The Virginian-Pilot
                             THE VIRGINIAN-PILOT 
              Copyright (c) 1994, Landmark Communications, Inc.

DATE: Wednesday, July 6, 1994                TAG: 9407060370
SECTION: LOCAL                    PAGE: B3   EDITION: FINAL 
SOURCE: BY BILL REED, STAFF WRITER 
DATELINE: VIRGINIA BEACH                     LENGTH: Medium:   58 lines

SCHOOL BOARD BORROWS $1.7 MILLION FROM CITY TO COVER COST OVERRUNS

The City Council agreed Tuesday to fork over $1.7 million to cover questionable cost overruns on two new public schools, with the proviso that the School Board repay it later this year out of its own till.

The decision came on a 10-1 vote and followed a rambling and often testy exchange between council budget watchdog John D. Moss and just-seated freshman Councilwoman Louisa M. Strayhorn, a former School Board member.

The two clashed over the issue of proper money management by school officials in building new schools and renovating existing structures.

Moss cast the lone vote against the cash advance, which allots $1.2 million to buy new computer equipment for Ocean Lakes High School and $500,000 to buy the same for Larkspur Middle School.

The funds were needed now, School Superintendent Sidney L. Faucette insisted, to enable the two new schools to open this fall.

The issue of the spending habits of school officials was broached last week by Moss, who demanded that Faucette account for money earmarked for construction of the $28 million high school and the $19 million middle school.

The purchase of a $42,000 flagpole for the new high school was a prime example of mismanagement in construction spending, he said.

On Tuesday, Moss continued his questioning, prompting Strayhorn, in her first day on council, to step into the fray.

``I think it's very important for people not to get the impression, when we're discussing these things, that somehow or other there has been something wrong with the way people have handled this,'' she said. The public should know city schools used ``accepted accounting procedures'' in handling its money, she added.

``I didn't raise the question of legally accepted accounting practices,'' Moss replied. ``I raised the question that we can't seem to account for the money we've spent so far.''

The original contract for the high school was for just under $22 million, Moss said. During the construction, the superintendent approved 11 separate change orders that jacked up the costs, and none of those increases has been explained, he said.

Faucette, who was on hand Tuesday to answer questions, said many of the change orders had to do with meeting state and federal environmental requirements that were beyond the control of local school officials.

Strayhorn criticized the ``negative'' manner in which school officials had been questioned in the past two weeks.

``I think that when we talk about schools and city councils, we all need to try very, very hard to get along,'' she said. ``And that it's very hard to get along if we don't treat people appropriately when they come up to give evidence.''

In the end, the council agreed to advance the $1.7 million to the school system on the condition that the sum be repaid from the system's end-of-the-year fund balance and its annual federal impact aid allotment. by CNB