Financial Health - Hopkins Public Schools

Hopkins Public Schools is navigating a complex financial landscape brought on by a combination of external factors.

Hopkins Public Schools, like many districts across Minnesota, is navigating significant budget challenges as we prepare for the 2025-26 school year. These shortfalls stem from rising costs in all areas, including inflation, increasing operational and labor expenses, and new state-mandated programs and requirements that are not fully funded. Additionally, flat enrollment continues to impact revenue, creating further financial strain

School Funding Landscape

Check out this video from the Minnesota Association of School Administrators (MASA) that helps explain the complexities of public school funding and the financial challenges schools across the state are facing.

The Association of Metropolitan School Districts (AMSD), which represents 47 K-12 school districts and 6 intermediate/cooperative districts, estimates a combined shortfall of more than $280 million among its members. Hopkins, like other districts, must make strategic budget adjustments to ensure long-term financial sustainability while continuing to support student success.

Proposed Reductions
Budgetary pressures

Proposed Reductions

For Hopkins, we anticipate a budget deficit of about $7 million. Our district maintains a healthy fund balance, which can help offset part of our deficit. However, this one-time resource is not a sustainable long-term solution.

Our financial challenge requires both careful decision-making and long-term financial sustainability. We recognize that budget reductions of this magnitude impact students, staff, and families, and we do not take these decisions lightly. Over the past several months, we have conducted a thorough analysis of our financial landscape, prioritizing efficiencies that minimize the impact on classroom instruction and student opportunities.

Proposed Transportation Efficiencies
Reductions for 2025-26

Proposed Transportation Efficiencies

More details on Transportation Changes for 2025-26

As part of our reductions, we have identified transportation as an area of efficiency exploration. Before the pandemic, transportation costs were $6 million per year—today, those costs have risen to $11 million, significantly impacting our overall budget. We are motivated to find transportation efficiencies while providing safe, reliable and equitable transportation for our students.

Transportation Adjustments:

Moving Back to a Three-Tier Routing System – While we loved the benefits of reducing our tiers and aligning our school start/end times, we are compelled to explore a less expensive routing system that move two elementary schools - Alice Smith and Gatewood - back to later start/end times. At this time we do not plan to adjust our secondary start times.
Paid Transportation for Open-Enrolled Families – Exploring an option for open-enrolled families to pay for door-to-door service rather than driving their child to an in-district bus stop.
Resident Families Who Can Opt Out – Identifying resident families who have historically signed up for transportation but have the flexibility and resources to drive their children to school, carpool with other parents, or signed up for services but rarely/never use the bus.
Expanding Walk Zones – Increasing the walk zone for resident families to two miles from the school, in alignment with Minnesota state statute.

If you'd like to learn more, these topics were discussed at the March 25 School Board Workshop which can be watched in full here.

Reductions for 2025-26

Budget reductions for the 2025-26 school year were presented at a high level at the March 25 School Board meeting. You can watch the presentation in full here.

Proposed reductions are as follows. Please note that these reductions are in draft form and have not been finalized.

Central Office and Operations Efficiencies

In addition to all district departments absorbing a 5 percent reduction, we are searching for more creative ways to help mitigate class size impact. The central office reductions focus on making district-wide operations more cost-effective. This includes saving at least $1M by streamlining our transportation system, shifting the funding source for Holistic School Safety, reducing capital costs, and trimming administrative contracts and service agreements. Additional efficiencies come from reducing overhead in departments like nutrition services, community education, and district governance.

Additional Detail - Administration and Central Services

Additional Detail - Administration and Central Services

Department / Category	Effect/Impact	Estimated Reduction
Transportation	Create efficiencies in Transportation operations leveraging recommendations from the Transportation Audit.	$1,000,000
Holistic School Safety	Move Holistic School Safety to be funded out of Restricted Safe School funds.	$572,349
Operations and Maintenance	Leverage Restricted Balance in Operating Capital to cover General Fund Capital Outlay Costs.	$500,000
Capital Projects Levy	Reduce FTEs and Service Agreements	$250,000
Community Education	Reimbursement to General Fund	$125,000
Nutrition Services	Reimbursement to General Fund	$125,000
Operational Costs Reductions	Reduction of emergency set aside in governance and management.	$100,000

Instructional Efficiencies

We are assigning staffing in a more targeted and conservative fashion to more strictly align with enrollment. This will reduce classroom teacher allocations at a minimal level. We proposed consolidating low-enrollment high school courses resulting in fewer sections offered. We also proposed adjusting time card payouts and substitute coverage at middle and high school.

