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2014 BudgetCITY OF HOPKINS FINANCE DEPARTMENT MEMORANDUM Date: August 20, 2013 To: Mayor & City Council From: Christine Harkess, Finance Director Subject: 2014 Budget As presented at the August 13°i work session we do have a balanced budget. This was achieved by adjusting revenues and eliminating over $130,000 from the budget. The budget took into consideration $289,900 in LGA that the city is expected to receive in 2014. This LGA along with the sales tax savings from the 2014 exemption was the reason we were able to have a 0% increase in the operating portion of the levy. The overall increase in the levy of 1.12% is all due to debt levies. The budget is presented with a 3.46% increase or $365,800. Most of that increase or $302,959 is due to personnel related expenses. The remaining portion or $62,841 is from materials, services and supplies. We have a general election in 2014 which adds $15,000 to the budget along with the increase in the assessing contract, and the addition of contractual services for irrigation and EAB treatments, stump removal and paver stone replacement. Public Works staffing has been working lean and as a result staff has been challenged with the workload. In the 2014 budget is a request for one additional PW staff that will be shared with water, sewer, storm sewer and refuse. This request comes as a result of the increased workload resulting from locates. There are days where over 60 locates have been requested and these locates are done on top of the normal daily workload. With the transfer of dispatch we are still saving over $364,000 annually. If dispatch were still part of the city budget our budget increase would be significantly higher. Attached are the following: 1. 2014 Budget — items impacting the budget 2. Power Point slides 3. 2014 General Fund Budget compared to 2013 4. 2014 Preliminary Tax Levy 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. 8/20/2013 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. 8/20/2013 Page Revenues • Total Revenues $10,946,129 • Tax Levy = $8,869,774 with levy limits • 81% of total revenues • 0% increase in General Fund Levy • LGA - $289,900 J Revenues General Fund 2013 2014 Change Property Taxes $8,952,774 $8,952,774 0.00% Intergovt9 Revenue 498,510 813,410 63.17% License, Permits & Fines 528,095 564,395 6.87% Charges for Service 182,850 201,250 10.06% Miscellaneous 403,100 399,300 -0.94% Interest 15,000 15,000 0.00% Total $10,580,329 $10,946,129 3.46% Revenues • Intergovernmental Revenue • LGA • Fire Aid & police grants • Licenses & Permits • Court Fines, building permits, • Charges for Service • Plan review fees, police charges, activity center charges Expenditures • Total Expenditures $10,946,129 • 3.46% increase or $365,800 over 2013 budget • Salary increase per contracts — 2% Jan 1, 1 % July 1 • Personnel related increases are 82.3% of the increase • Material, services and supplies are 17.2% of the increase Expenditures • Total Increase - $365,800 • 82.8% or $302,959 is personnel related FT Salaries 180,154 PT Salaries 57,856 Health Insurance 23,359 PERA& FICA 31,130 Misc personnel costs - OT, WC, etc. 10,460 302,959 Expenditures • Total Increase - $365,800 • 17.2% or $62,841 is materials, supplies, and services 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 Expenditures General Fund 2013 2014 Change General Government $1,269,025 $1,315,927 3.70% Community Services $901,681 $945,429 4.85% Public Safety $5,310,329 $5,418,659 2.04% Public Works $2,266,002 $2,384,144 5.21% Recreation $544,483 $586,329 7.69% Comm Dev & Planning $218,609 $220,441 0.84% Other $70,200 $75,200 7.12% Total $10,580,329 $10,946,129 3.46% Expenditures • General Government • Council travel • Audit costs • Added PT in Finance Expenditures • Community Services • Assessing contract • General election flop J o. Expenditures • Public Safety • Police — minimal increases • Fire — Relief Assn payment increases when state aid increases • Fire — adjusted PT Fire Aid to reflect actual Expenditures • Public Works • Irrigation contract • Safety training • Capital — oil storage tanks upgraded & flamable storage cabinet $5,600 • Paver stone work contracted out • EAB pesticide treatments & stump removal Expenditures • Recreation • Joint Rec contract increased • FT summer attendant in Oakes, Burnes & Valley Parks • $22,500 Expenditures • Community Development & Planning • Small adjustments • Other • Tuition reimbursement program increased • Original shortfall was $130,000 • Adjusted fine revenue - $30,000 • Personnel savings due to retirements • Shortfall down to $84,000 • Next we met with department managers M • Elimination of $84,000 shortfall • Police — reduced personnel time for off duty training - $20,000 • Police — reduced equipment maintenance $10,000 due to additional savings from LETG • Public Works — reduced seal coating & crack sealing budget by $30,000 • Sales tax savings