CR 2013-089 Proposed General fund budget and set budget meeting date1320 -
September 3, 2013 City of Hopkins Council Report 2013-089
APPROVE PROPOSED 2014 LEVY,
PROPOSED 2014 GENERAL FUND BUDGET
AND SET BUDGET MEETING DATE
Proposed Action
Staff recommends adoption of the following motions:
Move to approve Resolution 2013-052 "Approving proposed 2014 tax leve, debt service levies at levels under those
required in the bond covenants, proposed 2014 general fund budget, and setting budget meetingda
Adoption of resolution 2013-052 will set a maximum tax levy for 2014, will set debt levies at amounts sufficient to
pay debt service requirements taking into consideration other revenue sources and fund reserves, and approve a
proposed 2014 general fund budget. Actual budget and tax levy adoption will not occur until December 2013.
Overview
The City is required to certify a proposed tax levy and submit it to the county by September 16`h. There is also a
requirement to hold a public meeting on the budget where public comments are taken. Staff is suggesting December
3, 2013 as an appropriate date to discuss the budget. This will allow us to take into consideration comments from the
public prior to adopting the budget. If there are no changes to the proposed budget if can be approved at that same
meeting.
A proposed general fund budget has been established and is attached for your review. Adoption of the actual budget
will occur in December 2013 following the public comment meeting, and at that time, the final levy may not exceed
the approved proposed levy. The city council is charged with the authority to establish a budget for 2014 and set the
preliminary levy. Levy limits were reinstated for 2014 and those were taken into consideration when establishing the
proposed levy.
• Staff is recommending that council approve the resolution setting the proposed levy for general fund
operations; approve the levy adequate for the payment of debt, and to set budget meeting dates as set forth in
the resolution.
Primary Issues to Consider
• Legislative impacts
• 2014 budget concerns
Supporting Information
• Power point presentation
• 2014 proposed general fund budget
• Resolution 2013-052
Christine M. Harkess. CPA, CGFM
Finance Director
Financial Impact: $ 10,946,129 Budgeted: Y/N X N Source: Taxes and other revenues
Related Documents (CIP, ERP, etc.): 2014 budget Notes:
Staff Analysis
• 2012/2013 Legislative Actions
Local government aid (LGA), a property tax relief program to cities, that ensures residents have access to basic
services, regardless of where in Minnesota they live, has been reinstated for 2014. We will be receiving $289,900 with
all of it going to the General Fund.
The market value exclusion program that replaced the previous MVHC that homestead properties qualify for remains
in place.
Levy limits last repealed for 2005 were reinstated for the years 2009-2011, were repealed for 2012 and 2013 and have
been reinstated for 2014. The option for a special PERA levy to cover state mandated employer PERA increases was
removed for 2014 and is no longer a special levy.
• 2014 Levy
The City of Hopkins is proposing a total tax leve increase of $115,061 or 1.12%. The tax levy proposed totals
$10,416,235 which includes levies for the general fund and bonded debt. Details are included in the attached summary
of tax levy. Due to raising the gas and electric franchise fees we are able to offset the 2012 and 2013 street
improvement levies by $160,620. The 2013 Equipment Certificate levy was placed on the tax rolls as fees are not
sufficient to fund operations and debt. The Equipment Certificate Bond issue was set up with annual tax levies. For
the first year we chose to use fees to make the first bond payment. The debt levies are the sole reason for the levy
increase. There is no increase in the operating levy.
The capital levy implemented in 2005, was suspended for 2010, reinstated for 2011 and continues into 2014. This levy
is part of the levy limit calculation.
The Housing and Redevelopment Authority levy for 2014 is a continuation of the reinstatement of their past levy
authority. The HRA levy is a separate levy that is shoe n separately on the tax statements under "Other Taxing
Districts".
• 2014 Budget Analysis
The 2014 general fund budget, and the 2014 general operating tax is proposed at $10,946,129 and $10,416,235
respectively. The proposed levy is set taking into consideration levy limits for 2014 and can only be reduced from this
point forward. The general fund budget is currently proposed to increase by $365,800 or 3.46% over the 2013 budget
and is balanced. Expenditures include wage increase for employees, Police & Fire pension increases, provisions for
the 2014 general election and contracts for work due to staffing challenges.
