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1 Financial Planning Model Public Input Board Audit is presented to fiscally guides is provided to fiscally guides develops Board Priorities for Budget and Program are presented to Citizen's Financial Advisory Committee (CFAC) advises School Board presented to reflects provides budget progress to Superintendent Annual Budget supports Program Development is provided to Financial Information is provided monthly to provides guidance Board Policy and Goals guides informs guides develops modifies leads Administration Strategic Plan informs Public Hopkins School District Budgeting Process of 54 //

2 Preliminary FY General Fund Results FY9 FY FY FY FY Audited Audited Audited Audited Audited Balance Revenues Expenses Transfers Fund Balance UNASSIGNED OPERATING,57, ,992, ,9,582.6 (3,776,344.98) 2,696,57.5 COMMITTED FOR SEVERANCE 5,23,755. 2,956,629. 8,88,384. RESTRICTED FOR SAFE SCHOOLS PROGRAMS 2, , , , RESTRICTED FOR STAFF DEVELOPMENT 235,9.6 29, , , ASSIGNED FOR: SECONDARY STUDY. 367, ,47.68 ELEMENTARY STUDY. 25,. 25,. ELEMENTARY AVID. 36,. 36,. INTERACTIVE WHITEBOARDS.. Totals 7,6, ,53, ,866, ,723, of 54 //

3 Citizens Financial Advisory Committee 2-2 Budget Recommendations to the School Board December, 2 EXECUTIVE SUMMARY The Citizens Financial Advisory Committee (CFAC) was established to leverage the financial experience and expertise of a small group of community members and provide recommendations to the School Board regarding the financial planning and performance of the Hopkins School District. This is a long-standing advisory committee to the School Board. The current citizen committee members are: Nechia Agate Rick Ellingson Kip Heegaard Laura King Dave Koppe Jeffrey Ringer The committee has formally met three times with Superintendent John Schultz, Assistant Superintendent Nik Lightfoot and Director of Business Services John Toop. Certain members of the School Board have been present at the meetings. Committee members have also had numerous informal discussions with District staff. The committee review has focused on the following information: o Historical financial performance o Forecasting Model for next year (FY22) thru FY 25 (3 more years) Fundamental Facts:. Key drivers of the District s financial performance are: a. Number of students enrolled b. Per student funding from the State c. Additional funding from property tax levies on District residents d. Salary and fringe benefit costs of teachers, support staff and administration 2. The General Fund Balance is basically the District s contingency reserve and allows it to weather financial storms that inevitably occur. After designating for severance, the undesignated fund balance is now $.6 million, or 4.6% of annual operating expenses. Exhibit B shows Hopkins General Fund Undesignated fund balance compared to corresponding General Fund Undesignated fund balances of surrounding districts. 3 of 54 //

4 Recommendations/Findings: The committee has reviewed the assumptions and results of the District s FY2 thru FY25 Forecasting Model and has the following recommendations for the 2-2 budget and beyond:. CFAC recommends that the District strictly adhere to a practice of producing a balanced budget each year. In addition, it should monitor actual expenses on a monthly basis and adjust spending so expenses do not exceed revenue in any given year. In the event that expenses do exceed revenue and fund balance is reduced, the budget for the following year should be adjusted to replenish any fund balance reduction. 2. CFAC recommends accepting the District s assumption that the District will lose approximately 82 students per year for the next five years. Current year enrollment is projected to be at 7,339 students in June 2 and is projected to fall to 6,93 students in June 26. Enrollment should be monitored and reforecast annually. Falling enrollment has been a reality since FY2. Current demographic analysis by the State supports the assumption of declining enrollment across the State. (see Exhibit F) 3. At this point in time, the District has two very large unknown budget categories. They are: the level of future State funding and; future salary costs At this time CFAC finds it very hard to give, and therefore can t offer, single point estimates of either of these assumptions. This type of uncertainty is demonstrative of why maintaining strong and unwavering fund balance policies is so very important for any District. 4. CFAC recommends that the District continue the open and active dialogue with the unions representing all staff regarding the fundamental importance of controlling the growth of compensation and benefits at or below the level of growth in per student state reimbursement. We are proud of the performance of our District and greatly appreciative of the talent and commitment of all of our staff, but unfortunately we have to operate within the existing economic climate in the country and particularly the State of Minnesota. Since salary and fringe benefit costs make up 8+% of the District s expenses, any growth in this area in excess of the rate of state reimbursement will seriously threaten the financial and programmatic viability of the District over a 3 to 5 year period. This is particularly important in light of the following: The State has given % increases in its K-2 funding for the past two years ( 9/ and / ) while the District s compensation and benefits costs have risen. Given the existing $6.2 billion state budget deficit and the results of the recent election, per student funding will likely remain flat or may likely decrease for the next biennium. As an additional risk, there is even some early political discussion that the state aid payment shift/delays could increase from the current 3% level. In addition, consideration for payback of past delays is probably not a shortterm possibility. As a result, borrowing and related interest expense will likely continue in the short to mid-term future. 4 of 54 //

5 The District was very fortunate to have received approval from the citizens for an increase in the Capital Projects Levy for curriculum and technology and for the Capital Bond for safety and security. The District needs to demonstrate continued stewardship of District financial resources. 5. CFAC recommends accepting the District s assumption that fringe benefit costs will increase by 8% in each of the next 5 years. The increase is in line with historical experience in spite of the fact that the district has a self-insured plan. To help guide the Board Exhibit A displays in graph and grid format what the result to the District s fund balance would be over the next two years (all other assumptions being equal) using three different State revenue assumptions of %, -3% and -6% --- these assumptions are coupled with salary change assumptions of %, +2% and +4% (fringe benefits increase at 8% annually in all scenarios). As can be seen by the resulting grid, fund balance is consumed quickly in most scenarios. The district needs to recognize the likelihood of these scenarios and use fund balance strategically and planfully. 6. CFAC recommends continued analysis of opportunities for operational efficiency, including, but not limited to, the current studies of elementary education and special education. The district studies on these topics could lead to identification of opportunities that will guide future Board decisions in these areas. 7. CFAC recommends the District continue using the Forecasting Model to monitor the 3 to 5 year projected Fund Balance and make sure it does not fall below $8 million or % of annual operating expenses. This is critical to assure the District can sustain its quality curriculum/program offered its students. CFAC Conclusion: CFAC recommends careful management of the District s Fund Balance. The current Fund Balance is $.6 million (4.6% of annual operating expenses). This account is effectively the contingency reserve for the District and if it declines far enough SOD will occur. The following suggestions should be considered: a. In an era of flat or decreasing State revenue, the fund balance should not be used to simply cover ongoing cost increases because it will be quickly depleted. b. The District should continue to maintain the detailed Forecasting Model to show intermediate and long term impact of different financial options. c. CFAC recommends the Board consider the amount above % (4.6%) be used by the Board as an investment tool for the District. This investment can be for teachers and/or programs, but should only be used for one-time items. CFAC remains impressed by the ability and knowledge of financial management within the District. The District s Forecasting Model is excellent. The District, with a fund balance of $.6 million, remains financially stable at the present time. The District s voters have also greatly supported the District by passing the recent increase to the Capital Projects Levy for curriculum and technology. Uncertainty and variability with State K-2 funding for the next biennium, coupled with results of salary negotiations for that same biennium, results in CFAC not being able to give complete and definitive budget guidance for the next biennium. We continue to advocate maintaining a strong fund balance and trust that is in mind as decisions and agreements are being made in the near future. 5 of 54 //

