Report Estimates Unite Edina Detachment Would Cost Hopkins $550K

A proposal to carve off a piece of Edina from the Hopkins school district would cost Hopkins more than $550,000 in lost revenue, increase property taxes for those who remain in the district and jack up taxes for those whose properties change districts, according to a report released Thursday.

Click on the PDFs to the right of this article to read the full report.

The district requested the report in order to determine the financial ramifications of a request from Parkwood Knolls and Walnut Drive property owners who want to leave the Hopkins school district because they think its schools are not in locations that serve the families’ educational needs.

The district has never had a school in Edina in its 130 years.

Even though districts are typically named after one of the cities they serve, they are separate local government entities, legally distinct from those cities. Hopkins Public Schools, for example, covers all of Hopkins, most of Minnetonka, half of Golden Valley and parts of Eden Prairie, Edina, Plymouth and St. Louis Park.

The report, which Hopkins Public Schools commissioned from Ehlers Inc., examined two ways the detachment would affect the districts: changing their revenues and changing the taxes paid by property owners. It calculated what those changes would’ve been for 2012 and assumed that no students would’ve changed schools because of the detachment.

Of the 202 school-aged children in the area, 127 already attend Edina schools and just nine attend Hopkins schools, according to Unite Edina 273, the group spearheading the detachment effort.

Ehlers determined that the detachment would shift 156.67 “resident pupil units” from Hopkins to Edina. Those units are used to calculate operating referendum revenue.

 It would also decrease:

• 2011 referendum market value (used to calculate referendum market value rates) by $373 million, down 4.23 percent;
• 2010 net tax capacity (used to calculate the capital projects levy) by $4.23 million, down 4.38 percent;
• 2011 local net tax capacity (used to calculate tax capacity rates) by $4.13 million, down 4.70 percent.

That equates to a $557,747 loss in revenue for Hopkins—increasing residential homestead property taxes by 1.55 percent and commercial-industrial property taxes by 1.49 percent.

That’s slightly less than Unite Edina 273’s initial estimates. In October, it predicted that detachment would cost Hopkins $281,000 annually in operating levy taxes and $280,000 in taxes for the capital projects levy.

Alan Koehler, who’s been spearheading Unite Edina 273's detachment campaign, said he had just learned about report. The group will need more time to absorb the information released by the district, but Koehler said none of the statistics seemed significantly different from their projections.

"It's such an arcane world now that I didn't really know what to expect," Koehler said. "At this point, I don't have much to offer in terms of reaction."

Meanwhile, the report estimates Edina would see revenue increase by $519,811. That would decrease property taxes by 2.03 percent and 1.95 percent for residential homestead and commercial-industrial, respectively.

Ehlers predicted much bigger changes for properties in the detaching area. They would have to pay higher rates for referendum market value taxes and non-debt tax capacity taxes. The firm also assumed that they’d still have to help pay off Hopkins debt incurred while they were in the district, although that can be waived if both Hopkins and Edina school boards agreed.

If that doesn’t happen, though, the detaching property owners could see school property taxes grow 14 to 15 percent.

With the financial analysis in, Hopkins staff are working on their final report for the School Board, said district spokeswoman Jolene Goldade. That report will be included in the board packet sent to directors on about Dec. 14. The School Board will consider the detachment issue at its Dec. 20 board meeting.

***

… in Hopkins?

Residential pupil units: down 156.67 (1.9 percent)

Net change in all district revenue: down $557,747

• Operating referendum: down $275,000
• Capital projects levy: down $270,000
• Basic community education levy: down $8,028
• Early childhood family education levy: down $4,680

Property taxes for others in the Hopkins school district

• Residential homestead property: up 1.55 percent
• Commercial-industrial property: up 1.49 percent

… in Edina?

Residential pupil units: up 156.67 (1.81 percent)

Net change in all district revenue: up $519,811

• Operating referendum: up $286,000
• Capital projects levy: $221,000
• Basic community education levy: $8,028
• Early childhood family education levy: $4,680

Property taxes for others in the Edina school district

• Residential homestead property: down 2.03 percent
• Commercial-industrial property: down 1.95 percent

… for property owners that change districts?

School property taxes would increase 14 to 15 percent because they’d pay higher tax rates for the referendum market value taxes and non-debt tax capacity taxes and because they continue paying taxes on Hopkins debt.

Patch Editor Ryan Gauthier contributed to this report.