VII.2. 2025 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 16, 2024
Subject: 2025 General Fund Budget and Tax Levy
_____________________________________________________________________
PURPOSE
To provide input and guidance for the 2025 General Fund Budget and Tax Levy.
INFORMATION
2025 General Fund Budget and Tax Levy
During the January 5, 2024 Goal Setting event, City Council directed staff to prepare
budget proposals with a 9%, 7% and 5% tax levy increase when compared to 2024. The
following proposals were prepared based on existing positions, general fund budget
submissions & requests, preliminary equipment/capital requests, initial budgets for
special revenue funds and debt service needs.
The 2025 Budget includes salary and benefit increases for current positions. Other
additions with tax levy impacts are:
• Additional City Contribution to the Fire Relief - $96,000
o The City makes an annual contribution to the Hopkins Fire Department
Relief Association. The contribution is deposited into a pension trust fund
and used for retirement, disability or death benefit payments. An increased
City Contribution would allow for an increase to retirement benefits. This is
a retention and recruitment tool for paid on-call firefighters.
o Budget request from Fire Chief is attached
Finance Department
• Youth Social Worker Contract with Hennepin County - $88,000
o This is a current contract that has been funded through ARPA grant funds.
• Tax Levy Support for Parking Fund Operations - $75,000
o The parking ramp fund was historically supported by parking permits and
other user fees. Revenue has dropped significantly since the COVID-19
pandemic. A tax levy is needed to support parking operations in 2025.
• Tax Levy Support for the Communications Fund - $40,000
o The Communications Fund has operated at a loss for several years due to
declining cable franchise revenue. A tax levy is needed to support the
Communications fund in 2025.
• New City Logo - $35,000
o One-time costs to redesign the City’s Logo to reflect the dynamic and
diverse community Hopkins is.
o Budget request from Assistant City Manager is attached
• Planner Position - $40,000
o This is a current position that has been funded through ARPA grant funds.
o The budget increase represents 1/3 of the position costs. The remaining
cost is proposed to be split between the Economic Development and
Sustainability Funds.
• Maintenance Worker for Forestry/Parks Division - $30,000
o This position was funded in the 2024 Budget with a May 1st start date.
Additional costs are for the annual salary/benefit cost.
Proposed Reductions for an 8.46% Levy Increase are:
• Use surplus fund balance in the general fund - $400,000
• Increase estimated Inspections revenue - $200,000
o The City has typically used a very conservative approach to budgeting for
revenue. However, any of the current development projects could bring in
revenue to meet this budget including Cassia Chapel View Care Center and
any of the remaining buildings at 325 Blake.
• Mainstreet Banner Pole Installation - $130,000
o The City currently has agreements to mount banners on private buildings,
which have caused expensive repairs that the City was responsible for. The
City may not have the ability to install banners on Mainstreet without this
request.
• Use ARPA grant funds for police officer position in 2025
o The City can use unexpended ARPA funds and “obligate” the cost of newly
created positions into 2025 and 2026.
• Increase Insurance Deductibles - $30,000
o The City’s general liability and property insurance deductible is $20,000 per
occurrence and $40,000 aggregate. The estimated costs savings to
increase to $50,000/$100,000 deductible is approximately $60,000. The
remaining cost savings would be allocated to the City’s enterprise funds.
The City’s insurance risk fund has a balance of approximately $275,000 that
can be used for the increased deductible.
Proposed Reductions for a 6.88% Levy Increase are:
• Everything above
• Phase Pavilion Door Replacement over Three Years - $92,500
o Initial CIP requests include a $185,000 project to replace aging entry doors
at the Pavilion. The project could be phased over 2025-2027.
• Move cost of Police Officer Association (POA) Contract - $85,000
o The 2024-2026 POA contract was settled at a higher rate than budgeted in
2024. Move the additional cost to the Minnesota Public Safety Fund.
• Reduce City Contributions to Fire Relief - $48,000
o Increase the City Contribution to the Fire Relief by ½ of the request
• Phase Street Light Upgrades - $75,000
o The 2024-2028 CIP includes $240,000 for street lighting upgrades. The
project can be sized based on budget availability.
