The Hopkins School Board approved the 2019-20 budget after reviewing the budget with John Toop, district business services director, at the June 18 regular board meeting. The board approved the preliminary budget in March and was waiting to see the outcome of the Minnesota Legislature’s session.
“The budget book tonight as you have been presented has changed a little bit in format, but the goal has remained the same, which is approve a budget that keeps the unassigned fund balance at its current level. By doing that, we spend all available resources we can on student learning while remaining fiscally healthy,” Toop said. “I would also add that a budget is our best guess at the time of how results will come out over a year from now. New information will come to light, other information will be clarified, and previous information and estimates will be modified.”
The general fund for the 2019-20 school year was reviewed and will have an estimated deficit of $20,955. Revenue for the district is forecast to be $91,502,418, while expenditures are expected to total $91,761,498.
Toop informed the board that 73% of the budget is current employee wages and benefits and 3.5% is in the form of severance and post-employment benefits.
Funding for post-retirement employee benefits for the 2019-20 school year is at $500,000.
“That tells us that we should be funding those obligations at about $2,000,000 a year, we are currently funding in 2019-20 at a proposed $500,000, so one-fourth of that annual required amount,” Toop said. “We have withdrawn from our trust fund over the years for those promises to our employees, which we are allowed to do every year.”
The board was notified that employee salary benefits and education at all levels in the district have seen increases in cost.
“Salary and benefits are currently running 1.5% over spending levels from the previous year,” Toop said. “Also, the four biggest budget packages, elementary, junior high, high school and special education are running almost 2% higher than the previous year.”
In order to balance the budget, the board would need to withdraw from those trust funds. Toop highlighted the transfers that would need to be made. However, he advised this course of action would present difficulties for future budgets.
“If we do that, we would look at balanced budgets for the end of 2018-19 and 2019-20, but then in 2021 we would be left a deficit of $1,166,000,” Toop said. “We do need to structurally balance our budget so that we don’t use our trust funds, that is the key message tonight.”
Board Chair Wendy Donovan asked Toop if there was any other course of action he would recommend aside from transferring the funds before approval. Toop replied that he did not believe there was much they could do for the 2019-20 budget. He recommended the board could be vigilant about staff travel outside of staff development and spend more of their supply budget.
This was the last report submitted by Toop. He has been a part of the Hopkins district since 2005 and will be moving onto Edina Public Schools to serve as their business director.
“The systems that have been put in place during my tenure at Hopkins, I hope have served the district well,” Toop said.
“It has been a pleasure on my part to work with you,” Vice Chair Kris Newcomer said. “I have learned a lot from you, I think we all have, and our district is better for it.”
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