p.m. Welcome everybody. I call to order this special meeting of the Hopkins School Board for Thursday, September 25th. And we have a very short agenda um in front of us. And um I will turn it over to Dr. Mary Perryi Reid to do our Oh, wait. We have some consent items. Sorry for that. We will um go through the consent and I would look for a motion to approve the agenda. >> So moved. >> I have a motion. Is there a second? >> Second. >> I have a motion and a second. Any discussion? Seeing none, all those in favor, please say I. >> I. >> Any opposed? The chair votes I. And the agenda is approved. And I just wanted to see Natalia, have any of our board colleagues joined us online. Um, you know, Okay, we do not have any board members joining us online. Um, Director Thompson, Vice Chair Ross, and Director West Morland um are not here this evening for a a special meeting, but we do have four members and thus a quorum so we can move forward with our business this evening. And that takes us to our consent calendar. I would look for a motion to approve the consent calendar which is um the purpose is to provide the board with information considered to be more routine in nature. >> So moved. >> I have a motion. Is there a second? >> Second. >> I have a motion and a second. Any discussion? Seeing none. All those in favor please say I. >> I. >> I. >> Any opposed? The chair votes I. and the consent calendar is approved. And that takes us to our only order of new business, um the proposed tax levy certification. And I was excited to see um where we fall with that. So I welcome to the table Assistant Superintendent Lightfoot and also our partners at CISO. And I will turn it over to Dr. Mary Perry Reid. >> Thank you, Chair Andre. Um, so as stated tonight, our school board will review and take action on the proposed preliminary property tax levy for 2627. Um, and in simple terms, this levy represents the portion of local property taxes that help fund Hopkins Public Schools. And as our chair mentioned, we are seeing a small decrease of about $35,000 compared to this year. And um because state calculations can change between now and December, the board often chooses to certify the levy at the maximum amount allowed now. And then this gives the district flexibility to adjust later if the state makes changes outside of our control. So I am very grateful to Oh, I should also say that our district will our school board and district will host a truth and taxation hearing on December 2 at 6:00 p.m. to share details and hear feedback from the public. And then that same evening, our board will approve the final levy for the year. Um, so with that, I will turn it over to our presenters. I'm grateful to have Scott Lage, Jason Mudenberger, and Nick Lightfoot, who are here to share more about the the proposed preliminary property tax levy. Thank you for being here. >> Thank you, Superintendent. Good evening, school board. It is a pleasure to be here again. My name is Jason Mutzenberger with the Center for Effective School Operations. Um we're serving as your uh director of business services. Um I'm here with Scott Lay also on the team. Um I'm going to do the presenting tonight, but um we're all here with with Dr. Lightoot to answer any questions that you have board as we go through this. Um we do um we did include a number of different documents within the board packet um and a lot of detail. We're not going to go through all of that detail. We'll try and keep it summarized this evening, but we're happy to answer any questions um on the tax levy that you may have uh so that you have clarity as we move forward. Um this evening we are looking to uh approve the 2025 pay 2026 preliminary tax levy at the maximum. That is the action item that that you'll have this evening. Um what this uh is looking what it means is that the 2025 uh pay 26 levy so calendar 2026 taxes. Uh so as property owners here in Hopkins uh public schools uh when we pay our property taxes for calendar two 2026 that impacts our school district budget for fiscal year 27. Um and so we're we're actually beginning the budgeting process for fiscal year 27 this evening as we look to approve the preliminary tax levy uh for pay 26. Uh the deadline um Natalyia if you want to move uh two slides ahead. Thank you. Um the deadline uh for the board to approve the levy is September 30th. We have a short window each year uh where um the Minnesota Department of Education releases a preliminary levy certification document right around September 8th and then we start uh looking at calculations and reviewing the information. Um and the board needs to take action by September 30th. And so we're within that window this evening on the 25th. Thank you for scheduling a special meeting so that we can go ahead and and get this approved this evening. Um, with this information, we'll uh then provide the tax levy to the county auditor. Um, and the information um that you approve this evening is what goes on the proposed tax statements that get mailed to our community in November after uh November 4th election. Um, so that's a proposed tax levy amount that they receive. The final levy certification, as the superintendent mentioned, will occur on December 2nd uh at the truth and taxation hearing. Um where we'll present a bunch of information around the specific changes uh within the tax levy along with current budget year information. Um it's an opportunity for the community to come and ask