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VII.2. 2024 General Fund Budget & Tax Levy; Bishop CITY OF HOPKINS Memorandum To: Honorable Mayor and Council Members Mike Mornson, City Manager From: Nick Bishop, Finance Director Date: July 18, 2023 Subject: 2024 General Fund Budget and Tax Levy _____________________________________________________________________ PURPOSE To provide input and guidance for the 2024 General Fund Budget and Tax Levy. INFORMATION 2024 General Fund Budget Staff has been working to put together a 2024 General Fund Budget that meets the needs of the community and maintains service levels. The 2024 General Fund Budget includes salary and benefit increases for current positions. Other additions to the budget are: • Sustainability - $385,000 o Including 1 full-time position and $200,000 of annual funding for the Hopkins Climate Solutions Fund o More information on the City’s commitment to sustainability can be found here: https://www.hopkinsmn.com/501/Sustainability o Funded through increased franchise fees • Increased I.T. costs for Police needs - $165,000 o Estimated annual subscription/service fees for a new Record Management System o Enhanced security measures mandated by the Bureau of Criminal Apprehension • Diversity, Equity & Inclusion (DEI) - $100,000 o Allocation to meet Financial Investment and Human Capital goals to be developed through the Equity Strategic Action Plan (ESAP) o Information on the City’s ongoing DEI work and ESAP is here: https://www.hopkinsmn.com/581/Race-Equity • Maintenance Worker for Forestry/Parks Division - $90,000 o Budget request from Public Works Director is attached Finance Department • Fire Command Officer - $58,000 increase, $116,000 total o Position included in 2023 budget starting on 7/1 o Position is currently vacant while Fire Staffing Study is being completed • Transfer to Depot/ACE Program - $40,000 increase, 60,000 total o The preliminary budget for the Depot Fund includes a $60,000 contribution from the City of Minnetonka, $50,000 from Hopkins Schools and $19,500 from Three Rivers Park District. o Youth Workforce Development “The ACE Program” overview is attached The General Fund budget is balanced. Revenues and expenditures are both set at $18,989,803, a $1,801,363 or 10.48% increase from 2023. The general fund tax levy needed to support this budget is $15,061,076, a $1,125,295 or 8.07% increase from 2023. 2024 Tax Levy The 2024 Tax Levy has been prepared based on debt service needs, prior year ERP/CIP documents, preliminary equipment/capital requests and initial budgets for special revenue funds and market conditions. The total tax levy is $20,930,315, this is a $2,164,091 or 11.53% increase from 2023. Based on preliminary tax capacity information, city taxes on a median value home ($369,300) would be $2,402, which is a $214 increase from 2023. General Fund Surplus The City has a surplus of $499,241 at the end of 2023. 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 (which would reduce the tax levy) 3. Use for a new project or initiative Public Safety Funding The City will receive a one-time payment of $828,185 for public safety funding in December. The funding is not included in this budget proposal. The funding will be discussed at a future council meeting. FUTURE ACTION A budget engagement session will be held on August 14 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 5th City Council Meeting. The preliminary levy will be the maximum allowable amount for 2024 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 Monday, December 4th. The final levy is planned to be approved at the December 5th City Council Meeting. City of Hopkins General Fund Revenue Budget For the Year Ending December 31, 2024 FIRST DRAFT July 18, 2023 Department 2023 Budget 2024 Budget % Increase (Decrease) Property Taxes 14,020,781 15,146,076 8.03% Intergovernmental Revenue Local Government Aid 925,794 1,081,012 Intergovernmental Revenue - Other 705,000 797,000 Total Intergovernmental Revenue 1,630,794 1,878,012 15.16% Licenses, Permits & Fines Court Fines & Penalties 176,000 176,000 Building Permits & Inspections 557,000 563,000 Inspection Fines & Citations 3,000 3,000 City Clerk - Business Licenses 8,000 8,900 PD - Liquor, Animal Licenses & Penalties 101,800 101,800 Fire - Licenses & Permits 4,000 4,000 Public Works - Licenses & Permits 19,415 19,615 Planning & Zoning - Licenses & Permits 1,000 2,000 Total Licenses, Permits & Fines 870,215 878,315 0.93% Charges for Service Finance Department 5,500 5,500 Assessing 3,000 3,000 Inspections 175,450 175,450 Police 35,000 35,000 Fire 10,500 10,500 Public Works 3,150 3,150 Activity Center 94,300 118,500 Total Charges for Service 326,900 351,100 7.40% Miscellaneous Revenue Franchise Fees 296,200 679,450 Miscellaneous 20,250 25,250 Finance Department 3,000 3,000 Police 500 500 Fire 3,500 3,500 Public Works 5,300 10,600 Activity Center 11,000 14,000 Total Miscellaneous 339,750 736,300 116.72% Total Revenues 17,188,440 18,989,803 10.48% City of Hopkins General Fund Expenditure Budget For the Year Ending December 31, 2024 FIRST DRAFT July 18, 2023 Department 2023 Budget 2024 Budget % Increase (Decrease) City Council 105,851 133,032 25.68% Administrative Services 502,931 564,399 12.22% Information Technology 483,570 670,365 38.63% Diversity, Equity & Inclusion 33,530 133,530 298.24% Sustainability - 385,000 100.00% Finance 744,883 724,979 -2.67% Legal 225,000 250,000 11.11% Municipal Building 380,832 416,207 9.29% City Clerk 245,466 322,770 31.49% Inspections 1,062,119 1,173,086 10.45% Police 6,958,766 7,129,993 2.46% Fire 1,633,390 1,827,791 11.90% Public Works 3,632,027 3,929,510 8.19% Recreation 306,993 291,441 -5.07% Activity Center 486,192 554,995 14.15% Planning & Zoning 170,842 224,193 31.23% Community