Memo- 2010 Budget HearingCITY OF HOPKINS I FINANCE DEPARTMENT
MEMORANDUM
Date: November 24, 2009
To: Mayor & City Council
From: Christine Harkess, Finance Director
Subject: 2010 Budget Hearing
The December 1, 2009 council meeting will include discussion of the city budget and will allow
the public to comment. This is a change from past years when a formal budget hearing was
required. An announcement was made at the September 1 St meeting setting December 1 st at the
date we would accept public comments on the 2010 budget. This information was forwarded to
Hennepin County to include on the parcel specific notices that were mailed in mid November.
For the budget hearing we have established the following agenda:
1. Show Video on Property Taxes 101
2. Power point presentation
a. The power point is undergoing a few changes based on council input from the
November 24 work session and will be handed out at the meeting.
3. Questions from council
4. Questions from public
5. Close the budget hearing
ADMINISTRATIVE SERVICES:
OFFICE OF THE CITY MANAGER
MEMORANDUM
TO: Honorable Mayor and Members of the Council
FROM: Rick Getschow, Hopkins City Manager
MEETING DATE: November 24, 2009
SUBJECT: 2010 Budget
Background:
I will be presenting a draft of the budget presentation planned for December 1
that the Council can review at this work session.
The budget hearing will occur on December 1. This will be part of the regular
City Council meeting as a special Truth -In- Taxation meeting is no longer
required.
Final adoption of the budget is planned for December 15.
Public Hearing for the
2010 Levy and Budget
December 1, 2009
a
x - a
# The focus of the hearing is on the
budget and levy, not property valuations
+r Property valuation discussions are held
each spring
Taxation Process
# Preliminary Levy was set in September
*Proposed tax notices mailed
� Public hearing for final proposed levy
and general fund budget.
� Final adoption of budget and levy -set
for December 15thcouncil meeting.
r�
-
How Your Property Taxes
Are Determined
a
p
M
Step 1 — Determine Levy
Total proposed local budget
Less: Non - property tax revenue
Equals: Property tax levy
0
How Your Property Taxes
Are Determined
Step 2 — Determine Tax Capacity of
Individual Properties
Market value of individual property
Multiplied by: State mandated class rate
Equals: Tax capacity of individual
properties
6
How Your Property Taxes
Are Determined
Step 3 - Determine Property Tax Rate
Total tax capacity of all property
Divided by: Total city property tax levy
Equals: Property tax rate for Hopkins
How Your Property Taxes
Are Determined
Step 4 — Calculate Property Taxes
Tax capacity of Your property
Multiplied by: Hopkins property tax rate
Equals: Hopkins portion or your taxes
a`
How Your City and County Property
Taxes Are Determined
Box 1
Box 4
Total I,
I
Assessor's
Proposed Local
Market Value
Budget
minus
x times
Box 2
Box 5
All Non-Property
i State
Tax Revenue
Mandated
IE: State Aids
Class Rates
Fees, Interest Income
equals
= equals
Box 3
Box 6
Property tax
Total
Revenue Needed divided by!
Tax Capacity"
(Levy)
(formerly Assessed
Value)
equals
Box 7
-------------
Property
Tax Rate
("Tax Capacity Rate')
$12,000
$10,000
$8,000
$6,000
$4,000
$2,000
$0
Tax Shift
Tax Capacity Values
■ 2006
❑ 2007
❑ 2008
■ 2009
1:12010
Residential Comm /Indus Apartments
3 K
t
m
ti
Market Values
$1,800,000,000
$1,600,000,000
$1,400,000,000 j
$1,200,000,000
$1,000,000,000
$800,000,000
$600,000,000
$400,000,000
$200,000,000
a 1
$0 --
2002 2003 2004 2005 2006 2007 2008 2009
—�- Residential Apartment Cll - f-Total �,
$1,900
$1,700
f $1,500
$1,300
$1,100
$900
$700
$500
TAX HISTORY ON HOMESTEAD RESIDENTIAL HOME
WITH A CONSTANT VALUE OF $225,000
2003 2004 2005 2006 2007 2008 2009 2010
RESIDENTIAL PROPERTIES
TAX CHANGES FROM 2009
+10.0% -14.9%
0.8% of
homeowners
+20% and over
0.27% of
homeowners
Decrease
32.29% of
+5.0%-9.9%
31.17% of
homeowners
homeowners
w�
+15.0% - 19.9%
0.17% of
homeowners
+0.4%-4.9%
35.3% of
homeowners
r
,.
`.