• End Contract with Lockridge Grindal Nauen for Lobbyist Services - $20,000
Proposed Reductions for a 5.26% Levy Increase Are:
• Everything above
• Delay all street light upgrades – $165,000
• Reduce City Contribution to Fire Relief - $48,000
o Fire Relief will still receive a City Contribution based on 2024 Budget +
Inflation or $69,000
• New City Logo - $35,000
• Diversity Equity Inclusion (DEI) Budget - $25,000
o Reduce the DEI Budget from $100,000 to $75,000
• Contingency Budget - $25,000
o Reduce the Contingency Budget from $50,000 to $25,000
• Use DEI Funds for All Gender Bathroom Remodel - $10,000
o Initial CIP requests include design work for an all-gender bathroom at the
Activity Center. Use DEI funds for this purpose.
Financial Management Plan (FMP) Projections
During the spring of 2024 the FMP and staffing needs were reviewed internally. The
attached FMP summary includes the addition of 17 new positions between 2025-2029.
Six of these positions have been previously authorized by City Council and have
temporary funding sources through the American Rescue Plan Act and Minnesota Public
Safety Aid but will require permanent funding. The six firefighter positions are based on
the recently completed Fire Staffing Study. Three additional police officer positions have
been added as placeholders while the Police Staffing Study is completed. The remaining
additions are new requests. A more detailed overview will be provided during the July 16th
meeting.
FUTURE ACTION
A budget information session will be held on August 12 from 5-6 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 2nd City Council Meeting. The preliminary
levy will be the maximum allowable amount for 2025 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 2nd. The
final levy is planned to be approved at the December 3rd City Council Meeting.
City of Hopkins
General Fund Revenue Budget
For the Year Ending December 31, 2025
DRAFT (8.46% Levy Increase)
July 16, 2024
Department 2024 Budget 2025 Budget
% Increase
(Decrease)
Property Taxes 14,511,326 15,613,880 7.60%
Intergovernmental Revenue
Local Government Aid 1,081,012 1,084,775
Intergovernmental Revenue - Other 797,000 810,000
Total Intergovernmental Revenue 1,878,012 1,894,775 0.89%
Licenses, Permits & Fines
Court Fines & Penalties 176,000 176,000
Building Permits & Inspections 563,000 693,500
Inspection Fines & Citations 3,000 3,000
City Clerk - Business Licenses 8,900 12,400
PD - Liquor, Animal Licenses & Penalties 101,800 110,150
Fire - Licenses & Permits 4,000 4,000
Public Works - Licenses & Permits 19,615 19,615
Planning & Zoning - Licenses & Permits 2,000 4,000
Total Licenses, Permits & Fines 878,315 1,022,665 16.43%
Charges for Service
Finance Department 8,500 8,600
Inspections 175,450 274,775
Police 35,000 35,000
Fire 10,500 10,500
Public Works 3,150 3,000
Activity Center 118,500 154,500
Planning & Zoning - 16,000
Total Charges for Service 351,100 502,375 43.09%
Miscellaneous Revenue
Franchise Fees 346,200 380,600
Miscellaneous 25,250 45,000
Finance Department 3,000 3,000
Police 500 500
Fire 3,500 3,500
Public Works 10,600 8,000
Activity Center 14,000 14,000
Total Miscellaneous 403,050 454,600 12.79%
Total Revenues 18,021,803 19,488,295 8.14%
City of Hopkins
General Fund Expenditure Budget
For the Year Ending December 31, 2025
DRAFT (8.46% Levy Increase)
July 16, 2024
Department 2024 Budget 2025 Budget
% Increase
(Decrease)
City Council 133,033 156,598 17.71%
Administrative Services 536,656 698,990 30.25%
Information Technology 644,926 718,226 11.37%
Diversity, Equity & Inclusion 133,530 132,000 -1.15%
Finance 732,254 623,879 -14.80%
Legal 250,000 265,000 6.00%
Municipal Building 404,690 407,462 0.68%
