VII.2. 2026 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: September 2, 2025
Subject: 2026 General Fund Budget and Tax Levy
_____________________________________________________________________
PURPOSE
To provide input and guidance for the 2026 General Fund Budget and Tax Levy.
INFORMATION
The City Council reviewed a draft of the 2026 General Fund Budget and Tax Levy on
August 4th. The initial budget, including all staff requests, resulted in a tax levy increase
of $4.3 million or 20.7%. Staff made reductions and presented a tax levy of $22,643,813
or a 9.7% increase from 2025. Council directed staff to reinstate the Hopkins Climate
Solutions Fund Grant Program for $125,000. This change results in a tax levy of
$22,768,813 or a 10.3% increase. City Council directed staff to prepare levy scenarios
with 8%, 6% and 4% increases.
Total Proposed Budget Reductions to reduce levy from 20.7% increase to 7.98% Increase
This proposed scenario has minimal layoffs; however it does rely heavily on delaying
equipment purchases and capital improvements to later years.
• Reduce Equipment Replacement Requests - $860,000
o Armored Pick UP Truck
o 1 Ton Traffic Boom
o 2 Police Marked Patrol Vehicles
o Parking Enforcement Vehicle
o Camera Trailer
o Squad Car Rifles
o Police Gym Treadmill
o Public Works Supervisor Vehicle
o Tire Balancer
o Permitting and Licensing Software
Finance Department
• Reduce Capital Improvement Requests - $765,000
o City Street Lighting Upgrades
o City Hall/Police Station Roof Replacement
o Mainstreet Banner Pole Installation
o Arts Center Restroom Remodel
o Pavilion Roof Replacement
o Pavilion Warming House Blinds
o Excelsior Fencing Project
o Bathroom Project at Activity Center
• Eliminate New Employee Requests - $310,000
o HR Technician
o IT Technician
o Firefighter
• Pay Burnes Park debt with Franchise Fees - $150,000
• Eliminate Request for Class and Compensation Study - $100,000
• Eliminate Public Works Trainee Position - $80,000
• Reduce Diversity, Equity & Inclusion - $75,000
o Including Community Connectors
• Fund ACE Program through EDA Levy - $50,000
• Reduce Police Minor Equipment Budget - $50,000
• Reductions to Travel and Training (Staff and Council) - $50,000
• End Contract with Lockridge Grindal Nauen for Lobbyist Services - $40,000
• Reduce Public Works Supplies Budget - $40,000
Additional Proposed Budget Reductions for a 5.97% Levy Increase
• Eliminate three full-time positions - $345,000
o Staff would request City Council to identify areas or departments for
service reductions.
• Partially Fund the Arts Center through Economic Development Fund - $70,000
o Art Center would be funded by a tax levy ($330,000), Economic
Development Transfers ($105,000)
Additional Proposed Budget Reductions for a 4.00% Levy Increase
• Eliminate two additional full-time positions (5 total) - $230,000
o Staff would request City Council to identify areas or departments for
service reductions.
• Eliminate Hopkins Climate Solutions Fund - $125,000
• Partially Fund the Arts Center through Economic Development Fund - $50,000
o Art Center would be funded by a tax levy ($280,000), Economic
Development Transfers ($155,000)
FUTURE ACTION
A preliminary levy must be adopted at the September 16th meeting. The preliminary levy
will be the maximum allowable amount for 2026 and can only be reduced.
Any additional meetings to discuss the budget can be scheduled in October and
November. A Truth and Taxation hearing is planned for Monday, December 1st. A final
levy must be adopted by December 31st.
City of Hopkins
Tax Levy
For the Year Ending December 31, 2026
Levy Scenarios
9/2/2025
Proposed
Actual on 8-4-2026
Purpose FY2025 FY 2026 7.98% Increase 5.97% Increase 4.00% Increase
General Operations
General Fund 15,321,075 17,566,186 17,351,186 17,006,186 16,651,186
Capital Levy 445,000 302,500 262,500 262,500 262,500
Arts Center 380,000 400,000 400,000 330,000 280,000
Pavilion Fund 448,500 431,000 431,000 431,000 431,000
Equipment Replacement 180,000 44,000 - - -
Permanent Improvement 50,000 50,000 - - -
Parking 75,000 100,000 100,000 100,000 100,000
Total General Operations 16,899,575 18,893,686 18,544,686 18,129,686 17,724,686
Debt Levy 3,748,530 3,750,127 3,750,127 3,750,127 3,750,127
Total Levy 20,648,105 22,643,813 22,294,813 21,879,813 21,474,813
Percentage Increase 4.92%9.67%7.98%5.97%4.00%
Proposed
Actual on 8-4-2026
Purpose FY2025 FY 2026 7.98% Increase 5.97% Increase 4.00% Increase
City Taxes 2,260$ 2,464$ 2,422$ 2,372$ 2,323$
Dollar Increase 69$ 204$ 162$ 112$ 63$
Percentage Increase 3.15%9.03%7.17%4.96%2.79%
Proposed on 9/2/2024 - FY2026
Proposed on 9/2/2024 - FY2026
Preliminary Tax Calculation for a Median Value Home - $376,200