Because we are a service related operation, salaries and benefits compose 78% of current general fund expenditures
and any labor negotiations have a tremendous impact on the budget. The council and staff will continue to work on a
final budget that will allow for essential programs and services to be accomplished. Attached to this report is a
summary of 2014 general fund budget revenues and expenditures.
• Tax Impacts of Levy's
This will be the third year of the Market Value Homestead Exclusion (MVHE) so 1 don't expect many questions on
this aspect of the tax levy this year. The tax rate is projected to increase less than 1 % which should have minimal
impact on properties. We will know more when Hennepin County calculates the preliminary tax rates after the Sept
16`h submission deadline.
• Fiscal Disparity
The fiscal disparities program also affects what the tax impact will be on Hopkins taxpayers. If the city is a net
contributor taxpayers see an increase in the tax rate, however if the city is a net distributor the tax rate will go down.
Shown below are the fiscal disparities contribution and distribution amounts for the years 2005 — 2014. You can see
from the chart below how our net gain/loss has changed due to development/re-development in Hopkins and other
communities. The net gain/loss for Hopkins went down for 2014 which will have a positive effect on the levy as there
will be less of a deduct on our property values for fiscal disparity.
Analysis of Fiseal Disparities
Year
Contribution
Distribution Gain/(Loss)
2014
2,919,373
2,279,480
(639,893)
2013
3,111,160
2,271,762
(839,398)
2012
3,092,328
2,650,437
(441,891)
2011
3,324,078
2,645,025
(679,053)
2010
2,858,921
2,913,208
54,287
2009
2,766,202
2,840,070
73,868
2008
2,450,063
2,405,483
(44,580)
2007
2,116,466
1,997,455
(119,011)
2006
1,952,996
1,836,753
(116,243)
2005
1,526,509
1,673,106
146,597
• 2013 Budget Meeting for the 2014 Budget and 2014 Tax Levy
The 2009 Legislature made significant changes to the truth -in -taxation (TNT) requirements, essentially abolishing the
old scheme. The new law now requires that on or before September 16`h at a regularly scheduled meeting at which the
city council adopts a proposed tax levy, the city council must also announce:
The time and place of the council's next regularly scheduled meetings at which the budget and levy will be
discussed and must not be held before 6 pm.
The date and time of the regularly scheduled meeting at which a final budget and levy will be determined.
That the public will be allowed to speak at these subsequent meetings.
On or before September 16`h, the time as place of regularly scheduled meetings dealing with the budget and levies must
be included in the minutes and published in the official newspaper as required by law.
Therefore, staff is recommending the City Council budget meeting be set for December 3, 2013 with possible adoption
of the final budget at that same meeting.
20 / 4 Prelilly al ),
Lq)y and Blldgel
• Council adopts proposed levy and budget by Sept 16th
• Council sets budget meeting date to discuss budget and
receive public comments
• Budget Meeting — Tuesday, December 3rd
• Budget Approval — at that same meeting or next
scheduled council meeting
• Parcel specific notices are mailed by County
• Local Government Aid
• Levy Limits for 2014
• Priority — balanced budget
• Equipment Replacement Plan
• Capital Improvement Plan
• Financial Management Plan
• Utility Rate Study