questions around taxes as well. um as we have to provide an opportunity for them to speak at that meeting and then uh we'll we'll ask for the board to approve the tax levy later uh within uh that school board meeting. Next slide. Um so again these are for property taxes collected in calendar year 2026 and it'll be the basis for our 2027 fiscal year uh budget. Um couple of slides that that we want to get into on some of the detail if we go to the next one. Um the first one is just some some tax based definitions within in the levy. There's really two main categories that our property tax items fall within. And the first one is a referendum market value. Um this is taxable market value uh of all taxable property in the school district. Um our school taxes are for local share of a few categories of funding. most of them uh fall within this referendum market value including our voter approved um operating referendums. Um and those taxes are spread against referendum market value. You'll see where this comes into play a little bit later on in the presentation. The second piece is net tax capacity. Um this is the value of property uh in which taxes will be levied against for all other funding formulas. Um it's calculated by taking that taxable market value of property by our classification rates. those are set by the state legislature. Um property values uh residential property values up to $500,000 uh have a classification rate of 1.0 for example. Um our net tax capacity within Hopkins is about $178 million but the referendum market value is about 16 billion um of all property within the within the district. And so very different numbers and our taxes are calculated as such um depending on the categories. >> Jason Mr. Mr. Mutzenberger, would you mind moving your microphone closer? >> Net tax capacity um really comes into play, I would say, with the the major category of your capital project levy. Um we'll talk about that a little later on as as we mentioned the renewal um that's up for uh the uh a question this fall. Next slide. Um there are a number of changes or reasons why um uh our tax levy and uh your property taxes go up or down. Um and that's due to changes in state law. So um the legislature has the ability to impact our taxes. Um and so we often see that that come through as um as changes. The state is does highly regulate our tax um our taxes that we state pay at a local level. Um second item would be our our number of students that we serve or those pupil units and our population changes. So many of our levy calculations are based on our enrollment. Um and so our enrollment that we're projecting within this levy is relatively flat from our current year. Um our market value is the third item uh that change can change significantly um the levy. Um and so that market value within is the the value of the property within the district and how that's changing. We saw this in recent years um where our taxes went up significantly because our property values went up significantly. Um that's not the case this year. Um and um we have we're back to normal increases in our our market values. And then the the last item is really a change in our expenses as a district. Um and you can think of things like long-term facility maintenance or our career and tech levy. Um they're based on actual expenses. Um and that's one of the things I really uh do appreciate about the tax levy system in Minnesota. Um is that our our levies are adjusted uh for actual expenses for actual enrollment. Um and we see that in the following uh uh fiscal year or two fiscal years uh within the levy. And this year we're seeing some of those adjustments um uh increases in certain lines and decreases in certain lines that are based on our actual expenses. We move to slide seven. Our uh I think this is the main uh slide. Um if we look at total levy um that we're proposing this evening that the board approve is uh 68.7 million. It's down about $300,000 from last year or a minus.44%. I think that's a great message to come forward with especially in a year where we have um some ballot questions that our levy is decreasing at this time and so there'll be a reduction in taxes um as the levy currently stands um notwithstanding the questions that we have and we'll talk a little bit more about that at the end. Um we do have three categories within um the total levy um that receive tax revenue. And the first one's the general fund. Second is community service fund and the third one's our debt service fund. In our general fund, we're seeing a slight increase of 2.17%. Um and that's due to some increases that we have in our achievement integration expenses, in our long-term facility maintenance expenses, and then just our overall operating referendum increases that we have that are inflationbased. In our community service fund, we're uh looking at a decrease of 5.83% or about $62,000. Um and then on our debt service fund, we're down about 8% as we have um debt services based on our scheduled principal and interest payments on all of the debt that we have in the district. And our long-term facility maintenance debt is decreasing for our principal and interest payments. So, we're seeing a decline um in that altogether. Again, that results in a minus.44% to our tax levy. From here we get into a number of details um that I I don't believe we need to go through this evening. So um we just want to show um in full transparency all of the details within