City Council

HOPKINS CITY COUNCIL SPECIAL WORK SESSION AGENDA Tuesday, July 14, 2026 5:00 pm RASPBERRY ROOM AT HOPKINS CITY HALL I. CALL TO ORDER II. PRESENTATIONS 1. 2027 General Fund Budget and Tax Levy; Bishop III. ADJOURN  Finance Department CITY OF HOPKINS Memorandum To: Honorable Mayor and Council Members Mike Mornson, City Manager From: Nick Bishop, Finance Director Date: July 14, 2026 Subject: 2027 General Fund Budget and Tax Levy _____________________________________________________________________ PURPOSE To provide input and guidance for the 2027 General Fund Budget and Tax Levy. INFORMATION 2027 General Fund Budget and Tax Levy During the January 9 Goal Setting meeting City Council discussed the budget and weighed the importance of continuing the City’s Mission (Inspire. Educate. Involve, Communicate) and being stewards of taxpayer money. Discussion topics included an estimated 7% increase on base level operating expenditures, temporary reductions and delayed projects in the 2026 budget, CIP and ERP. The draft tax levy being presented is $25,640,518 or a 15.77% increase from 2026. Investment in Public Safety Departments The draft tax levy heavily invests in our Public Safety Departments, with 38.9% of the levy going to support the Police and Fire Departments. The Police Department is currently implementing a staffing study from January 7, 2025, which recommended 38 total sworn police positions. The 2027 budget adds one additional police officer for a total 35 sworn positions. The Fire Department is implementing a staffing study from September 19, 2023, which recommended a total of 20 full time fire positions. The 2027 budget is aided by FEMA’s Staffing For Adequate Fire and Emergency Response (SAFER) Grant and includes 15 positions. Staffing Reductions and Efficiencies The 2027 Budget continues to include staffing reductions and efficiencies. • The Special Projects and Initiatives Manager position was replaced with an HR Technician in 2025, resulting in costs savings and providing needed support for the City’s HR Division. • The Youth Program Specialists position and Deputy City Clerk positions were combined in 2026. The combination results in cost savings in both the General and Depot Funds. • The Planning and Economic Development Administrative Assistant was reassigned to the Fire Department in 2026, fulfilling a need identified by the Fire Department staffing study. • The Depot continues to be managed by the Hopkins Center for the Arts, which streamlines the facility rental process and provides additional space for Arts Center Programming. • The Fire Department sold a ladder truck in 2026 that was considered surplus. The sale will provide $400,000 to reduce the levy in 2028-2020 and save over $3,000,000 in 2029 when a new truck would have needed to be purchased. • The Planning and Economic Development will save approximately $100,000 in professional services by using internal staff and grant funded studies to complete the comprehensive plan update, 2050 Hopkins Mosaic. Reliance on Debt The draft tax levy recommends the use of debt issuance to pay for long lasting capital assets and equipment. Paying upfront can create an unnecessary burden for today’s taxpayer, this does however obligate the City to pay interest costs. Based on the draft tax levy the City is projected to issue up to $12 million in debt during 2027. This is approximately $3.5 million more than projected during the April 21, 2026 City Council Meeting. Projected debt includes: Project Amount Source of Repayment Central Park $4,800,000 Storm Sewer User Fees, Park Franchise Fees Watermain Project $3,200,000 Water User Fees, Tax Levy Public Works Parking Lot $1,200,000 Tax Levy, Storm Sewer User Fees Street Rehabilitation Project $550,000 Tax Levy Roofing at Fire, City Hall and $790,000 Tax Levy Pavilion Equipment: Ice Resurfacer, Police $785,000 Tax Levy Rescue Vehicle & Dump Truck  FUTURE ACTION A budget information session will be held on Monday, August 10 from 5-6 PM at City Hall. Details will be posted on the City’s website: https://www.hopkinsmn.com/466/City- Budget-Process. A preliminary levy must be adopted by September 30th of each year. A Truth and Taxation hearing is planned for Monday, November 30th. A final levy must be adopted by December 31st. Based on feedback, staff would plan to have additional meetings to discuss the budget in the Summer and Fall.  City of Hopkins First Draft Tax Levy 7/14/2026 For the Year Ending December 31, 2027 Actual Draft % Increase Purpose FY2026 FY 2027 (Decrease) General Operations General Fund 17,224,277 18,990,028 10.25% Capital Levy 262,500 412,500 57.14% Arts Center 380,000 395,000 3.95% Pavilion Fund 431,000 455,400 5.66% Equipment Replacement - 1,077,564 100.00% Permanent Improvement - 290,000 100.00% Parking 100,000 - -100.00% Total General Operations 18,397,777 21,620,492 17.52% Debt Levy 3,750,127 4,020,026 7.20% Total Levy 22,147,904 25,640,518 15.77% Tax Levy by Governmental Use Actual 2026 Draft 2027 Purpose Tax Levy Tax Levy Percent Public Safety 9,432,095 10,240,346 39.9% General Government 3,318,167 3,970,317 15.5% Public Works 2,484,135 2,459,537 9.6% Parks and Recreation 1,658,315 1,811,196 7.1% Activity Center 431,565 508,632 2.0% Pavilion 431,000 455,400 1.8% Arts Center 380,000 395,000 1.5% Capital projects & debt 4,012,627 5,800,090 22.6% Total 22,147,904 