Special Revenue Fund Budgets, Activity Center Budget, Enterprise Fund Budgets and Utility Rates; Bishop
CITY OF HOPKINS
Memorandum
To: Honorable Mayor and Council Members
Mike Mornson, City Manager
From: Nick Bishop, Finance Director
Date: November 10, 2020
Subject: Special Revenue Fund Budgets, Activity Center Budget, Enterprise Fund
Budgets and Utility Rates
_____________________________________________________________________
PURPOSE
No formal action is required at this meeting. Staff is requesting input on the proposed
budgets for special revenue funds, enterprise funds, activity center and utility rates.
INFORMATION
Chemical Assessment Team Fund (Special Revenue)
The State Chemical Assessment Team provides emergency response for assessment
of chemical hazards, the maintenance of state owned equipment and training of
personnel. The response area includes Hennepin, Scott, Carver, McLeod and Renville
Counties. The State of Minnesota reimburses the City quarterly for actual costs. The
Chemical Assessment Team does not receive any tax levy support from the City.
Proposed
2020 2021 Percentage
Budget Budget Incr (Decr)
Revenues 65,000$ 65,000$ 0.00%
Expenditures 65,000$ 65,000$ 0.00%
Revenues over (under) Expenditures -$ -$ 0.00%
Finance Department
Economic Development Fund (Special Revenue)
The Economic Development Fund coordinates the economic development processes
not directly funded by specific project budgets and also supports Artstreet and
marketing. The main revenue sources of the fund are the Hopkins Housing and
Redevelopment Authority (HRA) property tax levy and excess tax increment financing
(TIF). A preliminary HRA levy of $378,070 was set on September 15th, excess TIF is
budgeted at $100,000.
The major expenditures of the fund are salaries, benefits and grants. The 2021 budget
includes a $100,000 budget for the Façade Improvement Program (previously offered in
2015, 2017 & 2019). The program strengthens the vitality of Mainstreet by improving
the pedestrian experience, increasing building transparency, and beautifying buildings
through façade revitalization efforts, which will have a lasting impact on downtown
Hopkins. Eligible property owners, or business owners, may apply for grant assistance
up to 50 percent of the cost of the improvements – up to $25,000. The Façade
Improvement Program could be delayed until 2022, when there may be more interest
from local businesses that are still feeling the economic effects of COVID-19 in 2021.
Proposed
2020 2021 Percentage
Budget Budget Incr (Decr)
Revenues 467,951$ 503,070$ 7.50%
Expenditures 430,345$ 498,900$ 15.93%
Revenues over (under) Expenditures 37,606$ 4,170$ -88.91%
Parking Fund (Special Revenue)
The Parking Fund accounts for activities related to parking enforcement and parking
operations in the City. The major sources of revenue and parking permits, parking
leases and fines. The revenue budget for parking permits was reduced based on a
decrease in permit sales since the COVID-19 state of emergency. The major
expenditures are salaries and benefits. The budget is projecting a decrease in fund
balance of $33,375. The 12/31/2021 ending fund balance is projected to be a positive
$41,933.
Proposed
2020 2021 Percentage
Budget Budget Incr (Decr)
Revenues 154,524$ 121,500$ -21.37%
Expenditures 150,690$ 154,875$ 2.78%
Revenues over (under) Expenditures 3,834$ (33,375)$ -100.00%
Communications Fund (Special Revenue)
The Communications Fund provides two-way communication between the City and its
residents, employees, businesses; its civic and service organizations; and other
communities and government agencies. Some examples of the services provided are
Hopkins Highlights, the City’s website and the State of the City event. The main source
of revenue is cable franchise fees. The main expenditures are salaries, benefits and a
transfer out to the Arts Center Fund. The budget is projecting a decrease in fund
balance of $8,224. The 12/31/2021 fund balance is projected to be a positive
$313,732.