6 INTRODUCTION/BACKGROUND The Citizens Financial Advisory Committee (CFAC) has conducted an overview of the current and projected financial condition of the General Fund of the Hopkins School District. Our recommendations to the Hopkins School Board are based on consensus of the group to determine the underlying budget assumptions to form the budget projections for 2-2 (and beyond). The recommendations are based on current and near-term economic factors that impact the present and future financial situation of both the State of Minnesota and the Hopkins School District. Our recommendations are informed by three primary conditions:. The short and mid-term outlook for revenue increases is pessimistic. 2. The district s cost structure is roughly 8% human resources, followed by building operating costs. 3. The district continues to face short and mid-term enrollment decline, although, on a positive note, the rate of decline appears to be slowing, and open enrollment continues to increase and helps stem that rate of decline. It is important to note that the Hopkins district is not alone in experiencing these above conditions, yet as an individual district the Hopkins administration and Board is faced with the increasingly difficult task to find financial solutions to keep the district financially stable. STATE ECONOMY AND FUNDING The State of Minnesota, along with many other states and the Federal government, faces extreme budget pressure during the next biennium. It is difficult to see how the next elected Governor and the State legislature will find ways to increase per pupil funding for education. As Exhibit C shows, for the current biennium ( 9/ and / ), K-2 per pupil funding was flat, while other State budget areas experienced funding reductions. With the continued projected State budget deficit, it is highly likely K-2 education funding in the next biennium ( / 2 and 2/ 3) will be flat. Decreases are possible. This is even before consideration of paying back any prior payment delays or payment shifts. The State may need to raise a significant amount of new revenue, along with spending reductions, just to close the projected State budget shortfall. Payment shifts and their impact The Governor and Legislature enacted a number of measures to decrease spending to balance the State budget through FY -. The impact to K-2 education included delaying a total of now 3% of State aid payments to school districts (est. $2 million cash flow delay for Hopkins), and a 48.6% property tax shift effective for the FY - year (est. $9 million dollar cash flow delay for Hopkins). Most school districts needed to engage in short-term borrowing because of these payment delays, unless their General Fund balance and resulting positive cash balances are significant enough to withstand the effect of these payment shifts. Hopkins General Fund balance is healthy enough to withstand the State aid payment delay, but because of the property tax shift, will likely need to engage in short-term borrowing to some degree in FY -. GENERAL FUND BALANCE STRENGTH Hopkins General Fund Undesignated balance, after audited results for FY9-, stands at $,57,836, or 4.63% of selected FY9- expenses. This fund balance percentage is in line with other neighboring 6 of 54 //

7 districts (see Exhibit B). Hopkins has also begun to appropriately fund their previous and ongoing severance pay obligations. It is imperative because of the above discussion on the State economy, funding, and expenses that Hopkins follows its fund balance policy. A modification to that fund balance policy was made in May 29, stating that actual amounts above 6% (cash flow reserve) will be considered a contingency reserve. Contingency reserves should be used for the following purposes: to allow for the time and flexibility to correct for the revenue and expense fluctuations as noted above; to protect the system in cases of sudden shortfalls in revenue (e.g., unforeseen shortfall in enrollment or reduction in state appropriation within the current biennium); to cover unanticipated expenses (e.g., one-time legal fees, major disasters, unanticipated increases in utility costs); to provide for extraordinary one-time investments. Other than noted above, if the contingency reserve is determined to be utilized for a specific purpose in a given budget year other than using the contingency amounts to assist with general budget fluctuations, restorative plans for the reserve must be included in Board deliberations. Governmental Accounting Standards Board Statement No. 54 will change how District s account for their fund balances effective with the 2- fiscal year. There will be 5 different categories for fund balance according to GASB 54. The District will need to consider how to allocate amounts into these different fund balance categories and may need to modify their fund balance policy accordingly to align with GASB 54. TOTAL GENERAL FUND REVENUE SOURCES AND HISTORY Exhibit D shows General Fund revenues by major source for FY. State funding comprises 63% of our revenue, with 9% coming from local property taxes and 7% from transfers in and other local sources including activity participation fees, gate receipts, gifts, and interest income. % came from Federal sources, an increase of 8% from the previous year, reflecting the infusion of Federal stimulus dollars received by the District. Exhibit E shows General Fund revenue increases by percentage from FY2 to FY. Revenue has averaged a.3% increase per year from 24-5 through 29-. Also, it should be noted that the State gave the District a 2.5% increase in revenue (of the 6.24% increase in FY 25-6) for the implementation of the Q-comp program for the district. This means that this amount of the percentage increase was not available for discretionary spending and is ongoing. An increase of $225 per student in the local excess levy operating referendum was passed in November 2, effective for FY In November 25, Hopkins voters approved increasing and then consolidating all excess operating levies into one levy of $,57 per student, effective for years beginning with FY This excess operating levy will reach its maximum in FY3-4. Recently the District s voters approved an increase in its Capital Projects Levy for curriculum and technology from $3.5 million per year to $6.5 million per year for the next years. The increase has been fully incorporated into the District s financial projections herein. 7 of 54 //

8 STUDENT ENROLLMENT AND IMPACT ON REVENUE Most Minnesota school districts are experiencing declining enrollment due to demographic changes. Revenue increases to the per pupil formula allowance are then offset by the fewer numbers of students attending, resulting in even smaller actual gross revenue increases. Hopkins has been experiencing declining enrollment from FY2 to FY to the magnitude of,2 students, or about a 2.2% decrease over this 9-year period. (see Exhibit F). State funding on average is equal to about $6, per student. When enrollment declines, revenue is reduced by the loss of students from the previous year times $6, per student. If the amount per student increases, then gross revenue will remain relatively flat, depending on the increase and enrollment decline. If the enrollment declines with no increase in the amount per student, gross revenue will decrease for the school district, all others things being equal. This declining enrollment gap, sometimes called the Phantom Gap is actually quite real. If students decline by, causing a $6, decrease in revenue, and 6 teachers are reduced as a result of this decline with salaries and benefits of $6, each, there is a reduction in expenses of $36,. There still remains a gap between revenue losses matching expense reduction of $24,. This difference, the Phantom Gap, (see Exhibit G) is actually the difference in real dollars that needs to be reduced in other areas of the budget to match revenue loss with expense reductions. SALARY AND FRINGE BENEFIT EXPENSES School districts are labor intensive, (see Exhibit H) with 8-85% of their expenses for salaries and benefits. If these expenses increase above the increases in revenue, it becomes increasingly difficult to keep reductions away from the classroom, decreasing programming/curriculum or increasing class sizes to levels that become unacceptable in the public s eye. There is little wiggle room in reducing expenses that do not affect the classroom in some way. Therefore, the demand and need for operating referendums across the State to be passed at the local level, just to maintain current programming, has and will likely continue to increase at an unprecedented level. TOTAL GENERAL FUND EXPENSE HISTORY Exhibit E shows General Fund expenses increases by percentage from FY2 to FY. Expenses have risen only.8% from 24-5 through 29-. This time period reflects a need by the Hopkins School Board to rebuild the General Fund balance from its 24-5 low point of -4.2 million, or -5.34%, to its current level at June 3, 2 of $.6 million, or 4.63%. This is a turnaround of $5.8 million, or 9.97%, reflecting tough decisions that the School Board and administration have had to make to bring the district back to fiscal health. Exhibit I shows revenues and expenses per ADM (Average Daily Membership, or per student) that indicates the revenue and expense trend from 24-5 through 29-. Revenues have exceeded expenses per student (and in total dollars) for the General Fund for the past five fiscal years. 8 of 54 //

