2026 Budget Kickoff
CITY OF HOPKINS
Memorandum
To: Honorable Mayor and Council Members
Mike Mornson, City Manager
From: Nick Bishop, Finance Director
Date: January 14, 2025
Subject: 2026 Budget Kickoff
_____________________________________________________________________
PURPOSE
To get feedback on the planned 2026 budget calendar and to discuss financial
projections.
2026 BUDGET CALENDAR
The proposed budget calendar follows the same timelines as the 2025 and 2024 budget
cycles.
Meeting Date Meeting Type Subject Details
January 14th Work Session Budget Kickoff -Planned Budget Calendar
-Financial Projections
April-July N/A Internal
Preparations
-Departments Prepare Budgets,
Equipment Replacement and
Capital Improvement Schedules
July TBD Review 2026 Tax
Levy and General
Fund Budget
-First Draft
August TBD Review Capital
Improvement Plan
and Equipment
Replacement Plan
-Equipment Replacement Fund
-Park Improvement Fund
-Capital Improvement Fund
August Community
Event
Review 2025 Tax
Levy and General
Fund Budget
-Presentation
-Question and Answer Session
September Regular
Meeting
Approve
Preliminary Tax
Levy And General
Fund Budget
-Preliminary Levy Must be
Approved by September 30
September Regular
Meeting
Approve CIP and
ERP
Finance
October TBD Review Other
Budgets and Rates
-Special Revenue Funds
-Enterprise Funds
-Utility Rates
December 1st Regular
Meeting
Truth in Taxation
Hearing
-Overview of 2026 Budget and
Tax Levy
-Public Comment
-Approve Final Levy (by
December 28th
FINANCIAL PROJECTIONS
2026 Financial Projections
Based on available information, the preliminary tax levy for 2026 would be
approximately $23.6 million or a 14.38% increase from the 2025 levy. The levy includes
amounts for the general fund, capital improvements, Arts Center, Pavilion, equipment
replacement, permanent improvements, parking fund and debt repayments.
The major considerations related to the estimate for the 2026 financial projections are:
• Increase to general fund expenditures of 7%. This is to account for COLA
increases in settled and unsettled union contracts, step increases, increased
health care costs and other inflationary increases.
• Use of Fund balance in 2024 & 2025 to fund current operations
• Tax levy support for four existing positions:
o Three Police Officers
One currently funded by the American Rescue Plan Act
Two currently funded with Minnesota Public Safety Aid
o Deputy Fire Chief currently funded with Minnesota Public Safety Aid
• The addition of two new positions for the Administration Department
o Positions in Human Resources and Information Technology
• Projects scheduled in the 2025-2029 Capital Improvement Plan
• Projects scheduled in the 2025-2029 Equipment Replacement Plan
Additional Full-Time Employee Requests/Needs
Eleven additional full-time employees are planned to be requested between 2027-2032
• Additions to the Police Department based on Axtell Group’s staffing
o Three additional police officers in 2027, 2028 and 2029
o Two additional sergeants in 2031 and 2032
o Based on staffing study presented by Axtell Group on January 7, 2025
• Six additional full-time firefighters in 2030
o City will apply for Federal SAFER grant to fund the positions for three
years beginning in 2027
o Based on staffing study presented by Raftelis on September 19, 2023
o https://lf.hopkinsmn.com/WebLink/DocView.aspx?id=451284&dbid=1&rep
o=Hopkins
City Council Budget
The City Council budget will be reviewed. Staff is looking for feedback in two areas:
• Increasing Salaries of Mayor and Council Members in 2026
o A review of salaries is required based on Hopkins City Code, Chapter 2,
Article II, Section 2-19
o https://library.municode.com/mn/hopkins/codes/code_of_ordinances?node
Id=PTIICOOR_CH2AD_ARTIICICO_S2-19SAMACOME
• City Council Budget for Travel, Training and Conferences
Tax Increase on Median Value Home vs. Tax Levy Increase
The tax increase on a median value home is a useful metric for making budget
decisions and will become more important as the City continues to grow. The
redevelopment currently occurring and the future light rail developments can cause
increased costs, but also increased tax capacity.
The City’s 2025 tax levy increased by 4.92% when compared to 2024, while the city
taxes on a median value home increased 2.88%. A major factor in this difference was
increased tax capacity from new apartment buildings.
FUTURE ACTION
Staff will present a first draft of the 2026 Budget and Tax Levy in July.