The Rochester public schools district looks to be in line for an end-of-year Christmas bonus.
A recent audit has identified $2.6 million in unspent general fund dollars for the 2010-11 fiscal year. Those extra dollars could put leaders in an unfamiliar situation.
After years of tight budgets and paring programs and staff, district officials and the school board could be in a position to invest some dollars in the district's schools.
"Perhaps, there are places and ways to add back that might be able to make a better educational experience," school board chairman Dan O'Neil said.
O'Neil said the $2.6 million surplus did not come as a surprise. District officials have been monitoring a build up of "unassigned" dollars for many months now, and an audit conducted by the accounting firm Larson Allen confirmed the existence of the surplus.
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The amount also represents a fraction of the district's $140 million general fund budget.
The Rochester School Board plans to hold a special session on Tuesday to discuss the audit and its implications for the district's finances. The meeting is set for Tuesday at 6 p.m. in Room 137 of the Edison Building.
The development is good news in the sense that it changes the district conversation, however briefly, from one of cutting positions and programs to possibly adding back or expanding. But it also suggests that the district may not be using taxpayer dollars as effectively as it could be.
"Our goal should be to run in the black, not at a surplus," O'Neil said. "We're currently running at a surplus."
The audit also highlighted an imbalance in another area of the district's finances. The district's nutrition services program, the program responsible for feeding students, showed that its fund balance increased by more $325,000 to $3.1 million in 2010-11.
Since it costs $6.5 million each year to run its meal programs, the district has in effect built up a half-year's worth of nutrition services.
"That's not right," O'Neil said about the growing fund balance. "We should have the best food services in the United States and a much lower fund balance than half a year's worth of food service money on the shelf."
Yet a combination of state and federal laws handcuffs the ability of districts to use those extra dollars in other ways. State law prohibits officials from diverting surplus food service dollars to other programs or uses that might be more beneficial to schools and students.
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And federal laws often often play a big role in influencing how much schools can charge for meals.
In a report to the board, district officials attributed the $2.6 million surplus simply to "actual spending being less than budgeted in numerous areas of the general fund." It did not specify those areas.
But Rochester has traditionally been conservative in its budget projections. The district has also been imposing cost-saving measures in many areas across the district, from overtime to transportation services.
However small, the surplus gives Superintendent Michael Muñoz and the board an opportunity to discuss how it might enhance programs rather than cut them.
"That's a new question," O'Neil said. "We haven't had those kind of conversations in Rochester. We've only had questions about what do we cut."