the tax levy. So for the community and for the board um to be able to look at all of these items um and if if there are questions, we're happy to answer them. We do see increases in in the voter approved levy. Um we do have a number of adjustments, positive adjustments coming through um on that general fund um which are tied to our our referendum market value levies. On the next slide um we see our net tax capacity levies, things like operating capital um our our um um achievement integration levy um some some unemployment insurance. We have a number of negative adjustments here which are offsetting those other positive ones on the previous slide. Um, we also have some decreases in our leases. Um, this year we have um for for um our our lease at intermediate 287. As a member district, we pay um fees into 287 and they have some reductions in their lease to uh the uh uh the SEC building that some of our students utilize. Um and so we received the benefit of that reduction of that lease as well um as a member district. Um, we're also waiting on MDE uh to the Minnesota Department of Education to approve um a lease for our portable classroom that we have. Um, and so we're waiting for some final information there. It's another one of the reasons why we asked the board to approve the levy tonight at the maximum instead of a specific dollar amount. It still allows us that opportunity to work with the department of ed on any potential changes that we have or that they may have as levies get finalized. On the next slide, um you can see the totals uh between those two categories of levies um and general fund results in that 2% increase. Moving quickly through to the community service levy. This is that decrease of um just under 6%. Um we see a decrease in our early childhood family education line item. Um and that's based on our the population of of uh eligible students. Um we have an increase in our school age care. um it was at zero in the previous year. Um we're recommending an $80,000 levy this year. School age care um in the district, we have a number of expenses that are eligible uh to receive funding, but we haven't been collecting that money in recent years. And so we're recommending uh that we do add a small levy in there and start capturing that. Um back a number of years ago, um Hopkins did have some significant revenue come through school age care. um the program hasn't really changed materially. We still have those expenses. So, it's time I think that we we start to capture some of those. It helps offset that that loss in other revenue as well. And then in the debt service levy, um you can see that decrease of 8% and that's largely due to that long-term facility debt service and those scheduled principal and interest payments. This is part of the plan that our ellers, your financial adviser, has brought forward. Um, and so if you've had Ellers in in recent times come out and and talk about um your your debt um and uh they're they're part of this program. We've connected with them. I know we're new here in the district. We know Ellers well and have connected with them multiple times already on Hopkins and and your financial plan um as it relates to the debt. So tonight the the recommended board action tonight is to approve the total levy at the maximum. We do have the dollar amounts in there but uh I think having that maximum language is the right answer. Most districts in the state do approve at this levy at this uh board meeting uh for the preliminary levy. They approve at the maximum. Um, again, it allows us the flexibility continue to work with Department of Ed on any changes that may come. And then when we come back in December to to do the truth and taxation hearing, we ask the board to approve a specific dollar amount on each of the categories um to get to that total levy. We're estimating it's it's going to be around 68.68 million. As I mentioned before, we do have um an election uh this fall in November. Um on the next slide we uh see the two ballot questions. The first one is for a bond. The second is for the capital project levy. Um I always think about these bonds are for building. Levies are for learning. Um and so the first one with the bond we're looking at building improvements, safety and security improvements and updated classrooms and a whole number of things in there. And um there is an increase um to a tax impact increase of $7 per month on the average home um with that bond. As we presented this evening, uh there's a decrease in the overall tax levy, uh which means hopefully we can soften that $7 impact as we come forward. Um we would know that answer for sure in December at the truth and taxation hearing. And that's where we'll present the actual um tax impact numbers uh for residential and commercial buildings. And then the second ballot question um is the capital project levy. Uh this is a renewal question. It does not have a tax impact um on on the tax levy. It has a zero impact. Um but it would renew the capital project levy going forward. And that's a critical source of funding uh uh for students to have access to their their technology and opportunities that they have within the district. The next steps after approval of the preliminary tax levy tonight um would be um that we would continue to work with the Department of Education on the tax levy and I other potential changes that they have. Um in November you'd have your election um with the two ballot questions