25,640,518 100.0%  City of Hopkins First Draft Tax Levy 7/14/2026 For the Year Ending December 31, 2027 Adopted 2026 Draft 2027 % Increase Department Budget Budget (Decrease) City Council 141,198 142,618 1.01% Administrative Services 766,661 1,013,114 32.15% Communications 230,894 218,391 -5.42% Information Technology 766,859 1,018,418 32.80% Finance 654,335 765,308 16.96% Legal 270,000 285,000 5.56% Municipal Building 390,991 409,209 4.66% City Clerk 326,262 356,352 9.22% Inspections 1,250,349 1,256,409 0.48% Police 8,356,223 8,905,244 6.57% Fire 3,158,241 3,478,412 10.14% Public Works 4,467,380 4,652,974 4.15% Recreation 287,077 287,572 0.17% Activity Center 678,867 786,857 15.91% Planning & Zoning 256,732 268,970 4.77% Community Development 115,540 123,774 7.13% Tuition Reimbursement 10,000 10,000 0.00% Contingency 25,000 50,000 100.00% Transfer to Depot - 18,000 100.00% Total Expenditures 22,152,609 24,046,622 8.55%  City of Hopkins First Draft Tax Levy 7/14/2026 For the Year Ending December 31, 2027 Adopted 2026 Draft 2027 % Increase Department Budget Budget (Decrease) Property Taxes 17,309,277 19,075,028 10.20% Intergovernmental Revenue Local Government Aid 1,091,250 1,095,753 Intergovernmental Revenue - State 890,000 915,000 Intergovernmental Revenue - Federal 591,642 591,642 Total Intergovernmental Revenue 2,572,892 2,602,395 1.15% Licenses, Permits & Fines Court Fines & Penalties 176,000 176,000 Building Permits & Inspections 647,000 668,000 Inspection Fines & Citations 3,000 3,000 City Clerk - Business Licenses 11,000 12,100 PD - Liquor, Animal Licenses & Penalties 121,225 121,225 Fire - Licenses & Permits 4,500 5,000 Public Works - Licenses & Permits 1,215 78,500 Planning & Zoning - Licenses & Permits 4,000 4,000 Total Licenses, Permits & Fines 967,940 1,067,825 10.32% Charges for Service Finance Department 8,500 9,000 Inspections 234,500 233,200 Police 35,000 35,000 Fire 10,500 10,500 Public Works 45,000 45,000 Activity Center 180,000 207,000 Planning & Zoning 11,000 12,020 Total Charges for Service 524,500 551,720 5.19% Miscellaneous Revenue Franchise Fees 621,500 532,500 Miscellaneous 100,000 125,000 Finance Department 3,000 2,000 Police 500 500 Fire 28,500 - Public Works 8,000 - Activity Center 16,500 15,000 Youth Intern Program - 74,654 Total Miscellaneous 778,000 749,654 -3.64% Total Revenues 22,152,609 24,046,622 8.55%  City of Hopkins 2027 Operating Budget Request Budget Request Title: Patrol Officer Department: Police Department Division: Contact Person: Chief Johnson Duration: One-Time On-Going Type: Additional Support for Existing Service or Program Item Description: The police department needs to continue to hire patrol officer staff to meet the needs of the ever growing service demands in the city with the ever growing population. Item Justification: The police department hired the Axtell group in 2024 to conduct a staffing needs assessment of the department going into the future. They examined the calls for service, community engagement, light rail transit implementation and continued increase in high density housing projects. Study indicated we need to increase officer staff to 36. Estimated Cost: 133,141 Estimated Revenue (if any): Impact on Stakeholders: (Individuals involved in our work, businesses, residents, visitors or other departments) Impact on Personnel: Hiring adequate staffing levels ensures the safety of our officers and (Please describe any allows for training, vacations and mental health breaks from the daily personnel changes associated obligations of our duties. Adequate staffing also allows us to meet the with this request) service needs of the community and allows for thorough follow through and continued community building intiaitives. Impact on IT: Minimal- set up email, etc. (Please describe any implementation requirements, necessary software or ongoing support) How does the item relate to Providing the highest quality of service to our community is a key the City' s Mission and Vision? componenet to this specific request. We need the personnel to continue problem solving issues in the community while simulateneously preventing and detering crime in our community. This improves the quality of life for our residents. How does the item relate to "Promote a resilient community" starts with hiring and retaining the the City' s Goals? best staff. Employees provide the expertise to run the city to accomplish all goals. Retaining staff comprises of having adequate staffing levels to alleviate burnout, along with competitive wages and additional career development opportunities. Other Information or Staffing study recommended additional officer staffing with an increase Comments: to 36. We are currently at 34. This takes significant time to recruit, hire and train our officers and will not be fully integrated for over a year. We need to continue funding these positions for the betterment of our community.  