9 BUDGET ASSUMPTIONS INTRODUCTION TO CFAC ASSUMPTIONS AND RECOMMENDATIONS CFAC underscores that in order to have continuing financial stability; The Hopkins School District should anchor their fund balance projections at a projected level of % for the Forecasting Model. CFAC believes this is a reasonable and necessary means of protecting current programs in light of extreme uncertainty in the revenue outlook. It is necessary to have balanced budgeting occur on a long-term basis. All stakeholders must understand the trade-offs that occur if the district projects future expenses with the same program in excess of revenue increases, regardless in which area it is occurring. These trade-offs directly result in a combination of program changes and reductions, fee increases, staff cuts, and larger class size. The Hopkins School District is financially stable. The district should continue to evaluate the sustainability and productivity of the current and prospective programs it offers students in relationship to the matching of projected revenue and projected expenditures. CFAC strongly urges the School Board and district leaders to look forward now to the next biennium with the realization that the State may not be providing additional revenue, and may have to reduce their school district contribution in order to balance the state budget. CFAC wants to make it clear that regardless of the size of the district s fund balance, within reason, fund balance should not be used as a reason to incur additional ongoing annual costs. Fund balance can only be used once, and then it is no longer available. It is important to understand, especially in the New Normal the State and economy is experiencing, that there is not a connection between salary and benefit requests and fund balance. Excess fund balance, if any, needs to be looked at for one-time purchases only. The following are the CFAC recommendations as a result of the previous information presented. Enrollment Projections: Being able to estimate future student enrollment accurately is critical for revenue budgeting. Also, staffing for elementary, junior high and senior high is based on student enrollment. The Hopkins School District has just completed revised enrollment projections for the period of FY2 through FY6. (Exhibit F) Many factors affect enrollment projections. As revised enrollment projections were completed for this time period the following factors were noted and considered: the zip code and county births are up for the next projection cycle; the 2-K migration realized for Fall 2 was stable with the previous year, 29-, but less than 27-8 and 28-9; the Mobility Index through 28-9 increased from 3.2% to 4.3%; this is a factor we will continue to track; On an EOY basis from FY9 to FY (OE) IN increased by 8.32%; Open Enrollment (OE) OUT of the district from FY9 to FY increased by 9.69%, thus keeping the positive ratio of (OE) IN to (OE) OUT relatively flat; Fall 2 Seat Count Open Enrollment (OE) IN (FY) to the district increased by 4.38%, the Fall 2 Seat Count Open Enrollment (OE) OUT is unknown for FY; 9 of 54 //

10 The ratio of (OE) IN to (OE) OUT is currently about.5:, a ratio that the district will need to continue to monitor closely; on a positive note, the rate of enrollment decline appears to be slowing CFAC is aware that the continued increase in open enrollment IN may not be sustainable. The district needs to monitor how long it can continue to buffer the enrollment decline associated with the other factors listed above with increased open enrollment IN. CFAC Recommendation: Based upon the enrollment analysis and assumptions presented, CFAC supports the administration s recommendation for projecting enrollment for FY2 to FY6. The selected method will project a 49 student decline, or about 5.6%, over this five year period. It is also further recommended that these enrollment projections and underlying assumptions continue to be updated on an annual basis. Revenue Projections The State legislature sets state aid increases each biennium. Almost 7% of the District s General Fund revenue comes from the State, only 22% comes from local property tax levies. For FY and FY the total state per pupil revenue remained flat. Since enrollment is declining, the projected gross revenue for the district over this biennium will decline on an actual basis. For the upcoming biennium, based on the continued difficult economic constraints the State is encountering, CFAC is not able to give complete and definitive budget guidance for the next biennium. In order to help the Board in its budget setting work, CFAC believes Exhibit A is helpful in showing various combinations of State revenue coupled with various salary negotiation results, and what impact these combinations have on fund balance results. CFAC supports increasing other selected revenue components by.5% per year. CFAC Recommendation: At this time, based on the uncertain State revenue picture, CFAC is unable to give single point estimates on State revenue. CFAC does recommend that other selected revenue components increase at.5% per year (one-half percent) for FY -2 through FY 4-5. CFAC believes this revenue projection range is realistic. Salary/Fringe Benefit Projections: The single biggest expense challenge the district faces is the cost of Salary and Fringe Benefits. The General Fund budget is driven by these costs, as they represent 8% of the General Fund expenditures. All stake holders - district management, district staff, parents, students, and other members of the community - need to appreciate the extent for which these agreements will potentially increase class size, and result in continued reductions to educational programs over the long-term. The current economic recession has resulted in many private sector job layoffs, reductions in pay and hours for many people. Staff members are at the core of the education system, yet we must find a way to manage salary and fringe benefits in a financially viable manner, while maintaining quality staff and reasonable programmatic class sizes within the budget reality of the State s financial condition. There has been and will likely continue to be downward pressure on salary and fringe benefit increases at both the State and Federal levels, as evidenced by recent proposals being considered at the Federal level. While these proposals still must be passed, the results from the recent elections appear to reflect a desire to be much more fiscally conservative. of 54 //

11 CFAC Recommendation: CFAC recommends that the School Board maintains their sustainability principle that states that any increases to employee compensation above a baseline amount be reflected in the form of an FTE impact for the settlement, and that this FTE impact be clearly communicated to the bargaining group agreeing to an increase above the baseline amount. For the upcoming biennium, based on the continued difficult economic constraints the State is encountering, CFAC is not able to give complete and definitive budget guidance for the next biennium. In order to help the Board in its budget setting work, CFAC believes Exhibit A is helpful in showing various combinations of State revenue coupled with various salary negotiation results, and what impact these combinations have on fund balance results. Other Cost (non-salary and benefit) Projections: Other expenditures besides salary and fringe benefits comprise approximately 2% of all General Fund expenses. Some of the larger expenditures include consulting fees, contracted transportation, payments to other school districts, purchased services for utilities including electricity, water/sewer and garbage, natural gas for heating buildings, supplies and property/liability insurance. The district has recently secured a $5 million dollar transportation contract with their current provider with an adjustment clause based on the increase in the basic general education formula allowance for the current year and the two following years. The district has also secured pricing on natural gas for building heat that will realize at least a $3, savings over budget for 2- assuming a normal winter. The district has been and will continue to be proactive in looking for ways to control these costs. CFAC Recommendation: CFAC recommends continuing to look for ways to bring additional efficiencies to control other costs. For budgeting purposes, increase these other cost projections at a 2.% annual increase for FY -2 to FY 4-5. of 54 //

12 Exhibit A Forecasting Model - Range of Results Basic Revenue Assumption:.% Fund Balance % After GASB Designation for Severance 2.% 5.%.% 5.%.% -5.% 9- Actual % -5.% Year.% Rev /.% Salary.% Rev / 2.% Salary.% Rev / 4.% Salary Minimum Fund Balance Minimum plus 4% Reserve Statutory Operating Debt Description (Rev/Salary) 9- Actual % Rev /.% Salary 4.63% 4.6% 6.63% 7.53% 6.36% 2.6%.% Rev / 2.% Salary 4.63% 4.6% 5.8% 3.4% 8.5% -.43%.% Rev / 4.% Salary 4.63% 4.6% 3.63% 9.5%.3% -3.23% Minimum Fund Balance 6.% 6.% 6.% 6.% 6.% 6.% Minimum plus 4% Reserve.%.%.%.%.%.% Statutory Operating Debt -2.5% -2.5% -2.5% -2.5% -2.5% -2.5% $ Adjustment to Revenue - Per Pupil Assumption Note: Revenue and salary assumption noted above are reflected FY2, FY3, FY4, and FY5 To review additional financial assumptions 2 of refer 54 to the // Footnotes on the last page of Exhibit A.

13 Exhibit A Forecasting Model - Range of Results Basic Revenue Assumption: -3.% ($54 per pupil reduction) Fund Balance % After GASB Designation for Severance 2.% 5.%.% 5.%.% -5.% -.% 9- Actual % -2.% -25.% Year -3.% Rev /.% Salary -3.% Rev / 2.% Salary -3.% Rev / 4.% Salary Minimum Fund Balance Minimum plus 4% Reserve Statutory Operating Debt Description (Rev/Salary) 9- Actual % Rev /.% Salary 4.63% 4.6% 5.% 4.3%.62% 5.99% -3.% Rev / 2.% Salary 4.63% 4.6% 3.57%.27% 3.93% -6.29% -3.% Rev / 4.% Salary 4.63% 4.6% 2.4% 6.% -4.8% -8.77% Minimum Fund Balance 6.% 6.% 6.% 6.% 6.% 6.% Minimum plus 4% Reserve.%.%.%.%.%.% Statutory Operating Debt -2.5% -2.5% -2.5% -2.5% -2.5% -2.5% $ Adjustment to Revenue - Per Pupil Assumption (,3,952) (,285,726) (,268,633) (,253,223) Note: Revenue and salary assumption noted above are reflected FY2, FY3, FY4, and FY5 To review additional financial assumptions refer to the Footnotes on the last page of Exhibit A. 3 of 54 //

