III.3. Central Park Renovation – Funding Analysis; Bishop
CITY OF HOPKINS
Memorandum
To: Honorable Mayor and Council Members
Mike Mornson, City Manager
From: Nick Bishop, Finance Director
Date: August 4, 2025
Subject: Central Park Renovation – Funding Analysis
_____________________________________________________________________
PURPOSE
To provide an update on funding for the Central Park Renovation project.
INFORMATION
At the April 15th and July 15th City Council meetings staff updated City Council on the
Central Park Project, including information on grants and updated project costs. The
City has secured two significant funding sources: a $5 million grant from the Minnesota
Pollution Control Agency and $1 million dollars from Nine Mile Creek Watershed
District. The preliminary engineer’s estimate to complete the project is $13.9 million.
Tax Levy Impact and Bond Issuance
The attached cash flow projection has the City issuing $3.2 million in General Obligation
bonds to fund the project. The debt would be repaid with franchise fees beginning in
2029 through 2041. There would be no tax levy used to fund the project.
Finance Department
Storm Sewer Reserves and Storm Sewer Fees
The attached cash flow projection would utilize $2 million of existing reserves to fund
the project. Currently, there is no storm sewer utility revenue debt being issued and no
increased fees being considered to fund the project.
City staff and consultants are reviewing the categorizations of project costs to determine
if it is possible and advantageous to pay for more of the project from the Storm Sewer
Fund. The City could decide to raise its storm sewer rates to be comparable with nearby
Cities. The Cities rate has not changed since 2009. The City’s rate adjusted for a
modest 3% inflations would be $8.00.
Projected Funding Sources
Total funding sources identified are $15,429,782, which is $1.5 million more than the
projected costs. The City would need to secure funding for 65% of the remaining
funding sources to align with the attached cash flow projection and avoid the use of tax
levy to repay bond principal and interest.
Storm Sewer
MPCA Grant 4,999,782
Nine Mile Creek Watershed 1,000,000
Hopkins Storm Sewer Transfer In 2,000,000
Nine Mile Creek Watershed 200,000 Probable
8,199,782
Park System
Bond Proceeds 3,300,000
Park Dedication Fees - Pending 1,700,000 Pending
Hennepin Co Youth Sports Grant 300,000 Possible
Hennepin Co Brownfields Grant 200,000 Probable
MN Thunder Academy 1,000,000 Probable
Hopkins Area Little League 380,000 Probable
MN Outdoor Recreation Grant 350,000 Possible
7,230,000
Total Funding Sources 15,429,782
2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035
Projected Beginning Fund Balance
Restricted for Park Dedication Costs 396,807 396,807 496,591 296,589 296,589 296,589 296,589 296,589 296,589 296,589 296,589
Committed for Park Improvements & Maintenance 386,969 586,207 606,037 334,813 351,201 256,886 181,506 126,250 112,370 221,385 355,682
Total Projected Begining Fund Balance 783,776 983,014 1,102,628 631,402 647,790 553,475 478,095 422,839 408,959 517,974 652,271
Revenues
Franchise Fees 355,000 355,000 372,750 391,388 410,957 431,505 453,080 475,734 499,521 524,497 550,722
Grants - 3,499,782 2,500,000 - - - - - - - -
Grants - Pending - - 1,000,000 - - - - - - - -
Park Dedication Fees - - 1,700,000 - - - - - - - -
Interest Earnings 7,838 9,830 11,026 - 6,478 5,535 4,781 4,228 4,090 5,180 6,523
Total Revenues 362,838 3,864,612 5,583,776 391,388 417,435 437,040 457,861 479,962 503,611 529,677 557,245
Other Financing Sources
Low Interest Loan - BWSR (1% interest)- - - - - - - - - - -
Bond Proceeds (4%)- - 3,200,000 - - - - - - - -
Transfer In - Storm Sewer Fund - 2,000,000 - - - - - - - - -
Total Other Financing Sources - 2,000,000 3,200,000 - - - - - - - -
Total Revenues and Other Financing Sources 362,838 5,864,612 8,783,776 391,388 417,435 437,040 457,861 479,962 503,611 529,677 557,245
Current Expenditures, Repairs and Maintenance Projects 43,600 75,000 535,000 255,000 16,750 17,420 18,117 18,842 19,596 20,380 21,195
Central Park Project - 5,399,998 8,600,002 - - - - - - - -
Debt Service Transfers
Cottageville Park Bonds 120,000 120,000 120,000 120,000 120,000 120,000 120,000 100,000 - - -
Burnes Park Bonds - 150,000 - - - - - - - - -
Central Park Bonds - - - - 375,000 375,000 375,000 375,000 375,000 375,000 375,000
Total Debt Service Transfers 120,000 270,000 120,000 120,000 495,000 495,000 495,000 475,000 375,000 375,000 375,000
Total Expenditures, Capital Costs and Debt Service Transfers 163,600 5,744,998 9,255,002 375,000 511,750 512,420 513,117 493,842 394,596 395,380 396,195
Increase (Decrease) in Fund Balance 199,238 (3,744,998) (6,055,002) (375,000) (511,750) (512,420) (513,117) (493,842) (394,596) (395,380) (396,195)
Projected Ending Fund Balance
Restricted for Park Dedication Costs 396,807 496,591 296,589 296,589 296,589 296,589 296,589 296,589 296,589 296,589 296,589
Committed for Park Improvements & Maintenance 586,207 606,037 334,813 351,201 256,886 181,506 126,250 112,370 221,385 355,682 516,732
Total Projected Ending Fund Balance 983,014 1,102,628 631,402 647,790 553,475 478,095 422,839 408,959 517,974 652,271 813,321
Park Improvement Fund - Projected Cash Flows