The financial deficit that swamped the DeKalb County School District is gone, erased, eliminated.
It just evaporated.
That’s what the new chief finance officer of the once financially troubled school district told the new school board Monday.
The news on closing the books for fiscal year 2013, which ended in June, is “very, very good,” Mike Bell said. “We’re confident that we are out of a deficit position.”
That was how more than one DeKalb taxpayer reacted to the news.
“Do you believe all this,” said an incredulous Paige Olson, who sent three children through the county school system, the last one graduating in the spring. “It’s good news — if it’s real,” the Dunwoody resident said.
An earlier announcement by new interim Superintendent Michael Thurmond was received with similar skepticism.
Former CFO Michael Perrone quit on the same day in May that Thurmond announced nearly $30 million in surprise revenue. Before that day, the school board was poised for more budget cutting. Instead of cutbacks, they wound up supplementing the budget, eliminating one of the six furlough days previously imposed on teachers.
The announcement Monday refers to a deficit first documented by the state last fall. DeKalb’s books showed a $14.5 million deficit for the fiscal year that ended in June 2012. The school board in place at that time determined to eliminate the deficit over four years, but Bell said cost-cutting and yet more surprises with revenue means the deficit can be eliminated in an instant as of the end of fiscal year 2013.
Bell said local property tax collections exceeded projections by more than $20 million and that a spending freeze imposed by Thurmond after his hire earlier this year added to the surplus. He said the district was no longer engaged in fiscal “pathologies” that led to the deficit, such as under budgeting for legal expenses.
But Bell cautioned that DeKalb still lacks a financial cushion, with only $5 million to $10 million in the bank. A district this size should have more like a $60 million fund balance, he said.
Thurmond said every board member has asked him to spend any surplus on teachers, by reducing the remaining five furlough days, which are unpaid days off.
“It’s great news,” said David Schutten, president of the Organization of DeKalb Educators. “Hopefully, we’ll be able to get rid of a few furlough days.”
Board members reacted with pleasure, but also asked for details, such as how the news will affect the new budget for fiscal year 2014.
“This is obviously great news,” said John Coleman, a board member from Dunwoody. “A lot of this is because of improvements in the property tax collection and the beverage tax collection.”
Bell predicted that fiscal year 2014 “will be just as good if not better.”
Olson said residents have been hit with one financial surprise after another. During budget discussions in 2012, then Superintendent Cheryl Atkinson revealed news about previously undisclosed bills that had to be paid. The disclosure necessitated deep budget cutting and touched off rancorous debates while contributing to an accreditation agency’s decision to place the district on probation. Then came Thurmond’s surprise surpluses, and now this.
Thurmond, though, said the good news is real.
“We have turned the corner and closed the book, I believe, on a very difficult chapter in the history of this district,” he said. “The deficit is no more.”
The Story So Far
Previously: In May the DeKalb County School District announced $30 million in unexpected revenue.
The latest: A deficit from 2012 will be eliminated this year instead of over four years.
What’s next: The district financial officer expects the 2014 budget to be just as good as 2013’s if not better.