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2014 BudgetCITY OF HOPKINS FINANCE DEPARTMENT MEMORANDUM Date: August 8, 2013 To: Mayor & City Council From: Christine Harkess, Finance Director Subject: 2014 Budget Staff has been working to put together a 2014 budget based on the needs of the community and the services they have come to expect. The 2014 budget is prepared with a 2%/1 % salary increase that was approved as part of the 3 -year unionibargaining contracts that cover 2012- 2014. Those contracts call for a 0% increase in 2012, a 2% increase in 2013 and a 2% Jan 2014 and I% July 2014. 2014 Budget Info • The budget as it is currently presented is a 3.46% increase over 2013. • Tax Levy o We are subject to a levy limit in 2014 o We are receiving $289,900 in LGA o The tax levy currently shows a 1.12% increase, all due to debt levies. o The 2012 and 2013 Street debt service levy is partially offset by the increase in franchise fees. o The Equipment Certificates debt levy is NOT offset by equipment charges in 2014 as the fund cannot afford it. The following page lists budget items that impacted the 2014 budget. Attached are the following: 1. 2014 Budget — items impacting the budget 2. 2014 General Fund Budget compared to 2013 3. Breakdown of items comprising the budget increase 4. 2014 Preliminary Tax Levy 5. Worksheet calculating the 2014 levy limit Items that impact the 2014 budget Revenues • The City will once again receive LGA and $289,900 has been budgeted. • City Clerk — revenues from local elections is eliminated for 2014 as it is a general election year. • Inspections — slight adjustments were made to permit revenues and plan review fees. • Police — State grants for specific law enforcement efforts have been awarded so we are appropriately budgeting for them. Court fees have been increasing and once prosecution costs are covered the remaining revenue goes to offset police expense. • Fire — Fire Aid for fire pensions will be increased for 2014. These funds once received are turned over to the Fire Relief Association. • Activity Center — adjusted to reflect actual. Expenditures • General 0 2%/1 % salary increases budgeted. This is pursuant to year 3 of the approved bargaining agreements. o No increase in employer contribution to health care ■ Health care changes are due to employees opting in or out and changing coverage between options such as: single, single + spouse, single + children or family o Health insurance for retirees increased $4,167 from 2013 primarily due to older retirees on the full pay plan as premiums increased 13.3% for 2014. • Administration — salaries and benefits. • Finance — PT salaries added, audit costs, software maintenance costs increased for 2014. • Legal — increased prosecutions decreased legal services. • Municipal building — salaries & benefits. • Receptionist — salaries & benefits • Assessing — Hennepin County assessing contract increased by $3,000. • City Clerk — adjusted budget to account for a national election in 2014 • Inspections — salaries & benefits. • Police o Adjusted line items pertaining to transfer of dispatch as costs are coming in less than anticipated. o Staffing moved between departments • Fire o Increased payment to Relief Association as an offset to increased revenues. o Several line items adjusted to reflect actual expenditure history. • Public Works o Administration — personnel changes. o Streets & Alley's — Adjusted lines items to reflect actual, increased contractual services for new contracts in 2014 for sign monitoring, pave stone work, crack sealing. o Snow Removal — personnel and motor fuels. o Parks — personnel, $15,000 for irrigation contract o Forestry — personnel, $10,000 for Emerald Ash Borer contract. Recreation — Joint recreation was increased by $3,900. o Joint Rec continues to provide $15,000 in support to the Depot. 