2012 Levy and Budget

Taxation Process
Preliminary Levy was set in September Proposed tax notices mailed Final adoption of budget and levy
December 20th council meeting.

2012 Proposed Tax Levy

Purpose General Operations General Fund Capital Levy Special Levies: PERA Levy MVHC Levy Subtotal Special Levies - Other Debt Levies: 2002B GO Improv Revolving Bonds 2003 HRA Revenue Bonds 2007B GO Improv Revolving Bonds 2007 Capital Improvement Bonds 2010A GO Improvement Bonds 2010B Refunding Bonds Subtotal - Debt Levies Subtotal Special Levies TOTAL LEVIES Increase over prior year Percentage Incr (Decr) - Total 2011 $ 8,539,064 100,000 $ 8,639,064 35,500 222,850 258,350 2012 Net Levy Proposed $ 8,881,428 $ 125,000 $ 9,006,428 35,500 35,500 2012 Net Levy Revised $ 8,784,091 $ 125,000 $ 8,909,091 35,500 35,500

59,000 200,000 172,000 710,000 100,000 $ 1,241,000 $ 1,499,350 $ 10,138,414 $ 212,729 2.14%

220,000 184,500 765,900 77,000 59,000 $ 1,306,400 $ 1,341,900 $ 10,348,328 $ 209,914 2.07%

220,000 184,500 765,900 77,000 59,000 $ 1,306,400 $ 1,341,900 $ 10,250,991 $ 112,577

1.11%

Tax Levy Changes

General Levy Increase Capital Levy Special Levy Decrease
(For MVHC unallotment)

$245,027 25,000 (222,850) 65,400 $112,577

Debt Levy Increase Total Levy Change

2012 Proposed General Fund Budget and Levy

General Fund Budget $10,470,526 This is an increase from the 2011 budget of 1.66%. This is an increase over the current years levy of $112,577 or 1.11% and a .96% decrease from the preliminary certified levy. Tax Levy $10,250,991

Revenue Budget
General Fund Property Taxes Intergovernmental Revenue Licenses, Permits & Fees Charges for Service Miscellaneous Revenue Interest Earnings Use of 2009 Savings Total Revenues 2011 Budget 2012 Budget % Incr/(Decr) 2.98% 15.90% -10.59% 52.08% -0.51% -66.67% -100.00% 1.66%

$ 8,630,564 $ 8,887,591 442,070 512,370 544,790 487,115 161,200 245,150 314,900 313,300 75,000 25,000 130,803 $ 10,299,327 $ 10,470,526

General Fund Revenues

Expenditure Budget
General Fund City Council $ Administrative Services Finance Legal Municipal Building Receptionist Assessing City Clerk Inspections Police Fire Public Works Recreation Activity Center Planning & Zoning Other Financing Uses Total Expenditures 2011 Budget 71,547 451,670 203,243 135,000 294,818 44,172 167,236 99,415 616,607 4,484,387 838,258 2,174,400 199,721 333,471 125,182 60,200 $ 2012 Budget 68,697 469,132 209,726 135,000 296,863 44,846 173,091 109,970 613,167 4,530,032 855,424 2,198,677 205,099 323,765 126,837 110,200 Budget % Incr/(Decr) -3.98% 3.87% 3.19% 0.00% 0.69% 1.53% 3.50% 10.62% -0.56% 1.02% 2.05% 1.12% 2.69% -2.91% 1.32% 83.06% 1.66%

$ 10,299,327 $ 10,470,526

GF Expenditures

General Fund Budget Three Year Comparison

Year Budget Incr/Decr % Change -0.02% 2.25% 2.14% 2010 $ 10,073,003 $ (2,489) 2011 $ 10,299,327 $ 226,324 2012 $ 10,519,463 $ 220,136

Change over three year period = 4.43% Average change over three years is approximately 1.48% per year The rate of inflation from 2010 to 2011 was 3.8%

Analysis of Average Valued Home

2012 Home Valued at = $225,000 Assuming constant market value
2011 City Taxes 2012 Proposed City Taxes
Increase of $82 from 2011

$1,252 $1,334

2012 Revised City Taxes

$1,319

Decrease of $15 from preliminary levy

RESIDENTIAL PROPERTIES TAX CHANGES FROM 2011

Property Tax Breakdown on Home Valued at $225,000

City County School District Special Districts Total Taxes $1,334 $1,097 $ 657 $ 272 $3,360

This does not include referendum market value taxes levied by the school district(s) or reduction for the market value homestead exclusion which is new for 2012.

