Hoover school board plans $98 million in capital projects over 7 years

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The Hoover school board plans to spend more than $98 million on capital projects over the next seven years, including two new elementary schools, a 10-classroom addition at Bluff Park Elementary, theater and athletic upgrades, 24 new buses and a host of capital maintenance projects, according to a plan approved by the board Monday night.

The capital spending would pull the school system’s reserves down by more than $50 million, according to numbers shared by Chief Financial Officer Michele McCay.

The school board expects to end the current fiscal year with $99 million in reserve,  so unless some additional revenue sources are found, it’s likely the reserve fund would fall to roughly $49 million by the end of fiscal 2028 if expenses go as projected.

That would give the school system enough cash on hand to cover three months’ worth of expenses, compared to 11 months’ worth of expenses that could be covered now, McCay said.

State officials recommend school systems keep two to three months’ worth of expenses on hand to cover emergencies, McCay said. She prefers to keep about seven months’ worth of expenses in the system’s bank account but could still be comfortable with five months of expenses, she said.

The problem is that the school system is expected to drop below five months’ worth of reserves in about three years, she said.

School officials in the past have been good financial managers, not having to borrow additional money since 2007, but “we’re coming to the point where we have to make some pretty tough decisions,” McCay said.

The school system expects to end this fiscal year with $153 million worth of debt and should be able to make payments on that debt with recurring revenues, but “we need to come up with additional sources of revenue in order to maintain the infrastructure that we have and provide the services that our citizens and our students deserve,” she said.

That’s especially true because sales and income tax revenues are vulnerable, and even the value of commercial property could drop as brick-and-mortar businesses and the office market face difficult times, McCay said.

The future buildout of approved residential growth in Hoover raises financial challenges for the school system, she said. Developments that already have been approved are expected to generate more than 2,000 new students for the system, she said.

The school system has to find money for additional land, buildings, furniture and fixtures, utilities, food, buses, fuel, teachers and staff to serve all these students, McCay said.

USS Real Estate has agreed to donate 100 acres to the Hoover Board of Education on land currently just outside the Hoover city limits off Alabama 150, next to Lake Cyrus, but school officials still would have to pay for construction and operational costs for any new school that would go there.

School officials have not specified what type of school might go there, but the capital plan approved Monday night identifies the need for two new elementary schools somewhere.

School officials estimated they would need to spend $20 million to build the first elementary school in fiscal 2023 and 2024 and another $20 million to build the second one in fiscal 2027 and 2028.

“I don’t think there’s any question, if we take on two new elementary schools over the next few years, we’re going to have to have additional revenue to offset the loss of revenue that’s coming up sales taxes,” school board member Craig Kelley said. And “we don’t know what’s going to happen with the value of real estate for ad valorem [property tax] purposes.”

Currently, Hoover residents can vote to raise their property taxes by only 2.4 mills before reaching the maximum of 75 mills allowed by state law, but it’s going to take 10-12 additional mills to raise the additional $16 million a year that the Hoover school system likely will need to meet growth demands, Kelley said.

The city likely will need a statewide referendum to accomplish that, and Homewood was not successful in accomplishing a similar effort a couple of years ago, he said.

Kelley said he would like to see the city of Hoover return to its practice of giving building permit fees to the school system on top of other city allocations instead of as a part of an overall $5 million cash contribution per year.

The city as a general rule requires homebuilders to pay a $1,500 building permit fee for each home they build, but Signature Homes and U.S. Steel each have agreed to pay $3,000 building permit fees for houses in new developments.

Kelley said some council members have assured him they want to start passing that full contribution to the school system instead of including it as part of the annual $5 million cash contribution. But a couple of council members prefer for the school system to seek more money from property taxes instead, he said.

