The St. Louis County School District has experienced a remarkable financial turnaround, according to the district’s just completed audit on the 2009-10 school year.

School District Business Manager Kim Johnson presented the latest financial report to the school board on Monday. “It’s very good news,” said Johnson.

Indeed, the school district finished the 2009-10 school year with a nearly $304,000 budget surplus, which was far better than the $857,000 budget deficit district officials had anticipated when the school board approved the 09-10 budget back in June 2009.

It’s an extraordinary improvement over the estimated $2.78 million budget gap for the same school year that district consultants, working under a contract with Johnson Controls, had developed two years ago. Those projections, which had estimated the district would enter statutory operating debt by next June, formed the basis for the school district’s campaign to win passage of a $78.8 million bond measure.

While the financial turnaround is surprising, Superintendent Charles Rick said the district continues to face financial challenges that justify the school closure and consolidation plan approved by voters one year ago. “We’re not trying to mislead people on that,” he said.

Rick noted that the current district budget anticipates a $1.8 million shortfall in the 2010-11 school year. Yet for at least the past two years, the district has ended the year with substantially lower deficits than anticipated in board-approved budgets.

This past year, it was a combination of higher-than-expected revenues and cost savings in some areas that helped convert a nearly $1 million expected deficit into a $300,000 surplus. According to Johnson, additional special education funding, a jump in forest reserve funding, and more third-party billing for student services were the biggest factors on the revenue side, contributing to a $412,000 overall increase in funding from the budgeted estimates approved last year.

At the same time, a $196,400 health care premium rebate from the Northeast Service Cooperative, lower utility and fuel costs, and the purchase of one less bus than anticipated, helped keep the district’s costs below earlier estimates.

Rick said the district has tried to do a better job of purchasing, which has also contributed to the savings, which were achieved in virtually every spending category. “We’re trying to get more bang for our buck,” he said.

The financial turnaround has been achieved even though the district has yet to achieve any significant operational savings from its restructuring plan. Johnson told the board that a few small health and safety projects that had been included in the budget were delayed once the bond measure was approved and it became clear that buildings would close. Those projects, combined, totaled about $42,000 in savings.

Just over a year ago, district officials had stated that the district could not balance its budget without passage of the $78.8 million bond measure, which was needed to implement a school closure and consolidation plan. The latest budget figures suggest those claims may have been overstated.