Memo- 2012 Budget- Special Revenue FundsCITY OF HOPKINS FINANCE DEPARTMENT
MEMORANDUM
Date: September 9, 2011
To: Mayor & City Council
From: Christine Harkess, Finance Director
Subject: 2012 Budget - Special Revenue Funds
At the September 130' work session we will review the following Special Revenue Fund Budgets
in this order:
• Depot Coffee House
• Arts Center
• Chemical Assessment
• Economic Development
• E-911 Service Fee
• Housing Rehab
• Parking
• Communications
Jo Clare Hartsig, Depot Resource Coordinator, Ted Duepner, Teen Coordinator and teens will be
present to discuss the Depot Coffee House the activities they are involved in and some of the
budget challenges they are facing. Jo Clare has prepared a budget narrative and included an
article from the Star Tribune both of which are included.
Amanda Birnstengel, Arts Center Director will be present for the Arts Center budget discussion
and has included a budget narrative in this packet.
We are proposing an increase in the quarterly and annual parking permits and an analysis of rates
has been included for your review.
BUDGET DISCUSSION - 9/13/2011
2011 2012
Budget Budget
Depot Coffee House Fund
Total Revenues 122,900 120,000
Total Expenditures 122,867 120,175
Net Use of Fund Balance 33 (175)
Fund Balance 9/9/2011 13,403
Comments
Revenues
• Depot applies for grants each year to supplement the levy for lease that is received from the school.
• Main income is levy for lease, grants and cover charges
• Budgeted $25,000 in grants for 2012 - this is a reduction from the 2011 budget as grants have become harder to get.
• Budgeted $10,000 income from County - Three Rivers possible support
• Budgeted for $15,000 in miscellaneous income - partnership participation???
• Joint Rec fee proposed for 2012
Expenditures
• Part-time personnel hours are adjusted if grants are not received to cover this position
• Many lines items have been adjusted as Depot works to maintain a balanced budget
• Solar panels reduce electric bill and balance is paid by Depot Express Coffee Service
• Capital items - sound/video technology to be able to record performances (based on initial success of MRAC grant)
• City support of rec programming totals $205,098 for 2012
• City support of senior programming totals $260,765 for 2012
• Currently there is very limited city support for teen programming, primarily the skate park ($7,063)
Depot Finance/Budget Report for Hopkins City Council
September 2011
Prepared by Jo Clare Hartsig, Depot Resource Coordinator
Depot Use: Thriving Program/Growing Business/Popular Trailhead
Over the past 13 years the Depot has provided a safe and welcoming place for our community's
youth to gather. For the past five or so years with dedicated youth staffing, there has been steady
growth. Programming has become stronger and more well -attended and the youth development
focus has resulted in some wonderful community -wide projects (Hip Hop Residency in 2009,
Puppet Project in 2010 Raspberry Parade, and 2011 Solar Power Educational Project). Last year
there were over 7,000 "attendees" just for Depot evening events, held at least twice a week,
throughout the year. Each evening's activities are managed by a team of Depot youth volunteers.
Add to that the daily Depot Express coffee shop customers and throngs of trail users on a good
weather weekend, and it is clear what a strong presence the Depot has become. In addition to
regular meetings of the Youth Board, there is a group of Depot Partner representatives who
provide institutional insight and support for staff and programs during monthly meetings and as
needed in between.
Current Challenges
Structure does not lend itself to typical fund-raising activities - The Depot student Board,
while amazing and especially energized these past few years, is not the best structure for
building a big or deep donor base. They contribute work hours that keep the place running
for youth events. Ted has taught everyone that "every Friday (or lately Wednesday, too) is a
fund-raiser". The result has been an increase from $4,000 to $10,000 in cover charges
income since 2008. They also help represent the Depot in various settings. Students would
be willing to participate in a large fund-raising event but not a constant stream of fund-raisers
a la school band or teams.
2. Every entity at the Depot benefits greatly by being part of the City, fiscally, geographically,
and personnel -wise. However, the Depot does not have 501(c)3 status which limits fund-
raising. Give MN is a case in point.
3. Funding landscape has shifted considerably over the last three years. Large foundations are
generating less income and some are limiting their largesse to emergency needs, food,
housing, etc. Although the school district has renewed Levy support for the next five years,
there are no guarantees that other funders will be able to support the Depot for consecutive
years.