• Expenditures— $10,946,129
• 3.46% increase or $365,800 over 2013 budget
• Personnel related increases are 89.8% of the
increase
• Material, services and supplies are 10.2% of the
increase
Expenditures
General Fund
General Government
Community Services
Public Safety
Public Works
Recreation
Comm Dev & Planning
Other
Total
2013
2014
Change
$1,269,025
$1,319,927
4.01%
$901,681
$945,429
4.85%
$5,310,329
$5,439,659
2.44%
$2,266,002
$2,384,144
5.21%
$544,483
$586,329
7.69%
$218,609
$220,441
0.84%
$70,200
$50,200
-28.49%
$10,580,329 $10,946,129 3.46%
• Revenues — $10,946,129
• Local Government Aid
• Court Fines
• Grant Revenues
Revenues
Property Taxes
Intergovt'I Revenue
License, Permits & Fines
Charges for Service
Miscellaneous
Interest
Tota I
$10,580,329 $10,946,129 3.46%
2013
2014
Change
$8,952,774
$8,952,774
0.00%
498,510
813,410
63.17%
528,095
564,395
6.87%
182,850
201,250
10.06%
403,100
399,300
-0.94%
15,000
15,000
0.00%
$10,580,329 $10,946,129 3.46%
F1
• 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
• 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
• Increase of $115,061 or 1.12%
• Operating Levy - $8,994,774
• Special Levies, Debt - $1,421,461
• Reductions in debt levy
• Enterprise Transfers - $145,000
• Gas & Electric Franchise Fees - $160,620
• The levy set will be the Maximum levy for 2014
• Levy can be reduced but not increased
• Staff continues to refine the budget
J
r
Levy Rate
Year Increase Increase
2013 0.49% 3.741%
2012 1.11% 3.003%
2011 2.14% 6.674%
2010 3.90% 1.684%
2009 3.90% 1.914%
J
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:
Debt Levies
1.623,427
1,727.081
Enterprise Transfers
145,000)
(145.000)
Fee Offset
164.370)
0
Franchise Offset
(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%
J
r
Levy Rate
Year Increase Increase
2013 0.49% 3.741%
2012 1.11% 3.003%
2011 2.14% 6.674%
2010 3.90% 1.684%
2009 3.90% 1.914%
Year Contribution Distribution Gain/(Loss)
Changes
2014
2,919,373
2,279,480
(639,893)
in the FD
2013
3,111,160
2,271,762
(839,398)
program
2012
3,092,328
2,650,437
(441,891)
affect the
2011
3,324,078
2,645,025
(679,053)
tax rate
2010
2,858,921
2,913,208
54,287
2009
2,766,202
2,840,070
73,868
2008
2,450,063
2,405,483
(44,580)
2007
2,116,466
1,997,455
(119,011)
2006
1,952,996
1,836,753
(116,243)
2005
1,526,509
1,673,106
146,597
� / u
Fiscal Disparities Net Contribution
� zoo,a00
2006 2007 8 2009 201 2011 2012 2013 2014
(200.000)
(400.000)
1600.000)
(800.000)
—rGain/Moss)
(1000 000)
• 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
• Approve levy & budget
CITY OF HOPKINS
PROPOSED GENERAL FUND REVENUE BUDGET
2013 2014 %
Department Budget Budget lncr/(Decr)
Property Taxes 8,952,774 8,952,774 0.00%
Intergovernmental Revenue
PERA Aid
20,510
20,510
0.00%
Local Government Aid
0
289,900
24.44%
Police - Federal Grant
82,000
82,000
0.00%
Police - State Aid
177,000
177,000
0.00%
Police - POST Reimbursement
9,000
9,000
0.00%
Police - Misc Grants
10,000
15,000
50.00%
Fire - State Aid
70,000
90,000
28.57%
PW - State Aid
130,000
130,000
0.00%
Total Intergovernmental Revenue
498,510
813,410
63.17%
Licenses, Permits & Fees
5,750
10,150
76.52%
Court Fines
135,000
168,000
24.44%
Building Permit & Inspection Fees
269,180
272,480
1.23%
Administrative Citations
8,000
8,000
0.00%
Business Licenses
5,000
5,000
0.00%
Liquor, Animal Licenses & Penalties
97,000
97,000
0.00%
Fire Licenses & Permits
3,500
3,500
0.00%
PW - Licenses & Permits
9,415
9,415
0.00%
P&Z - License & Permits
