Preliminary 2021 Budget

New Hope City Council Approves Preliminary 2021 Budget
Posted on 09/15/2020

The New Hope City Council approved the 2021 New Hope preliminary budget and maximum tax levy at its meeting on Sept. 14 and they were certified to the Hennepin County Auditor.

The preliminary 2021 general fund budget is $15,936,977, which is an increase of $526,427, or 3.4%, over the 2020 budget.

Major changes in the 2021 budget include:

  • An increase of $243,524 for wage and benefit increases; a 3% cost of living adjustment is budgeted for employees along with an increase in the city’s share of health insurance coverage; and a 3% increase in City Council salaries is included in the budget (to be considered in October 2020).
  • $156,000 is budgeted for phase 1 of police department body and squad camera purchases (phase 2 scheduled for 2022). It is recommended that this cost be funded with a transfer in from the IT reserve fund in order to keep the general fund tax levy to a minimum.
  • There is an increase of $85,288 in the budget for West Metro Fire-Rescue District due to a $54,673 or 4.2% increase in New Hope’s share of the joint powers agreement and a $33,265 increase in central garage charges due to a replacement charge for the new emergency generator shared between the fire district and the police station/city hall facility.

The preliminary tax levy for the entire 2021 budget is $17,417,601, which represents a 3.4% or $572,885 increase over the 2020 levy of $16,844,716, which was a 10.08% increase. The city tax rate is projected to decrease from 64.721% in 2020 to 62.471% in 2021.

According to the Hennepin County Assessor, the median home value for taxes payable in 2021 is $257,000, an increase of 5.33% from 2020. The estimated impact on residential homes based on a 3.4% increase in the city tax rate is 2%. For homes valued between $150,000 and $400,000, the tax increase is estimated to be $14 to $43. More information on the proposed impact will be available after the final tax capacities are certified with Hennepin County.

The preliminary 2021 budget is posted on the city’s website at newhopemn.gov/finance. The City Council will continue to refine the budget and tax levy over the next few months. The final budget and levy numbers may decrease, but they cannot increase. The proposed 2021 budget and tax levy will be presented at a public hearing on Dec. 7. Interested residents are invited to attend the public hearing and ask questions. New Hope City Council will consider the final 2021 budget and tax levy for approval by mid-December.