4. The Depot Express has some benefits to the youth program but not (yet!) in the form of
income. Original intentions of the relationship of the business to the youth project has
evolved in 13 years to the point where the stand alone business allows youth staff to run the
counter during programming hours for financial benefit. There is a great deal of
collaboration around building use, improvements, and equipment procurement. Having full-
time business hours has made a huge difference in the DE bottom line and has helped make
the Depot a community gathering place for all ages. Youth program operating expenses have
decreased in 2011 because the DE is paying a larger share of utilities and equipment repair
and maintenance. As the business becomes more successful, this trend will continue.
Responses to Challenges
1. Establish Depot Youth Foundation - Jo Clare is working with a pro Bono attorney at Dorsey
and Whitney (through a Board member's parents) to set up a separate 50103. There will be
some filing expenses and waiting period, but it will launch the Depot into the funding board
world and bring some more community leaders to the table as Foundation board members
2. Depot Partner Boe Carlson is exploring the possibility that Three Rivers consider some
ongoing financial support for the building as it is the location of trailhead amenities.
Carlson School of Management "Sapphire Group" has selected the Depot for their 2011-2012
project and will provide pro bono marketing expertise to help improve visibility and secure
new funding sources.
4. The Depot Youth will look to more ways to generate income from "youth base" - MRAC
grant has just been submitted for audio recording equipment to be able to offer inexpensive
recording option for local performers during youth programs. Possible annual "Depot
Tracks" CD or mp3. Plans for shirt design project as part of marketing class at HHS, several
of which will be produced for sale to support Depot Youth Project.
5. The Depot's biggest expense and one of the biggest positive statements made about the
importance of youth work, is that there is a full-time Youth Project Coordinator. Because of
looming budget shortfalls, Ted has decreased his time to 30 hours a week to better reflect the
program's needs. It is hoped that this is temporary and can be changed when financial
stability returns. Ted will retain health care and other benefits at the reduced schedule per
City of Hopkins policy. Jo Clare works on a per hour basis and is careful of time she submits.
Staff has already cut back on line items over which they have control.
The Future?
A number of other non -profits and youth -oriented programs are having the same kinds of
financial struggles as the Depot given the flat economy and shift in funding priorities for some
traditional income sources. The Depot came into being because of community need and people
willing to work hard to make it all happen. The City of Hopkins, like many of the surrounding
communities does a great job serving the needs of young families, elementary/middle school-age
children, and elders. Yet, there is a gap in programs and (safe, chemical -free) places for high
school aged youth. The Depot has consistently been a "homing" place for students for 13 years.
It is the staff and students' hope that the wider community will help us respond in short-term and
more systemic ways in order to sustain the Depot into the future.
StarTribuneocom
With focused giving, who gets left out?
As foundations and companies such as
Target focus on specific issues, like its
recent $500 million commitment to
literacy, others will go unfunded.
By JEAN HOPFENSPERGER, Star Tribune
Last update: October 1, 2010 - 11:31 PM
Tony Wagner's attention was piqued when he heard
that the Target Corp. was directing a whopping $500
million to childhood literacy. The president of a
network of Minneapolis community centers, Wagner
worries about the growing trend toward niche
philanthropy.
In recent years, at least a half-dozen Minnesota
foundations have redirected nearly a half -billion
dollars to specific issues, typically early literacy,
education and basic needs. So has the Twin Cities
United Way. The goal is to make a measurable impact
on a major social ill, foundations say, instead of
spreading money more thinly across different
community needs.
Nothing wrong with that, said Wagner, president of
Pillsbury United Communities. But what about the i
ssues not on today's A -list: after-school programs,
teen services, programs to combat child abuse,
mental health -- or sustained help for struggling
parents?
"We're all trying to decide which issue we can work
A.J., ;� em cn+
f
JGET THE LATEST NEWS,
r.,r
on," Wagner said. "If you do more, you run the risk of
not being paid -- or not being in compliance with a
specific contract."
Target's announcement last week that it would focus
corporate funding on literacy programs for the next
five years reflects the growing interest in "strategic
philanthropy," said Bill King, president of the
Minnesota Council on Foundations.
Under increasing pressure to produce measurable
results from the billions of dollars they pour into the
arts, human services, housing and beyond,
foundations are looking at root causes of social
problems, he said.
The Bush Foundation, which gives away about $36
million a year, took the leap several years ago,
scrapping its general funding in favor of teacher
training, leadership development and Indian tribal
government -building. Most recently, the Jay and
Rose Phillips Foundation directed its $9 million in
annual grants to just education, employment and
housing.
Other foundations that have tightened their lens
include the Northwest Area, Travelers and Otto
Bremer foundations, said King. The Twin Cities
United Way has created new impact areas and shifted
a portion of its dollars to them.