that the county would mail out the proposed property tax statements to owners. um December 2nd, we'd be back for the truth and taxation hearing um and then have the board approve the levy at that time as well. And then we'd be set and off and running with um the the start of our revenue budget uh for fiscal year 2027. That's what we have tonight for you on the tax levy. We're happy to take any questions you have. >> Thank you. Appreciate the information. Um, and also the way it's carefully laid out. Um, this feels new. I don't know if it is new, but um, just the the different line items. Wondering if there are any um, questions or comments from my board colleagues. >> Chair Andre. >> Yes, Treasure Heartland. >> Hi. Thank you very much for coming tonight and and um this was presented um somewhat more thoroughly or with more line items and more breakdown than I think the board has seen in the past. Um can you because it was kind of presented in two different ways. Am I correct in the understanding that at a a similar meeting last year for this, we heard that because of similar changes in our net tax capacity that we did actually lose something like a million dollars that were be collected in that are being collected right now in 25 that will serve as our revenue in 26 or was that a different discussion with vendor? Director Chapanduka. I guess I'm basically I'm asking is this the second year in a row that our taxpayers will have seen a decrease in money going to the schools which is a good thing for taxpayers. And then conversely though of course our district is >> seeing fewer less revenue. Um, I, you know, that's a great question and I don't know, um, back to last year the impact of taxes, but I'm happy to take a look at that and send some information back through the superintendent for you. Um, anytime that we do have changes in the tax levy though as as far as uh increased revenue or decrease revenue again because of enrollment changes, because of um market value adjustments, because of actual expenses that we have within the categories on the levy, those do come through the next year in the tax levy. And so we saw an increase of over $600,000 in positive adjustments in this levy year um for items related to those referendum market value categories. We also saw a decrease in some items on the net tax capacity. Um and and so there is a a combination of those adjustments through here. I'd have to go back to last meeting and see exactly or last year and what those those proposed numbers were and and what they related to. But um what I can assure you is that the the numbers that um are contained within this levy document are based on the actual expenses and actual enrollment data that we have in the district. >> Okay. Um yes I am I am going back to my notes and we had a more thorough discussion in December than September and so yes we were um fiscal year 24 looks like our number was about 71 million. So this is our second year in a row of decrease um in burden to our taxpayers. And so I think it's kind of an interesting you know catch 22. Of course, taxpayers want to hear that and it's it absolutely is kind of a positive message that um like our real expenses that were um given to the state um means that we did tighten that up and then of course means that we do have less revenue. So, can I ask a quick follow-up question then we talk about all of these levies? These are levies that are guaranteed to us or not guaranteed to us but we're entitled to because of state legislature. And then this last piece that you called out is an exception is a voter approved levy. >> They're going to Is that accurate? >> Yeah. Uh that is correct. So many of the levy items, most of them within uh the levy are state regulated formulas um based on enrollment, based on market value. Um and and there are only uh a few that are voter approved that are directed by the school board. Um and so most of the levy is dictated by the state and then a few items are controlled by the school board um such as the voter approved levies. >> Okay. And so then any any of these adjustments that you're talking about come from either our real expenses were lower >> than originally projected or occasionally the state might change some formula that we are then subject to. >> Correct. I think there are a couple of examples of that. Long-term facility maintenance. We submit a plan. The board approves a 10-year plan um each year on how we're we're anticipating uh spending those funds. um we include estimates within the levy and then we adjust them for actuals and so the the taxpayers then can receive that funding back through their taxes from a state side. Um there's there are some items in here that are equalized revenue where state aid um pays for some of it out of uh so the state money uh versus taxpayer money and those are adjusted each year depending on how market values change within Hopkins compared to the rest of the state. Okay, that helps. I think it helps us and it helps the community understand. And so then I think my final follow-up question is or possibly comment is that um when a homeowner in our district gets their November statement, like undoubtedly their total tax line is probably going to go up, but they should see at least as far as Hopkins Schools is concerned that that line item is I mean It's not down tons, but it is it will be down from the year before. Is that what it will look like? >> The there are a number of