Proposed
2020 2021 Percentage
Budget Budget Incr (Decr)
Revenues 238,014$ 243,000$ 2.09%
Expenditures 238,656$ 251,224$ 5.27%
Revenues over (under) Expenditures (642)$ (8,224)$ -100.00%
Depot Fund (Special Revenue)
The Depot programs offer area youth creativity and leadership opportunities,
strengthens involvement in community activities, and nurtures their growth and
development through interacting with peers, the public and community partners. The
Depot Youth Board guide and support site and programming decisions, including the
management of the Depot Coffee operations. The major revenue sources of the fund
are coffee sales and support from community partners (Hopkins School District, Three
Rivers Park District, City of Minnetonka and a transfer from City of Hopkins General
fund). The major expenditures are salaries, benefits and coffee supplies. The fund had
a breakeven budget planned for 2020. Due to the effects of COVID-19 the fund is now
projected to decrease its fund balance in 2020 by $2,680. The 2021 budget is
projecting a decrease in fund balance of $14,266. The 12/31/2021 fund balance is
projected to be a negative $79,527.
Proposed
2020 2021 Percentage
Budget Budget Incr (Decr)
Revenues 307,412$ 233,000$ -24.21%
Expenditures 307,412$ 247,266$ -19.57%
Revenues over (under) Expenditures -$ (14,266)$ -100.00%
Arts Center Fund (Special Revenue)
The Hopkins Center for the Arts is a premiere cultural and artistic destination drawing
over 250,000 visitors annually. Its amenities include a 715 seat theater, black-box
theater, art gallery, dance studio, classroom, meeting and multipurpose spaces. The
main revenue sources are property tax levy, rents, leases, ticket sales, grants, and
transfers in. The preliminary tax levy amount of $331,182, includes both $271,182
needed to sustain current operations and also $60,000 to reduce the deficit owed to the
City’s General fund. The fund is also supported by transfers of $50,000 and $30,000
from the City’s Communication and Economic Development funds. Major expenditures
include salaries, benefits and payments to artists. Significant expenditure reductions
including a reduction in full time employment were made in 2020 and planned in 2021
to maintain a balanced budget as a result of revenue shortfalls associated with impacts
of COVID-19.
Proposed
2020 2021 Percentage
Budget Budget Incr (Decr)
Revenues 1,185,836$ 1,084,159$ -8.57%
Expenditures 1,125,836$ 1,024,159$ -9.03%
Revenues over (under) Expenditures 60,000$ 60,000$ 0.00%
Activity Center (General Fund)
The Hopkins Activity Center is a community facility with a gym, kitchen and meeting
rooms. The Activity Center’s mission is to provide pathways to “Experience the Upside
of Aging”. It is a gathering place for mature adults to participate in recreational, social,
educational, fitness and volunteer activities. The main sources of revenue are member
fees and facility rentals. The main expenditures are salaries, benefits and payments to
instructors or for other programming. Program revenues are $374,798 less than
program expenditures. The indirectly funded amount is provided through property
taxes, local government aid, franchise fees and interest. The Activity Center is part of
the City’s General fund and does not have its own fund balance.
Proposed
Budget Budget Percentage
Budget Budget Incr (Decr)
Revenues 119,100$ 82,000$ -31.15%
Expenditures 497,843$ 456,798$ -8.24%
Indirectly funded amount (378,743)$ (374,798)$ -1.04%
Pavilion Fund (Enterprise)
The Hopkins Pavilion is a multi-use, year-round arena and community facility. The
arena is used for a multitude of activities including ice skating, broomball, soccer,
lacrosse, inline skating, rugby, baseball, softball, concerts, company picnics and other
community and private events. The main revenue sources are a property tax levy,
facility rentals and leases. The main expenses are depreciation, salary, benefits and
bond interest. The depreciation budget increased from $100,000 in 2020 to $480,000 in
2020, causing the majority of the 56.4% increase in expenses. The budget is projecting
a decrease in net position of $274,860, which includes $480,000 of depreciation. The
funds cash flow is projected to be neutral.
Proposed
2020 2021 %age
Budget Budget Incr (Decr)
Revenues 781,500$ 823,500$ 5.37%
Expenditures 702,256$ 1,098,360$ 56.40%
Revenues over (under) Expendi 79,244$ (274,860)$ -100.00%
(remainder of this page left blank intentionally)
Utility Funds (Enterprise)
The City has four separate utility funds to provide: water, sanitary sewer, storm sewer
and refuse collection services. They are classified as enterprise of business-type
funds. The main source of revenue for all funds is user charges. The main expenses
are salaries, benefits, depreciation, bond costs and municipal wastewater charges.
