Preliminary 2011 Budget & Levy presentation for Hopkins City Council on September 7, 2010.

1. City of Hopkins
2011 Preliminary
Levy and Budget

2. Truth and Taxation Process
Council adopts a proposed levy.
Council sets budget meeting dates to
discuss budget and receive public
comments
Budget meeting dates
Budget Meeting – Tuesday, December 7th
Budget Approval – Tuesday, December 21st

3. Legislative changes effecting
local governments
Local Government Aid (LGA)
$50,000 earmarked for the Arts Center
Unallotted for 2009 & 2010
Back in for 2011
Market Value Homestead Credit (MVHC)
Unallotted for 2009, 2010 & 2011
Levy limits in place for 2009 to 2011.
No levy limits in 2005-2008

4. City Planning
City council and staff have been
meeting and discussing options for
maintaining a balanced budget in 2011
and beyond.
Options include budget cuts, use of
reserves, taxes and new revenue
sources.
The 2011 General Fund budget details
will be outlined prior to adoption of the
final budget and levy in December.

5. Why do levies go up?
Increased spending and/or decreases in
non tax revenue sources
Spending may increase for several
reasons
Inflationary increases
Additional or enhanced programs
Infrastructure improvements
New debt levies
Non tax revenue sources may decrease
Slow economy
Reduction in government aids
Reduced revenues due to economic factors
Reduced interest earnings

6. How do levies go down?
The City may reduce its tax levy by
decreasing costs or increasing non tax
revenue sources.
To decrease costs the city could eliminate
programs or services it currently provides.
The City may also outsource certain city services
at a lower cost.
The City may cancel or delay capital projects
Increased revenues are derived primarily from
new fees and increased charges for services.
The City may receive grants for specific
programs.

7. What are our tax needs?
The 2011 preliminary levy
Levy set at $10,138,414
Proposed increase of $212,729 or 2.14%
over the 2010 levy.
The increase is primarily a result of
decreases in revenue sources and
unallotment of MVHC
Expenditures will increase 2.24%

8. Tax Levy Options
The levy set September 7 will be the
maximum levy for 2011.
Levy can be reduced but it cannot
be increased.
Staff continues to evaluate the
budget and the final levy and budget
may include additional reductions.

9. 2011 Proposed General Fund Budget
and 2011 Preliminary Levy
2011 General Fund 2011 Levy
Budget
$10,138,414
$10,299,327
This is a increase over This is an increase over
last years budget of last years levy of
2.24% $212,729 or 2.14%.
The increase is due to Increase is due primarily
inflationary increases. to loss of revenue

10. Budget Challenges
Unallotment of MVHC - $232,850
Decreased building permit fees due to
economy
Decreased interest income
Flat or decreasing property values

11. Budget Impacts
Reduced spending across all
departments
Delayed hiring of staff vacancies
Reduced capital expenditures
Focus on savings and efficiencies

12. Development and Taxes
City property taxes for 2011 are going to be affected
by decisions that were made over past years for
various development projects that continue to be
added to the tax base.
Decertified TIF District 2-1
Added over $500,000 to the tax base
Additional projects in the planning stages will add to
the city’s tax base for 2012 and beyond.

13. Fiscal Disparities
Changes in the Fiscal Disparities Program affects the
tax rate for Hopkins properties.
Net
Year Contribution Distribution Gain/(Loss)
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

14. Fiscal Disparities
Local units of government in the Twin Cities
metropolitan area are part of a property tax base
sharing program. Under this program, a portion of
the growth in commercial and industrial property
value of each city is contributed to a tax base
sharing pool. Each city then receives a distribution
of property value from the pool based on market
value and population in each city.
The Cargill project resulted in Hopkins’ becoming a
net contributor.

15. Financial Impacts
Arts Center debt paid off 8 years early
Construction project bids have been very
favorable due to low bids
New bonds issued have low interest rates
Recent and planned bond refundings have
saved us over $535,000 in interest expense