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1. How many departments prepare a budget?

The City has seven department heads that prepare a budget.

2. Where do multi-use paths fall within the budget and can that be shown as its own line item?

Construction of each multi-use path is a separate item in the Capital Improvement Plan.

3. What opportunities will there be to comment on the preliminary budget after it is approved in September?

The only time currently scheduled to comment on the preliminary budget is at the Truth in Taxation hearing scheduled for November 30.  You can also contact the Mayor, City Council and Finance Director at any time, or leave a comment using this form.

The focus of the City’s engagement and comment periods are on the early part of the year, because we believe there is greater flexibility and opportunities for impact early on in the process versus the final months.

4. Why does the Truth in Taxation hearing occur so late in the budget process?

All Minnesota Cities must follow the Truth in Taxation process laid out by the Minnesota Department of Revenue. The hearing is required to be held after truth in taxation statements are received by each tax payer.  The City recognizes that holding the hearing in late November or early December is not enough time to change the budget and will be holding its own public engagement sessions on May 19 and August 18.  We believe this early engagement will offer greater flexibility and opportunities for impact versus the final months.

5. Does the city use a top-down or bottom-up budget process?

The City uses a strategic planning process.  City Council sets a mission and vision statement, which helps inform how services should be provided and to develop an annual budget. The City Council also listens to feedback and requests from departments and divisions related to day-to-day operations and needs.

6. Do departments receive any instructions on how to prepare budgets? Who set the instructions?

Department heads base their budgets on the City’s Mission and Vision. In 2021, results of Budget Survey and Community Engagement events will also be considered. The City Manager and Finance Director give instruction on preparing budgets.

7. Did or could you consider a Fiscal Advisory Committee made up of residents?

We considered the request and determined the best way was to incorporate the ideas and viewpoints from all residents. 

We have initiated an encompassing resident engagement process for the 2021 budget plan. This includes adding more opportunities and ways for residents to provide input into the budget process, Financial Management Plan and the proposed 2021 budget (when ready). 

The public meetings scheduled for May 19 and August 18 are both prior to the council setting the initial maximum tax levy in September.

8. When will the 2020 Budget document be posted online?

Currently a summary of our annual budget is posted here. The annual budget document will be posted by the end of January. 

9. When do you plan to update the Financial Management plan for the next five years?

An updated Financial Management Plan will be presented on May 19.

10. Does the Hopkins compare itself with other Cities?

We have compared ourselves to other Cities when making specific decisions on: organizational 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. It is not an apples to apples comparison, we try to make the best decisions for Hopkins.  

11. Why does the City issue debt?

The City issues debt for infrastructure and large scale equipment that has a useful life equal to or greater than the length of the debt. Seventy percent of the City’s debt levy is for street reconstruction. 

The City is in the middle of a plan to reconstruct all streets within the City paid for with debt, special assessments and user charges for water, sewer and storm sewer. All streets in Hopkins are planned to be reconstructed in the next 10-12 years. The City has also made significant infrastructure investments on the 8^th Avenue Artery and Blake Road that prepare the City to take full advantage of Southwest Light Rail. 

12. Will revenue considerations that affect decisions on the upcoming zoning changes be made?

Maximizing tax base, and other economic development strategies including the addition of living-wage jobs, will inform the zoning update process as one of several considerations. The zoning standards must also establish regulations that insure the City gets the type of development it wants and that both existing and future development are compatible with adjacent uses. In developing the zoning code, the City will look holistically at land use from the perspective of four environments: Built, Social, Natural and Economic and strive to meet goals in all four areas.

13. Commercial property bring in more revenue, is the city focusing on them over residential apartment buildings?

That is not necessarily true. While commercial property does pay a higher tax rate, commercial property does not generally develop at the density of new multifamily housing, so the overall value of commercial property is less than multifamily development, resulting in a lower taxable value. There are exceptions, specifically class A office buildings such as Excelsior Crossings, but the office market is not driving new class A office development today – or in the foreseeable future.

The majority of the City’s redevelopment sites are located near the Green Line Stations and have been guided for a variety of higher density development, including commercial and housing. The City of Hopkins would like to see a mix of jobs and housing available near the stations, but the market has to be there to support development.

14. What is the outcome of the Moline parking ramp settlement? How does it affect the budget? What documents are available online?

The outcome of the Moline parking ramp settlement was presented at the December 17 City Council Meeting. That presentation is available online here and documents are available here.

To summarize: The City of Hopkins, and the Hopkins HRA, agreed to issue an additional TIF Note for $8 million and extend the duration of the TIF District from 15 to 25 years. The obligation will be paid from TIF generated from the new property value created by the Moline development. The developer, Doran Companies, will retain ownership of the parking ramp.

The Moline parking ramp settlement will not directly affect any budget or tax levy in the near term. The City’s tax levy is divided among all properties based on taxable market value, which does not include value created in tax increment financing (TIF) districts. However, property in TIF Districts do pay taxes on the base value (the value of the property before redevelopment). Because the redevelopment would not have happened but for the use of TIF, the real impact on taxable market value is in the normal increase the base property value would have experienced due to inflation and market value increases of the previous office/warehouse development. The City acknowledges, however, that the settlement results in the City of Hopkins being able to capture the increased property taxes later than originally planned.

Even though the duration of the TIF district was extended from 15 to 25 years, based on projections, with very modest inflation (two percent), the district will have the obligations paid off in 21 years. If we use more of a historical, but yet conservative inflation of four percent, all obligations would be paid off in 18 years.