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All departmental budgets follow the same process, regardless of size. The Finance Department prepares a salary and benefit budget based on existing employees. The department completes a budget for materials, supplies and services. A budget request form is required for any additions to the budget, however this was not allowed for the 2021 Budget due to the impacts of COVID-19.
The City’s budget process for 2021 will include two budget engagement sessions, a budget survey and a Truth in Taxation hearing.
You can also comment through the City’s website and directly to the City’s Finance Director or City Council.
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The City is experiencing revenue losses for our recreational facilities, charges for services, and licenses and fees. The City did receive Federal CARES funding, which has limited uses, cannot be used for revenue losses and will only be available through November 15, 2020. We are also projecting higher than usual property tax payment delays. The City’s tax levy accounts for the majority of the City’s revenues at approximately 62 percent.
There are many other non-budgetary impacts that are changing how we are able to operate.
The City has chosen not to publish benchmarking data. We have compared ourselves to other Cities when making specific decisions on: organization structure, compensation staffing, service delivery, franchise fees and utility rates. Each City is different and we don’t analyze the overall budget or tax rate of each neighboring or comparable City. None of the cities sharing a border with Hopkins would be comparable based on population, demographics or tax capacity. It is not an apples to apples comparison, we try to make the best decisions for Hopkins.
Yes, we reduced staff hours at the Activity Center, Hopkins Center for the Arts, Depot Coffee House and Pavilion, and also within the Inspections and Public Works Departments. The Fire Department did not hire any part-time firefighters. We also eliminated a position at the Hopkins Center for the Arts permanently.
The City would have the ability to cut almost any area of the current budget. The exceptions would be general obligation bonds and services required by Minnesota, such as inspections and elections.
Realistically, the services provided by the City are not all or nothing. Services could still be provided, but at a reduced level.
The City has five active TIF Districts. Two of the five decertify in 2023, and one is no longer collecting TIF.
View City’s Annual Disclosure for the year ended December 31, 2019.
The City’s Director of Economic Development & Planning is also giving a development update at the September 1 City Council meeting, which will include information on how TIF has been used in Hopkins.
The amount of the equipment replacement levy did increase by $140,000 between the 2020 Levy and the Draft presented on August 17. The originally proposed 2020 levy was $250,000, however the City chose to issue equipment certificates (debt) to purchase a wheel loader in 2020. This allowed the City to reduce the equipment replacement levy by $140,000 and still purchase needed equipment. The equipment certificates are paid off over 10 years.
Yes, the City has made strategic investments over the past few years to prepare our infrastructure for the impact of light rail. The two largest and most noticeable projects are the improvements at the 8th Avenue Artery and Blake Road.
We regularly discuss opportunities to partner and partner with not only our neighboring communities, but with the school district and other entities like the Metropolitan Council or Three Rivers Park District. We view our joint partnerships as one of the City’s strongest assets and opportunities. Specifically, the Fire Department has looked into partnerships with other communities. Based on our geography, Hopkins would need to be the smaller city in the partnership. This could result less control over the department, which could negatively impact on our Insurance Services Office (ISO) rating. The ISO rating is an independent metric to evaluate how well a local fire department can protect the community.
During the initial stages of planning the engagement process for the 2021 budget, we decided to try to bring as many people into the conversation as we could. We did not expect that every resident or business owner would review detailed aspects of the budget and some complex information was simplified. One example is the budget survey conducted in March and April, in which we said the MAIN options the City has for balancing the budget are to “increase revenue (taxes) or reduce current services provided.” The City is also constantly reviewing expenditures and looking for opportunities for efficiencies and additional funding sources such as grants or partnerships.
The majority of services provided in the City’s general fund will not be paid for from new revenue sources. The City provides police protection, fire protection, street maintenance, parks, snow/ice removal, planning, zoning and forestry. These will continue to be largely supported by property taxes.
We have prioritized completing needed infrastructure projects, which required the issuance of debt. We believe the projects were important to Hopkins. They could not have been completed if paying off debt was our focus.
In the past five years, the City has completed the following street projects: Mainstreet, Avenues West, Park Valley and Peaceful Valley, 8th Avenue Artery, Northeast Hopkins, Blake Road and Cambridge Street/Hiawatha Avenue/Lake Street.
The projects at 8th Avenue and Blake Road will allow Hopkins to fully realize the benefits of Southwest Light Rail. The City has also completed renovations of City Hall and the Hopkins Pavilion.
Staff was asked to submit a cut scenario and many of those reductions were placed in the draft budget. Reductions higher than what was presented in the draft budget would have a significant impact on operations and would require longer discussions and likely elimination of services. The engagement we completed this spring directed us to maintain services with an inflationary increase which was included in the draft budget.
Just over 70 percent of our employees are represented by five different unions. All five are under a three year contract covering the period form January 1, 2018 to December 31, 2020. None of the contracts will be settled when the preliminary budget is passed in September. We are strategic about how we choose to share this information for negotiation purposes.
We have frozen hiring in multiple positions and eliminated a position. Every vacancy is being reviewed.
The remaining 30 percent are unrepresented. Their wages and benefits are set by the City. As a best practice, the City treats non-unionized employees equitably to unionized employees.
Police and fire department expenditures are collectively increasing by $353,580 or 4.74 percent from 2020. The increase is mainly due to the difference between actual salary and benefits rates in 2020 compared to the projections being used for the 2021 budget.
Thank you for the feedback. We presented a budget based on the engagement we received this spring, which said to maintain services.
Staff does not intend to post the individual comments. We do not feel that the comments are valuable information for outside parties without leading to a misleading analysis of the survey. The comments were internally valuable, as they provided us with feedback on how to improve services. View an overview of the survey results.
On June 2, City Council approved the creation of an early retirement incentive program, with the intention of restructuring and reducing expenditures in 2021. No staff took part in the program.
Yes, the draft budget presented on July 21 and August 17 focused on maintaining services and cutting back where we could without impacting services.
The survey was conducted in March and April. Governor Walz declared a State of Emergency on March 13, 2020. 43 percent of survey responses were received before March 13 and 57 percent were received after this date.
The 2020-2024 Capital Improvement Plan was approved by City Council on October 15, 2019. Projects included by year are:
No, we did not feel it was appropriate at this time to add any new positions.