VII.1. Special Revenue Fund Budgets and Activity Center Budget Review; Bishop
CITY OF HOPKINS
Memorandum
To: Honorable Mayor and Council Members
Mike Mornson, City Manager
From: Nick Bishop, Finance Director
Date: October 10, 2023
Subject: Special Revenue Fund Budgets and Activity Center Budget Review
_____________________________________________________________________
PURPOSE
No formal action is required at this meeting. Staff is requesting input on the proposed
budgets for special revenue funds. The proposed Activity Center fund budget is shown
for informational purposes.
INFORMATION
Chemical Assessment Team Fund (Special Revenue)
The State Chemical Assessment Team provides emergency response for assessment
of chemical hazards, the maintenance of state owned equipment and training of
personnel. The response area includes Hennepin, Scott, Carver, McLeod and Renville
Counties. The State of Minnesota reimburses the City quarterly for actual costs. The
Chemical Assessment Team does not receive any tax levy support from the City.
Proposed
2023 2024 Percentage
Budget Budget Incr (Decr)
Revenues 65,000$ 65,000$ 0.00%
Expenditures 65,000$ 65,000$ 0.00%
Revenues over (under) Expenditures -$ -$
Finance Department
Economic Development Fund (Special Revenue)
The Economic Development Fund coordinates the economic development processes
not directly funded by specific project budgets and also supports Artstreet and
marketing. The main revenue sources of the fund are the Hopkins Housing and
Redevelopment Authority (HRA) property tax levy and excess tax increment financing
(TIF). A preliminary HRA levy of $487,653 was set on September 19th, excess TIF is
budgeted at $50,000.
The major expenditures of the fund are salaries, benefits and grants. The 2024 budget
does include $100,000 for the Façade Improvement program. Staff is reviewing the
current criteria to determine any modifications needed in 2024. Similar support to
property & business owners will also being offered through the City’s American Rescue
Plan Act funds.
Proposed
2023 2024 Percentage
Budget Budget Incr (Decr)
Revenues 571,531$ 557,706$ -2.42%
Expenditures 486,250$ 520,278$ 7.00%
Revenues over (under) Expenditures 85,281$ 37,428$
Parking Fund (Special Revenue)
The Parking Fund accounts for activities related to parking enforcement and parking
operations in the City. The major sources of revenue and parking permits, parking
leases and fines. The revenue budget for parking permits has been reduced based on a
decrease in permit sales due to trends caused by COVID-19. The major expenditures
are salaries and benefits. The budget is projecting a decrease in fund balance of
$34,894. The 12/31/2024 ending fund balance is projected to be a negative $56,660.
Staff is in the initial stages of exploring options for the parking ramp such as gated
access with automatic payment kiosks, which could increase revenue and decrease
expenditures.
Proposed
2023 2024 Percentage
Budget Budget Incr (Decr)
Revenues 143,250$ 125,000$ -12.74%
Expenditures 158,610$ 159,894$ 0.81%
Revenues over (under) Expenditures (15,360)$ (34,894)$
Communications Fund (Special Revenue)
The Communications Fund provides two-way communication between the City and its
residents, employees, businesses; its civic and service organizations; and other
communities and government agencies. Some examples of the services provided are
Hopkins Highlights, the City’s website and the State of the City event. The main source
of revenue is cable franchise fees. The main expenditures are salaries, benefits and
printing/mailing costs. The budget is projecting a decrease in fund balance of $51,487.
The 12/31/2024 fund balance is projected to be a positive $89,346.
Proposed
2023 2024 Percentage
Budget Budget Incr (Decr)
Revenues 230,000$ 230,000$ 0.00%
Expenditures 304,324$ 281,487$ -7.50%
Revenues over (under) Expenditures (74,324)$ (51,487)$
Sustainability Fund (Special Revenue)
The Sustainability Fund will be established in 2024. The fund will continue the Hopkins
Climate Solution Fund grant program which offers incentives to residents and
businesses to accelerate the transition to cleaner and more efficient energy. Grant
funding available in 2024 is budgeted at $200,000. The current program has one-year of
funding from the City’s ARPA allocation. The fund will also support one full-time
employee and other costs related to sustainability. The source of revenue from the fund
is gas and electric franchise fees. The City adopted ordinances to increase the fees
beginning on 1/1/2024, with $385,000 of the increase going towards sustainability.