In Target's case, it's the company -- not the
foundation -- that is redirecting its giving. Over the
next five years, it will donate roughly $100 million a
year to early literacy. The company donates 5
,lar. THE JUDDS THE LAST ENCORE TOUR
TUESDAY, NOVEMBER 30
ON SALE NOW IAyWc LAKE'
CA51NO • HOTEL
av,,,aOpemdamts,,n,opmWd.,,,,,d+so,.,ca,rAl) mysticlake.corn
-1-
Print Powered By . d FormatDynamics_
StarTribune.com
percent of its income to charity, and the literacy
program will consume the lion's share of that.
Currently, that money is divided among social
services, arts, education, emergency disaster relief
and more. Target spokesman Joshua Thomas said he
didn't know which programs would be cut because
the literacy program won't consume all of Target's
cash donations. Those donations amounted to $133
million last year.
Target chose to focus on early literacy because it felt
that its longstanding commitment to K-12 education
was too broad, Thomas said. The $500 million will
finance a new Twin Cities -based reading center with
an online national component, existing Target
educational programs such as Target School Library
Makeovers and new grants in Target communities.
Nonprofits wary
Steve Lapinski, executive director of the Washburn
Child Guidance Center in Minneapolis, watches the
funding shifts with mixed reaction. On one hand,
his center might be eligible for a new Target grant
if it can cast its services as "preparing
disadvantaged young children for the classroom."
In another era, that might be called "helping
stabilize children with severe emotional and
behavioral disorders."
On the other hand, the center already has lost
funding from the Bush Foundation and will do the
same with the Phillips Foundation, said Lapinski,
who believes children's mental health is a critical
Advertisement
community issue. The funding boxes that
nonprofits must squeeze into don't reflect the
complex nature of social problems, he said.
Molly Greenman, president of the Family
Partnership (formerly Family and Children's
Services) said the shifting missions of foundations
make it a lot harder for organizations such as hers
to fund "a whole program."
Wagner, meanwhile, is curious why so many
groups are focusing on early education -- Target,
McKnight, United Way, not to mention the public s
chool system. The same children who learn to
read by third grade may live in unstable homes,
have no safe place to go after school, and are at
risk of joining gangs as teens. Where's the priority
on older kids? he asked.
"I call it the tyranny of the urgent," said Steve
Morse, executive director of the Minnesota
Environmental Partnership, which closed four field
offices this year. "If we don't take a long-term
perspective, we'll have problems down the road."
Foundations respond
Peter Hutchinson, president of the Bush
Foundation, said creating strategic goals forces
funders like him to be accountable. Pouring
millions of dollars into a specific cause and
forging a network of community partners to
achieve it blasts the issue into the public spotlight,
he said, and creates far more leverage than a
smaller grant.
Send flowers for any occasion f 4''
BouSet
9"'_1 from +sihW
:r ; Order ONLY at
proflower&6om/happy
Y Prod lowers' or call 1-877-888-0688
-2-
Print Powered By For mtDynamic_s
StarTribune.com
"It puts pressure on you to deliver," said
Hutchinson, "whereas in the traditional style the
only pressure is to get money out the door."
King notes that in the case of corporate giving, the
advantage of having one major philanthropic
mission is that it can be a rallying point not just for
cash donations, but for company employees' time,
talent and volunteerism.
The McKnight Foundation has taken a middle path.
It has a $100 million, five-year climate change
initiative, for example, but it has maintained
funding for the arts, social services, early learning
and more, said Neil Cuthbert, vice president of
programs at McKnight.
Cuthbert sees the advantage to both approaches.
Focused spending allows foundations to better
show results from their investments.
But he understands the concerns of some
nonprofits.
"It's a really difficult equation," he said.
Jean Hopfensperger • 612-673-4511
Advertisement
Point your
i mobile browser to
http.//sta rtribune.com
Send flowers for any occasion � 'A
Send
BouSet
from 1999,
+S/n �.
K +r ; Order ONLY at
proflowers.com/happy
r roF lowers or call 1-877-888-0688
-3-
Print Powered By d Forma Dynamics
2011 2012
Budget Budget
Arts Center Fund
Total Revenues 795,212 781,247
Total Expenditures 794,943 780,841
Net Increase in Fund Balance 269 406
Fund Balance 9/9/2011 (1,122,680)
Comments
• Cash balance available ($819,325)
• LGA eliminated
• Increase in rentals due to rate increase and active sales effort
• Fund raisers - Art Fair continues to grow and budget includes on additional fund raiser
• Copier lease now part of operational costs
• Significantly reduced many expenses including travel, equipment rentals, advertising
• See attached narrative for additional budget information
Comments
• HazMat program under Homeland Security Dept of State of MN. We are one of seven teams in MN.
