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Hopkins Labors Under Heavy Equipment Costs

An account to pay for replacing equipment could be in the red by 2013.

Hopkins has more equipment than it can afford to replace, and that could lead to hard choices between higher taxes or fewer services.

Advancing technology has led to an increasing array of equipment in the city inventory. Grants paid for much of that equipment, including laptops and video cameras in police cars and the Fire Department fitness center. But the city must pick up the tab when it’s time for those items to be replaced.

“You can only push so many things back until, all of a sudden, the day of reckoning comes,” said Finance Director Christine Harkess.

The source of the problem is what's called the equipment replacement fund. Hopkins created this fund in the late 1980s to level the cost of equipment purchases from year to year and avoid borrowing, said Acting City Manager Jim Genellie. That worked well for about 20 years, but officials expect the account to go in the hole by 2013.

The city once devoted $500,000 per year to this fund but trimmed those deposits in half eight years ago, when the city lost a stream of state money. Under the city's current plan, replacement costs should average about $640,000 per year between 2010 and 2015. Contributions to the fund would average just $370,000 per year during that same period.

Fixing the problem with increased savings alone would cost $1 million per year by 2024

"We can't raise enough money to solve this problem," Genellie said.

Borrowing and extending equipment life cycles could buy some time. But that still leaves inevitable cuts in equipment—and these cuts aren’t just about trucks, laptops and fitness equipment. 

“All of that equipment is intimately related to the services we provide,” he said.

Genellie was reluctant to offer any plausible loss of service before the city has a chance to investigate the issue in-depth. But he used an implausible example to illustrate his point. The city could save substantial money by selling off police cars, all the expensive equipment that goes inside them, officers’ guns and other police paraphernalia. But that would mean the end of police service.

Substitute in snow plows, public works vehicles, radios or any number of items and the effects would be the same.

Hopkins could potentially offset service losses by using contractors or partnering with neighboring cities. West metro cities, for example, could each purchase a specific type of firefighting vehicle and collaboratively combat fires instead of each purchasing an entire fleet.

The city needs to take a hard look at what equipment it really needs, said Genellie, who has already sat with department heads to explain the severity of the problem. The challenge will undoubtedly be waiting on the desk of the new city manager, whenever he or she is hired.

“It took us a long time to get into it. It’s going to take us a while to get out of it,” Genellie said.

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