Proposed
2023 2024 Percentage
Budget Budget Incr (Decr)
Revenues -$ 385,000$ 100.00%
Expenditures -$ 385,000$ 100.00%
Revenues over (under) Expenditures -$ -$
Depot Fund (Special Revenue)
The Depot Fund will operate under a new model in 2024, with both Depot Coffee
operations and the Depot Youth components being affected. The Depot Youth Board
will still exist to fulfill the mission of providing a place of community and learning in
which student involvement and youth development are encouraged in a chemically-free
environment. The program will also be expanded to include youth workforce
development through The ACE program. During it’s second year (2023) the ACE
program provided nine young adults with resume-building professional experience
through internships. The initial years of the program were funded by ARPA and a United
Way grant. The 2024 budget includes support from Hopkins General Fund ($60,000),
City of Minnetonka ($60,000), Hopkins School District ($50,000) and Three Rivers Park
District ($19,500).
As a result of issues stemming from the Green Line Extension and COVID-19
Pandemic, Depot Coffee operations were suspended in early 2023. The fund ended
2022 with a deficit fund balance of $214,597. The City of Hopkins, Three Rivers Park
District, the City of Minnetonka and the Hopkins School District issued a request for
services seeking a business operator for the Depot in 2024. Based on increased
contributions from the City’s General Fund, the City of Minnetonka and lease revenue
from a private operator the fund is projected to increase its fund balance by $20,000
and end 2024 with a deficit fund balance of $180,000.
Proposed
2023 2024 Percentage
Budget Budget Incr (Decr)
Revenues 248,224$ 203,832$ -17.88%
Expenditures 263,224$ 183,832$ -30.16%
Revenues over (under) Expenditures (15,000)$ 20,000$
Arts Center Fund (Special Revenue)
The Hopkins Center for the Arts is a premiere cultural and artistic destination drawing
over 250,000 visitors annually. Its amenities include a 715 seat theater, black-box
theater, art gallery, dance studio, classroom, meeting and multipurpose spaces. The
main revenue sources are property tax levy, rents, leases, ticket sales, grants, and
transfers in. The preliminary tax levy amount of $345,000, includes both $316,467
needed to sustain current operations and also $28,533 to reduce the deficit owed to the
City’s General fund. The fund will also receive the remaining ARPA allocation of
$136,052 in 2023 to further reduce the fund balance deficit. Major expenditures include
salaries, benefits and payments to artists. The fund is projected to end 2024 with a
deficit of $132,619. This is an improvement of $887,401 since 1/1/2021.
Proposed
2023 2024 Percentage
Budget Budget Incr (Decr)
Revenues 1,087,458$ 1,172,650$ 7.83%
Expenditures 1,027,458$ 1,144,097$ 11.35%
Revenues over (under) Expenditures 60,000$ 28,553$
Activity Center (General Fund)
The Hopkins Activity Center is a community facility with a gym, kitchen and meeting
rooms. The Activity Center’s mission is to provide pathways to “Experience the Upside
of Aging”. It is a gathering place for mature adults to participate in recreational, social,
educational, fitness and volunteer activities. The main sources of revenue are member
fees and facility rentals. The main expenditures are salaries, benefits and payments to
instructors or for other programming. Program revenues are $422,495 less than
program expenditures. The indirectly funded amount is provided through property
taxes, local government aid, franchise fees and interest. The Activity Center is part of
the City’s General fund and does not have its own fund balance.
Proposed
2023 2024 Percentage
Budget Budget Incr (Decr)
Revenues 105,300$ 132,500$ 25.83%
Expenditures 486,192$ 554,995$ 14.15%
Indirectly funded amount (380,892)$ (422,495)$