• $45,000 represents the compensation funding to run the dept. This has not changed since the program began in 1995.
• Fire Dept applies for additional grants under Homeland Security to supplement the budget and they have been fairly successful getting
at least one additional grant of $55-75,000 per year.
• Reimbursement based grant - we spend the funds, then get reimbursed.
Economic Development Fund
Total Revenues 148,600 188,500 Tax levy was increased for 2011
Total Expenditures 300,709 269,964
Net Use of Fund Balance (152,109) (81,464)
Fund Balance 9/9/2011 2,603,595 includes $1,521,965 in property held for resale
Available Cash 9/9/2011 54,541
Comments
• This department funds the economic development activities of the city.
• Available cash has been used to purchase property for development
- 525 Mainstreet $697,098
-- Park Nicollet Site $824,867
- Since 2009 we have incurred $11,150 in property related expenses
• Arts Center has an outstanding $300,000 loan to this fund.
• ED fund continues to support the Arts Center with a $61,000 annual transfer
E-911 Service Fee We are required to account for these funds in a separate
Total Revenues 24,960 fund per state statutes.
Total Expenditures - 24,860
Net Use of Fund Balance 100
Fund Balance 9/9/2011 16,594
Comments
• State funds from surcharge on phone bills
• Funds are to support E-911 program within the General Fund and are transferred periodically
2011
2012
Budget
Budget
Chemical Assessment Fund
Total Revenues
45,000
45,000
Total Expenditures
45,000
45,000
Net Use of Fund Balance
-
-
Fund Balance 9/9/2011
(94,507)
Comments
• HazMat program under Homeland Security Dept of State of MN. We are one of seven teams in MN.
• $45,000 represents the compensation funding to run the dept. This has not changed since the program began in 1995.
• Fire Dept applies for additional grants under Homeland Security to supplement the budget and they have been fairly successful getting
at least one additional grant of $55-75,000 per year.
• Reimbursement based grant - we spend the funds, then get reimbursed.
Economic Development Fund
Total Revenues 148,600 188,500 Tax levy was increased for 2011
Total Expenditures 300,709 269,964
Net Use of Fund Balance (152,109) (81,464)
Fund Balance 9/9/2011 2,603,595 includes $1,521,965 in property held for resale
Available Cash 9/9/2011 54,541
Comments
• This department funds the economic development activities of the city.
• Available cash has been used to purchase property for development
- 525 Mainstreet $697,098
-- Park Nicollet Site $824,867
- Since 2009 we have incurred $11,150 in property related expenses
• Arts Center has an outstanding $300,000 loan to this fund.
• ED fund continues to support the Arts Center with a $61,000 annual transfer
E-911 Service Fee We are required to account for these funds in a separate
Total Revenues 24,960 fund per state statutes.
Total Expenditures - 24,860
Net Use of Fund Balance 100
Fund Balance 9/9/2011 16,594
Comments
• State funds from surcharge on phone bills
• Funds are to support E-911 program within the General Fund and are transferred periodically
Arts Center Budget Report for Hopkins City Council
September 2011
Prepared by Amanda Birnstengel, Arts Center Director
This is an extremely aggressive attempt to make up the lost $50,000 LGA and will take a lot of effort to
execute.
Here are some bullet points on what I am projecting to get it to balance.
--Increases of revenue
• Substantial increases in rentals (Only obtainable by actively marketing to corporate and other
clients)
• Increases in Sponsorships (Friends will be focusing on this, as would I and the Sales and
Development Manager)
• Add events with fundraising cast- (Friends are planning a one day fall arts kick off, we will do a
Valentine's Day floral event, and looking at other new ideas for events)
• Increases in membership
• Increase in % of tickets sold to concerts to reflect social media and other marketing efforts. This is
definitely a stretch goal, as it exceeds what has been done in the past substantially.
--Cutting costs
• Historically, concerts cost us net money to produce, especially the Take Five Tuesdays as the
audience develops. However, they are core to the mission. I don't want to eliminate the Take 5
Tuesday series at this time because it is crucial to developing the younger audience and vital to
the performing arts grants that we get. However, we will eliminate two concerts overall and will
be replacing with events that will be geared more toward fundraising (see above). Susan is also
mindful of the cost of acts we book for next year (smaller groups rather than large, etc) and
continue to pare down expenses as much as possible without sacrificing artistic quality.