Collectively, the funds are projected to end the year with a cash balance of $3.4 million
and a net position (fund balance) of 27.8 million. All funds have a positive cash flow
projection in 2021.
Water Proposed
2020 2021 %age
Budget Budget Incr (Decr)
Revenues 2,256,004$ 2,292,074$ 1.60%
Expenditures 2,235,098$ 2,198,674$ -1.63%
Revenues over (under) Expenditures 20,906$ 93,400$ 100.00%
Sanitary Sewer Proposed
2020 2021 %age
Budget Budget Incr (Decr)
Revenues 3,052,340$ 3,105,587$ 1.74%
Expenditures 3,025,741$ 2,963,236$ -2.07%
Revenues over (under) Expenditures 26,599$ 142,351$ 100.00%
Storm Sewer Proposed
2020 2021 %age
Budget Budget Incr (Decr)
Revenues 793,532$ 789,332$ -0.53%
Expenditures 621,945$ 596,969$ -4.02%
Revenues over (under) Expenditures 171,587$ 192,363$ 12.11%
Refuse Proposed
2020 2021 %age
Budget Budget Incr (Decr)
Revenues 1,006,206$ 1,001,941$ -0.42%
Expenditures 1,008,049$ 1,029,220$ 2.10%
Revenues over (under) Expenditures (1,843)$ (27,279)$ -100.00%
Utility Rates
Proposed Water, Sanitary Sewer, Storm Sewer and Refuse fund budgets have been
prepared for 2021. The Water and Sanitary Sewer budgets being proposed include rate
increases of approximately 2% based on operational and capital needs. The City has a
tiered rate structure for water consumption. There is no proposed rate increase
proposed for the Storm Sewer of Refuse funds.
2020 2021 Percent
Current Proposed Increase
Flat Rates Per Meter Per Month
Residential - 5/8" meter 2.96 3.02 2.03%
Residential - 1" meter 2.96 3.02 2.03%
Apt/Commercial - 1-1/2" to 2" meter 5.93 6.05 2.02%
Apt/Commercial - 3" meter 8.90 9.08 2.02%
Apt/Commercial - 4" meter 11.85 12.09 2.03%
Apt/Commercial - 6" meter 17.78 18.14 2.02%
Consumption Rates, Per 1,000 Gallons
Residential and Multi-Family
0 - 3,000 gallons 3.04 3.10 1.97%
3,001 - 5,000 gallons 3.49 3.56 2.01%
5,001 and over 4.01 4.09 2.00%
Commercial
0 - 10,000 gallons 2.90 2.96 2.07%
10,001 - 20,000 gallons 3.32 3.39 2.11%
20,001 and over 3.83 3.91 2.09%
Irrigation - all usage 3.63 3.70 1.93%
Production meter 3.06 3.12 1.96%
Sanitary Sewer 6.73 6.86 1.93%
The two following charts show the impact of the water and sewer rate increases for
different user types.
Actual 2020 Proposed
2021 $ Increase % Increase
Single Family Residential (Lower User)
Water (1,500 Gallons)7.52$ 7.67$ 0.15$ 1.99%
Sewer (1,500 Gallons)10.10$ 10.29$ 0.19$ 1.93%
Total Monthly Bill 17.62$ 17.96$ 0.34$ 1.96%
Single Family Residential (Median User)
Water (4,000 Gallons)15.57$ 15.88$ 0.31$ 1.99%
Sewer (3,000 Gallons)20.19$ 20.58$ 0.39$ 1.93%
Total Monthly Bill 35.76$ 36.46$ 0.70$ 1.96%
Single Family Residential (High User)
Water (8,800 Gallons)34.30$ 34.98$ 0.68$ 1.99%
Sewer (4,800 Gallons)32.30$ 32.93$ 0.62$ 1.93%
Total Monthly Bill 66.60$ 67.91$ 1.31$ 1.96%
Impact on Low, Median and High Residential User
Actual 2020 Proposed
2021 $ Increase % Increase
Commercial Property (Low User with a 1" Meter)
Water (3,000 Gallons)14.63$ 14.93$ 0.30$ 2.05%
Sewer (3,000 Gallons)20.19$ 20.58$ 0.39$ 1.93%
Total Monthly Bill 34.82$ 35.51$ 0.69$ 1.98%
Commercial Property (High User with a 2" Meter)
Water (35,000 Gallons)125.58$ 128.20$ 2.62$ 2.09%
Sewer (35,000 Gallons)235.55$ 240.10$ 4.55$ 1.93%
Total Monthly Bill 361.13$ 368.30$ 7.17$ 1.99%
Impact on Low and High Commercial User
Annual Service Cost for Median Value Home
Based on the preliminary tax levy passed on September 15th and the utility rates
proposed in this memo the annual service cost for a median value home is projected to
increase by $63.76 or 2.13%. The median value home was $276,000 in 2020 and
$291,000 in 2021.
