The Vestavia Hills Board of Education on Monday approved a nearly $122 million budget for fiscal 2025, representing an 11% increase from 2024 total budgeted expenditures of $109.6 million.
The budget includes raises for all employees and $9.5 million in capital projects with a focus on energy management retrofits that include building automated controls, building insulation and water conservation.
The total budget of $121.6 million in spending of public money includes $100.4 million in spending from the general fund, $11.8 million from the special revenue fund and $9.5 million from the capital projects fund.
Public revenues are expected to be $117.9 million, up 8.9% from the $108.3 million in budgeted revenues in 2024.
While expenditures are expected to be $3.7 million higher than revenues in 2025, the school district this summer received more than $7 million in state “advancement and technology” money that it plans to use for capital projects in fiscal 2025.
Revenues for the general fund in 2025 are expected to be $103.6 million (8.7% higher than the 2024 budget), and the district plans to spend $100.4 million of that (a 3.7% increase from the 2024 budget), the budget shows.
While the Vestavia Hills school district’s general fund budget has had above average state and local revenue increases the past several years, school officials say they don’t expect that to continue.
The 10-year average growth of local property tax revenues has been about 4%. However, in some years, the district has seen very little growth, and the Alabama Legislature has passed a law that places a cap on property tax growth at 7%, which will eliminate the higher revenue growth years that have recently been experienced.
As The Bray development continues to happen, that will have a positive impact on property tax revenues, but employee health insurance costs that are paid by the school system likely will increase next year, which could have a significant impact on personnel costs, school officials said in their written budget presentation.
Overall expenditures have been increasing at a rate of about 4% per year. Personnel costs make up about 79% of the school system’s general fund budget.
By the end of fiscal 2025 — Sept. 30, 2025 — the school district plans to have $16.7 million in its general fund reserve. That’s equivalent to two months of operating expenses. The state requires a one-month reserve fund, but Vestavia Hills school officials have been trying to strengthen their reserves.