8/8/2013 Page 2 o Park Service — added FT park attendant staffing at Oakes, Burnes and Valley Parks. • Activity Center — staffing changes, insurance option changes. • Planning & Zoning — salaries & benefits • Community Development — staffing changes • Tuition Reimbursement Program increased by $5,000 due to number of applicants. Other Items of Note: • Of the total 2014 increase of $365,800 the majority or 82.8% is attributed to personnel related items and only 17.2% is related to materials, service and charges. This follows the budget which is 78.2% salaries & benefits. The increase in salaries and benefits is roughly 4% over 2013 taking into consideration the approved salary increase, eligible step increases, requests for additional PT and variances in health insurance elections. • We are still saving over $400,000 with the transfer of dispatch. The actual decrease in expenses happens the year implemented, however if dispatch was still part of our budget, the 2014 budget would be at least $400,000 higher than is currently proposed. Health insurance for retirees after steadily decreasing since 2010, has begun to increase again. Not because more retirees are on the plan but because the premiums for the older retirees who receive 100% of their insurance has increased 13.3%. Of that increase 9.5% was a rate cap and 3.8% was due to health care reform. We have 16 retirees on the post - employment health care plan and along with others who had not maxed out their benefit have resulted in a $4,167 increase in the amount we are paying for retiree health care. We do have two that will age out of the program in 2014. 8/8/2013 Page 3 CITY OF HOPKINS ANALYSIS OF GENERAL FUND REVENUE BUDGET Finance 400 Current Services 449 Miscellaneous 5,750 4,800 10,150 4,800 Increase 269,180 Total Finance 10,550 (Decrease) 4,400 2013 2014 from % Department Budget Budget 2013 Budget Incr/(Decr) Unallocated 118,000 3,000 2.61 Property Taxes - levy 8,869,774 8,869,774 - Property Taxes - delinq 45,000 45,000 - Penalties 8,000 8,000 - Miscellaneous Taxes 30,000 30,000 - Fiscal Disparities (incl w/taxes) - - - Local Government Aid - 289,900 289,900 PERA Aid 20,510 20,510 - Interest Earnings 15,000 15,000 - Franchise Fees 290,000 290,000 - Miscellaneous - 100 100 Total Unallocated 9,278,284 9,568,284 290,000 Finance 400 Current Services 449 Miscellaneous 5,750 4,800 10,150 4,800 4,400 - 269,180 Total Finance 10,550 14,950 4,400 41.71 32,000 32,000 - Charges for Service 39,850 41,850 2,000 360 Le al - Court Fines 115,000 118,000 3,000 2.61 345 POST Reimbursement 9,000 9,000 - 400 Assessin - Charges for Service 1,500 2,000 500 33.33% City Clerk 312 Licenses 364 Administrative Citations 400 Charges for Service 5,000 - 5,000 5,000 - - - - (5,000) - Total City Clerk 10,000 5,000 (5,000) -50.00% Inspections Police 318 Licenses and permits 269,180 272,480 3,300 364 Administrative Citations 8,000 8,000 Plan Check Fees 32,000 32,000 - Charges for Service 39,850 41,850 2,000 Total Inspections 349,030 354,330 5,300 1.52% Police 330 Federal Grant 82,000 82,000 - 344 State Aid 177,000 177,000 - 345 State Grants 10,000 15,000 5,000 345 POST Reimbursement 9,000 9,000 - County Grants - - 313 Licenses 96,000 96,000 - 360 Court Fines 20,000 50,000 30,000 Forfeitures - - - Penalties 1,000 1,000 - 400 Charges for Services 42,000 48,000 6,000 449 Other Miscellaneous 1,000 - (1,000) 440 Contributions 500 1,500 1,000 Total Police 438,500 479,500 41,000 9.35% Increase (Decrease) 2013 2014 from % Department Budget Budget 2013 Budget Incr/(Decr) Planning & Zoning 320 Permits 1,000 1,000 - 387 Variances 1,500 2,000 500 400 Charges for Service - Total Planning & Zoning 2,500 3,000 500 20.00% 4491Community Development - Misc 88,900 88,300 (600) Total Revenues Fire 10,946,129 365,800 318 Licenses 3,500 3,500 - 320 Permits - - - 384 Federal Grant - - - 344 State Aid 70,000 90,000 20,000 449 County Grants - - - 450 Administrative Citations - - - 400 Current Service 3,000 3,000 - 