Actual Proposed
2020 2021 % Increase
City Property Taxes 1,828.00$ 1,877.00$ 2.68%
Water - Consumption
7,500 gallons per month
$3.04/$3.49/$4.01 Tiered Rates 349.08$
$3.10/$3.56/$4.09 Tiered Rates 356.04$
Sewer - Consumption
5,000 gallons per month
$6.73/ 1,000 gallons 403.80$
$6.86/ 1,000 gallons 411.60$
Refuse Collection 262.20$ 262.20$ 0.00%
Storm Sewer 60.00$ 60.00$ 0.00%
Franchise Fees 84.00$ 84.00$ 0.00%
Total 2,987.08$ 3,050.84$ 2.13%
1.99%
1.93%
Annual Service Cost for Median Value Home
FUTURE ACTION: 2021 Budget Preparation Schedule
The following table outlines the tentative schedule for discussions on important aspects of the City’s Budget.
Meeting Date Meeting Type Subject Details
October 6 Regular Meeting Financial Management Plan (FMP)
Update
-Overview of the FMP, prior tax increases and
debt
October 13 Work Session Review Capital Improvement Plan
(CIP) and Equipment
Replacement Plan (ERP)
-Park Dedication Fund
-Capital Improvement Levy (City Buildings)
-Permanent Improvement Revolving Fund
(Street Projects)
-Equipment Replacement Levy
October 20 Regular Meeting Quarterly Financial Report
November 4
(Wednesday)
Regular Meeting Review Options for 2021 Tax Levy -Review reduced levy options for 2021
November 10 Work Session Review Special Revenue Budgets,
Activity Center Budget, Enterprise
Fund Budgets and Utility Rates
-Chemical Assessment -Activity Center
-Economic Development -Sewer
-Parking -Storm Sewer
-Communications -Refuse
-Depot -Pavilion
-Arts Center -Water
November 17 Regular Meeting Approve CIP, ERP & Utility Rates
November 30
(Monday)
Regular Meeting Truth in Taxation Hearing -Overview of 2021 Budget and Tax Levy
-Public Comment
December 1 Regular Meeting Approve Final Budget & Tax Levy -Final Comments from Council on Budget
-Could be approved if appropriate
December 15 Regular Meeting Approve Final Budget & Tax Levy -Last scheduled meeting to approve
Special Revenue Fund Budgets,
Activity Center Budget, Enterprise
Fund Budgets and Utility Rates
November 10, 2020
Chemical Assessment Team
Provides emergency response to chemical
hazards
Reimbursed by Minnesota
Proposed
2020 2021 Percentage
Budget Budget Incr (Decr)
Revenues 65,000$ 65,000$ 0.00%
Expenditures 65,000$ 65,000$ 0.00%
Revenues over (under) Expenditures -$ -$ 0.00%
Economic Development
Coordinates the Economic Development
Process not funded through project budget
Artstreet
Marketing
Economic Development Fund
Main Revenue Sources
Hopkins Housing and Redevelopment Authority
(HRA) Levy -$378,070
Excess Tax Increment Financing -$100,000
Main Expenditures
Salaries & Benefits
Grants
Economic Development Fund
Façade Improvement Program -$100,000
Previously offered in 2015, 2017, 2019
Grant assistance for 50% of the cost of
improvements, up $25,000
Could be delayed until 2022
Economic Development Fund
Proposed
2020 2021 Percentage
Budget Budget Incr (Decr)
Revenues 467,951$ 503,070$ 7.50%
Expenditures 430,345$ 498,900$ 15.93%
Revenues over (under) Expenditures 37,606$ 4,170$ -88.91%
Parking Fund
Parking Enforcement and Operations
Main Revenue Sources
Parking permits, leases and fines
Main Expenditures
Salaries, benefits, Insurance, Maintenance
Parking Fund
Planning for a decrease of annual permit sales
Projected ending fund balance of $41,933
Proposed
2020 2021 Percentage
Budget Budget Incr (Decr)
Revenues 154,524$ 121,500$ -21.37%
Expenditures 150,690$ 154,875$ 2.78%
Revenues over (under) Expenditures 3,834$ (33,375)$ -100.00%
