Hoover schools end fiscal 2017 $27 million in the black

The Hoover school system officially ended fiscal 2017 $27 million in the black, Chief Financial Officer Tina Hancock told the school board tonight.

That’s a dramatic turnaround from many years of deficit spending and the $1.9 million deficit that was projected when the 2017 budget originally was passed in September 2016.

Hancock, while pleased with the large surplus, noted that about $18.2 million of that was one-time money that will not be a continual source of revenue for the school system in the future.

Jefferson County in September gave the Hoover school system an unexpected $9.1 million, which was Hoover’s share of $69 million of county sales tax money that was unspent following the county’s refinancing of debt.

Also, the Hoover school system in the first month of fiscal 2017 closed on the sale of the former Berry High School campus to the Vestavia Hills Board of Education for $11 million and had $9.1 million of that left unspent, Hancock said.

Much of that money had been budgeted for capital projects in 2017, such as the new artificial turf and tracks at Hoover and Spain Park high schools and a new band facility for Hoover High, Hancock said. But not all of the bills for those capital projects actually came in fiscal 2017, which ended Sept. 30, she said. Those bills have been arriving and will continue to come in fiscal 2018, she said.

Other factors contributing to the $27 million budget surplus were an increase in property tax revenues and the school system’s efforts to cut costs and keep expenditures below budgeted amounts, Hancock said.

Property tax revenues climbed from $71.3 million in 2016 to $72.4 million in 2017, Hancock said. That’s up from $63.7 million in 2013, $66.3 million in 2014 and just under $67 million in 2015, school system records show.

Overall tax revenues were up $2.32 million for 2017, and interest income was $368,000 instead of the $100,000 that had been originally budgeted, Hancock said. Interest income grew due to a decision in November 2016 to invest $50 million in short-term U.S. treasury bonds. That amount should be higher in 2018 due to getting returns on those bonds for a full fiscal year, Hancock said.

Also, the school system spent only 93 percent of the expected expenditures for 2017 — about $3.4 million below budget, Hancock said. Some of that was due to capital projects that were not completed in fiscal 2017 as expected, and the school system also spent about $1.5 million less on salaries than budgeted due to conservative staffing projections, Hancock said.

She also noted in particular how the child nutrition department has cut staffing when possible through attrition and cut costs through smart management decisions.

“I think we’re all learning to be more thoughtful, more frugal and more wise in what we’re spending,” she said.

The Hoover school system experienced deficits of $9.6 million in 2012, $10.2 million in 2013, $7.9 million in 2014 and $1.4 million in 2015. Fiscal 2016 ended with a surplus of about $500,000, which was the first time the school system ended the year in the black since 2011.

Thanks to this strong year, the school system’s overall fund balance stood at about $121 million as of Sept. 30, up from $93.4 million the year before, records show.

School board President Earl Cooper said Hancock, Superintendent Kathy Murphy and other staff have done a marvelous job in managing the school system’s finances.

The school board tonight approved a three-year extension of Hancock’s employment contract, stretching her contract tenure to June 30, 2021.

In other business tonight, Murphy informed the school board that she plans to proceed with plans to turn the former Riverchase Middle School bought this year from the Pelham Board of Education into a Career Connection Center.

School officials want to begin four career preparation programs there in August 2018: culinary arts, a fire service college, building and construction trades and computer science, Murphy said.

Officials plan to talk with an architect about potential renovations to the building to accommodate those programs, Murphy said. There are no cost estimates for that work yet, Hancock said.

Murphy said she could not be more excited about the possibilities for the career preparation programs. “We’re going to have some opportunitiess available to students in our schools – opportunities that have not existed in the past for our children,” she said.

Murphy also noted that school officials continue to tweak a proposal for the YMCA to take over after-school care for the Hoover school system. She plans to bring a recommendation to the board for its consideration in January, she said.