1,000
1,000
0.00%
Total Licenses, Permits & Fines
528,095
564,3951
6.87%
Charges for Service
Finance Department
5,750
10,150
76.52%
Municipal Building
0
0
0.00%
Assessing
1,500
2,000
33.33%
City Clerk
5,000
0
-100.00%
Inspections
71,850
73,850
2.78%
Police
42,000
48,000
14.29%
Fire
3,000
3,000
0.00%
Public Works
2,750
2,750
0.00%
Activity Center
49,500
59,500
20.20%
Planning & Zoning
1,500
2,000
33.33%
Total Charges for Service
182,850
201,250
10.06%
Miscellaneous Revenue
Franchise Fees
290,000
290,000
0.00%
Miscellaneous
0
100
Finance Department
4,800
4,800
0.00%
Police
1,500
1,500
0.00%
Public Works
4,400
4,600
4.55%
Acitivty Center
13,500
10,000
-25.93%
Community Development
88,900
88,300
-0.67%
Total Miscellaneous Revenue
403,100
399,300
-0.94%
Interest Earnings
15,000
15,000
0.00%
Total Revenues
$10,580,329
$10,946,129
3.46%
CITY OF HOPKINS
PROPOSED GENERAL FUND EXPENDITURE BUDGET
2013 2014 Budget %
Department Budget Budget Incr/(Decr)
City Council 68,967 69,872 1 1.31%
Administrative Services
0
0
0.00%
Administration
179.060
196,685
9.84%
Personnel
46,768
40,599
-13.19%
Wellness
2,000
2,000
0.00%
Information Services
254,988
261,305
2.48%
Total Administrative Services
482,816
500,589
3.68%
Finance
Debt Management
0
0
0.00%
General Accounting
163,587
185,203
13.21%
Payroll
45,609
48,516
6.37%
TIF Administration
0
0
0.00%
Utility Billing
5.000
9.400
88.00%
Total Finance
214,196
243,119
13.50%
Legal
Municipal Building
142,000
313,998
143,000
317,414
0.70%
1.09%
Receptionist
47,048 1
45,933
-2.37%
lAssessing
177,187 1
183,607
3.62%
City Clerk
City Clerk 51,782 54,462 5.18%
Elections 45,582 60,808 33.40%
Total City Clerk 97,364 115,270 18.39%
Inspections
Building Code Inspections
261,854
267,051
1.98%
Fire Inspections
35,155
36,675
4.32%
Heating & Plumbing Inspections
88,952
91,054
2.36%
Housing Inspections
157,595
165,788
5.20%
Misc. Community Inspections
78,908
81,265
2.99%
Vacant Property Management
4,666
4,719
1.14%
Total Inspections
627,130
646,552
3.10%
Police
Police Administration
527,437
516,611
-2.05%
Patrol
2,627,237
2,780,576
5.84%
Heat Team
73,611
69,715
-5.29%
Reserves
15,162
15,586
2.80%
Investigations
615,083
550,389
-10.52%
Metro Drug Task Force
114,468
122,629
7.13%
Pawn Shop
3,335
3,530
5.85%
Outreach
107,332
107,394
0.06%
Reception -Records
244,501
267,563
9.43%
2013 2014 Budget %
Department Budget Budget Incr/(Decr)
Systems Management 65,855 49,501 -24.83%
Total Police 4.394.021 4.483.494 2.04%
Fire
Fire 912,343 953,037 4.46%
Emergency Preparedness 3,965 3,128 -21.11%
Total Fire 916,308 956,165 4.35%
Public Works
129,683
132,191
1.93%
PW Building
34,988
33,631
-3.88%
Equipment Services
85,096
98,887
16.21%
Administration
38,345
41,280
7.65%
Engineering
132,003
140,861
6.71%
Street & Alleys
878,399
912,716
3.91%
Snow & Ice Removal
182,623
205,553
12.56%
Parks
680,774
698,934
2.67%
Forestry
233,774
252,282
7.92%
Total Public Works
2,266,002 1
2,384,1441
5.21%
Recreation
Playground
21,417
21,992
2.68%
Ice Rink
13,113
15,295
16.64%
Park Service
12,454
36,975
196.89%
Joint Recreation
155,000
158,900
2.52%
Skate Park
7,165
7,394
3.20%
Total Recreation
209,149
240,556
15.02%
Activity Center
Act Ctr - Community Use 276,859 289,497 4.56%
Act Ctr - Maintenance 58,475 56,276 -3.76%
Total Activity Center 335,334 345,773 3.11%
IPlanning & Zoning
129,683
132,191
1.93%
Development
88,926
--Community
88,250
-0.76%
Tuition Reimbursement
10,200
15,200
49.02%
lContingency
50,000 1
25,000 1
-50.00%