City of Hopkins 2027 Operating Budget Request Budget Request Title: Staffing Request - IT Technician Department: Administration Division: IT Contact Person: Casey Casella, Assistant City Manager Duration: One-Time On-Going Type: Additional Support for Existing Service or Program Item Description: The IT Division is requesting an additional full-time employee for 2027. The division is currently at 4 FTE. This additional would bring the total to 5. Item Justification: Increased technology demands due to: Increase in staffing, devices supported, departments are adopting technology faster than we can keep up with all of the requests, compliance and regulation is becoming stricter requiring more staff time, cybersecurity issues are growing at an alarming rate Estimated Cost: $88,350 - $117,300 annually Estimated Revenue (if any): Impact on Stakeholders: Projects are being delayed for stakeholders because there is (Individuals involved in our insufficient IT staffing to meet all requests. There are not enough IT work, businesses, residents, team members to properly maintain IT systems, handle requests for visitors or other departments) support, and requests to implement new technology. Impact on Personnel: Increase admin by 1 FTE (Please describe any personnel changes associated with this request) Impact on IT: New set up and software for 1 person - cube, desk phone, laptop, (Please describe any dock, monitors, monitor stand, mouse, keyboard, VPN token, implementation requirements, Laserfishe, Springbrook, Microsoft office suite Adobe Pro. necessary software or ongoing support) How does the item relate to The IT division is tasked with internal support, providing the the City' s Mission and Vision? confidentialitiy, integrity, and availability of the city's systems so those that directly work implementing the city's mission, vision, and goals are able to carry out their important work. How does the item relate to The City has focused on employee recuritment and retention. Have the City' s Goals? consistent access to IT resources impacts all employees. Maintaining the quality of IT support to employees keeps the City's retention efforts in line with our peer cities. Other Information or See attachement. Comments: Supplemental Staffing Request – IT Technician Overview The Information Technology Department respectfully requests funding for one additional IT Technician position. The City currently relies on a four-person IT team to support all municipal technology operations, including public safety systems, utility infrastructure, cybersecurity, end-user support, enterprise applications, telecommunications, and strategic technology initiatives. As the City's dependence on technology continues to grow, current staffing levels are no longer sufficient to maintain desired service levels while also addressing cybersecurity, compliance, and project delivery requirements. Current Environment The IT Department supports: • 280 desktop and laptop computers • More than 100 mobile phones and tablets • Over 100 surveillance cameras • Technology systems within police vehicles, fire apparatus, and public safety facilities • 58 servers • 15 firewalls and approximately 50 network switches • Multiple VPN environments • More than 100 vendor-supported applications and services • Critical infrastructure supporting public safety, water operations, financial systems, and City services Technology is now integrated into nearly every City operation, making reliable IT support essential for service delivery. Service Impact Demand for IT services continues to increase while staffing remains unchanged. Recent operational metrics show: • Help desk ticket volume increased by 15.19% over the past year • Average ticket resolution times are approximately one week • Technology projects are taking longer to complete due to limited staff availability • Departments are experiencing delays in technology deployments and improvements • Staff are increasingly focused on reactive support rather than proactive planning and modernization Without additional staffing, service levels are expected to continue to decline as technology adoption grows. Cybersecurity and Compliance Risk The City faces increasing cybersecurity obligations and regulatory requirements. The IT Department is responsible for supporting compliance efforts related to: • Criminal Justice Information Services (CJIS) • Payment Card Industry (PCI) requirements • Water system cybersecurity requirements • State and federal cybersecurity initiatives • Security awareness training and phishing simulations • Cyber insurance audits • Incident response planning and audit activities Unlike many organizations of similar complexity, the City currently has no dedicated cybersecurity position. Cybersecurity responsibilities are performed in addition to normal operational duties, limiting the City's ability to proactively address risk. Operational Resiliency Current staffing levels provide limited redundancy. When a staff member is absent due to vacation, illness, training, or emergency response, the department's ability to deliver timely support is significantly reduced. This creates operational risk and limits the City's ability to respond to both routine support requests and unexpected technology incidents. Recommendation Adding a fourth IT Technician will improve service responsiveness, increase operational resiliency, support growing technology demands, and allow the department to better address cybersecurity and compliance responsibilities. This position represents a proactive investment in maintaining reliable City services, protecting critical systems, and supporting the technology needs of all departments.  