Report: Detachment would decrease Hopkins district’s revenue

If the Parkwood Knolls neighborhood detaches from the Hopkins school district, it would cause the district’s net revenue to decrease by $557,000.

At the request of the Hopkins School Board, the public finance firm Ehlers wrote an independent report on the financial impact the northwest Edina neighborhood would have if it succeeds in annexing into the Edina school district.

If successful, the neighborhood would bring in $519,000 in net revenue to the Edina school district, according to the report.

The detachment of the neighborhood would also continue to impact district revenues and property into the future because the property values and enrollment in the area are expected to increase, as well as the spreading of debt service levies onto a smaller tax base in the Hopkins school district for future debt, according to the report.

The Hopkins School Board is expected to decide on the neighborhood’s detachment request during its meeting at 7 p.m., Thursday, Dec. 20, at the Eisenhower Community Center, 1001 Highway 7, Hopkins. The Truth in Taxation meeting on the issue scheduled for Dec. 11 will not be taking place.

The Hennepin County Board has the final say in the detachment and annexation process, according to state statute, but Unite Edina 273, the group that represents the neighborhood, needs the approval of the Hopkins School Board before it can move to the county level.

The Edina School Board has declined to write a letter of support for the annexation at the request of Unite Edina 273, saying it wasn’t in the best interest of the district to do so at this time.

The report was the last piece everyone’s been waiting for, Unite Edina 273 Chair Alan Koehler said. They’re glad its finally been completed.

“It’s a good framework for going forward,” he said.

John Toop, business director for the Hopkins School District, said the data in the report was what they expected and was close the estimated financial impacts it presented to the Senate Education Committee when it was considering the detachment/annexation state statute.

The revenue decrease that would occur in the Hopkins School District is equal to nine teachers’ salaries, he said.

The Hopkins School District’s general fund is $80 million. The revenue that would be affected would be in the operating referendum and capital projects levy.

The capital projects levy is for curriculum and technology and is separate from the district’s general fund. The levy revenue is used for items such as purchasing computers and paying staff to fix them, he said.

If the neighborhood is successful, the change in school districts would cause 156.67 resident pupil units in the Hopkins school district to change to the Edina school district. This would represent a decrease of 1.9 percent of the Hopkins school district’s resident students and an increase of 1.81 percent of Edina school district’s resident students, according to the report.

According to Unite Edina 273, 133 students of the 212 students living in the neighborhood attend Edina schools through open enrollment.

Residents in the Hopkins School District would see their school property taxes increase by 1.55 percent, while commercial-industrial school property taxes would increase by 1.49 percent, according to the report.

Residents in the Edina School District would see their school property taxes decrease by 2.03 percent. Commercial-industrial property taxes would decrease by 1.95 percent, according to the report.

Parkwood Knolls’ residents would see their school property taxes increase by 14 to 15 percent. The report points out that they would be paying higher tax rates for referendum market value taxes and for non-debt tax capacity taxes, as well as paying the debt service taxes on existing Hopkins school district debt.

According to the report:

– $373 million of the 2011 referendum market value, the amount used to calculate tax rates payable in 2012, would be affected. In Hopkins, this would be a decrease of 4.23 percent, and in Edina, it would be an increase of 4.89 percent.

– The 2010 net tax capacity, which is used to calculate capital projects levy revenue, would have $4.23 million affected. That amount represents a decrease of 4.38 percent in the Hopkins district and an increase of 4.92 percent in the Edina district.

– The detachment would affect $4.13 million of the 2011 local net tax capacity, which would be a decrease of 4.7 percent in the Hopkins School District and an increase of 5.1 percent in Edina.

– The operating referendum revenue, based on resident pupil units, would decrease by $275,000 in the Hopkins School District and increase by $286,000 in the Edina School District.

– The capital projects levy revenue, based on the tax capacity, would decrease by $270,000 in the Hopkins district and increase by $221,000 in the Edina district.

If you go

What: Hopkins School Board vote on Parkwood Knolls’ detachment request

When: 7 p.m., Thursday, Dec. 20

Where: Boardroom, Eisenhower Community Center, 1001 Highway 7, Hopkins

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