Where My Taxes Go

Budget Challenges
Loss of significant revenue sources
Inspection revenues Decline in investment income

Change in Homestead Credit Program PERA rate increase state mandated Inflation
Energy costs Fuel & fuel related projects Property & liability insurance

Market Values

MVHC vs MVHE
Market Value Homestead Credit
After tax credit Direct reduction of taxes

Market Value Homestead Exclusion

A portion of your home value is excluded from being tax Value is reduced before taxes are calculated

Theoretical Illustration
Average Tax Rate Illustration
Old Law Credit Estimated Market Value Exclusion Taxable Market Value Class Rate Net Tax Capacity Tax Rate Gross Tax Credit Net Tax Capacity $116,000 $0 $116,000 1% $1,160 105.81% $1,227 $268 $959 New Law Exclusion $116,000 $26,800 $89,200 1% $892 110.92% $989 $0 $989

Tax Shift

Tax Capacity Values

Fiscal Disparities
Spreads commercial growth among all metro cities and benefits cities that are not experiencing commercial growth Hopkins had been a net gainer we received more than we contributed Hopkins is now a net contributor meaning we contribute more that we receive Results in higher tax rate

Fiscal Disparities Changes

Changes in the Fiscal Disparities Program affects the tax rate for Hopkins properties.
Year Contribution 2012 2011 2010 2009 2008 2007 2006 2005 3,092,328 3,324,078 2,858,921 2,766,202 2,450,063 2,116,466 1,952,996 1,526,509 Distribution 2,650,437 2,645,025 2,913,208 2,840,070 2,405,483 1,997,455 1,836,753 1,673,106 Net Gain/(Loss) (441,891) (679,053) 54,287 73,868 (44,580) (119,011) (116,243) 146,597

Responses to Budget Challenges

Smart Growth and Development Innovation Savings and Efficiencies Grants Debt Savings/Refinancing Delayed hiring of vacant positions Eliminated capital items

Smart Growth and Development

LA Fitness Excelsior Crossing Phase III Hopkins Health & Wellness Center Expansion Marketplace & Main Apartments Pizza Luc

Innovation
Partnerships
Hopkins School District Hennepin County Minnetonka Joint Recreation Program Other Neighboring Cities Three Rivers Park District Watershed Districts, etc.

Savings & Efficiencies

Go Green
Implemented police vehicle fuel monitoring system to save on fuel costs Building and Facility Changes have saved over $15,000 annually Organics recycling Scanning of documents to digital storage Paperless Packets

Grants
During the past few years, the City has received almost $7 million in Grants: Police Department - $473,000 Fire Department - $592,000 Public Works - $230,000 Economic Development - $4,169,000 Dow Towers - $975,000

Grants (cont.)
Depot Coffee House - $271,000 Center for the Arts - $113,500 Recreation $82,000 In addition the City has received over $385,000 in Park Dedication fees from new development.

Value for Taxes

24-Hour Police and Fire Protection Emergency medical treatment and management services Well Maintained Streets, Trails, and Sidewalks Elections Boulevard Tree and Forestry Program High Quality Recreation programs Hopkins Activity Center and Hopkins Depot Hopkins Center for the Arts Community and Economic Development Housing Services and Programs Building Inspections, Licensing, and Code Enforcement Beautiful Parks and Open Space

Questions?
Finance Director, Christine Harkess. Phone number is 952-548-6330 e-mail address is charkess@hopkinsmn.com.