14 Exhibit A Forecasting Model - Range of Results Basic Revenue Assumption: -6.% ($37 per pupil reduction) Fund Balance % After GASB Designation for Severance 2.% 5.%.% 5.%.% -5.% -.% -5.% -2.% -25.% -3.% 9- Actual Year -6.% Rev /.% Salary -6.% Rev / 2.% Salary -6.% Rev / 4.% Salary Minimum Fund Balance Minimum plus 4% Reserve Statutory Operating Debt Description (Rev/Salary) 9- Actual % Rev /.% Salary 4.63% 4.6% 3.38%.9% 6.88% -.7% -6.% Rev / 2.% Salary 4.63% 4.6%.97% 7.3% -.63% -2.4% -6.% Rev / 4.% Salary 4.63% 4.6%.46% 2.95% -8.47% -24.3% Minimum Fund Balance 6.% 6.% 6.% 6.% 6.% 6.% Minimum plus 4% Reserve.%.%.%.%.%.% Statutory Operating Debt -2.5% -2.5% -2.5% -2.5% -2.5% -2.5% $ Adjustment to Revenue - Per Pupil Assumption (2,6,94) (2,57,45) (2,537,266) (2,56,446) Note: Revenue and salary assumption noted above are reflected FY2, FY3, FY4, and FY5 To review additional financial assumptions refer to the Footnotes on the last page of Exhibit A. 4 of 54 //

15 Supporting Financial Results: Exhibit A Variance (Revenue - Expenditures): Revenue Projected Salary Increase Projected Salary Increase Revenue.% 2.% 4.%.% 2.% 4.% -6.% (755,579) (,762,455) (2,869,33) -6.% (,774,346) (3,86,23) (6,82,369) -3.% 545,372 (46,53) (,568,379) -3.% (488,62) (2,52,55) (4,796,643).%,846, ,449 (267,427).% 798,35 (,234,78) (3,5,98) Revenue Projected Salary Increase Projected Salary Increase Revenue.% 2.% 4.%.% 2.% 4.% -6.% (3,32,595) (6,46,67) (9,947,458) -6.% (5,74,23) (,59,39) (4,955,956) -3.% (2,52,962) (5,48,36) (8,678,825) -3.% (4,488,7) (8,85,86) (3,72,733).% (78,929) (3,879,43) (7,4,9).% (3,23,84) (7,552,593) (2,449,5) Fund Balance % After GASB Designation for Severance: Revenue Projected Salary Increase Projected Salary Increase Revenue.% 2.% 4.%.% 2.% 4.% -6.% 3.38%.97%.46% -6.%.9% 7.3% 2.95% -3.% 5.% 3.57% 2.4% -3.% 4.3%.27% 6.%.% 6.63% 5.8% 3.63%.% 7.53% 3.4% 9.5% Revenue Projected Salary Increase Projected Salary Increase Revenue.% 2.% 4.%.% 2.% 4.% -6.% 6.88% -.63% -8.47% -6.% -.7% -2.4% -24.3% -3.%.62% 3.93% -4.8% -3.% 5.99% -6.29% -8.77%.% 6.36% 8.5%.3%.% 2.6% -.43% -3.23% 5 of 54 //

16 Supporting Financial Results: Exhibit A Assumptions:. Enrollment projections from November 2 2. Auditing results: Original Budget: 2-4. Preliminary True-up based upon actual results: Percentage increase other revenue (non-formula allowance and non-referendum revenue):.5% all years. 6. Percentage increase for fringe benefits: 8.% all years. 7. Percentage increase all non-salary and non-benefit expenditures: 2.% all years. 8. Pro-rated special education revenue: 96.% FY and 98.% FY 2 through FY5. 9. Legislative payment timing assumption: 7/3 all years.. Legislative property tax shift: $9,, all years.. Lost interest income assumption:.% / Additional interest expense assumption: 2.%. 29- * TRA Rate assumptions: 5.5% 5.5% 6.% 6.5% 7.% 7.5% 3. PERA Rate assumptions: 7.% 7.25% 7.25% 7.25% 7.25% 7.25% 4. OPEB Explicit/Implicit/VEBA: (,754,483) (5,) (5,) (5,) (5,) (5,) 5. GASB Designation for Severance: 5,23,755 8,25,846 8,25,846 8,25,846 8,25,846 8,25, Staff Development Assumption: 442,45 226,4 867,3 857,5 845, , Other Reductions: Net Savings - PMG - (25,) (35,) (5,) Transfer Media Generalist to Capital Projects Levy over three years beginning in FY. 9. Federal Education Jobs (ARRA): $,324,734 based upon $82 per ADM and an ADM assumption of 7, Federal Education Jobs (ARRA) allocation: $94,734 in one-time expenditures and $,3, allocated to targeted staffing over two years ($565, FY and FY2). 2. Assume the special education budget continues to be reduced annually based upon the inflation for salaries and benefits. 22. Reduction in the natural gas budget on a one-time basis in 2- in the amount of $35,. 23. No assumptions were made to the following: Statute 27A.46, debt service transfers, transfers to and from self-insured health insurance fund, transfers to and from operating capital, implementation of any new programs including an elementary world language program, changes in transportation expenses including a bell time change and/or implementation of a fee-for-service, no continuation of any pilot programs implemented in 2-, no changes in the high school schedule, continue with the recommended change to the junior high schedule to an alternating quarter beginning in 2-2, and no enrollment sensitivity. 6 of 54 //

17 Exhibit B 25.% District Comparison FY Fund Balance % After Severance Designation 2.% 5.%.% 5.% 4.63% 2.% 9.% 5.69% 7.85% 5.3% 9.% 4.39% 5.6% 7.26%.% Hopkins Edina Minnetonka Eden Prairie Wayzata Orono Bloomington Burnsville St. Louis Park Robbinsdale Fund Balance % After Severance 8-District Average ( > %) -District Average Hopkins Edina Minnetonka Eden Prairie Wayzata Orono Bloomington Burnsville St. Louis Park Robbinsdale Undesignated Fund Balance % 2.25% 5.26% 9.% 5.69% 7.85% 23.% 2.66% 4.39% 6.67% 7.63% 8-District Average ( > %) 8.53% 8.53% 8.53% 8.53% 8.53% 8.53% 8.53% 8.53% 8.53% 8.53% -District Average 6.25% 6.25% 6.25% 6.25% 6.25% 6.25% 6.25% 6.25% 6.25% 6.25% Fund Balance % After Severance 4.63% 2.% 9.% 5.69% 7.85% 5.3% 9.% 4.39% 5.6% 7.26% 8-District Average ( > %) 6.% 6.% 6.% 6.% 6.% 6.% 6.% 6.% 6.% 6.% -District Average 4.9% 4.9% 4.9% 4.9% 4.9% 4.9% 4.9% 4.9% 4.9% 4.9% Designated for Severance 5,23,755 2,297, ,887,4 2,36,52-46,958 43,497 7 of 54 //

18 Exhibit C Basic Formula Allowance per Student and % Increase by Year FY2 through FY Basic Formula Allowance Excluding Roll-Ins 5.% 4.% 3.% 2.%.%.% 4.48% 4.5% 2.7% 2.63% 2.25%.%.%.%.%.% Annual Rate of Change Basic Formula Allowance Excluding Roll-ins 3,958 4,62 4,62 4,62 4,244 4,435 4,535 4,585 4,585 4,585 Annual Rate of Change 2.7% 2.63%.%.% 4.48% 4.5% 2.25%.%.%.% Basic Formula Allowance 4,68 4,6 4,6 4,6 4,783 4,974 5,74 5,24 5,24 5,24 8 of 54 //

19 Exhibit D Hopkins Public Schools - Revenue by Source FY General Fund excluding Capital and OPEB Other 3,889, % Federal 8,94,52.74% Transfers 2,325, % Local 5,425, % State 52,624, % Local State Federal Other Transfers Local State Federal Other Transfers Total 29-5,425,363 52,624,68 8,94,52 3,889,983 2,325,794 83,26,34 9 of 54 //

