staff is requesting the addition of one (1.0) FTE for a building inspections position, estimated costs are $116,000 with salary and benefits for the new position. INFORMATION The building inspector position would be a reoccurring cost and is planned to be paid for by building inspection permit revenue. There are no plans for a general fund allocation at this time. The position is necessary to help with the expected increase in development activities to maintain current service level expectations. Staff prides itself on providing fast and accurate plan review and inspections. Below is a list of the expected development activities over the next few years as well as a listing of approximate times for inspections required. Please note: This does not include normal residential and minor commercial permit activity, service levels in these areas would also be impacted if the position were not approved. Project Start Number of Units Number of Inspections Blake School ELC 2nd Qtr. 2022 N/A 80 Trilogy BLD A 1st Qtr. 2022 219 3700 Alatus BLD A 3rd Qtr. 2022 174 2900 Trilogy BLD B 4th Qtr. 2022 250 4250 Beacon Vista 44 4th Qtr. 2022 50 850 Other Projects Alatus BLD C 2023 390 6600 Alatus BLD D 2023 187 3200 Mann Theater Site 150 2550 Community Services- Inspections Knollwood North 140 2380 Inspections Each Unit & Common Area 1. Floor/Ceiling Trusses 7. Electrical Rough-In 13. Final Plumbing 2. Sheer Walls 8. Framing 14. Final Electrical 3. Plumbing Rough-In 9. Insulation 15. Final Sprinklers 4. Mechanical Rough-In 10. Firestopping 16. Final Gas Piping 5. Gas Piping Rough-In 11. Sound Insulation & R.C. Chanel 17. Final Mechanical 6. Fire Sprinkler Rough-In 12. Fire Resistive Assemblies 18. Final Building Other Inspections Footings Foundation Utilities Sheathing Time it takes for each inspection varies from 10 minutes to 45 minutes. FUTURE ACTION The preliminary levy is planned to be approved at the September 6th City Council Meeting. The final is planned to be approved at the December 6th City Council Meeting. CITY OF HOPKINS Memorandum To: Honorable Mayor and Council Members Mike Mornson, City Manager From: Dale Specken, Fire Chief Date: July 12, 2022 Subject: Budget Request for Command Position and Evaluation of Full-Time Model _____________________________________________________________________ PURPOSE Staff is requesting authorization to issue a RFP for a staffing study to evaluate transitioning from a paid on call to full-time staffing model. Staff is requesting the addition of one (1.0) FTE for a fire command officer position to assist with the transition, overseeing full-time firefighters and to assist with special projects, estimated costs are $110,000 with salary and benefits for the new position to be funded with general fund tax levy in 2023. INFORMATION Due to the increase in population and the challenges of finding Paid on Call Firefighters, Staff recommends to explore transitioning to a Full-time Department with a small contingent of paid on call Firefighters. With the increase in population, the department expects an increase in our call load over the next several years. The goal would be to be ahead of the population increase and have staffing in place. These positions would be Firefighter / Inspector Positions. The Fire Department would take all medicals to free up capacity for the Police Department. Staff applied for a Federal Grant for 12 firefighter positions for three years at which time the city will pick up the full-time positions. Staff recommends doing a staffing study estimated cost is between $50,000 and $100,000. Staff also recommends hiring a command position in 2023 to help with the study. FUTURE ACTION The preliminary levy is planned to be approved at the September 6th City Council Meeting. The final is planned to be approved at the December 6th City Council Meeting. Fire Department City of Hopkins Overview of Options for General Fund Surplus July 12, 2022 Use For An Already Existing Request Potential to Reduce 2023 Levy Cost/ Savings Activity Center Roofing Projects 160,000 Funded through surplus in 7/12/2022 Draft Budget Hopkins Historical Building (windows and doors)55,000 Funded through surplus in 7/12/2022 Draft Budget Fire Station - Replace Air Handler 82,000 Funded through surplus in 7/12/2022 Draft Budget Pavilion - Indoor Turf 95,000 Funded through surplus in 7/12/2022 Draft Budget Street Lighting Upgrades - Central Business District 100,000 Funded through surplus in 7/12/2022 Draft Budget Street Lighting Upgrades - Residential 190,000 Funded through surplus in 7/12/2022 Draft Budget 682,000 Potential to Reduce Future Levies Cost Annual Savings # of Years Notes Log Truck 165,000 21,500 10 Principal and Interest on Equipment Certificates Traffic Boom Truck 135,000 18,000 10 Principal and Interest on Equipment Certificates Art Center Deficit 438,987 60,000 7 Tax Levy to Eliminate Deficit 738,987 Use for a new project or initiative New Initiative or Projects Cost Fire Department Staffing Study 50,000 -100,000 Estimated Cost Range, RFP would be issued 2023 ERP or CIP Requests Police Records Management System 200,000 Advanced from 2024 to 2023, current system purchased in 2012 Portable Radios (Police, Fire & Public Works)290,000 Potential for replacement due to Hennepin County requirements Notes Notes July 12, 2022 City of Hopkins 2023 Budget Preparation Schedule for City Council The following table outlines the tentative schedule for discussions on important aspects of the City’s Budget and American Rescue Plan Act (ARPA) Spending Plan. Meeting Date Meeting Type Subject Details April-July N/A Internal Preparations -2021 Audit Ongoing -Departments Prepare Budgets, Equipment Replacement and Capital Improvement Schedules July 12 Work Session Review 2023 Tax Levy and General Fund Budget -First Draft August 10 Work Session Review Capital Improvement Plan (CIP) and Equipment Replacement Plan (ERP) -Equipment Replacement Fund -Park Improvement -Capital Improvement August 15 Community Event Review 2023 Tax Levy and General Fund Budget -Presentation -Question and Answer Session September 6 Regular Meeting -Approve Preliminary Tax Levy and General Fund Budget -Approve CIP and ERP -Preliminary Levy must be approved by September 30 -Permanent Improvement Revolving Fund (Street Projects) October 11 Work Session Review, Special Revenue Fund Budgets, Enterprise Fund Budgets, Activity Center Budget and Utility Rates -Water -Sewer -Storm Sewer -Refuse -Pavilion -Communications -Chemical Assessment -Parking -Economic Development -Depot -Activity Center -Arts Center July 12, 2022 City of Hopkins 2023 Budget Preparation Schedule for City Council Meeting Date Meeting Type Subject Details November 1 Regular Meeting Approve Utility Rates November 30 Regular Meeting (Wednesday) Truth in Taxation Hearing -Overview of 2023 Budget and Tax Levy -Public Comment December 6 Regular Meeting Approve Final Budget & Tax Levy -Final Levy must be approved by December 28