Fulton County Schools found an unexpected $33 million surplus, the school’s chief financial officer said.

The school spent $28.7 million less on salaries than previously budgeted because it filled vacant positions with a less-experienced work force, according to CFO Robert Morales. Because of the mild winter, the system also spent $2 million less than it budgeted for utilities.

The school board has several options, according to a presentation it received about the surplus. It can reduce taxes. It can make a one-time technology upgrade. It can give employees a bonus. There’s also a possibility the board could take some of the money and pay back $3 million the system overpaid pensioners since the 1990s.

Morales said he’d prefer to hang on to the money because of recent changes to Georgia’s tax code that will start to phase in over the next few years.

“I want to have the largest possible fund balance in this time of uncertainty,” Morales said. “One of the concerns is the new tax laws. We don’t know how those laws are going to affect us.”

Other possible financial problems waiting around the corner could gobble up the board’s future revenue, according to the presentation.

Property tax appraisals in Fulton County continue to fluctuate. Sometimes that helps the school board, Morales said.

“When the tax commissioner and the property appraiser came to visit our board the prior February, they were saying the tax digest was going to go down around 7 percent. Apparently it only went down 3 percent,” Morales said. “The fact is we picked up funding because of that.”

The state may also tinker with the funding formula for schools or other costs, such as the cost of health care, may continue to rise.

School board members are considering what to do with the windfall, according to Area Superintendent Karen Cox. Cox explained the surplus to local school principals during a Sept. 13 meeting at High Point Elementary.

District 3 School Board Member Gail Dean said she thinks the board may opt to use the money on a one-time expense. “What we don’t want to do is spend it on reoccurring expenses,” Dean said.

The fix for the $3 million pension overpayment is still being discussed, school officials say. Cox told school staff that a software upgrade caused the school system to mistakenly overpay about 400 pensioners while underpaying about 35. One option might be asking the pensioners to pay back the money, Cox said.

“There’s still legal work being done to figure out the best way to take care of our fiduciary responsibility and be fair to our employees,” she said.

Dean said she doesn’t know if the board will consider paying back the money out of its unanticipated surplus.

“The pension fund has to have it,” Dean said. “The pension fund has to be made whole.”

Morales said with the surplus the school system’s current reserves are $251 million, enough to cover 3.6 months of operating expenses.

The school’s next fiscal year begins on July 1, 2013.

Dan Whisenhunt

Dan Whisenhunt wrote for Reporter Newspapers from 2011 - 2014. He is the founder and editor of Decaturish.com