20 Exhibit E 8.% Hopkins Annual Rate of Change Revenue (Excluding Capital) and Expenditures FY2 through FY General Fund Revenue Excluding Capital 6.% 4.% 2.%.% -2.% -4.% -6.% 6.24% 584% 5.84% 3.77% 3.% 3.38% 2.2% 2.89%.52%.73%.53%.% 7%.7%.96% 96% 55%.55% -.2% -.33% * -2.34% -.36% -.28% -3.89% 389% Revenue Expenditures Org. Budgt * Revenue.% 3.77% 3.% -.2% 6.24%.53%.96% -2.34%.52% -.28% Expenditures 2.2%.7% 2.89% 3.38%.73% -3.89% -.33%.55% -.36% 5.84% * Note: The rate of change reflected for 2- expenditures is based upon the original budget. Once this budget is formally revised by the School Board in the first quarter of 2, a lower increase will be reflected in the expenditure rate of change from 29- to of 54 //

21 Exhibit F Hopkins Public Schools EC - 2 EOY Adj. ADM, 9, 8, 8,359 8,328 8,288 8,95 8,8 8,4 7,663 7, 6, 5, 4, 3, 2,, 7,426 7,377 7,339 7,254 7,55 7,79 7,5 6, EOY Adj. ADM Enrollment Projections - November EOY Adj. ADM 8,359 8,328 8,288 8,95 8,8 8,4 7,663 7,426 7,377 7,339 7,254 7,55 7,79 7,5 6,93 Annual Decline (84) (3) (4) (93) (4) (68) (35) (237) (49) (38) (84) () (75) (74) (76) Note: Katherine Curren closed in of 54 //

22 Exhibit G Phantom Gap 5,, 4,5, 4,, 3,5, 3,, 2,5, 2,,,5,,, 5, The phantom gap will continue to exist as long as enrollment continues to decline. As illustrated in this graph, as the rate of the enrollment decline slows, the gap narrows. The difference in the gap from the November 29 enrollment projections to the November 2 enrollment projections is about $.7 million in FY5. 2,995,62 2,542,2 2,98,62,52,22,49,22 543,66,3,78 65,48 494,238 68,32 828,9 89, , , Cumulative Loss in Revenue Declining Enrollment (/) Cumulative Decrease in Exp. FTE Reductions (/) Cumulative Loss in Revenue Declining Enrollment (/9) Cumulative Decrease in Exp. FTE Reductions (/9) Phantom Gap - /9 Enrollment Projections Phantom Gap - / Enrollment Projections Difference in the Gap - /9 to / Salary Assumption Benefit Assumption Revenue Assumption , ,969,37,7 2,,948 2,727,237 3,48,822-2,23 353, ,726,25,982,48,3,73,93,965,442 34,47 44,247 65,39 984,966,246,937,74,892 2.% 2.% 2.% 2.% 2.% 8.% 8.% 8.% 8.% 8.% -3.% -3.% -3.% -3.% -3.% 22 of 54 //

23 Exhibit H Hopkins Public Schools Salaries & Benefits versus All Other Costs FY General Fund excluding Capital and OPEB All Other 4,979, % Benefits,94, % Salaries 5,275, % Salaries Benefits All Other Salaries Benefits All Other Total 29-5,275,452,94,925 4,979,92 77,449, of 54 //

24 Exhibit I General Fund Revenue and Expense per ADM 2,, 8, 6, 4, 2, Hopkins General Fund Revenue and Expenditures per ADM FY2 through Budgeted FY * Total Revenue per ADM Expenditures per ADM Budgeted * Total Revenue per ADM 8,635 8,994 9,39 9,43,7,373,952,37,28,94 Expenditures per ADM 8,862 9,46 9,352 9,777 9,964 9,777,9,574,499,7 24 of 54 //

25 R e p o r t t o t h e S c h o o l B o a r d I n t r o d u c t o r y C o m m e n t s f o r 2 22 B u d g e t i n g January 6, 2 R e p o r t P r e p a r e d b y J o h n W. S c h u l t z, P h. D. S u p e r i n t e n d e n t J o h n T o o p, D i r e c t o r o f B u s i n e s s S e r v i c e s Overview ThepurposeofthisreportistoprovidecontextastheBoardentersintotheirdeliberations aboutthe2 22SchoolDistrictbudget.ThisreportwillproviderelevantbackgroundtoHopkins educationalandfiscalprograms.inwritingthisreport,itisimpossibletocomprehensivelydetailevery aspectofthisdynamic,healthyandvibrantschoolsystem.thisreportwillprovidefocustothoseareas thatarestrategicinadvancingeducationthroughoutthecommunitiesthatcomprisethehopkinspublic Schools. HopkinsEducationalProgram TheSchoolDistrictcontinuestoofferhighqualityinstructionandcurriculumtoits approximately7,28students.hopkinspublicschoolsremainsproudofitsdemographicswith36%of studentsbeingstudentsofcolor,34%qualifyingfreeandreducedlunch,and6.6%beingenglish LanguageLearners. HopkinsPublicSchoolscontinuestoofferacomprehensiveeducationalprogramthroughoutthe P 2system.EarlyChildhoodandElementaryteachersenthusiasticallydelivercurriculumatsix elementaryschoolsandoneearlychildhoodcenter,alwaysrecognizingtheuniqueneedsofeachchild. Elementarycurriculumprovidesastrongfoundationinreading,writing,mathematics,science,physical education,socialstudies,art,music,andhealth.eachelementaryschoolhasachallengeteacherto addresstheneedsofgiftedandtalentedstudents.anelementarystudyiscurrentlybeingconductedto reviewtheprogrammingofferedtoelementarystudents.theserecommendationswillbeprovidedto thesuperintendentinthespring. OneofthekeyprogramsinstitutedrecentlyattheelementaryisResponsetoIntervention(RTI). RTIwasintroducedtomanyMinnesotaschoolsin27asaresearchbasedsystemthatefficientlyand effectivelymeetsindividualstudentneeds.teachersandstaffusedatatointervenewithcurriculumand methodologywhenastudentshowsadelayindevelopingorismissingconceptsandskills.rtialso intervenesinagiftedandtalentedstudent slearningtoprovideopportunitiestoaccelerateorchallenge theirachievement.anecdotally,teachersarereportingthatrtiishavinganimpactonstudentlearning. Timeandadditionaldatawillprovideamorecomprehensiveevaluationoftheprograminthefuture. Initialdatashowspromisingresults. Studentsthatenterourjuniorandseniorhighsareprovidedopportunitiestoprepareforpostsecondaryeducationortheworkforcethroughabreadthofcoursechoiceatthesecondary.Students arelearninginstateoftheartclassrooms,whichincludebutarenotlimitedtointeractivewhiteboards, wirelessaccess,andsoundamplification.mostimportantly,allcurriculaisdeliveredbyhighlytrained teacherswhocarrycontentareaalongwithgreatpassionforworkingwithchildren. The2 2budgetprovidedresourcestofulfilltherecommendationsgeneratedfroma studyofthe7 2program.Curriculumwritinghasbeencompletedinallcontentareas,withnecessary staffdevelopmentavailabletosupporttheinstructionalstaff.professionaldevelopmentwasalso providedintrainingteacherstodeliveraworld class2 st centuryeducation.moreprofessional developmentwillbeneededinthisarea. Excellence. Every School. Every Student. Every Day 25 of 54 //