Communication Fund
Communication between City and
Residents, Employees, Businesses
Civic and Service Organizations
Other Communities and Government
Organizations
Examples:
Hopkins Highlights, City’s Website and State of the
City event
Communication Fund
Main Revenue Source is Cable Franchise Fees
Main Expenditures are salary, benefits and a
$50,000 transfer to the Arts Center
Communications Fund
Fund balance on 12/31/2021 is projected to
be $313,732
Proposed
2020 2021 Percentage
Budget Budget Incr (Decr)
Revenues 238,014$ 243,000$ 2.09%
Expenditures 238,656$ 251,224$ 5.27%
Revenues over (under) Expenditures (642)$ (8,224)$ -100.00%
Depot Fund
Depot programs offers are youth creativity
and leadership opportunities
Depot Youth Board make programming
decisions and manage the Depot coffee
operations
Depot Fund
Major revenue sources are coffee sales, and
support from community partners
Hopkins School District, Three Rivers Park District,
Minnetonka and Hopkins
Major expenditures are salaries, benefits and
coffee supplies
Depot Fund
Fund balance on 12/31/2021 is projected to
be negative $79,527
Proposed
2020 2021 Percentage
Budget Budget Incr (Decr)
Revenues 307,412$ 233,000$ -24.21%
Expenditures 307,412$ 247,266$ -19.57%
Revenues over (under) Expenditures -$ (14,266)$ -100.00%
Arts Center Fund
Premiere cultural and artistic destination
drawing over 250,000 visitors annually
715 seat theater, black-box theater, art
gallery, dance studio, classrooms, meeting
and multipurpose spaces
Arts Center Fund
Main revenue sources are property tax levy,
rents, leases, tickets sales, grants and
transfers in
Preliminary Levy of $331,182
$271,182 tot sustain current operations
$60,000 to reduce deficit to general fund
Transfers in from the Communications Fund
($50,000) and Economic Development Fund
($30,000)
Arts Center Fund
Major expenditures include salaries, benefits
and payments to artists
Significant expenditure reductions including
reduction in full time employment were made
in 2020 and planned in 2021
Arts Center Fund
Fund balance on 12/31/2021 is projected to
be $1,036,077
Activity Center (General Fund)
Mission is to provide pathways to “Experience
the Upside of Aging”
Gathering place for mature adults to
participate in recreational, social, educational,
fitness and volunteer activities
Activity Center (General Fund)
Main revenue sources are member fees and
facility rentals
Main expenditures are salaries, benefits and
payments to instructors or for other
programming
Part of the general fund and does not have a
fund balance
Activity Center (General Fund)
Indirectly funded amount is provided by
property taxes, local government aid,
franchise fees and interest
Proposed
Budget Budget Percentage
Budget Budget Incr (Decr)
Revenues 119,100$ 82,000$ -31.15%
Expenditures 497,843$ 456,798$ -8.24%
Indirectly funded amount (378,743)$ (374,798)$ -1.04%
Pavilion Fund
Multi-use, year-round arena and community
facility
Ice skating, broomball, soccer, lacrosse, inline
skating, rugby, baseball, softball, concerts,
company picnics and other community and
private events
Pavilion Fund
Main revenue sources are property tax levy,
facility rentals and leases
Main expenditures are depreciation, salary,
benefits and bond interest
Depreciation budget has increased by
$380,000 in 2021 based on renovation project
Pavilion Fund
Decrease in net position of $274,860
(including depreciation)