Development 126,848 129,312 1.94% Tuition Reimbursement 19,200 19,200 0.00% Contingency 50,000 50,000 0.00% Transfer to Depot/ACE Program 20,000 60,000 200.00% Total Expenditures 17,188,440 18,989,803 10.48% City of Hopkins Tax Levy For the Year Ending December 31, 2024 FIRST DRAFT July 18, 2023 Actual Preliminary % Increase Purpose FY2023 FY2024 (Decrease) General Operations General Fund 13,935,781 15,061,076 8.07% Capital Levy - 248,000 100.00% Arts Center 347,697 376,467 8.27% Pavilion Fund 340,000 551,000 62.06% Equipment Replacement 250,000 482,300 100.00% Permanent Improvement - 50,000 100.00% Total General Operations 14,873,478 16,768,843 12.74% Debt Levy 3,892,746 4,161,472 6.90% Total Levy 18,766,224 20,930,315 11.53% City of Hopkins 2024 Operating Budget Request Budget Request Title: Department: Division: Contact Person: Duration: Type: Item Description: Item Justification: Estimated Cost: Estimated Revenue (if any): Impact on Stakeholders: (Individuals involved in our work, businesses, residents, visitors or other departments) Impact on Personnel: (Please describe any personnel changes associated with this request) Impact on IT: (Please describe any implementation requirements, necessary software or ongoing support) How does the item relate to the City' s Mission and Vision? How does the item relate to the City' s Goals? Other Information or Comments: The Forestry Division supports the programs and infrastructure that create safe vibrant spaces, support exceptional neighborhoods, parks, and improve safe opportunities to be out and involved in the community. With the emergence of Emerald Ash Borer(EAB) in the past few years,the Forestry Division has been overwhelmed with deseased trees and their removal,creating a loss of mature tree canopy This additional support for the Forestry/Parks Division is necessary to maintain the physical assets that support these goals as well as support of the arts, events, and engagement of our residents. Add one full time Maintenance Worker to the Forestry Division. Performing work related to planting, maintaining, and/or clearing trees in the City's public and right- of-way spaces; inspecting public/private trees for diseases that City Ordinance requires, and taking required actions. Allow our City Forester more time to complete administrative work for city's diseased trees such as, Emerald Ash Borer(EAB), grant recording, tree inspections, coordinating outside resources for tree and stump removals, tree plantings, and responding to resident and buisnesses concerns about their trees. Currently the crew has two employees the City Forestery Lead (Forester) and one maintenance worker. With the additional employee this would allow the Forester to still assist with the forestry work, but have the freedom to work on all the other administrative work he must accomplish. This new postion will allow our City Forester to free up from the crew to do the administrative work involved with the EAB grants information, coordinating outside resources to assist with the tree and stump removals, planting of new trees, and assisting the residents and buisnesses within the city. Adding one Forestry position will allow our City Forester time to handle the administrative work involved with the working on the EAB grant information, coordinating outside resources to assist with the tree and stump removals, planting of new trees, and assisting the residents and buisnesses within the city. None required. $90,000 New Service or Program Additional Maintenance Worker Position Forestry/Parks Public Works Forestry Chuck Autio One-Time On-Going Youth Workforce Development The ACE Program Need for Young Adult Workforce Development Since early 2022, the City of Hopkins, the Hopkins Race and Equity Initiative and the Hopkins School District have been exploring the ways that young adults, specifically those who face barriers to employment, can have greater access to jobs and career exploration (see full workforce report). For students with barriers to employment in the Hopkins School District, there currently is a gap for this type of programming or service. Most programs offered are aimed at providing career exploration for high-achieving students rather than those currently underserved who would benefit most from additional career mentorship and opportunities. Programs like BrookLynk and Step Up have had great success in building programming to bridge this gap. However, youth in our area are not eligible to participate due to the location-based eligibility restrictions. Data from both Hennepin County and other non-profits like the Opportunity Atlas, further illustrate the need for young adult work force programming for residents of our communities. For communities of color, and low-income youth data shows they are currently positioned to earn less than their peers over their lifetimes. Early work exposure, paid jobs, and workforce training is a proven method to helping reduce this disparity and lead to higher employment rates and future wages. The Minnesota Department of Employment and Economic Development has found that, “The number one predictor of future successes in the workforce is early exposure to work experience.” Public Sector Hiring Challenges For many communities, the current public sector workforce is not reflective of diversity in their community or the region. While these positions often offer high wages, excellent benefits and the opportunity for stable careered employment they may also have unique and complex hiring and/or licensing processes that might deter candidates. Beyond that, many candidates simply not know about the vast array of positions within a city that might align with their interest or have the mentorship connections to navigate entry into the field. Additionally, many cities