variables. So, the short answer is potentially. Um yes. Um but depending on the increase in their market value, >> right? So, if your market value of your home goes up significantly, you may still see an increase in the property taxes uh for each jurisdiction. Um school district being one of those. Um, as we're presenting it this evening, the overall tax levy is going down. So, if all things were held steady, everybody's taxes would be going down for a school district. >> Sure. If everyone's home value was the same, but that isn't the case. Okay, that makes sense to me. Thank you. >> Thank you. >> Chair Dre, can I ask a question? >> Thank you all so much for coming here tonight um and presenting this information to us. is very um important especially with the upcoming election and just learning about how property taxes and values work. I'm still learning school finance. So um even in going into my third year is still a little bit uh confusing to me. So I appreciate any moments of clarity. I just have one question. Um and please let me know if this is relatable to the presentation. Um but the question was um what like what school rating or performance level is required to drive an increase in local property values and how does the implementation of a school levy affect this trend? >> So the first question if you can repeat that on on your school rating and how that impacts tax levy. Is that the first question? >> Yeah. So like how does like the school performance like a district performance impact property um uh what is it property uh values? So I know a lot of times people talk about like how they move to certain neighborhoods or certain cities because there's a thriving school district. So just understanding how does our district impact that um and does the levy play into um increasing those property values as well. >> I would say it goes the other way in a sense of the the tax levy is driven by the market value. >> Okay. >> And the enrollment within the district um versus the levy driving the market value. So, we know that a great school district um is a thriving community, right? And a poor school district can can suffer in their market values and their um in their community. Hopkins here, we've got a great school district. We've got a wonderful community. Property values are increasing, yet our tax levy is still decreasing. I don't think there's a direct correlation necessarily to that um is is how I view that. And if you can repeat your second question. >> Oh, and the second question was just like how would the So you answered the you kind of answered it, but it was just how would a um a levy um uh imple excuse me a levy impact like the property values. And so I think that you answered it in your first um >> the other thing I would add too is is in a in a thriving community where there's especially growth in in housing growth in business that helps um grow the the market value of the property within the community um which will help drive down taxes as well. And so we're looking for um a place, right, a community that is thriving both from a school side, a a city side um where we have continued growth within the community so that we can all result in lower taxes and and and so I think there there's a relationship there, but um certainly to the quality of the school district. Um I think um a a great school district is going to drive people into the district. It's going to drive enrollment up. Um, but it's going to drive the value of homes up as well. So, >> okay. Thank you so much, >> J. Andre. >> Yes, Director Jean. >> Hi, I do have a quick question. Uh, so that uh early childhood uh $80,000. Um, just a few questions about that. Is that um a uh kind of expanding the uh revenue for the that that we're claiming that we can kind of coming into the system and then b is there more than 80,000 available and you know are we going to get more for the work that we do? >> Yes. So um couple things there. Um we we certainly do have more opportunity for additional revenue. Um, but I think we want to be cognizant of the impact of the tax levy um with with what number we put in here. Um, and so we've gone with a conservative low $80,000 compared to our expenses which um are are well over um $700,000 in the school age care program. Um that is an expense to the community education budget without revenue on that line item. Currently, in the past, um, a number of years ago, Hopkins did have a levy that was much higher than the $80,000. Um, and we see this with many school districts on the school age care levy. Those are costs that continue to increase. It's expenses to support students with disabilities. Um, and we're seeing increased expenses um, in general fund, on special education. We're seeing it on the community education fund um, in the school age care levy. Um and and so to catch up in that you have to increase that levy line item which increases taxes. Um so we want to work our step into that in instead of uh that immediate tax impact to everybody. We also um feel like there's um some needed review in that area. We're still uh within our first um month roughly uh here in Hopkins. We'd like to review uh that school age uh care levy with the community ed director with Dr. life foot and make sure we're capturing the correct number of expenses within the right program um and and account codes as we talk about it from a finance side so that we can then generate the correct tax levy. So um there's some