Cash flow is projected to be neutral
Proposed
2020 2021 %age
Budget Budget Incr (Decr)
Revenues 781,500$ 823,500$ 5.37%
Expenditures 702,256$ 1,098,360$ 56.40%
Revenues over (under) Expenditures 79,244$ (274,860)$ -100.00%
Preliminary Taxes on Median
Value Home ($291,000)
Area Supported by Levy Dollar Amount Percentage
Public Safety $705 37.5%
General Government $253 13.5%
Public Works $202 10.7%
Parks and Recreation $140 7.5%
Pavilion $35 1.9%
Activity Center $35 1.9%
Arts Center $34 1.8%
Capital Projects and Debt $473 25.2%
Total $1,877 100.0%
Utility Funds
Four separate utility funds
Water
Sanitary Sewer
Storm Sewer
Refuse Collection
Enterprise or Business-Type Funds
Utility Funds
Main source of revenue is user charges
Main expenditures in all funds are salaries,
benefits, depreciation, bond costs
Sanitary Sewer fund also pays municipal
wastewater charges to Met Council
All funds have positive cash flow projected in
2021
Water Fund
Proposed rate increase of 2%
Water Proposed
2020 2021 %age
Budget Budget Incr (Decr)
Revenues 2,256,004$ 2,292,074$ 1.60%
Expenditures 2,235,098$ 2,198,674$ -1.63%
Revenues over (under) Expenditures 20,906$ 93,400$ 100.00%
Sewer Fund
Proposed rate increase of 2%
Sanitary Sewer Proposed
2020 2021 %age
Budget Budget Incr (Decr)
Revenues 3,052,340$ 3,105,587$ 1.74%
Expenditures 3,025,741$ 2,963,236$ -2.07%
Revenues over (under) Expenditures 26,599$ 142,351$ 100.00%
Storm Sewer Fund
No rate increase
Storm Sewer Proposed
2020 2021 %age
Budget Budget Incr (Decr)
Revenues 793,532$ 789,332$ -0.53%
Expenditures 621,945$ 596,969$ -4.02%
Revenues over (under) Expenditures 171,587$ 192,363$ 12.11%
Refuse Fund
No rate increase
Refuse Proposed
2020 2021 %age
Budget Budget Incr (Decr)
Revenues 1,006,206$ 1,001,941$ -0.42%
Expenditures 1,008,049$ 1,029,220$ 2.10%
Revenues over (under) Expenditures (1,843)$ (27,279)$ -100.00%
Water and Sanitary Sewer Rates
All rates are proposed to increase by
approximately 2%
Flat Rates Per Meter Per Month
Tiered Water Consumption Rates
Sewer Consumption Rates
2021 Preliminary Tax Statements
Total Estimated Market Value in Hopkins
Increased by 6.1%
Tax Increases for Residential Property (without
improvements of classification changes)
43% -Total Property Taxes Decreased
30% -Increased between .1% -4.9%
27% -Increased by over 5%
Options for 2021 Tax Levy
Preliminary –
2.82% Increase
City Taxes of
$1,877
Increase of $49
or 2.68%
Option 1 –1.48%
Increase
City Taxes of
$1,848
Increase of $22
or 1.19%
Option 2 –No
Increase
City Taxes of
$1,818
Decrease of $9
or 0.49%
Next Steps
Meeting Date Meeting
Type
Subject Details
November 4
(Wednesday)
Regular
Meeting
Review Options for 2021
Tax Levy
-Review reduced levy options for
2021
November 10 Work
Session
Review Special Revenue
Budgets,Activity Center
Budget, Enterprise Fund
Budgets and Utility Rates
-Chemical
Assessment
-Economic
Development
-Parking
-Communications
-Depot
-Arts Center
-Activity
Center
-Water
-Sewer
-Storm Sewer
-Refuse
-Pavilion
November 17 Regular
Meeting
Approve CIP, ERP & Utility
Rates
November 30
(Monday)
Regular
Meeting
Truth in Taxation Hearing -Overview of 2021 Budget & Tax Levy
-Public Comment
Next Steps
Meeting Date Meeting
Type
Subject Details
December 1 Regular
Meeting
Approve Final Budget & Tax
Levy
-Final Comments from Council on
Budget
-Could be approved if appropriate
December 15 Regular
Meeting
Approve Final Budget & Tax
Levy
-Last scheduled meeting to approve