Hoover school officials predict $3.4 million budget surplus for 2018

Hoover school officials tonight for the first time in 13 years presented a budget that is expected to end in the black, thanks to increasing property and sales taxes, more funding from the city of Hoover and cost-cutting measures.

School system Chief Financial Officer Tina Hancock is predicting the school system will spend $177.5 million in fiscal 2018 and take in $180.9 million in revenues, resulting in a $3.4 million positive balance.

While the school district did end up with a surplus of about $500,000 in fiscal 2016, the original budget for that year predicted a $10.4 million deficit. And while school officials now are hoping to end fiscal 2017 in the black, the 2017 budget passed a year ago predicted a $1.9 million deficit.

So this is the first time in 13 years the Hoover school board will consider a budget at the beginning of the fiscal year that ends in the black, Hancock said.

The school system’s financial status has made great improvements in the past couple of years.

One of the biggest helps has been an increase in property tax revenues, Hancock said. The city of Hoover also in March increased its contribution to the school system from $2.5 million a year to $5 million a year.

School officials also have worked to cut costs without sacrificing so much that the quality of education being offered suffers.

The positive budget deserves “just an ounce of celebration,” Superintendent Kathy Murphy said, but it didn’t come without some pain. “Every department has taken a bit of a hit,” Murphy said.

But just as people shouldn’t spend more money than they make in their personal lives, school officials should treat public money the same way, she said.

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, Hancock said. 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.

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 $1.3 million for a partial roof replacement at Hoover High, $750,000 for paving projects, $314,546 for replacement of heating and air conditioning units, $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.

School board member Craig Kelley said he’s concerned that state legislators might try to take more revenue from wealthier school districts such as Hoover and spread out the money to poorer school districts across the state. Kelley said that’s not fair to Hoover, and Hoover officials will fight that as long as they can.

There is another public hearing scheduled at 4:30 p.m. on Sept. 11 to review the 2018 budget presented by Hancock tonight, and the school board is expected to vote on the budget in a 5:30 p.m. meeting that same day, Hancock said. The budget must be presented to the Alabama Department of Education by Sept. 15.

Hoover school board President Earl Cooper said he thinks the 2018 budget presented by Hancock is very positive.

“It’s taken us two to three years to get to this point,” Cooper said. “We just have to stay the course and run as efficiently as we can and continue the optimal level of high educational services we provide our students.”

Cooper advised the 2018 budget is only a snapshot in time and is subject to change.

Hancock said while the school system’s financial condition has greatly improved, there are still challenges ahead as debt payments may rise, enrollment continues to grow and new facilities may be needed in the future.

See a summary of the Hoover school system’s proposed 2018 budget here.