• Substantial reduction in paid advertising while increasing other means of promotion- such as
continuing Social Media, door-to-door poster distribution on Mainstreet, possible creation of a
volunteer "street team" to promote the Center, seeking coverage on Twin Cities Live, utilizing all
city marketing venues, online calendars, partnering strategically, etc.
• Cutting operational costs even closer to the bone- no replacement of chairs, vacuums, etc, core
maintenance only (I was hoping to replace blinds and AN), dropping Rotary membership, etc.
We did actively try to address the loss of LGA funds by applying for operating funds from the Minnesota
State Arts Board. (four-year operating grant) However, we were just informed last week that we will not be
funded, for failing to meet one of the five criteria for support -- proven financial stability. We have a
complex, tiered and confusing financial structure with the Friends, the Center and the City which was not
easy for the panelists to grasp. However, the largest stumbling block was the balance sheet for the
Center as included in the last City audit which shows total liabilities of $1,003,574 which includes
$966,967 in interfund liabilities - $666,967 for negative cash at YE owed to the General Fund and
$300,000 owed to the Economic Development Fund. If we can ever find a way to write that down, it may
help.
2011 2012
Budget Budget
Housing Rehab Special Revenue Fund
Total Revenues
3,500 1,000
Total Expenditures
96,334 101,902
Net Use of Fund Balance
(92,834) (100,902)
Fund Balance 9/9/2011
524,375
Comments
• This fund supports the Community Development Coordinator. We are currently using fund balance to pay this position. At the current
rate we will use up our fund balance in 5 years. There is no income stream for this fund.
• Funds in this fund came from repaid CDBG loan funds that had no restriction on them. In 1992 (or thereabouts) HUD made a change
in the program and repaid CDBG funds could no longer be used for admin costs and are now returned to Hennepin County to be re -
loaned. We were able to retain the funds that had been repaid and now use them to fund the Community Development Coordinator
positon along with our Housing efforts.
Parking Fund
Total Revenues
82,000
Total Expenditures
115,293
Net Use of Fund Balance
(33,293)
Fund Balance 9/9/2011
219,497
88,500
88,130 2011 included $30,000 for capital items - ramp deck sealing
370
Comments
• This fund supports the operation of the parking ramp and lots, the enforcement of our parking ordinance and the capital improvements
of the parking ramp.
• Parking permits sales increased for 2011 due to additional users of the ramp.
• If there is no capital expenditures and with the increase in parking rates the fund can support the operation of the parking facilities but
not capital requirements. Therefore we need to continue to provide for ongoing maintenance type capital improvements.
• Capital - none for 2012
• Rate increase is proposed for 2012 for quarterly and annual permits only.
See attached for analysis
Communications Fund
Total Revenues
204,000 201,500
Total Expenditures
227,874 210,026
Net Increase in Fund Balance
(23,874) (8,526)
Fund Balance 9/9/2011
394,129
Comments
• Includes $20,000 for city wide survey - continuation of 2011 budget item
• Included in this budget is $9,600 for web streaming of council meetings
• Transfer to Art Center of $86,920 continues
• Capital improvements to the Council Chambers is completed. No capital items are in this budget.
CITY OF HOPKINS, MN
ANALYSIS OF PROPOSED PARKING PERMIT FEE INCREASES
Year
2012
Daily
$ 3.00
Monthly
$ 25.00
Quarterly
$ 60.00
Annual
$200.00
Daily
0.00%
Percent Increase
Mnthly Qtly
0.00% 9.09%
Annual
8.11%-
+ 5.00/qtr
+ 15.00/yr
= $1.66/mo
= $1.25/ mo
2011
$ 3.00
$
25.00
$ 55.00
$185.00
0.00%
25.00%
17.02%
15.63%
2009
$ 3.00
$
20.00
$ 47.00
$160.00
0.00%
17.65%
9.30%
6.67%
2005
$ 3.00
$
17.00
$ 43.00
$150.00
50.00%
13.33%
7.50%
7.14%
2004
$ 2.00
$
15.00
$ 40.00
$140.00
2003
$ 2.00
$
15.00
$ 38.00
$130.00
2001
$ 2.00
$
15.00
$ 35.00
$120.00
1997
$ 2.00
$
15.00
$ 32.00
$110.00
1996
$ 1.50
$
14.00
$ 30.00
$105.00
1995
$ 1.00
$
13.00
$ 28.00
$100.00
1994
$ 1.00
$
12.00
$ 26.75
$ 96.00
1992
$ 1.00
$
11.50
$ 25.50
$ 92.00