City of Hopkins 2027 Operating Budget Request Budget Request Title: Citywide Job Classification and Market Compensation Study Department: Administration Division: HR Contact Person: Casey Casella, Assistant City Manager Duration: One-Time On-Going Type: Additional Support for Existing Service or Program Item Description: Request to hire a consultant to conduct a comprehensive classification and compensation study. This is a process by which employee positions and payment is evaluated to ensure that jobs are appropriately classified and pay is externally competitive and internally equitable. Item Justification: State law requires public jurisdictions to use a job evaluation system in order to determine the comparable work value to eliminate any gender- based wage inequities in compensation and submit reports every 3 years. Currently the City uses the DMB system through Gallagher consulting. Estimated Cost: $60,000 Estimated Revenue (if any): None Impact on Stakeholders: Maintaining internal compliance with state law will avoid mandated (Individuals involved in our costly pay adjustments from the State. Maintaining externally work, businesses, residents, competitive wages will benefit employee recruitment and retention, in visitors or other departments) turn having a quality workforce to service the public. Impact on Personnel: Positions may move pay scales. This could impact pay scales in turn (Please describe any impacting personnel budgets citywide. personnel changes associated with this request) Impact on IT: None (Please describe any implementation requirements, necessary software or ongoing support) How does the item relate to "Creating a spirit of community where people enjoy exceptional the City' s Mission and Vision? government services". The city should seek to be an employer of choice that is internally equitable and externally competitive for employee wages and benefits. How does the item relate to "Promote a resilient community" starts with hiring and retaining the best the City' s Goals? staff. Employees provide the expertise to run the city to accomplish all goals. Other Information or Due to the technical nature of compensation systems, this study cannot be done in house. Industry best practice is to conduct a market study every 3-5 years (last Comments: completed in Hopkins in 2023), and a classification system study every 5 years (last completed in Hopkins in 2017). A compensation plan will deteriorate over time if it is not maintained, especially in today's volatile job market.  City of Hopkins 2027 Operating Budget Request Budget Request Title: Community Events Fund Department: Admin Division: N/A Contact Person: Casey Casella, Assistant City Manager Duration: One-Time On-Going Type: New Service or Program Item Description: This is a grant fund that will help support community-driven events that align with the City's vision for equity and recognized cultural hertitage months. Funds could be administered by the Community Engagement Task Force, ensuring requests are engaging to the Hopkins community. Item Justification: This allows the City to support more community-driven events which celebrate the many backgrounds within Hopkins without requiring as much Staff support. The City has received requests from community groups for financial support for these types of events. The recent community survey showed the importance of community events and festivals, with 80% of respondents citing these events as important to their inclusion in Hopkins and 75% wanting more of these events. Additionally, 88% of residents said Hopkins should prioritize working with community members in planning events, something this item will directly respond to. Estimated Cost: $20,000 Estimated Revenue (if any): N/A Impact on Stakeholders: The fund will support more community events. After doing continued (Individuals involved in our outreach about community engagement desires with residents, creating work, businesses, residents, this fund will build trust with residents by showing clear nest steps are visitors or other departments) being taken as a result of their feedback. Impact on Personnel: This may reduce staff time needed to plan city community events. It (Please describe any may also create opportunities for staff to gain valuable feedback on city personnel changes associated policies/initiatives through event collaborations. with this request) Impact on IT: No impact. (Please describe any implementation requirements, necessary software or ongoing support) How does the item relate to This item meets the City's mission by inspiring, educating, involving, and the City' s Mission and Vision? communicating about the different cultures and communities within Hopkins. This item helps the city meet its vision statement of creating a spirit of community where all people feel safe, welcome, and like diversity is celebrated by supporting the creation of events that celebrate all community members. How does the item relate to This item addresses goal one of the strategic plan. Having more resident-led the City' s Goals? events will promote Hopkins as a destination and enhance city events. It addresses all goal statements of goal three, Take It To Them. Having the funds be allocated by a resident board makes this item especially strong in goal three. Other Information or Staff would develop a policy and process for applying for funds. The Comments: Community Engagement Task Force could review proposals and vote to administer funds.