Additional Detail - Instructional Efficiencies

Additional Detail - Instructional Efficiencies

Department / Category	Effect/Impact	Estimated Reduction
Secondary Substitute Coverage Reconfiguration	Reduce substitute needs district-wide by using large group spaces for multiple classes and have paraprofessionals as supervisors.	$400,000
Targeted Staffing	Reduce Targeted Staffing allocation. Implement staff adjustment to address any shift in enrollment.	$400,000
Reduce Timecard Extra Pay	Reconfigure timecard payments for extra duties.	$500,000
Alternative Learning Program Reconfigurations	Reconfigure the number of FTEs supporting Alternative Learning Programs.	$250,000
Counselor Realignment	Realign counselor positions and fund 0.5 FTE using Achievement and Integration allocations.	$500,000
Secondary Schedule Reductions	High School course consolidation and setting minimum course levels.	$360,000
Classroom Teachers Round-down	Realign the calculation of teacher FTEs to enrollment projections. Any changes to enrollment at the beginning of the fiscal year will be addressed through staff adjustment.	$621,000

Budgetary pressures

Statewide and in Hopkins the shortfalls are a result of unexpected and significant swings in inflation, cost of living increases, enrollment loss, and state funding that continues to fall short of school districts’ actual and projected expenses.

Understanding School Finance

Three arrows going up with the dollar sign

Inflation

Big swings in inflation have increased costs in utilities, transportation, food, supplies, insurance, and of course – cost of living. Expenses for services, transportation, utilities, and supplies are projected to increase by 5% annually.

Staffing Challenges

School districts had to respond to historical staffing challenges by increasing salaries in a number of job categories to remain competitive and fill vacancies.

Cost of Living

Hopkins nine bargaining units that have settled or are expected to
settle at increases that exceed what the state gave us. We value our employees and need to pay them a livable wage that matches what our neighbors are offering.

Salary Impact

Hopkins believes that all staff should be fairly compensated. Cost-of-living salary adjustments have an enormous impact on the district's overall budget, as 83% of the budget goes towards salaries and benefits.

Enrollment

Overall, our enrollment has grown by just over 2 percent. While being able to maintain or slightly grow our enrollment is critical in this climate, we are preparing for flat growth moving forward.

Solutions and Steps Forward

Navigating our budget will require us to be strategic and thoughtful. We are working on a variety of solutions to keep cuts away from our classrooms and away from people. In addition to scrubbing all budgets and identifying where we might find efficiencies, here are some areas we can lean into as we navigate next year and beyond:

Fund Balance

Fund Balance

Hopkins currently maintains a healthy fund balance of about 12 percent, which can help offset part of our deficit. However, this one-time resource is not a sustainable long-term solution. Ongoing factors beyond our control have required consecutive annual reductions, pushing us to consider all options. It is crucial that we adopt a thoughtful, strategic approach to address these challenges while minimizing the impact on classrooms, class size, and staff.

Operate More Efficiently

Operate More Efficiently

Since early fall, building principals and district leaders have been collaborating to think through budget solutions. We began by considering all options and then prioritized reductions that minimize classroom impact while maximizing efficiency. We continue to explore targeted reductions in key areas such as:

Printing, supplies, professional development, and travel costs
Program and/or staffing redundancy
Co-location of speciality programming, including language immersion, offered at more than one site
Transportation efficiency
Master schedule efficiencies
Instructional and peer coaching model
District office department efficiencies

Some adjustments may be implemented quickly, while others may require exploration into the next school year

Enrollment

Enrollment

The Hopkins portfolio needs to be competitive and impactful to maintain and grow our enrollment into the future. We are seeing increased interest in language immersion - especially Spanish immersion - and our VirtualEDU online/blended school. In addition, all of our elementary schools have unique identities that appeal to different aspects of our vision. We are entering an environment where families want choice and a variety of options. We are proud that Hopkins is creative and complex enough to be able to serve a range of needs.

Advocacy

Join the Hopkins Legislative Action Committee

This is a legislative funding year, and we have an opportunity to advocate for increased state support alongside other districts. Hopkins is fortunate to have an active Legislative Action Coalition (LAC) that works with the School Board to champion education-focused legislation. If you want to get involved, now is a great time to advocate for more funding. While advocacy is an important part of our strategy, we predict state funding increases will be limited, requiring us to make tough decisions locally.