estimated for supplies line items • Total Levy $10,416,235 • 1.12% increase or $115,061 over 2013 levy • 0% increase in General Fund Levy • Special Levies - Debt • New — 2013 GO Bonds — using $75k in gas & electric franchise fees to offset portion of levy • 2012B Equipment Certificates — no fee offset for 2014 ONE,- W - 2014 Net Levy Purpose 2013 Proposed General Operations General Fund $8,834,274 $8.869,774 Capital Levy 125,000 125,000 PERA Levy 35,500 0 Subtotal 8,994,774 8,994,774 Special Levies: DebtLevies 1,478,427 1,582,081 Fee Offset (64,370) 0 Franchise Offset (107,657) (160,620) Subtotal Special Levies 1,306,400 1,421,461 TOTAL LEVY $10,301,174 $10,416,235 Increase over prior year $50,183 $115,061 Percentage Incr (Decr) 0.49% 1.12 Tax Rate 62.414 62.623 est. 0.209 Incr • Present proposed budget and levy at September 3rd Council meeting • Adopt proposed budget and levy at September 3rd Council meeting and certify to County • Parcel specific notices mailed by County • Hold Public Meeting on the budget and levy at the December 3rd Council meeting 08/14/2013 CITY OF HOPKINS ANALYSIS OF GENERAL FUND REVENUE BUDGET Finance 400 Current Services 5,750 10,150 4,400 449 Miscellaneous 4,800 4,800 - Total Finance 10,550 14,950 4,400 41.71% 360 Le al - Court Fines 115,000 118,000 3,000 2.61% 400 Assessin - Charges for Service 1,500 2,000 Increase 33.33% City Clerk (Decrease) 2013 2014 from % Department Budget Budget 2013 Budget Incr/(Decr) Unallocated 364 Administrative Citations - 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 3.13% Finance 400 Current Services 5,750 10,150 4,400 449 Miscellaneous 4,800 4,800 - Total Finance 10,550 14,950 4,400 41.71% 360 Le al - Court Fines 115,000 118,000 3,000 2.61% 400 Assessin - Charges for Service 1,500 2,000 500 33.33% City Clerk 312 Licenses 5,000 5,000 - 364 Administrative Citations - - - 400 Charges for Service 5,000 - (5,000) Total City Clerk 10,000 5,000 (5,000) -50.00% Inspections 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) Total Revenues 10,580,329 10,946,129 365,800 3.46% Total Expenditures 10,580,329 10,946,129 365,800 3.46% Fire 318 Licenses 3,500 3,500 - 320 Permits - - - 344 Federal Grant - - - 344 State Aid 70,000 90,000 20,000 - County Grants - - - 400 Administrative Citations - - - 400 Current Service 3,000 3,000 - 4,400 Donations 200 - 450 Miscellaneous - - - Total Fire 76,500 96,500 20,000 26.14% Total Revenues 10,580,329 10,946,129 365,800 3.46% Total Expenditures 10,580,329 10,946,129 365,800 3.46% Public Works 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 - - - Total Public Works 146,565 146,765 200 0.14% Activity Center 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) -0.67% Total Revenues 10,580,329 10,946,129 365,800 3.46% Total Expenditures 10,580,329 10,946,129 365,800 3.46% CITY OF HOPKINS ANALYSIS OF GENERAL FUND EXPENDITURE BUDGET Increase (Decrease) 2013 2014 from % Department Budget Budget 2013 Budget Incrl(Decr) City Council 68,967 69,872 905 1.31% Administrative Services Administration 179,060 192,685 13,625 Personnel 46,768 40,599 (6,169) Wellness 2,000 2,000 - Information Services 254,988 261,305 6,317 Total Administrative Services 482,816 496,589 13,773 2.85% Finance 615,083 547,748 (67,335) 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% Legal 142,000 143,000 1,000 0.70% Municipal Building 313,998 317,414 3,416 1.09% Receptionist 47,048 45,933 (1,115) -2.37% Assessing 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 18.39% Inspections 615,083 547,748 (67,335) 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 615,083 547,748 (67,335) 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% (Decrease) 2013 2014 from % Department Budget Budget 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% 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% Planninq & Zoninq 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% Contingency 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% Grand Total Expenditures 10,580,329 10,946,129 365,800 3.46°_/0 Budget Incr in 2013 0.23% CITY OF HOPKINS ANALYSIS OF TAX LEVY Purpose General Levy General Fund Capital Levy PERA Levy Total General Levy Sepcial Levies - Debt: 2003 HRA Revenue Bonds 2007B GO Improv Revolving Bonds 2007A Capital Improvement Bonds 2010A GO Improvement Bonds 2010B Refunding (2002B 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 LEVIES Increase over prior year Percentage Incr (Decr) - Total Tax Capacity Rate (per HC rate cards) 2012 2013 08/14/2013 2014 $ 8,784,091 $ 8,834,274 $ 8,869,774 12 5, 000 12 5, 000 12 5, 000 35,500 35,500 - $ 8,944,591 $ 8,994,774 $ 8,994,774 220,000 - - 184,500 186,520 188,093 765,900 763,800 766,110 77,000 77,000 79,175 59,000 - - 220,000 220,000 166,737 140,710 (107,657) (85,620) 64,370 97,965 (64,370) - 90,028 (75,000) 1,306,400 1,306,400 1,421,461 $ 10,250,991 $ 10,301,174 $ 10,416,235 $ 370,927 $ 50,183 $ 115,061 3.75% 0.49% 1.12% 58.676 62.417 62.623% estimated