City Council Approves Preliminary 2022 Budget

City Council Approves Preliminary 2022 Budget
Posted on 09/14/2021

The New Hope City Council approved the 2022 New Hope preliminary budget and maximum tax levy at its meeting on Sept. 13 and they were certified to the Hennepin County auditor.

The proposed 2022 general fund budget is $16,179,193, which is an increase of $242,216, or 1.5%, over the 2021 budget. Major changes in the 2022 budget include:

  • An increase of $281,056 for wage and benefit increases, a 3% cost of living adjustment and an increase in the city’s share of health insurance coverage and a comparable cities adjustment. A 3% increase in City Council salaries is also included in the budget.
  • An increase of $105,000 in IT charges.
  • 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.
  • 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.
  • A $39,000 increase in the budget for election costs, due to the gubernatorial election in 2022.
  • A $315,454 decrease in central garage charges primarily in the police department (for leasing vehicles) and the street department (reduced equipment purchases).
  • New Hope 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.
  • 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.

The preliminary tax levy for the entire 2022 budget is $18,231,011, which represents a 4.67% increase over the 2021 levy of $17,417,601. The total levy includes a 5% increase in the street and park infrastructure levies to support long-term funding plans for street and park improvements. Three bond debt tax levies are increasing in 2022 while another three are decreasing, resulting in overall combined debt tax levies decreasing by $1,797 in 2022.

Also included in the preliminary 2022 budget is a new Housing Redevelopment Authority (HRA) tax levy of $417,000 to be used to help fund redevelopment activities, including the Scattered Site Housing Program. The Economic Development Authority (EDA) tax levy is reduced by $212,000 in 2022 to offset the overall increase.

According to the Hennepin County Assessor, the median home value for taxes payable in 2022 is $275,000, a 7% increase from 2021. Per updated information recently received from the County, 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 amounts to a property tax increase of between $57 and $180 per household. The city tax rate is project to slightly increase from 62.59% in 2021 to 62.719% in 2022. Although New Hope’s property tax rate appears higher than neighboring communities, approximately 13% of the rate accounts for the street infrastructure levy. This levy funds street infrastructure projects and spreads the cost of the improvements across all tax-paying properties in the community rather than assessing project-adjacent properties. More information on the proposed impact will be available after the final tax capacities are certified with Hennepin County.

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 complete proposed 2022 budget may be found at newhopemn.gov/finance. The proposed 2022 budget and tax levy will be presented at a public hearing at New Hope City Hall on Monday, Dec. 6, at 7 p.m. Interested residents are invited to attend the public hearing and ask questions. The New Hope City Council will consider the final 2022 budget and tax levy for approval by mid-December.