800 Donations (300) - Total Activity Center Miscellaneous 69,500 - Total Fire 76,500 96,500 20,000 26.14% Planning & Zoning 320 Permits 1,000 1,000 - 387 Variances 1,500 2,000 500 400 Charges for Service - Total Planning & Zoning 2,500 3,000 500 20.00% 4491Community Development - Misc 88,900 88,300 (600) Total Revenues Public Works 10,946,129 365,800 329 Licenses & Permits 9,415 9,415 - 344 State Aid 130,000 130,000 - 384 Equipment Use Charge - - - 400 Charges for Service 2,750 2,750 - 449 Miscellaneous Revenue 4,400 4,600 200 450 Sale of Fixed Assets - - - 3,500 Total Public Works 146,565 146,765 200 Planning & Zoning 320 Permits 1,000 1,000 - 387 Variances 1,500 2,000 500 400 Charges for Service - Total Planning & Zoning 2,500 3,000 500 20.00% 4491Community Development - Misc 88,900 88,300 (600) Total Revenues Activity Center 10,946,129 365,800 3.46% 380 Rent 26,000 26,000 - 400 Charges for Services 15,000 25,000 10,000 404 Memberships 8,500 8,500 - 440 Contributions 10,700 6,000 (4,700) 445 Fundraising 2,000 3,500 1,500 449 Other Miscellaneous 800 500 (300) Total Activity Center 63,000 69,500 6,500 10.32% Planning & Zoning 320 Permits 1,000 1,000 - 387 Variances 1,500 2,000 500 400 Charges for Service - Total Planning & Zoning 2,500 3,000 500 20.00% 4491Community Development - Misc 88,900 88,300 (600) Total Revenues 10,580,329 10,946,129 365,800 3.46% Total Expenditures 10,580,329 10,946,129 365,800 3.46% 2014 Revenue Shortfall - LEVY NEEDED (::::D 2013 Levy - inicudes special levies for GF 8,829,591 8,869,774 Total Estimated TAX LEVY - Levy Limits 10,946,129 Non general levy revenues 19,815,903 Total Revenues CITY OF HOPKINS ANALYSIS OF GENERAL FUND EXPENDITURE BUDGET Department 2013 Budget 2014 Budget Increase (Decrease) from 2013 Budget % Incr/(Decr) JCity Council 68,967 69,872 905 1.31% 36,675 1,520 Heating & Plumbing Inspections 88,952 91,054 Administrative Services Housing Inspections 157,595 165,788 8,193 Administration 179,060 192,685 13,625 Vacant Property Management Personnel 46,768 40,599 (6,169) 627,130 Wellness 2,000 2,000 - 267,563 Information Services 254,988 261,305 6,317 (16,184) Total Administrative Services 482,816 496,589 13,773 2.85% Finance Debt Management - - - General Accounting 163,587 185,203 21,616 Payroll 45,609 48,516 2,907 TIF Administration - - - Utility Billing 5,000 9,400 4,400 Total Finance 214,196 243,119 28,923 13.50% Le al 142,000 143,000 1,000 0.70% Munici al Building 313,998 317,414 3,416 1.09% Rece tionist 47,048 45,933 (1,115) -2.37% lAssessing 177,187 183,607 6,420 3.62% City Clerk City Clerk 51,782 54,462 2,680 Elections 45,582 60,808 15,226 Total City Clerk 97,364 115,270 17,906 18.397/6 Inspections 527,437 514,641 (12,796) Building Code Inspections 261,854 267,051 5,197 Fire Inspections 35,155 36,675 1,520 Heating & Plumbing Inspections 88,952 91,054 2,102 Housing Inspections 157,595 165,788 8,193 Misc. Community Inspections 78,908 81,265 2,357 Vacant Property Management 4,666 4,719 53 Total inspections 627,130 646,552 19,422 3.10% Police Police Administration 527,437 514,641 (12,796) Patrol 2,627,237 2,765,887 138,650 SWAT Team 73,611 69,378 (4,233) Reserves 15,162 15,552 390 Investigations 615,083 547,748 (67,335) Drug Task Force 114,468 121,830 7,362 Pawn Shop 3,335 3,530 195 Community Services Building 107,332 107,394 62 Support Services (Records) 244,501 267,563 23,062 Systems Management 65,855 49,671 (16,184) Total Police 4,394,021 4,463,194 69,173 1.57% Department 2013 Budget 2014 Budget (Decrease) from 2013 Budget % Incr/(Decr) Fire Fire Department 912,343 952,337 39,994 Emergency Preparedness 3,965 3,128 (837) Total Fire 916,308 955,465 39,157 4.27% Public Works PW Building 34,988 33,631 (1,357) Equipment Services 85,096 98,887 13,791 Administration 38,345 41,280 2,935 Engineering 132,003 140,861 8,858 Street & Alleys 878,399 912,716 34,317 Snow & Ice Removal 182,623 205,553 22,930 Parks 680,774 698,934 