CFAC makes recommendations for budget planning

December 22, 2008
The Citizens Financial Advisory Committee (CFAC), which comprises financial and business experts, recently developed several recommendations for the Hopkins School Board and district administration to consider as they develop the school district's 2009-10 budget.

In making their recommendations the CFAC took into account several existing conditions, none of which is unique to the Hopkins Public Schools:
  • The school district is facing a continuing, short- and long-term enrollment decline.
  • The short- and long-term outlook for revenue improvement is very cautious.
  • The district's cost structure is tied roughly 80 percent to people, with building operating costs coming next.

The CFAC recommendations include the following:
  • Enrollment projections, which currently project a 413-student decline over the next five years, should be updated on an annual basis.
  • The school district should plan on growth in general fund revenue of 0 percent for the next two years, and possibly 2 percent the following three years.
  • The district should plan to increase other revenue by .5 percent per year for the next five years; 0 percent might be more realistic, but the district should be prepared to develop contingency plans in the event of a reduction in state revenue.

The CFAC emphasized that in order to have financial stability it is necessary to have balanced budgeting occur over a long-term basis. Although the district has now achieved a general fund balance that conforms to their fund balance policy guidelines, it is important to consider the current and near-term economic situation, the state budget outlook, and how those factors translate into revenue increases, if any, from the state. The CFAC therefore cautioned against any current or near-term spending or programming increases, unless they are relatively budget neutral.

The CFAC also recommended that studies already under way on facilities use, special education, transportation, differentiated staffing, and site-level administration be completed and analyzed for possible efficiencies that could be implemented to minimize reductions in key budget areas.

The CFAC noted that Hopkins Public Schools is now on a multi-year path to financial stability, with the current projected budget surplus providing an opportunity to evaluate the sustainability and productivity of the current and prospective programs it offers students.

More

CFAC Report Executive Summary (pdf, 41 KB)

An executive summary of the Citizens Financial Advisory Committee's report.

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