work for us to get to that point um and we know that we have eligible expenses. We're starting with an $80,000 level to to try and um offset some of those and provide some stability in community ed. Um but I think there is more opportunity as we move forward. >> Okay. So I'm Could there be half a million is what I heard? >> There could be potentially. Yes. >> It's a lot of teachers. >> I am actually wanting to follow up and perhaps um Assistant Superintendent Lightfoot or uh Dr. Mary Perry Reed, you might be able to shed some light on what are we talking about when we talk about community services, school age care, what programs fit in there that Hopkins provides? >> Yeah, I can speak to that a little bit. A lot of that is associated within the kids and company program when we think about before and after school care. Um and um uh Jalisa Breedlove and I spoke briefly about what we're looking at with expenditures and much like what was mentioned making sure that those expenditures do provide services for students with disabilities and there's another categorical component >> family resource. >> Thank you. That's why we have them. >> Um that family resource component as well. So that's what I think we want to delve more into is what does that look like and what are our actual expenses so that we can get to a more firm number um to what was mentioned earlier about the potential of what that could be. I I when I when I hear you saying that, I think um immediately about the proposed um family engagement plan that we talked about here at the board and how could those dollars help us um really make that meaningful and impactful for our families in the district. So, thank you for bringing this forward. I think this can have a deep impact. Um, and I'm also just wondering if we could at some point, I don't expect anyone to know the answer now, um, but what when did we stop collecting these dollars? Um, and perhaps if there's any sort of idea of of what would have um, precipitated that would be interesting to have because I do know that Hopkins has always been known for providing excellent special education services. Um, so just wondering when we decided to stop levying for that. >> And we're happy to provide some more of that information at the truth and taxation hearing. um because this will be contained within that >> um presentation as well. So, we can dig into that category a little bit more. >> Great. Thank you so much. And I just had uh another just quick follow-up question. I know I think a lot of us have have asked this in different ways, but um do we have an idea of what is driving the reduction in um the cost to our taxpayers? And then also, I know here at the board table, we often think in terms of a family's home, you know, property taxes, but how do um the other sorts of property in our district play into this like commercial and and that sort of thing? They're they're not exempt from this. Correct. We're not putting all of this on families. >> No, absolutely not. All property, all taxable property in the district is part of the tax levy. and that includes commercial industrial property. Um when we come back in December, we'll have the tax impact of all those different categories. That's something that Ellers does a nice job putting together for the district. Um the tax impact at different values for residential and different values for commercial industrial property. And so we'll take a look at the impact of all of those, but yes, everybody pays taxes um uh towards our levy. Um to your other question on on why we're continue why we're seeing that decrease again. I you know enrollment has a a very big impact on our tax levy and what we're seeing is relatively stable enrollment but our market values of our properties continue to increase right so we're going to see it um values increase enrollment is stable and so the overall tax levy is going to drop because of that. Um, we also see a reduction though on um on that debt component of our levy. That's part of that long-term financing plan that Ellers puts together. So, we do have and are showing a reduction in our principal and interest payments on our debt as we continue to pay down some of that debt. Um, and so that's very intentional and structured on on the impact of that reduction. Um, but that's driving that debt service levy down which is also impacting the overall levy to come down as well. Okay, thank you. Well, with that, um I would look for a motion to um approve the uh proposed um property tax levy. And is this um what is P A Y? What does that stand for? >> Payable. So 2025 payable 26. payable 2026 um for fiscal year 27. And just so that we're all clear, we are not going with the specific dollar amount, but instead authorizing at the maximum. >> Do I have a motion? >> Some moved. >> Is there a second? >> Second. >> I have a motion and a second. Any further discussion? Seeing none, all those in favor, please say I. >> I. >> I. >> Any opposed? The chair votes I. And the proposed tax levy is approved. Thank you so much for being here this evening. Thank all of you for being here this evening as well. >> Thank you so much team. >> And with that, I would look for a motion to adjurnn. >> So moved. I have a motion. Is there a second? Second. I have a motion and a second. Any discussion? Seeing none, all those in favor, please say I. >> I. Any opposed? The chair votes I. And this meeting is adjourned at 5:40 p.m. [Music] Thank you all.