18,160 Forrestry 233,774 252,282 18,508 Total Public Works 2,266,002 2,384,144 118,142 5.21% IT Recreation Playground 21,417 21,992 575 Ice Rink 13,113 15,295 2,182 Park Service 12,454 36,975 24,521 Joint Recreation 155,000 158,900 3,900 Skate Park 7,165 7,394 229 Total Recreation 209,149 240,556 31,407 15.02% Activity Center Act Ctr - Community Use 276,859 289,497 12,638 Act Ctr- Maintenance 58,475 56,276 (2,199) Total Activity Center 335,334 345,773 10,439 3.11% IPlanning & Zoning 129,683 132,191 2,508 1.93% [Community Development 88,926 88,250 (676) -0.76% Tuition Reimbursement 10,200 15,200 5,000 49.02% lContingency 50,000 50,000 - 0.00% Total Expenditures 10,570,329 10,936,129 365,800 3.46% Other Financing Uses Transfers Out 10,000 10,000 - Total Other Financing Uses 10,000 10,000 - 0.00% lGrand Total Expenditures 10,580,329 10,946,129 365,800 ( 3.46%1) Budqet Incr in 2013 0.23% 2014 Budget Analysis of Increase in Budget from 2013 Increase in Expenditures from 2013 365,800 Increase in personnel costs (302,959) Increases related to costs other than personnel 62,841 82.82% Equipment Charges 25,150 Assessing Contract 4,000 General Election 15,000 PW Forrestry - Irrigation Contract 10,000 PW - Safety Training 5,000 Miscellanous items 3,691 Total 62,841 17.18% Personnel Cost Detail Increase in Personnel Costs 302,959 FT Salaries (180,154) PT Salaries (57,856) Health Insurance (23,359) PERA & FICA (31,130) Other personnel related costs 10,460 ie - Workers Comp, OT etc CITY OF HOPKINS ANALYSIS OF TAX LEVY 07/23/2013 Incr from Purpose 2012 2013 2014 2013 Subject to Levy Limits General Fund $ 8,784,091 $ 8,834,274 $ 8,869,774 Capital Levy Total Levy subject to Limits Special Levies: PERA Levy Subtotal - Special Levies Other Debt Levies: 2003 HRA Revenue Bonds 2007B GO Improv Revolving Bonds 2007A Capital Improvement Bonds 2010A GO Improvement Bonds 2010B Refunding (20026 Improv Bds) 2012A GO CIP Bonds 2012B GO Bonds Gas & Elec Franchise Fees - levy offset 2012B Equipment Certificates Fees used to offset levy 2013B GO Bonds Gas & Elec Franchise Fees - levy offset Subtotal - Debt Levies Total - Special Levies TOTAL LEVIES Increase over prior year 125,000 125,000 125,000 $ 8,909,091 $ 8,959,274 $ 8,994,774 0.40% 35,500 35,500 35,500 35,500 220,000 - 184,500 186,520 765,900 763,800 77,000 77,000 59,000 - 220,000 166,737 (107,657) 64,370 (64,370) not a special levy for 2014 188,093 2017 766,110 2022 911,110 levy requirement 79,175 025 145,000 less - Enterprise Fund Leases 766,110 220,000 2023 140,710 2027 (85,620) 97,965 2022 90,028 2028 (75,000) 1,306,400 1,306,400 1,421,461 8.81% $ 1,341,900 $ 1,341,900 $ 1,421,461 5.93% $ 10,250,991 $ 10,301,174 $ 10,416,235 1.12% $ 112,577 $ 50,183 $ 115,061 Percentage Incr (Decr) - Total 1.11% 0.49% 1.12% ESTIMATED 2014 LEVY UNDER NEW LEVY LIMITS Step 1 Calculate allowable special levies for taxes payable 2012 2013 Step 2 Calculate your initial levy limit base 2012 Certified Levy Plus 2012 LGA Minus 2012 levy that would have been special levies 2012 Total 2013 Certified Levy Plus 2013 LGA Minus 2013 levy that would have been special levies 2013 Total Initial levy limit base (greater of 2012 or 2013) Step 3 Calculate your final levy limit base Final Levy limit base (initial levy limit base * 1.03) Step 4 Calculate your levy limit 2014 LGA Levy Limit (final levy limit base minus 2014 LGA but not less than the greater of 2012 or 2013 certified levy) No city's final levy limit can be lower than the greater of 2012 or 2013 certified net tax capacity levels. Step 5 In addition to the amount of the levy limit, a city can levy amounts needed in 2014 for special levies. These amounts are above and beyond the limited portion of the city's levy. 1,341,900 1,341,900 10,250,991 (1,306,400) 8,944,591 10,301,174 (1,306,400) 8,994,774 8,994,774 9,264,617 (289,907) 8,974,710 8,994,774 07/22/2013 bonded indebtedness only bonded indebtedness only