26 2 ReporttotheSchoolBoard IntroductoryCommentsfor2 22Budgeting January6,2 TheSecondaryStudyaffirmedtheuseofthefour blockscheduleathopkinshighschooland reformedthejuniorhighscheduletoincreasestudentpersonalizationwiththeirteacher.thejuniorhigh schedulewentfromanalternatingdayscheduletoanalternatingquarterschedule.asaresult,the teacherstudentloaddecreasedfrom8to9.thisschedulechangewillaffordmoreopportunitiesfor studentstochoosefromexpandedelectiveoptions.asaresult,teachershavespentthisschoolyear developinganewsetofelectivesforeachdepartmentatthejuniorhighschool. TechnologyremainsahallmarkoftheSchoolDistrictwithteacherspushingtheouterlimitsof technologyuseintheclassroom.teacherscontinuetoexpandtheiruseofcoursewarethroughtheuse ofmoodle,usingpodcastsandwebvideostoprovideinstruction,andinteractivewhiteboardsandother presentationtechnologytoengagetheirstudents.withthepassageofthecapitalprojectslevy,the Districtiswellpoisedtoexplorehowtechnologiesimpactstudentlearning. MeasuresofAcademicProgressasaPerformanceIndicator HopkinsPublicSchoolscontinuetohaveapositiveimpactonstudentlearning,asmeasuredby studentassessments.hopkinsstudentsinallfourgradelevelsofmaptestingperformedabovethe nationalaverageinmathematicsandreading,otherthaningrade3reading.grade3readingscoresare slightlylowerthanin29andgrade4readingscoreshaveimprovedsince29.growthisseenfrom grades3to4.wearepleasedtonotethatourstudentsconsistentlyscoreinthetopquartilesinall gradelevels,asbetween3%and5%ofstudentsscoreinthisrangeinbothreadingandmath.itwould betypicaltohave25%ofthestudentstestedineachquartile.itisnotablethatingrade6,5%of studentsperforminthetopquartileofmath,and4%inreading,whichisthehighestlevelacrossthe four yearcomparison. ComparativeMAPgrowthdatainReadingfromgrade3tograde4showspositivetrends.It shouldbenotedthatthedistrictcontinuestobesuccessfulwithstudentswhostaylongenoughinthe Districttobenefitfromitsprogram.ThisisstatedinlightofincreasingstudentmobilityintheDistrict. ItshouldalsobenotedthattheDistrictcontinuestomeasuregapswherestudentsofcolorlag behindtheachievementofwhitestudents.inlightofthisindicator,thedistrict scommitmentto providingearlychildhoodeducationandaddressingequityineducationremainsapriority,asthis programmingfocusesresourcestoourmostat riskstudents. StrategicPlanning TheDistrictcontinuestoworktoproviderelevantandengaginglearningexperiences,whichis evidentinthestrategicworkofthedistrict.thestrategicplanremainsvibrantandwillcontinuetobea foundationfordevelopingbudgetrecommendations.thestrategicplanhasmotivated Science,TechnologyEngineeringandMathematics(STEM)atalllevels,whichincludesthe implementationofengineeringiselementarycurriculumattheelementarylevel. Mathematicstoincreaseitsrigorbymovingalgebrafrom9 th gradeto8 th,whichincreases mathematicsrigoratallgradelevelsbelowgrade9. professionaldevelopmentfocusedontheteachingofmathematics,asthedistrictensuresall grade 6studentsreceiveaminimumof6minutesofmathematicsinstructionperday. theopportunityto double up inmathatthejuniorhighs,asthenewscheduleisintroduced. professionaldevelopmentcenteredupontheteachingofreading,asthedistrictensuresall grade 6studentsreceiveaminimum9minutesofreadinginstructionperday. theexaminationofcollegereadinessatalllevels,whichincludesavid,increasingawarenessof highschooladvancedplacementopportunitiesattheelementaryandjuniorhighs,andthe implementationofthenavianceprogram. Excellence. Every School. Every Student. Every Day 26 of 54 //

27 ReporttotheSchoolBoard IntroductoryCommentsfor2 22Budgeting January6,2 theimportanceofensuringthatourschoolcommunitiesengageallstudentsandfamiliesfrom themanyculturesrepresentedintheschools.professionaldevelopmentinculturalproficiency andequityandsubsequentevaluationinthisarearemainsthefocusofthiswork. explorationofouropportunitiestoprovideelementaryworldlanguagetoallstudents,asacore componentofa2 st centuryeducation,whichwouldbuildafoundationonwhichtobuildan enhancedsecondaryworldlanguageprogram. StateFiscalSystem Accompanyingthisreportarealloftherevenuesourcesthatareusedtooffertheprogramming describedabove.itshouldbenotedthatweareenteringintoanuncertainfuturewithrespectto fundingandstaterevenue.withnewlegislatorsandagovernor,themodelingbythebusinessoffice andtherecommendationsfromthecitizen sfinancialadvisorycommittee(cfac)becomesextremely criticalforplanning.inthisreport,theboardwillbepresentedwithparametersthatcfacandthe administrationhavediscussed.youwillnotethatcfacprovidedranges.intheconclusion,the administrationisprovidingtheparametersforplanningpurposes. SchoolDistrictFinance TheDirectorofBusinessServiceswillusetheforecastingmodeltopresentthecurrentstatusof thehopkinspublicschoolbudgetandprojectionsforupcomingyears.astheauditindicated,theschool District s29 2revenuesexceededexpenditures.AsaresulttheSchoolDistrictincreaseditsfund balance,asithasinthepreviousfouryears.thisbringsincreasedstabilitytothefiscalconditionofthe District,allowingtheDistricttostrategizeandplanforitsfuture.ThefundbalanceallowstheDistrictto beresponsive,proactive,andstrategicinthefaceofloomingstatebudgetdecision making,ratherthan beingreactivetofiscalconditions. Schooldistrictenrollmentcontinuestodecline,whichhasanimpactontheDistrict srevenue picture.fortunatelytherateofenrollmentdeclinehasslowedandhasallowedustopositivelyimpact ourbudgetandinturnstaffing,especiallyattheelementarylevel.enrollmentandclasssizeinformation areprovidedinthisreport.itishopedthatenrollmentwillcontinuetotrendmorepositively.classsize rangeshaveremainedrelativelyunchangedoverthelastthreeyears. TheSchoolDistrictcommunityapprovedanincreaseintheirleviesfortechnologyand curriculumforthenexttenyears.asaresultofreceivingtheseresources,wehavesecureddollarsto supportthematerials,equipmentandthetechnologiesweprovidestudentsandstaff.thesedollarswill alsoprovideresourcesforcurriculumandinstructiontomeettheconditionsourstudentswill experienceinthe2 st Century.Throughthisbudgetprocessathree yearplanofthecapitalprojectlevy willbepresentedandreviewed. PreviousStudies AstheDistrictentersintoitsplanningforthe2 22budget,therehavebeenseveralstudiesthat havebeenconductedtoinformthebudgetingprocess.thesecondarystudysetthreedifferentlevelsof funding,eachwithitsownprogrammaticchanges.specialeducationcontinuestoexamineitsprogram tokeepthecrosssubsidytothegeneralfundmoremanageable.abelltimestudywasconductedwith recommendationstoschoolstarttimestoreducetransportation.eachofthesestudiescontains recommendationsthathaveanimpactontheschooldistrictbudget.theelementarystudymaybring forwardrecommendationsthatwillimpactthedistrictbudget.havingthesestudiesavailableare helpfulintheeventthedistrictisfacedwithmodifyingitsbudget. 3 Excellence. Every School. Every Student. Every Day 27 of 54 //

28 4 ReporttotheSchoolBoard IntroductoryCommentsfor2 22Budgeting January6,2 FinalThoughts ThisreportisprovidedtogiveasnapshotoftheprogrammaticandfiscalhealthoftheDistrict.The schooldistrictisthehealthiestithasbeeninthelastsixyears.innovationandnewideasareemerging toensureallstudentsdeveloptheskills,knowledge,andpassionforlifelonglearning.thisreport providesseveralitemsrequestedbytheschoolboardforbeginningtheirdeliberationsinsettingthe fiscalparametersforthe2 2budget.Theseitemsaredetailedinthenextsection. BudgetTimelineandProcess Dec7,2SchoolBoardWorkshop BoardAuditCommitteeandSchoolBoardDiscussAuditResultswithDistrictAuditFirm December6,SchoolBoardMeeting SchoolBoardActsonAuditResults January6,2SchoolBoardWorkshop BoardDiscussesBudgetParametersandProcess Superintendent scommentsonstateofthedistrict BudgetTimeline/Process DistrictStrategicPlan Program/StudentInformation EnrollmentSummary CurrentClassSizeAverages UpdateonPilots ForecastingModelResults SummaryofRevenueSources SummaryofFiscalPlanningModel:TotalRevenueandExpenditures 2 2,2 22,22 23,23 24,24 25 BudgetReconciliationfromFYtoFY ProjectedFinancialPositionwhen2 2Budgetapproved PastTrends RevenueminusExpenditureVariance PastTrends BudgetversusActual TotalUndesignatedGeneralFund Current,Audited,Projected 6and%Levels BridgeProjectionAnalysis 2 22CFAC/BudgetParameters FTEReductionsduetoDecliningEnrollment, ConsequencestoSettlement, ImpactofParametersonTargetedStaffing CurrentTargetedStaffingAllocation CurrentTargetedStaffingallocation Projectedallocationfor2 22 AnalysisofCapitalProjectsLevyProjections 2 22RevenueandExpenditureAssumptionsDevelopedfromParameters Excellence. Every School. Every Student. Every Day 28 of 54 //