Total Expenditures
10,570,329 1
10,936,129
3.46%
Other Financing Uses
Transfers to other funds 10,000 10,000 0.00%
Total Other Financing Uses 10,000 1 10,000 1 0.00%
Grand Total Expenditures $ 10,580,329 $ 10,946,129 3.46%
Total Revenues $ 10,580,329 $ 10,946,129
Revenues Over (Under) Expenditures $ - $
CITY OF HOPKINS
2014 TAX LEVY
TOTAL LEVIES
Increase over prior year
Percentage Incr (Decr) - Total
Tax Capacity Rate
Incr/Decr in Tax Capacity Rate
$10,301,174 $10,416,235
$50,183 $115,061
0.49% 1.12%
62.417% 61.765% preliminary
estimate
3.741 -0.652%
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
8,994,774
8,994,774
Special Levies - Debt:
2007B GO Improv Revolving Bonds
186.520
188,093
2007 Capital Improvement Bonds
908,800
911,110
Enterprise Fund Transfers
(145.000)
(145,000)
2010A GO Improvement Bonds
77,000
79,175
2012A GO CIP Bonds
220,000
220,000
2012B GO Bonds
166,737
140,710
Gas & Elec Franchise Fees - levy offset
(107,657)
(85,620)
20128 Equipment Certificates
64,370
97,965
Fees used to offset levy
(64,370)
0
2013A GO Improvement Bonds
0
90,028
Gas & Elec Franchise Fees - levy offset
0
(75.000)
Subtotal - Debt Levies
1,306,400
1,421,461
TOTAL LEVIES
Increase over prior year
Percentage Incr (Decr) - Total
Tax Capacity Rate
Incr/Decr in Tax Capacity Rate
$10,301,174 $10,416,235
$50,183 $115,061
0.49% 1.12%
62.417% 61.765% preliminary
estimate
3.741 -0.652%
CITY OF HOPKINS
Hennepin County, Minnesota
RESOLUTION NO. 2013-052
RESOLUTION APPROVING THE PROPOSED 2014 TAX LEVY, SETTING
DEBT SERVICES LEVIES AT LEVELS UNDER THOSE REQUIRED IN THE BOND
COVENANTS, APPROVINGTHE PROPOSED 2014 BUDGET, AND
SETTING BUDGET MEETING DATE
BE IT RESOLVED BY THE COUNCIL OF THE CITY OF HOPKINS, MINNESOTA,
That the following sums be levied for 2014 upon the taxable property in the City of
Hopkins, for the following purposes.
General Lev
General Fund
$8,994,774
Special Levies
Debt Levies
2007A GO Capital Improvement Bonds
766,110
2007B GO Improvement Bonds
188,093
2010A GO Improvement Bonds
79,175
2012A GO Capital Improvement Bonds
220,000
2012B GO Bonds
55,090
2012B Equipment Certificates
97,965
2013A GO Improvement Bonds
15,028
Subtotal Special Levies
1,421,461
Total Levy 10.416.235
HRA/EDA Lew
Housing & Redevelopment Authority Levy 273,980
That based upon staff analysis of specials assessments currently levied for Permanent
Improvement Bonds, alternative revenue sources for the Capital Improvement Bonds and
Equipment Certificates, and available reserves within all debt service funds listed below, that the
debt service levies for 2014 for the following issues be levied at amounts less than that provided by
the bond covenants.
Net Debt
Bond Issue Service Levy
$9,920.000 G.O. Capital Improvement Bonds of 2007A (132212) $766,110
$5,505,000 G.O. Bonds — Equipment Certificates of 2012B (132833) $ 97,965
$5,505,000 G.O. Bonds of 2012B (132833) $ 55,090
$3,650,000 G.O. Improvement Bonds of 2013A (132883) $ 15,028
That the Proposed 2014 General Fund Budget be set at $10,946,129.
That the budget meeting to discuss the 2014 budget and tax levy be set for December 3, 2013 at 7:30
pm in the City Council Chambers.
BE IT FURTHER RESOLVED that the City Clerk is hereby ordered and directed to transmit a certified
copy of this resolution to the County Auditor of Hennepin County, Minnesota.
Adopted by the City Council of the City of Hopkins tliis 3"' day of September 2013.
Eugene Maxwell, Mayor
ATTEST:
Kristine A. Luedke, City Clerk