2010 Proposed Tax Levy
Purpose 2008 2009
General Operations
General Fund $ 7,825,565 $ 8,160,614
Capital Levy 75,000 100,000
$ 7,900,565 $ 8,260,614
Special Levies:
PERA Levy
MVHC Levy
Subtotal Special Levies - Other
Debt Levies:
1999D GO Perm Impr Revolving Bonds
2001 GO Refunding Bonds - Improv Rev
2001 GO Refunding Bonds - Park & Rec
2002B GO Improv Revolving Bonds
2002 HRA Revenue Bonds
2003 HRA Revenue Bonds
2007B GO Improv Revolving Bonds
2007 Capital Improvement Bonds
Subtotal - Debt Levies
11,815
35,500
Subtotal Special Levies
TOTAL LEVIES
Increase over prior year
Percentage Incr (Decr) - Total
$ 11,815 $ 35,500
26,000
150,000
59,000
26,000
130,000
59,000
230,000 225,000
175,000 175,000
642,000 642,000
$ 1,282,000 $ 1,257,000
$ 1,293,815 $ 1,292,500
$ 9,194,380 $ 9,553,114
$ 388,622 $ 358,734
$ 372,571
4.41% 3.90% 3.90%
2010
Net Levy
Proposed
$
8,384,010
$
8,384,010
35,500
239,175
$
274,675
108,000
59,000
200,000
185,000
715,000
$
1,267,000
$
1,541,675
$
9,925,685
Purpose 2008 2009
General Operations
General Fund $ 7,825,565 $ 8,160,614
Capital Levy 75,000 100,000
$ 7,900,565 $ 8,260,614
Special Levies:
PERA Levy
MVHC Levy
Subtotal Special Levies - Other
Debt Levies:
1999D GO Perm Impr Revolving Bonds
2001 GO Refunding Bonds - Improv Rev
2001 GO Refunding Bonds - Park & Rec
2002B GO Improv Revolving Bonds
2002 HRA Revenue Bonds
2003 HRA Revenue Bonds
2007B GO Improv Revolving Bonds
2007 Capital Improvement Bonds
Subtotal - Debt Levies
11,815
35,500
Subtotal Special Levies
TOTAL LEVIES
Increase over prior year
Percentage Incr (Decr) - Total
$ 11,815 $ 35,500
26,000
150,000
59,000
26,000
130,000
59,000
230,000 225,000
175,000 175,000
642,000 642,000
$ 1,282,000 $ 1,257,000
$ 1,293,815 $ 1,292,500
$ 9,194,380 $ 9,553,114
$ 388,622 $ 358,734
$ 372,571
4.41% 3.90% 3.90%
Tax Levy Changes
.
r
General Levy Increase
Special Levy Increase
(For MVHC unallotment)
Debt Levy Increase
Total Levy Change
$123,396
239,175
10.000
$372,571
2010 Proposed
General Fund Budget and Levy
�y
t .
General Fund Budqet
2010 Levv
$9,925,685
$10
This is an decrease
from the 2009 budget
of 0.02 %.
This is an increase
over the current year's
levy of $372,571 or
3.9% and no change
from the preliminary
certified levy.
Expenditure Budget
General Fund
2009
Budget
2010
Budget
Budget %
Incr /(Decr)
City Council $
78,072
$ 73,147
-6.31%
Administrative Services
452,071
433,314
-4.15%
Finance
189,877
190,039
0.09%
Legal
130,625
135,000
3.35%
Municipal Building
308,809
306,284
-0.82%
Receptionist
45,893
46,576
1.49%
Assessing
167
168,065
0.46%
City Clerk
97,819
107,958
10.37%
Inspections
592
599,705
1.14%
Police
4,327,445
4,366,178
0.90%
Fire
810,921
794,517
-2.02%
Public Works
2
2,146,475
0.31%
Recreation
214
197,640
-8.06%
Activity Center
328,409
326,418
-0.61%
Planning & Zoning
101,906
121,687
19.41%
Other Financing Uses
88,520
60,000
- 32.22%
Total Expenditures $10,075,492 $ 10,073,003 -0.02%
General Fund Budget
Impact on Levy
Y.
General Fund Budget Decrease
Funded by levy
Loss of MVHC
Loss of Other Revenues
Total GF Budget Increase
($ 2,289)
362,571
(244,667)
120
($ 2,289)
General Fund Budget
Expenditure Solutions
�
0% wages — Freeze for most employees
� Delayed hiring of vacant positions
� Eliminated non - critical capital items
r� "Every little bit adds up" —small cuts
across all city departments
q
Savings &Efficiencies
*Police Department
e
# Implemented police vehicle fuel monitoring
program to save on fuel costs
* $639,600 in total savings over last 5 years
# $450,000 in grants received to offset program and
capital expenses
# $25,000 in donations received to offset program
expenses
$164,600 savings realized by using local vendors,
omitting capital purchases and reworking cell
phone program
Savings &Efficiencies
*Fire Department
# Daytime rescue standby program
• Responded to over 100 calls since inception of
program
• Frees up police allowing them more street time
• Reduced cost in number of firefighters responding
to rescue calls
g
A �.