are finding themselves plagued by tight job market conditions, especially in careers like law enforcement, where hiring chas been increasingly difficult. Cities can work to reduce disparities and diversify their workforce through providing young adults exploratory job experiences through internships and other programming. This can be an excellent way to recruit and build for cadet/trainee style programs. Without the location-based restriction, the ACE program also serves as a recruitment platform for departments. ACE Program Now in its second year, the ACE Program provides young adults ages 14-24 with resume-building professional experience through an internship with the cities of Hopkins or Minnetonka. The program provides young adults with: • Career exploration in public service (with future goal to scale and include private business partners) • Competitive wages of $16/hour • Development of a professional network and coaching from supervisors and mentors • Focused program on youth with barriers to employment or underserved communities in the workforce (see eligibility criteria). Regional Youth Advisory Board The City of Hopkins, Minnetonka, Three Rivers Park District, and Hopkins Public Schools have partnered on the Depot Youth Advisory Board (YAB) for the past 25 years. The YAB is comprised of 15 youth (ages 18 and under) and up to 5 adult members (ages 18+), who meet weekly on Fridays to plan youth-focused events such as study and art nights, concerts and move nights, and oversee the operations of the Depot. The Depot serves as a chemical-free, youth-centered space for young adults to gather, events in the facility have ranged from weekly study nights to Queer prom and concerts). Similar successful programs run effectively through empowering youth with decision-making abilities, leadership development and community building. These opportunities can be a powerful opportunity to combat isolation, anxieties and lead to resilient youth who are ready to be our future leaders. While many communities find programing for ages 14-24 to be challenging, the YAB has shown for nearly three decades that when youth have a voice at the table, they can thrive in creating meaningful, relevant programming for their peers. Looking ahead and with the consideration to merge the two programs (ACE program with the YAB) as well as add additional partners, the program would shift into a regional board, with each partner community having one to two members appointed by the YAB to the board. Current membership comes from Hopkins High School students, there is also the opportunity to engage youth board and commission members though more meaningful leadership and connections. Finances and Support Needed Staffing Successful operation of these programs requires at least one permanent full-time position with a continuous funding source, as well as larger supervisory oversight and technical support (Payroll, IT, Finance). This position would support the Youth Advisory Board and its associated events and programming as well as provide support for the ACE program year-round, including youth recruitment, employer engagement and seeking, securing, and managing grants. Additionally, we would hire one seasonal positional to work concurrently with the youth workforce internship season. This position would provide additional capacity and support to youth interns and their supervisors. Physical Location/ Youth Center Currently, the YAB utilizes The Depot, a space provided through a lease agreement between the City of Hopkins and Three Rivers Park District. Three Rivers Park District provides capital maintenance as part of their contribution to the YAB, and it is assumed it will remain a home for youth-led and focused programming. Through partnership with other communities, it would be a welcome addition to the program for the YAB up to being able to provide programming opportunities at other facilities (Williston, Royal Athletic Center, Rec Center/ Aquatic Center). Continued business operation of the Depot is still a desire of the Hopkins City Council and the community. Staff are working on a request for services to find a private business partner to operate a food or beverage serving operation in the space that still allows for use of the space for the YAB and their events. Funding The goal is for all communities to financially participate in supporting both the ACE Program and the YAB, while also continuing to seek the many grants available for youth-focused work. While there are many grant sources available for youth workforce development, most of these grants are focused funding direct-to-youth wages and other needs associated a youth workforce program. Currently, the City of Hopkins receives funding from the United Way, and in the past has received funding from Hennepin County to support wages of interns in the ACE Program. In addition to other duties, the full-time position, along with support from City staff, would be to continue to research and apply for grants to support the program. Ideally, grant funds would also support a part-time, seasonal position to assist with administration. Next Steps The City of Hopkins is looking for your community to join us in this work to support youth and young adults across our communities. While there have been informal conversations about what this may look like, we are asking that you consider making a 2024 budget request of $60,000 to join us as both partner in the YAB and the ACE Program. This amount would help fund staff and programming costs related to both programs. We would like to know if this is of interest to your organization or if you need more information by July 31, 2023, to help with our own budget plans. Any questions about this program can be directed to Ari Lenz, Assistant City Manager.