120621 City Council Special Meeting Packet
CITY COUNCIL
SPECIAL MEETING
Monday, December 6, 2021
7:00 p.m.
New Hope City Hall
4401 Xylon Avenue North
Council Chambers
Mayor Kathi Hemken
Council Member John Elder
Council Member Andy Hoffe
Council Member Michael Isenberg
Council Member Jonathan London
1. CALL TO ORDER – December 6, 2021
2. ROLL CALL
11. UNFINISHED & ORGANIZATIONAL BUSINESS
11.1 Public hearing to take comments on 2022 city budget
12. OTHER BUSINESS
13. ADJOURNMENT
Mayor’s 2022 Budget Public Hearing Opening Comments
December 6, 2021
The purpose of this public hearing is to take public comments on
the city’s proposed budget and tax levy for 2022. The city council
adopted the preliminary budget at the September 13 council
meeting and has been reviewing all the budget details with the
city manager and department heads for the last several months.
The final budget and tax levy will be adopted at the December 13
council meeting.
The city manager and financial consultant will be making the
presentation on the budget and then the public hearing will be
opened for the council to take public comments on the budget.
No official action will be taken on the budget at this meeting.
Here are a few key points about the 2022 budget:
The general fund budget is increasing 1.5% or $242,216 over the
2021 budget.
The general fund tax levy is increasing 4.72% or $513,889 over
the 2021 tax levy.
The major increases in the general fund are for:
‐ Wages and benefits
‐ IT charges
‐ An increase for West Metro Fire‐Rescue District
‐ An increase for the Emerald Ash Borer
removal/replacement program
‐ 2022 election judge costs for the gubernatorial election
The total tax levy, including infrastructure funds, EDA and
HRA, and debt is an increase of 4.67% over the 2021 tax levy.
A new HRA levy is recommended to support the scattered
site housing program and other redevelopment activities.
A 5% increase is being recommended for the street and park
infrastructure funds. New Hope does not assess tax paying
properties for street improvements; the cost is included with
the overall taxes being paid and accounts for about 13% of
the tax levy.
The city tax rate will increase slightly, from 62.60% in 2021 to
62.72% in 2022.
The median home value in 2022 is $275,000, which is a 7%
increase from 2021.
The estimated tax impact on residential properties based on
a 4.67% increase in the city tax levy is 7% or between $57 ‐
$180 per year depending on home value.
The city’s long‐term financial plan shows no new debt
issuance over the next 10 years.
The city’s portion of your tax bill is about 35‐38%, with the
other major taxing jurisdictions being Hennepin County and
the School District.
I:\RFA\City Manager\2021\Budget 2022\CM 120621\11.1 Q ‐ Budget Hearing 2022 120621.docx
Request for Action
December 6, 2021
Approved by: Kirk McDonald, City Manager
Originating Department: City Manager
By: Kirk McDonald, City Manager
Agenda Title
Public hearing to take comments on 2022 city budget
Requested Action
This is a public hearing to take public comments on the 2022 proposed final budget. Representatives from
AEM will be in attendance to make a presentation along with the city manager. Staff recommends that
Council take public comments following the presentation and then either continue or close the public
hearing. Staff is recommending that Council formally adopt the budget and set the tax levy at the
December 13 council meeting.
Policy/Past Practice
The City Council annually conducts a public hearing on the city budget and tax levy to take public input on
the proposed budget and levy.
Background
The preliminary budget and tax levy was adopted at the September 13 city council meeting. This is the
maximum tax levy and budget that can be adopted; it can be reduced before final adoption in December, but
it cannot be increased. The Council reviewed all general fund budgets with department heads at their
September work session and reviewed utility and enterprise fund budgets at the October work session. The
Council reviewed the final budget hearing presentation at the November work session, as additional
information had been added regarding results of the 2021 city services/performance measurements survey,
average utility rate increases, and Hennepin County Assessor information. No changes have been made to
date on the budget.
2022 Budget
The 2022 preliminary general fund budget is $16,179,193, which is an increase of $242,216 (1.5%) over the
2021 budget of $15,936,977. The major changes in the budget include:
An increase of $281,056 for wage and benefit increases ($131,694 for reallocation of personnel expenses
from EDA to provide funding for scattered site housing/redevelopment projects; $149,362 for all other
general fund personnel costs). A 3% cost of living adjustment is budgeted for employees along with an
increase in the city’s share of health insurance coverage for a comparable cities adjustment. A 3% increase
in City Council salaries is also included in the budget.