City Clerk 339,242 327,542 -3.45%
Inspections 1,208,270 1,265,343 4.72%
Police 7,185,841 7,604,164 5.82%
Fire 1,709,014 1,982,178 15.98%
Public Works 3,858,812 4,289,317 11.16%
Recreation 276,441 276,735 0.11%
Activity Center 554,334 636,049 14.74%
Planning & Zoning 196,248 248,455 26.60%
Community Development 129,312 125,357 -3.06%
Tuition Reimbursement 19,200 19,200 0.00%
Contingency 50,000 50,000 0.00%
Transfer to Depot/ACE Program 60,000 61,800 3.00%
Total Expenditures 18,421,803 19,888,295 7.96%
City of Hopkins
Tax Levy
For the Year Ending December 31, 2025
DRAFT
July 16, 2024
Actual
Purpose FY2024 8.46% Increase 6.83% Increase 5.26% Increase
General Operations
General Fund 14,426,326 15,528,880 15,375,880 15,277,880
Capital Levy - 455,000 455,000 445,000
Arts Center 345,000 380,000 380,000 380,000
Pavilion Fund 440,000 541,000 448,500 448,500
Equipment Replacement 360,000 250,000 250,000 250,000
Permanent Improvement - 290,000 215,000 50,000
Communications - 75,000 75,000 40,000
Parking - 75,000 75,000 75,000
Total General Operations 15,571,326 17,594,880 17,274,380 16,966,380
Debt Levy 4,107,613 3,748,530 3,748,530 3,748,530
Total Levy 19,678,939 21,343,410 21,022,910 20,714,910
Actual
FY2024 8.46% Increase 6.83% Increase 5.26% Increase
City Taxes 2,191$ 2,312$ 2,273$ 2,236$
Dollar Increase 3$ 121$ 82$ 45$
Percentage Increase 0.14%5.52%3.74%2.05%
Draft FY 2025
Preliminary Tax Calculation for a Median Value Home
Draft FY 2025
City of Hopkins
2025 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:
Additional Support for Existing Service or Program
Additional City Contribution to the Fire Relief
Fire Department
Fire Chief, Dale Specken
Paid On-Call Firefighters help create a spirit of community where people enjoy
exceptional government services.
Paid On-Call Firefighters preserve the hometown feel of Hopkins by maintaining
high quality public safety services.
$165,000 Total Cost in 2025, Increase of $96,000
None
N/A
The City makes an annual contribution to the Hopkins Fire Department Relief
Association. The contribution is deposited into a pension trust fund and used for
retirement, disability or death benefit payments. An increased City Contribution
would allow for an increase to retirement benefits.
The City's paid on-call firefighters currently receive a payout of $8,400 per year
of service at retirement. They receive a relatively low hourly wage ($18.28/hour
in 2024) with the retirement payout representing approximately 50% of total
compensation. An increased City Contribution would allow for increases to
retirement benefits that are comparable to other Cities. (Minnetonka's current
payout is $12,000/year)
Paid On-Call Firefighters are highly trained employees that are needed to
provide 24 hour station coverage. They are local community members making a
positive difference in the community by providing high quality fire response,
prevention services, emergency medical, hazardous material handling and
supporting educational events.
Potential to attract new firefighters and keep current firefighters for a longer
period of time. By keeping these firefighters it will mean the department will
have more experienced personnel.
None
One-Time On-Going
City of Hopkins
2025 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:
Other (Describe Below)
Refresh City of Hopkins Logo
Administration
Communications
Kelsey Baumann, Communications Manager
Branding logos are a significant aspect of the feel and reputation of the
community. This process incorporates the Inspire and Involve mission by
incorporating stakeholders in the process. The project also relates to the mission
that diversity is celebrated and our representation is aligned to our mission.
