Dana Sullivan, the Montclair School District's business administrator, reported one of the largest surpluses in recent memory— $5.7 million—to stunned members of the Board of Education on Wednesday night.
She said the money would be applied toward property tax relief as required under state guidelines.
The presentation signaled the start of the district's budget process—a process that got off to a bizarre start Wednesday night.
After announcing the huge surplus, school board members said that—if they'd known school costs were trending lower than expected—they might have made different decisions during last year's contentious budget saga.
Indeed, the size of the surplus left over from the 2010/2011 operating budget was nearly double the $3.2 million surplus the district reported the year before.
Last year, residents pleaded, yelled, and cried at the podium during school board meetings, anxious that schools might be closed and that health benefits would be taken away from classroom aides.
(Schools weren't closed but health benefits were taken away from aides.)
Overall, the school board made more than $3 million in cost reductions to programs, services, and staff to get to a $110 million budget last year.
But, by what school board members said, they might not have made such drastic cuts had they known about the surplus.
"We are surprised at the size of the surplus," said School Board President Shelly Lombard.
"Last year we went through a painful process and lots of high drama," she said. "We might have done things a little bit differently had we known this."
Sullivan started out her presentation Wednesday night by explaining that the district's "fund balance" is defined as the accumulated difference between revenues and expenditures.
She said that the 10 areas that generated a surplus in the 2010/2011 budget include:
—Out-of-district tuition $1,521,000 (not as many students went to school out of the district)
—Salaries $1,375,000 (41 people retired)
—Supplies and texbooks $273,000
—Health insurance and employee benefits $224,000
—Miscellaneous revenue $242,000
—Legal fees $82,000
—Extraordinary special aid funds $805,000
—Utilities and buildling maintenance $571,000
—Other areas of the budget $156,000
Sullivan said that the total increase to the current surplus, which was already about $2 million, is $5.7 million.
"It's impossible to budget a $110 million budget to the penny," she said. "We've been watching every penny and every purchase order.
"We haven't made purchases for anything not absolutely necessary," she added.
But School Board Member Robin Kulwin asked whether the district might be "cutting off our nose to spite our face."
"We've been cautious with copying at schools. Why wouldn't we want to use some of that money for textbooks?" she asked. "Have we become frozen educationally?"
But Sullivan told the board that it's impossible to predict exactly what's going to happen with the budget early in the year, when the school board typically begins hashing over budget line items.
"I can give you estimates," she said, noting that the budget year runs from July to June.
She noted that "a lot of this [surplus] played out at the end of the year."
Like other school districts throughout the state, Montclair finalizes its budget in March, forcing board members to plan ahead on a wide range of line items such as heating that can be impacted dramatically by price swings.
Lombard warned that the district still faces uncertainties such as how much state aid it might get and also what might happen with a new labor agreement being negotiated with the 1,100-member Montclair Education Association that represents its teachers and school employees.
In other school news, Superintendent Dr. Frank Alvarez reported that most school buildings are in good condition except for a few fallen limbs following the weekend's snowstorm.
He said he decided to close Montclair schools both Monday and Tuesday because of concerns over safety and students who walk to school.
He added that attendance was normal on Wednesday and that delays in transportation totaled no more than five or 10 minutes.
Alvarez said he can't recall ever having to use snow days so early in the year, noting that the district already has used two of its three budgeted snow days for the year.
For more on this issue, read Montclair Patch on Thursday.