IT charges to the general fund increased $105,200. The software for body cameras (WatchGuard/$30,000)
is allocated to the police department budget, and in 2022 a small percentage of the HR
director/coordinator personnel cost is allocated to the IT budget.
There is an increase of $65,859 in the budget for West Metro Fire‐Rescue District due to a 4.9% increase in
New Hope’s share of the joint powers agreement. Similar to 2021, it is recommended that New Hope’s
share of the aerial lease payment ($51,800) be funded by the general fund instead of a transfer from the
Fire Capital Projects. The lease payments for two new engines will be included in the 2023 budget.
Agenda Section
Public Hearing
Item Number
11.1
Request for Action, Page 2
The budget includes a $50,000 increase for the Emerald Ash Borer Removal/Replacement Program on
public property (city right‐of‐ways, parks, etc.) due to the increasing occurrence of the disease in the
northwest metro area.
2022 is a gubernatorial election year, and there is a $39,000 increase in the budget for election judge
costs.
There is a $315,454 decrease in central garage charges primarily in the police department (for leasing
vehicles) and the street department (reduced equipment purchases).
The city is scheduled to receive $866,642 in LGA (local government aid) in 2022, which is a $4,916 increase
over 2021. The revenue will be utilized in the general fund to offset central garage equipment and
building replacement charges; it is not used for general operations.
There is a decrease of $130,000 in building permit and related revenue, as the Windsor Ridge single‐
family home development will be completed at the end of 2021.
2022 Tax Levy
The tax levy for the general fund is $11,393,354, which is $513,889 or a 4.72% increase over the 2021 general
fund levy of $10,879,465. The total tax levy for 2022, including the general fund, street and park infrastructure
funds, economic development and housing and redevelopment authorities, and prior debt levies for City
Center, Northwood South and Northwood North infrastructure bonds, the 2017 Police Station/City Hall
facility bonds, and the 2018/2019 Pool and Park improvement bonds is $18,231,011. This represents a 4.67%
or $813,410 increase over the 2021 levy of $17,417,601, which was a 3.4% or $572,885 increase. The total tax
levy includes a 5% increase in the street and park infrastructure levies to support the long‐term funding plans
for street and park improvements. There is no additional increase in the park infrastructure levy for ice arena
to assist with ice arena capital needs, as the final increase was implemented in 2021. A new HRA levy of
$417,000 is recommended for 2022 which is established as a special taxing district. The EDA levy of $153,000,
which is a reduction of $212,000 from 2021 levy of $365,000 to help offset the HRA levy, will be included in
the city’s tax rate. Both levies are needed to support the scattered site housing program and other
redevelopment due to funding changes in the CDBG program. Three of the bond debt tax levies are
decreasing (2015 City Center, 2015 Northwood South, and 2018 Pool and Park) for a total decrease of $8,833.
Three of the bond debt tax levies are increasing (2016 Northwood North, 2017 Police Station/City Hall, and
2019 Pool and Park) for a total increase of $7,036. Overall, the combined debt levies are decreasing by $1,797.
The median home value for taxes payable in 2022 is $275,000, which is a 7% increase from the median value
home in 2021. At this time the estimated impact on residential homes based on the proposed 4.67% increase
in the city tax levy is 7%. For homes valued between $150,000 and $400,000 the tax increase estimate is $57 to
$180. The city tax rate is projected to increase slightly from 62.60% in 2021 to 62.72% in 2022.
Information provided by the Hennepin County Assessor was distributed at the November work session. The
single‐family resident valuation in the city increased by 6.9% for 2021. The total taxable property market
value in the city increased by 7.72%, from $2,021,382,123 to $2,177,389,934. The estimated market value
median for 2021 was $275,000.
Property tax comparisons were also provided for residential, apartment and commercial/industrial properties
and are attached with a summary. Taking the total tax levy into account (city/county/school district), out of
4,774 single‐family properties, approximately 28% will see an increase between 0 and 4.9% and 53% will see
Request for Action, Page 3
an increase between 5% and 9.9%. Sample tax statements were provided for various property types. It is
important to remember that the city’s portion of the tax statement is about one‐third of the total amount.
Staff recommends the Council receive public input at this public hearing and provide direction to staff as to
whether any adjustments should be made to the budget prior to the December 13 council meeting.
Attachments
Hennepin County Assessor Information
2022 Budget/Tax Levy Presentation