Hoover school officials propose 2017 budget with $1.9 million deficit

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Hoover school officials on Tuesday night unveiled a proposed 2017 school system budget with a $1.9 million deficit.

Superintendent Kathy Murphy told the 30 or so people who came to the Hoover Municipal Center for the first of two budget hearings that she doesn’t expect thunderous applause for a deficit budget, but school officials have worked hard to get the deficit as low as it is.

Real numbers for fiscal 2016 are not yet available, but the budget approved for 2016 a year ago anticipated a $10.4 million deficit, which is similar to deficit spending approved in 2012, 2013 and 2014.

Revenues for 2017 are expected to remain about the same, so to accomplish a smaller deficit, cuts had to be made in all departments, Murphy said.

“We’re reining it in. We’re being savvy with your money,” Murphy said.

About 26 jobs have been eliminated from the budget, she said. For example, the school system has about 11 fewer bus drivers than it did last year, thanks to route consolidation and better utilization of space on buses, school officials said. The operations and maintenance department has lost about 13 employees since 2012, officials said.

Also, some salaries were lowered this year as jobs were filled, and some employees’ contracts were reduced from 12 months to 10 months, or from 10 months to nine months, Murphy said. Travel expenses were cut, and discretionary money given to principals was cut from $85 per student to $25 per student, Murphy said. With 13,916 students, that’s roughly $835,000 less in discretionary spending for principals systemwide.

Principals will have to find other ways to fund expenses they’ve helped pay for in the past, or do without, Murphy said.

“It’s going to be painful. We’re tightening everything up,” she said. “There is no cushion. The cushion is gone. We did not build fluff or cushion into the budget.”

The 2017 budget put together by new Chief School Finance Officer Tina Hancock and her staff shows the school system plans to spend $169.9 million in the fiscal year starting Oct. 1, while taking in $167.7 million in revenue and making use of about $300,000 from other sources.

The $1.9 million shortfall will come out out of the school’s system overall fund balance, which is expected to be at $92.9 million at the beginning of fiscal 2017 and $91 million at the end of the year.

Trisha Crain, a resident of the Green Valley community, asked whether cuts made in the budget have impacted the qualify of education being offered in Hoover schools. Murphy said they have not, but only because employees have been willing to take on additional duties and responsibilities. However, she has serious and significant concerns that employees could be loaded up with too much work, she said.

Plus, additional costs are coming down the road, such as much higher debt payments and capital expenses that have been put off, Murphy has said.

“Unless something happens, there will be serious cuts that I pray to God do not negatively impact the quality of our education,” Murphy said.

With so much of the school system’s budget (82 percent) tied up in personnel, additional cuts could mean fewer electives and lost educational opportunities for students, she said.

Derrick Murphy, the former Hoover school board president and incoming city council member, said a lack of revenue also keeps Hoover from expanding opportunities that he believes should be available, such as increased opportunities for vocational programs and fine arts.

Most of the school system’s expenditures are in its general fund, which is expected to be about $135 million in 2017. The majority of that money — $85 million — would go to instructional services, while $21.8 million would go to instructional support, $18 million would go to operations and maintenance, $5.6 million would go to auxiliary services and $3.3 million would go to general administrative services.

The school system also proposes to spend about $19 million from special revenue accounts, including $5.6 million for child nutrition, $2.35 million for special education and $1.8 million for an after-school program.

The 2017 budget also includes $10.8 million in debt payments and $3.6 million for capital projects, including replacement and upgrades of heating and air conditioning and kitchen equipment and various painting projects, Hancock said.

School officials plan to continue looking for places to cut expenses, potentially including athletic and extracurricular supplements, Murphy said. The 2017 budget includes $1.3 million for athletic coaching supplements and another $1 million for non-athletic supplements, such as the math and debate team coaches.

Murphy has instructed principals that they soon will have to offer fresh justification for the amount paid for each supplement. Also, school officials will re-examine Hoover’s practice of paying supplements as a percentage of employees’ base pay rather than as a flat amount per job, Murphy said.

School board member Earl Cooper said school officials also should take into consideration the opportunities that coaches have to earn extra pay, such as through athletic camps. Crain asked school officials to review supplement pay opportunities by gender, saying that male coaches are given more opportunities than female coaches to earn additional supplements by coaching greater numbers of teams.

Additional revenue coming?

Murphy, upon questioning, also on Tuesday night noted that the 2017 budget proposal does not take into consideration that the newly elected Hoover City Council could increase funding for Hoover schools. It only anticipates the $2 million city allocation that has been standard in recent years, plus another $400,000 or so in front-door building permit fees for new construction, she said.

The projected 2017 revenues also do not include any money that could be received from the sale of the former Berry High School campus to the Vestavia Hills Board of Education, Murphy said. She doesn’t want to factor that money into the budget until the deal is completed, she said.

A federal judge has given approval for the sale, but de-annexation of the property from Hoover and annexation into Vestavia Hills still requires approval of a Jefferson County Circuit Court judge, she said.

That sale, once completed, would bring in $11 million for Hoover schools. Murphy said that while that amount would easily wipe out the $1.9 million deficit, there still are other capital projects that have been postponed that could easily eat up the money from Vestavia Hills. Those projects include a new band room that can accommodate the entire Hoover high band and track resurfacing projects at various schools, she said.

A second public hearing for the Hoover school system’s proposed 2017 budget is scheduled for 6:30 p.m. Thursday in the boardroom at the Farr Administration Building at 2810 Metropolitan Way. School officials also plan to broadcast that meeting live on the Internet, officials said.