Here is a breakdown of planned capital expenses over the next seven years, by year:

Fiscal 2022:

  • Hoover High theater upgrade (partial payment of $5.3 million)
  • Roofing projects at Simmons Middle and Greystone and South Shades Crest elementaries ($4.7 million)
  • Spain Park High theater upgrade ($2 million)
  • Bathroom upgrades ($1.25 million)
  • Cooling tower replacement at Bluff Park Elementary ($1.2 million)
  • Architectural services for new elementary school ($1.12 million)
  • Twelve new 72-passenger buses ($1,050,000)
  • Mechanical upgrade at Gwin Elementary ($1 million)
  • Flooring projects ($599,000)
  • Architectural services for 10-classroom addition at Bluff Park Elementary and athletic upgrades at Berry and Bumpus middle schools ($576,000)
  • Paving projects ($570,000, including $500,000 for a road behind Hoover High)
  • Playground repairs ($300,000)
  • Lighting projects ($180,000)
  • Painting projects ($180,000)
  • Security camera refresh ($120,000)
  • Locker upgrades at Simmons Middle School ($80,000)
  • Central office canopies ($30,000)

Total cost for fiscal 2022: $20.2 million

Fiscal 2023:

  • New elementary school (Partial cost of $10 million)
  • Complete Hoover High theater upgrade (remaining $5 million)
  • Ten-classroom addition at Bluff Park Elementary ($4.5 million)
  • Athletic upgrades at Berry and Bumpus middle schools ($4.5 million)
  • Roofing projects at Brock’s Gap Intermediate and Gwin Elementary ($1.5 million)
  • Heating, ventilation and air conditioning conversion ($1.3 million)
  • Bathroom upgrades ($1.25 million)
  • Transportation building addition ($1.2 million)
  • Twelve new 72-passenger buses ($1,050,000)
  • Flooring projects at Spain Park High and Green Valley and Trace Crossings elementaries ($600,000)
  • Paving projects ($300,000)
  • Lighting projects ($300,000)
  • Bleacher installation at Bumpus Middle ($200,000)
  • New playground at Riverchase Elementary ($180,000)
  • Painting projects ($180,000)

Total cost for fiscal 2023: $32 million

Fiscal 2024:

  • Completion of elementary school ($10 million)
  • HVAC projects ($1.2 million)
  • Roofing project at Rocky Ridge Elementary ($600,000)
  • Lighting projects ($320,000)
  • Paving projects ($300,000)
  • Extend canopy at Greystone Elementary ($200,000)
  • Flooring projects ($200,000)
  • Painting projects ($180,000)

Total cost for fiscal 2024: $13 million

Fiscal 2025

  • Roofing projects ($1.2 million)
  • HVAC projects ($800,000)
  • Lighting projects ($320,000)
  • Paving projects ($300,000)
  • Flooring projects ($200,000)
  • Painting projects ($180,000)

Total cost for fiscal 2025: $3 million

Fiscal 2026:

  • Roofing project ($1.2 million)
  • Architect fees for another elementary school ($1.12 million)
  • HVAC project ($800,000)
  • Lighting project ($320,000)
  • Paving projects ($300,000)
  • Flooring projects ($200,000)
  • Painting projects ($180,000)

Total cost for fiscal 2026: $4.12 million

Fiscal 2027:

  • New elementary school (Partial cost of $10 million)
  • Roofing projects ($1.2 million)
  • HVAC projects ($800,000)
  • Lighting projects ($320,000)
  • Paving projects ($300,000)
  • Flooring projects ($200,000)
  • Painting projects ($180,000)

Total cost for fiscal 2027: $13 million

Fiscal 2028:

  • Completion of elementary school ($10 million)
  • Roofing projects ($1.2 million)
  • HVAC projects ($800,000)
  • Lighting projects ($320,000)
  • Paving projects ($300,000)
  • Flooring projects ($200,000)
  • Painting projects ($180,000)

Total cost for fiscal 2028: $13 million

Editor's note: This article was updated at 10:54 a.m. with the complete list of capital projects planned and estimated costs once the written plan was provided on Tuesday, June 15.