29 ReporttotheSchoolBoard IntroductoryCommentsfor2 22Budgeting January6,2 January2SchoolBoardMeeting, BoardAdoptsBudgetParameters February3,2SchoolBoardWorkshop BoardDiscussesDistrictAdministration sbudgetrecommendations RecommendedProgramChangesfor2 22SchoolDistrictBudget Proposed2 22HopkinsSchoolDistrictBudget TotalDollarAmountProjectedtoBeSpentinGeneralFund PreliminaryRevenueandExpenditureSummarySheetandIndividual PackageBudgetSummariesfor2 22 TargetedStaffingProposal February8,2PublicMeeting BudgetInput February,2BoardWorkshop SchoolBoardDiscussesAdministration sbudgetrecommendation March3,2SchoolBoardWorkshop SchoolBoardDiscusses2 22Budget March7,2SchoolBoardMeeting SchoolBoardConsidersPreliminaryApprovalofSchoolDistrictBudget May9,2 SchoolBoardAdoptsSchoolDistrictBudget DistrictStrategicPlan TheDistrict sstrategicplancanbefoundinappendixa. Program/StudentInformation EnrollmentSummary CurrentClassSizeAverages ThisinformationisprovidedinAppendixB. UpdateonPilots Thissectionprovidesasummaryofthepilotsandsomeoftheone timeexpendituresbudgetedinthe 2 2budget. AliceSmithReady4KPreschool HopkinsPublicSchools,alongwithagrantfromtheHopkinsEducationFoundation,providedthe necessaryfundingtoopenthealicesmithready4kpreschool.thepreschoolisdesignedtoprepare lowincomeand/orenglishlanguagelearnersforkindergarten.thesearechildrenwhomaynot otherwisehavehadapreschoolopportunitypriortokindergarten. Eachsection(morningandafternoon)isfilledwithfourteenchildren,atnocosttothefamilies.The weekofaugust3th September3rd,allfamiliesparticipatingintheprogramreceivedahomevisitfrom theready4kteacherandanoutreachparenteducator.itwasfeltthathomevisitswouldbean 5 Excellence. Every School. Every Student. Every Day 29 of 54 //

30 6 ReporttotheSchoolBoard IntroductoryCommentsfor2 22Budgeting January6,2 importantfirststepinconnectingfamilieswiththeschoolcommunity.homevisitswerealsousedto collectregistrationmaterials,introducetheteachertothechildandhisfamily,andassistfamiliesin learningaboutothercommunityanddistrictresources. EveningparenteducationsessionsareheldmonthlyatAliceSmith,withchildcareavailable.Thegoalsof thesessionsareto:helpparentsunderstandthehopkinsschoolsystem;teachparentswaystohelp theirchildlearnkindergartenreadinessskillsathome;andconnectfamilieswiththeresourcesinthe communityandtheirhomeschool.participationisstronglyencouragedand,todate,about5%ofthe parentshaveattendedthesesessions. Theassessmenttools,IndividualGrowthandDevelopmentIndicators(IGDI)andWorkSampling,willbe administeredthreetimesthroughouttheyear.thefirstroundofassessmentswerecompletedin November,evaluatingpicturenaming,rhyming,andalliteration.Thestudentpopulationrepresents79% studentsofcolor,57%englishlanguagelearners,and%low income.accordingtotheclassroom teacher, ThechildreninReady4Kareallgreatlybenefittingfromthisprogrambyexperiencingnew materials,classroomrulesandroutines,aswellasdevelopingsocialskillsthatwillpreparethemfor theirkindergartenexperience. AssessmentPilot ElementaryReadingProgressMonitoring InsupportofourResponsetoIntervention(RTI)workattheelementarylevel,wehadplannedto introducethedibelsdatasystemfromtheuniversityoforegonasourprogress monitoringtoolin reading.thedibelssystemprovidesprogress monitoringtoolsintheareasof:alphabeticprinciple, phonemicawareness,accuracyandfluency,vocabulary,andcomprehension.thecostisestimatedtobe approximately$.perchildperyear,or$4forallelementarystudentseachyear.atthistimewe areintheprocessofcreatingabalancedassessmentprotocolforallschoolsandgradelevelsinthearea ofreading.wearenotyettothepointofutilizingthedibelssystem,butanticipateofferingthetoolas anoptiontopilotlaterthisspring. OnlineHybridCourseDevelopment HopkinsSchoolsislookingcarefullyatwhateducation,supportedbyrichtechnologicalresources,might looklikeinthefuture.oneexampleofhowlearningexperienceswillbedeliveredwillbethroughan hybridcourseorblendedlearningexperience.hybridcoursesofferamixofface to faceandonline instructioninanonlineenvironmentwithmediarichresourcesandcontent.hybridclasseshavethe samehighstandardsandexpectationsforlearning,butthroughadifferentmethodofdelivery. FiveteachersfromHopkinsPublicSchoolsparticipatedintrainingofferedbyDistrict287inhybrid coursedevelopment.theseteachersreceivedtrainingintechnologyand2stcenturyteachingtools andusedtheseskillstocreateahybridunittopilotoverthecourseofthethisschoolyear.allproject participantshavemadetheirhybridunitspubliclyavailabletosharewithothereducators.thegoalof thisworkistoimprovestudentachievementthroughintegratingonlineresourcesintocourse curriculum. Pilothybridunitswereusedbyteachersincreativewriting,ProPel,geometry,chemistry,languagearts, andadultoptions.teachersreportsuccesswiththepilotunits,particularlyinstudentengagement. Teachersalsoreportstudentperformanceisonparwithtraditionallessonformats. Excellence. Every School. Every Student. Every Day 3 of 54 //

31 ReporttotheSchoolBoard IntroductoryCommentsfor2 22Budgeting January6,2 Weareworkingwiththeseteacherstofullyimplement,onanongoingbasis,hybridexperiencesintheir courses.inaddition,wewilldevelopmeanstotrainandsupportotherteachersindevelopinghybrid instructionandcurriculum. CapitalProjectLevy Thecapitalprojectslevyisusedfortechnologyresourcesandsupportandforcurriculum,textbooks, andinstructionalmaterials. Fortechnologyresourcesandsupport,thecapitalprojectlevycoverstheTotalCostofOwnershipof computers,infrastructure,softwarepurchasing/licensing,repair/maintenance,scheduledreplacement ofequipment,internetaccesscosts,training,andtechnicalsupportstaffing. Theprojectedannualexpendituresforcurriculumandtechnologyareasfollows: Equipmentreplacement/upgradedona4 6yearcycle $,2, (computers,printers) Softwarelicenses,purchases,updates,subscriptions,services $562, Repairs/Maintenance $245, Network,Internetconnection,hosting $75, Trainingandstaffdevelopment $43, Technicians,supportstaff,networkandsystemsstaff $,555, Technologyintegrationsupportandmediaspecialists $995, Textbooks,curriculummaterials,librarybooks $,2, Annualizedcostsofdata,network,phone,andequipmentupgradesand $5, replacement Contingency,reserveforfuturereplacement $223, ofhighcostequipmentsuchasservers ForecastingModelResults ThebudgetdataforsettingtheparametersiscontainedinsixexhibitsofAppendixC.Nexttoeach budgetdatatitleistheexhibitandthepagenumberinappendixc. ExhibitA:RevenuebySourceFYandFY ExhibitB:FinancialBridge ExhibitC:BudgetReconciliation ExhibitD:2 22BudgetParametersandTargetedStaffing ExhibitE:2 22Revenue/ExpenditureAssumptions,asdevelopedfromparameters ExhibitF:CapitalProjectsLevyProjections SummaryofRevenueSources(ExhibitA,Page 2) SummaryofFiscalPlanningModel:TotalRevenueandExpenditure(ExhibitB,Pages3 4). (Notetherevenueassumptionsonthegreylineis 3.%andsalaryincreaseassumptionis2%.) 2 2,2 22,22 23,23 24,24 25 BudgetReconciliationfromFYtoFY(ExhibitC,Page5) CurrentProgramExpenditureandRevenueAssumptions ProjectedFinancialPositionwhen2 2Budgetapproved 7 Excellence. Every School. Every Student. Every Day 3 of 54 //