* Faster response to medical emergencies
* $10,000 savings in payroll costs
* $2,000 savings in building maintenance costs
Savings & Efficiencies
*Public Works
Refuse containers in CBD allow for servicing with
Rv automated refuse truck — manpower savings
Hall HVAC Upgrade
— replacement of old
City pg p
chiller with efficient rooftop units
Savings of $20,000 /yr — 5 yr payback
In -house Utility Rate Study — savings of $10,000
In-house Pavement Management Inspections
# Savings on annual consultant fees
� Fire Alarm Central Reporting System
+� Fire, boiler &intrusion alarms routed to dispatch
. Savings on annual service contract of $2,500
Savings &Efficiencies
*Public Works — cont.
* HC Sentencing to Service Work Force Program
• Low risk offenders with Co. Supervisor perform litter
control, landscape area maintenance and, grass cutting
• Cost savings of $7 per hour over PW seasonal staff
9
i�
# Diseased Elm Tree Removal
• Combined PW depts. resulting in larger workforce
• Reduced need for contractual services
Savings &Efficiencies
*Other Departments
# Administration
• Since 2005, received over 3,500 hrs donated for clerical
service, a savings of over $20,000 per year
• Assessing contract with Hennepin Co saves $74,000/yr
• Scanning of documents into digital storage
# Planning &Zoning
# Utilizing current staff to do in-house GIS mapping
# Finance
# Implemented mandatory direct deposit for employee
payroll
* Fully integrated finance software
Budget Challenges
* Loss of significant revenue sources
• MVHC
• Inspection revenues
• Decline in investment income
e_
• Health care costs
• PERA rate increase —state mandated
• Inflation
• Energy costs
• Fuel &fuel related projects
• Property &liability insurance
h1 .
x
a -=
5
. r � rry
Long -Range Planning
*Capital Improvement Plan
# Equipment Replacement Plan
Both are 20 year plans for major expenditures
• Focus is on next 5 years
• Allows us to plan for funding of major
projects and equipment purchases
� f �
Looking Ahead
2010 -2011
* Look for additional savings &efficiencies
# Evaluate programs
* Evaluate services
* Evaluate projects
� r �
Revenue Budget
Vk >.:
A
General Fund
2009
Budget
2010
Budget
%
Incr /(Decr)
General Government
$1
$1,137,784
-1.87%
Community Services
1
1
3.79%
Public Safety
5,138,366
5
0.43%
Public Works
2
2
0.31%
Recreation
543
524,058
-3.56%
Other
88,520
60,000
- 32.22%
Total Expenditures $10,075,492 $10,073 -0.02%
0%
%
General Fund — Sources of Reven
im
2002 2003 2004 2005 2006 2007 2008 2009 2010
100%
X,
`.
90%
...
0%
50%
40%
0%
%
General Fund — Sources of Reven
im
2002 2003 2004 2005 2006 2007 2008 2009 2010
k ■ I
Current Levy Proposal
# No change to proposed levy
# City tax on a home valued at
$225,000 increases approximately
3.57% or $38
*Equates to about $3.17 per month
Analysis of Median Valued Home
r 2010 Home Valued at = $225,000
*Assuming constant market value
+ 2009 City Taxes'
# 2010 Proposed City Taxes
$1,064
$1,102
# Increase of $38 from 2009
# 2010 Revised City Taxes
$1,102
# No change from preliminary levy
R� �a k
Property Tax Breakdown
on Home Valued at
$225
*City
*County
*School District
*Special Districts
Total Taxes
$1
$ 958
$ 516
$ 212
This does not include referendum market
value taxes levied by the school district(s)
Where My Taxes Go
Tax Rate Comparison
*Current city tax rate = 47.315%
# TNT 2010 proposed tax = 48-990%
# 2010 final tax rate = 48.990%
* Tax rate increase = 1.675%
Property Tax Levy Changes
Overall Increase in levy
$372,571
*Increased General Levy
*increased Special Levies
$123,396
$249,175
I . 1
f a
$160
$140
$120
$100
$80
$60
$40
$20
Compare the Value
Monthly Costs
Taxes as Compared to Other Services
Cellular Gas Service Electric
Phone Service
Service
Cable N Auto Family Night City Services
Service Insurance Out - Hopkins
Restaurant &
Movie
How much will we pay?
* $92 a month in property taxes for city
services.
� $1- $2 a month in franchise fees.
� $25 a month in refuse &recycling charges
0 $40 for water distribution and sanitary sewer
charges.
f
i
s
{r
>s F
t.
0
• 9 •
What do we get?
x,
• 24 -Hour Police and Fire Protection
• Emergency medical treatment and management services
• Well Maintained Streets, Trails, and Sidewalks
• Refuse and Recycling Services
• Utility Services- Water, Sanitary Sewer and Storm Sewer
• Boulevard Tree and Forestry Program
• Beautiful Parks and Open Space
• High Quality Recreation programs
• Hopkins Activity Center and Hopkins Depot
• Hopkins Center for the Arts
• Community and Economic Development
• Housing Services and Programs
• Building Inspections, Licensing, and Code Enforcement
• Elections
Public Hearing for the
2010 Levy and Budget
December 1, 2009
.sg