Preserve the hometown feel of Hopkins - A logo is often the first and most
thought about symbol of a city. It has potential to enhance community visibility
and pride within residents, and promote Hopkins to a broader audience. It
creates a since of place and identity for Hopkins and increases the competitive
edge within a competitive market for new residents and businesses. A well-
designed logo is crucial for brand recognition.
$35,000
None
The $35,000 is only for the logo redesign process. Implementation and
replacement costs would be separate. Budget allocation is a critical decision,
especially for initiatives that might not seem immediately urgent. However,
investing in the City's visual identity is an investment in future growth and
success, such as increased brand value and enhanced organizational
reputation.
Request for one-time cost to redesign the City's logo. Ongoing costs to
implement and replace the old logo would be separate costs from this request.
Staff suggests a rolling implementation replacing logos as items come up for
replacement, which could take up to 5 years.
The City of Hopkins has grown and evolved significantly over the past few years.
The current logo, while once effective, could use improvement to capture the
dynamic and diverse community Hopkins is. A refreshed logo will encapsulate
our current values, mission, and vision, ensuring that visual identity aligns with
the organizational growth and direction.
Following the City's mission, the redesign process would include community
input during the design phase.
No personnel changes. Approximately 6 months of project oversite and
organization from the Communications Manager/Assistant City Manager.
Implementation would require IT to make digital changes to replace the logo
picture.
One-Time On-Going
City of Hopkins
Financial Management Plan Update
Executive Summary
Proposed
July 16, 2024
2024 2025 2026 2027 2028 2029
Tax Levy Final
General Fund 14,426,326 15,429,880 16,828,235 17,308,849 17,869,440 18,847,227
Capital Improvements - 455,000 125,000 350,000 400,000 400,000
PIR/Streetlight - 290,000 240,000 90,000 225,000 200,000
Arts Center 345,000 380,000 345,000 375,000 375,000 375,000
Pavilion 440,000 541,000 450,000 450,000 450,000 450,000
Equipment Replacement 360,000 250,000 150,000 250,000 250,000 400,000
Communications 75,000 78,000 81,120 84,365 87,740
Parking 75,000 78,000 81,120 84,365 87,740
Debt Service 4,107,613 3,748,530 4,011,972 4,595,592 5,009,988 5,569,482
Total City Levy 19,678,939 21,244,410 22,306,207 23,581,681 24,748,158 26,417,189
% Increase 6.28%7.96%5.00%5.72%4.95%6.74%
Council Approvals from Other Funding Sources
American Rescue Plan Act - -
Police Officer 1 - - 126,000 131,040 136,282 141,733
Youth Social Worker - 60,000 62,400 64,896 67,492 70,192
Planner (33.3%)- 39,000 40,560 42,182 43,870 45,624
Minnesota Public Safety Aid - - - - -
Assistant Fire Chief - - 153,000 159,120 165,485 172,104
Police Officer 2 - - 126,000 131,040 136,282 141,733
Police Officer 3 - - 126,000 131,040 136,282 141,733
Current Requests/Additions
Firefighter SAFER Grant - 1 - - - - 113,500 118,040
Firefighter SAFER Grant - 2 - - - - 113,500 118,040
Firefighter SAFER Grant - 3 - - - - 113,500 118,040
Firefighter SAFER Grant - 4 - - - 113,500 118,040
Firefighter SAFER Grant - 5 - - - - 113,500 118,040
Firefighter SAFER Grant - 6 - - - - 113,500 118,040
Police Officer 4 - - - 131,040 136,282 141,733