32 8 ReporttotheSchoolBoard IntroductoryCommentsfor2 22Budgeting January6,2 PastTrends RevenueminusExpenditureVariance PastTrends BudgetversusActual TotalUndesignatedGeneralFund(SeeExhibitB,Pages3 4) Current,Audited,Projected 6and%Levels BridgeProjectionAnalysis(SeeExhibitB,Pages3 4) 2 22CFAC/BudgetParameters(ExhibitD,Pages6 8) ImpactofStaffDevelopmentsetatCurrentLaw FTEReductionsduetoDecliningEnrollment, ConsequencestoSettlement (Thisisunavailableatthistime,untilthenextcontractsettlementiscompleted.Note salaryassumptionsremainat2%) ImpactofParametersonTargetedStaffing CurrentTargetedStaffingAllocation(ExhibitD,Page9) CurrentTargetedStaffingallocation Projectedallocationfor RevenueandExpenditureAssumptionsDevelopedfromParameters(ExhibitE, Page ) CurrentProgramExpenditureandRevenueAssumptions AnalysisofCapitalProjectsLevyProjections AswewerewaitingforBoardapprovaloftheCapitalProjects,Levy,thisexhibitwillbeadded afterjanuary3,2. Conclusion AsCFAConlygaveusrangesforthe2 22parameters,itistheadministration srecommendation thatwesetthe2 22parametersforplanningpurposesat 3.%revenuesandplanforapayment aidshiftat5/5.wealsorecommendweplanonthefollowingincreases:2.%salaries,8%employee benefits,andstaffdevelopmentsetatcurrentlaw(2%ofbasicformulaallowance=$867,). Excellence. Every School. Every Student. Every Day 32 of 54 //

33 H o p k i n s P u b l i c S c h o o l s Strategic Plan Appendix A Adopted: April 23, 29 Welcome Welcome to Hopkins Pubilc Schools Strategic Plan, which is guiding us into the future. Hopkins Public Schools is a place where students meet a dynamic and innovative educational program within a diverse, rich, and caring community. Hopkins students of any age will be active participants in the pursuit of knowledge, and will be able to analyze and apply new understandings to their lives. John W. Schultz, Ph.D. Superintendent of Schools District enrollment: 7,7 District Area: 32 square miles District Employees:,2 Values The core Values of our district are those values we hold that form the foundation on which we perform our work and conduct ourselves. These core values guide us as we work to achieve our mission and objectives through our strategies. Excellence Our intentional efforts are toward continuous improvement, and our commitment is to deliver rigorous programming that affords all individuals the opportunity to excel as we instill a passion for learning. Equity Our commitment is to raise the achievement of all learners, creating an environment in which learners of all races, cultures, and socio-economic backgrounds achieve to their fullest potential. Partnership Our commitment is to engage families and community members in creating a learning environment that is characterized by excellence, equity, and ethical behavior. Innovation Our commitment is to provide innovative learning opportunities to help students master the skills required of them as they participate in a constantly evolving, global environment. Inclusion Our commitment is to ensure that each learner feels welcome as a unique and contributing member of our diverse community. Fiscal Responsibility ;I [MPP QEREKI HMWXVMGX ½RERGIW WS EPP TVSKVEQW and services are supported by reliable resources available to the district. Mission Statement 8LI MWWMSR VI¾IGXW XLI PSJXMIWX KSEP SJ XLI school district. It is a statement of our desired future, and our identity. Serving a community rich in culture and diversity, the Hopkins Public Schools develops in all students the skills, knowledge, and passion for lifelong learning. Objectives 3FNIGXMZIW EVI XLI EGLMIZEFPI JIEWMFPI ERH ZIVM½EFPI VIWYPXW XLEX IRWYVI SYV (MWXVMGX [MPP EGLMIZI SYV QMWWMSR ;I VIEGL XLI 3FNIGXMZIW XLVSYKL XLI 7XVEXIKMIW 3FNIGXMZIW EVI ZIVM½IH F] XLI Performance Indicators. Each student will demonstrate academic growth in order to meet or exceed Hopkins School District standards.,stomrw EGLMIZIQIRX HEXE [MPP VI¾IGX KVS[XL XLEX IPMQMREXIW XLI HIQSKVETLMG predictability and disproportionality of the highest and lowest achieving groups. Each learner will develop and consistently display cultural respect and demonstrate cultural competence. Community members will be informed, connected, and engaged in the work of the Hopkins Public Schools 33 of 54 //

34 Strategies to support programs and schools. Each Strategy has one or more Action Plans. Achievement Strategy 2st Century Teaching and Learning We will focus upon core content, learning skills, and instructional tools in order to promote high rigor and achievement for all learners, as we prepare students for success in the 2st century. A. Core Content: Core content includes reading, mathematics, science, social studies, health literacy, and global awareness. ) Balanced Reading and Writing Instruction through explicit instruction that includes literacy skills, application, comprehension, and motivation. 2) Mathematics Instruction strategies that articulate math concepts, and deliver effective curriculum and instruction. 3) Science, Technology, Engineering, and Mathematics (STEM) We will embed STEM concepts and skills within real-world curriculum at every level to better prepare our students for the 2st century. 4) World Language We will develop a K-2 World Language plan that will prepare students to succeed in a 2st century, global ecomony. 5) Curriculum Review and Innovation We will embed 2st Century Skills and Power Standards within the curriculum review process, and explore opportunities for curriculum alignment and integration. B. Learning Skills: Learning skills include life and innovation, communication, and collaboration. The ability to use knowledge, attitudes, skills, and practices that esteem all races and cultures, and lead to the academic achievement and personal development of all learners. 2) Pre-Advanced Placement (Pre-AP), Advanced Placement (AP), and Advancement Via Individual Determination (AVID) We will increase student access to and success within rigorous coursework through Pre-AP, AP, and AVID coursework and strategies. 3) Graduation Planning, 6 2 and Beyond We will assist students and families with the expanded information and knowledge necessary to transition successfully across elementary and secondary education levels, in preparation for college-readiness and productive lives beyond high school. C. Instructional Tools: Instructional tools include information and communication technologies, print materials, and other media and multimedia tools. Technology Integration and Multi-Media We will integrate information technologies into curriculum, instruction, and assessment in order to stimulate learning, collaboration, communication, and creativity, as we maximize intellectual and personal growth. D. Assessment for Student Learning We will develop, analyze, and utilize common standards and assessments in order to inform instruction and increase student learning. Power Standards and Assessment We will identify and align standards within each curriculum area, and utilize common formative and summative assessments to measure student progress. Communication Strategy We will create a responsive and culturally sensitive communication system that allows us to inform, connect, and engage all District stakeholders. Inform: We inform all families and community members about Hopkins Public Schools academic excellence, culture of innovation, and how we nurture interests and passions of students and staff. Connect: We collaborate with all families and community members to establish an environment that welcomes involvement and fosters good will. Engage: We nurture relationships with all families and community members to sustain connections that enhance our ability to achieve excellence in every school, with every student, every day of 54 //