Hoover school board passes non-deficit original budget for first time in 13 years

The Hoover school board tonight for the first time in 13 years passed an original budget without planned deficit spending.

The school board plans to spend $177.5 million in fiscal 2018, which starts Oct. 1, and take in $180.9 million in revenues, resulting in a $3.4 million positive balance.

For a decade, the school board was unable to keep annual expenses below revenues and has been digging into what was a hefty fund balance to make ends meet.

But as that fund balance dwindled down and school officials took heat for spending more money than they took in, Superintendent Kathy Murphy has been working to get costs under control since being hired in the summer of 2015.

The school district did end fiscal 2016 in the black by about $500,000 but started that year with a $10.4 million budget deficit. The school board a year ago passed a $1.9 million deficit budget for 2017 but hopes to end this year in the black as well.

Murphy said starting fiscal 2018 with a balanced budget is a big deal.

“It’s been a long time coming and much needed,” she said. “It was kind of like a hemorrhage that needed to stop.”

School officials have been thoughtful and thorough in looking for ways to cut costs without compromising students’ well-being and education, Murphy said. “We’ve tried to be savvy with our taxpayers’ money,” she said.

The cuts have not come without some angst and pain, but hopefully they will put the school system in a much better position for the future, Murphy said.

School board Vice President Craig Kelley said school officials have been very frugal because they realize they don’t have money to throw away.

Challenges lie ahead with money coming from the state, and the Hoover school system still has a lot of needs as debt payments will rise in two years and new facilities will be needed as enrollment continues to grow.

In addition to cost-cutting, Murphy said a lot of other factors played into this year’s balanced budget, including rising property and sales tax revenues, a increase in investment interest and more money coming from the city.

The Hoover City Council in March increased the city’s contribution to Hoover schools from $2.5 million a year to $5 million a year, and Mayor Frank Brocato has proposed to maintain that level of contribution for fiscal 2018.

The Hoover school system actually could end up in a much stronger position at the end of fiscal 2018 than even the original budget predicts, said Tina Hancock, the system’s chief financial officer. School officials made no accommodation for an estimated $9 million that could come from Jefferson County as a result of the county refinancing a bond issue, she said.

If that money does indeed come through, that will strengthen the system’s financial position even more, Hancock said. However, some of that money could be applied to renovations of the Riverchase Middle School that Hoover is in the process of buying from the Pelham Board of Education, she said.

Hoover school officials have not yet decided how they will use that facility, but it could require some renovation.

Heavy local funding

About 80 percent of the school system’s 2018 expenditures are expected to be for personnel, including 217 teachers that are completely funded by local money instead of state or federal money, Hancock said.

The 2018 budget includes money for six more teachers than the 2017 budget did, but funding for two child nutrition employees has been eliminated as the child nutrition program looks to cut staffing through attrition, Hancock said.

The new teachers are needed because of growth in the number of students, she said. The budget anticipates total enrollment at 13,947 students, up from an official enrollment count of 13,876 students in the 2016-17 school year.

Spending per student is expected to be $12,504, which is lower than the $13,715 per student in 2008 but higher than in 2014, when spending per student had fallen to less than $11,000, Hancock said. Hoover’s spending per student is much higher than the state average, but school officials would like to see that number rise back to where it was before, she said.

The $135 million proposed general fund budget includes $107.9 million for instruction and instructional support, $16.4 million for operations and maintenance, $6.9 million for transportation, $3.5 million for administration and $676,652 in other expenses. The proposed child nutrition budget is $8.9 million.

The proposed budget for capital projects is $2.9 million, including $2 million for a partial roof replacement at Hoover High, $379,000 for paving projects, $200,000 for painting, $150,000 for foundation work at Gwin Elementary, $150,000 for a cooling tower at Bluff Park Elementary and $37,000 for kitchen heat pumps and door replacements at Hoover High.

The school system’s debt payments in 2018 are expected to be $11.8 million, but those debt payments are expected to increase by about $2 million in 2020 when some of the debt matures, Hancock said. The school system’s total debt stands at $168 million.

The school system’s projected revenues include $95 million in local revenues, $72 million from the state, $6.9 million from the federal government and $579,000 from other sources.