Police Officer 5 - - - - 136,282 141,733
Police Officer 6 - - - - - 141,733
I.T. Technician - - - - 80,000 83,200
Increased I.T. Costs - 65,000 67,600 70,304 73,116
Human Rescource Position - - 100,000 104,000 108,160 112,486
Compensation Plan - - - - 30,000 -
Increase PT Hours of Community Connectors - - - 25,000 26,000 27,040
Increase Multimedia Communication Assistant to F - - - - 40,000 41,600
Permitting/Planning/Financial Software - - 100,000 100,000 100,000 100,000
Activity Center PT Position - - - 38,000 40,000 41,600
Comprehensive Plan, Professional Services - - - - 100,000 -
Levy Required - 99,000 898,960 1,124,958 2,233,719 2,325,600
Total City Levy w/ Additions 19,678,939 21,343,410 23,205,167 24,706,639 26,981,877 28,742,790
% Increase 4.86%8.46%8.72%6.47%9.21%6.53%
Taxes on Median Value Home 2,191.00$ 2,312.00$ 2,420.00$ 2,522.00$ 2,685.00$ 2,807.00$
$ Increase 3.00$ 121.00$ 108.00$ 102.00$ 163.00$ 122.00$
% Increase 0.14%5.52%4.67%4.21%6.46%4.54%
Projected
\\lisa\Share\FINANCE\FMP\2025 FMP\FMP_Executive Summary_Dept Head Requests
2025 Draft Budget & Tax Levy
July 16, 2024
Budget Discussion Overview
Goal Setting Event on January 5th
City Council and Staff set Goals and Strategic Plan
Directed staff to prepare 9%, 7% and 5% Tax Levy
Increase Scenarios
Budget Discussion Overview
Fee Review on February 20th
Pavement Management Program and Debt
Update on April 16th
Budget Process
January
City Council sets
Mission & Vision
July
Draft Budget and Tax
Levy Presented to City
Council
August
Community
Engagement Session
September
Preliminary Levy is Set
December
Truth in Taxation
Hearing
December
Finalize Levy
Debt Update
Fee Review
Financial
Management
Plan
2025 Draft Budget & Tax Levy
Based on:
General Fund Budget Submissions & Requests
2024-2028 CIP/ERP Documents
Preliminary equipment and capital requests
Preliminary Special Revenue Fund Budgets
Review 2025-2029 CIP/ERP on August 5th
Review Special Revenue Budgets in October
2025 Budget Additions
Previously Authorized – ARPA
Youth Social Worker Contract - $88,000
Planner Position - $40,000
Funded equally by General Fund, Economic Development
Fund and Sustainability Fund
Previously Authorized – 2024 Budget
Maintenance Worker – Forestry/Parks (May 1st)
2025 Budget Requests
City Contribution to Fire Relief - $96,000
Primarily used for retirement benefits
Retention/Recruitment for Paid On-Call
Firefighters
Tax Levy Support for Parking Fund - $75,000
Drop in user fees
2025 Budget Requests
Tax Levy Support for Communications Fund -
$40,000
Declining cable franchise fees
New City Logo - $35,000
One-time cost to redesign City’s logo
8.46% Levy Increase
Use $400,000 of surplus to reduce the General
Fund Levy
Increase estimated Inspections revenue -
$200,000
Cassia Chapel View Care Center
325 Blake Development
8.46 Levy Increase
Mainstreet Banner Pole Installation -
$130,000
Use ARPA Grant Funds for Police Officer -
$125,000
City can use unexpended funds to “Obligate” cost
of new positions in 2025/2026
8.46% Levy Increase
Increase Insurance Deductibles - $30,000
Decrease insurance premiums by 25%
Also creates savings in Utility Funds
6.83% Levy Increase
Everything included in 8.46% Proposal
Phase Pavilion Door Replacement - $92,500
Replacement of aging entry doors could be phased
over 3 years
6.83% Levy Increase
Move Cost of Police Officer Contract to MN
Public Safety Fund - $85,000
Reduce City Contributions to Fire Relief -
$48,000
Increase would be ½ of requested
6.83% Levy Increase
Reduce Street Light Upgrades - $75,000
Current CIP has $240,00 for Street Light Upgrades
Project can be sized based on budget availability
End Contract for Lobbyist Services - $20,000
Also creates savings in Economic Development
Fund
5.26% Levy Increase
Everything included in 8.46% & 6.88%
Proposals
Delay All Street Light Upgrades in CIP -
$165,000
5.26% Levy Increase
Reduce City Contributions to Fire Relief -
$48,000
Fire Relief would still receive City Contribution
based on 2024 Budget + Inflation ($69,000)
New City Logo - $35,000
5.26% Levy Increase
Diversity, Equity & Inclusion Budget - $25,000
Reduce from $100,000 to $75,000
Reduce Contingency Budget - $25,000
Reduce from $50,000 to $25,000
DRAFT 2025 Tax Levy
Actual
Purpose FY2024 8.46% Increase 6.83% Increase 5.26% Increase
General Operations
General Fund 14,426,326 15,528,880 15,375,880 15,277,880
Capital Levy - 455,000 455,000 445,000
Arts Center 345,000 380,000 380,000 380,000
Pavilion Fund 440,000 541,000 448,500 448,500
Equipment Replacement 360,000 250,000 250,000 250,000
Permanent Improvement - 290,000 215,000 50,000
Communications - 75,000 75,000 40,000
Parking - 75,000 75,000 75,000
Total General Operations 15,571,326 17,594,880 17,274,380 16,966,380
Debt Levy 4,107,613 3,748,530 3,748,530 3,748,530
Total Levy 19,678,939 21,343,410 21,022,910 20,714,910
Draft FY 2025
Property Taxes in 2025
Estimated Market Value of properties
determined by Hennepin County Assessor
City Council sets the Property Tax Levy
Taxes paid are based on proportionate share
of market value
Property Taxes in 2025
Total market value in Hopkins increased by
4.9% (Gross Growth)
Includes New Apartments valued at $75 million
Net Growth of 2.0%
Property Taxes in 2025
Value of residential properties increased by
3.5%
Value of median value home increased by
2.6%
City Taxes on Median Value Home
Estimated Market Value on 1/2/2024 = 378,800
Estimated based on preliminary tax capacity
information
Actual
FY2024 8.46% Increase 6.83% Increase 5.26% Increase
City Taxes 2,191$ 2,312$ 2,273$ 2,236$
Dollar Increase 3$ 121$ 82$ 45$
Percentage Increase 0.14%5.52%3.74%2.05%
Draft FY 2025
Financial Management Plan
17 New Positions between 2025-2029
3 from American Rescue Plan Act
Police Officer, Youth Social Worker & Planner
3 from MN Public Safety Aid
Assistant Fire Chief & 2 Police Officers
Financial Management Plan
17 New Positions between 2025-2029
Current Requests (not approved)
6 Firefighters w/ 3 years of Grant Funding
3 additional police officers (Staffing Study in Progress)
1 I.T. Technician
1 Human Resources Position
Next Steps – 2025 Budget
Meeting Date Meeting
Type
Subject Details
August 5
(Monday)
Work
Session
Review Capital
Improvement Plan and
Equipment Replacement
Plans
-Equipment Replacement
-Capital Improvements
-Permanent Improvement
-Pavilion
August 12
(Monday)
Community
Event
Review 2025 Tax Levy and
General Fund Budget
-Presentation
-Question and Answer Session
September 3 Regular
Meeting
-Approve Preliminary
2024 Tax Levy and
General Fund Budget
-Approve CIP and ERP
-Preliminary levy must be approved
by September 30
Next Steps – 2025 Budget
Budget Information Session
Monday, August 12 from 5-6 PM at City Hall
Presentation, Question & Answer Session
Truth in Taxation Hearing
Tuesday, December 3 @ 6:30 in Council Chambers
Presentation, Public Comment
QUESTIONS OR DISCUSSION