The Virginian-Pilot
                            THE VIRGINIAN-PILOT  
              Copyright (c) 1995, Landmark Communications, Inc.

DATE: Wednesday, May 3, 1995                 TAG: 9505030438
SECTION: LOCAL                    PAGE: B3   EDITION: FINAL  
SOURCE: BY KAREN WEINTRAUB AND ELIZABETH THIEL, STAFF WRITERS
DATELINE: VIRGINIA BEACH                     LENGTH: Long  :  108 lines

CORRECTION/CLARIFICATION: ***************************************************************** A budget workshop scheduled for today by the Virginia Beach City Council was canceled and should not have been included in a calendar with Wednesday's city-budget story. Correction published in The Virginian-Pilot on Thursday, May 4, 1995, on page A2. ***************************************************************** BEACH SCHOOLS REJECT BUDGET PROPOSAL CITY COUNCIL TRIES TO KEEP TABS ON DISTRICT FINANCES, BUT SCHOOL BOARD DEADLOCKS.\

The School Board on Tuesday night rejected the City Council's attempts to tinker with its budget. Meeting two buildings away, and unaware of the board's action, the council decided to tinker even more.

The council agreed to keep a closer watch on how the district spends local taxpayer dollars by more clearly defining how it thinks school funds should be spent.

The School Board, meanwhile, in a deadlocked vote, refused to cut its proposed operating budget by $3.8 million as the city had requested. The city manager had proposed a smaller school budget than the district had wanted, and asked for the board to approve the reduction.

``City Council, you have our budget,'' said board member Elsie M. Barnes. ``You cut it.''

Instead of cutting the budget, however, the council agreed to increase the district's construction money. After hearing from dozens of parents with children in First Colonial and Kellam high schools, the council decided to add $4.85 million to its construction budget to renovate and expand those schools.

About half the city's operating budget and a third of its construction budget goes to fund the schools, which have no taxing authority of their own.

The council is expected to approve its 1995-96 spending plan next Tuesday. That plan will include $838 million for day-to-day city operations and $101.5 million for construction costs. The school operating budget for next year is $362.2 million; its capital spending plan for next year is $45.4 million.

Currently, funds for day-to-day operations are given in one lump sum and provides construction money in broad categories that allow a great deal of flexibility.

Council members informally decided to break the operations money into four spending categories, and to be more specific about how construction money can be spent. That way, the council will have a better idea of where the money is going and the school district will have less leeway to alter projects.

The council has also asked the district to provide quarterly updates on construction projects.

Over the past few weeks, council members have repeatedly raised concerns about school spending, particularly on school addition and renovation projects.

Several years ago, the council authorized spending about $4.3 million to renovate First Colonial High School. Instead, the district spent nearly $5.8 million and did not finish the work.

Two years ago, the council gave the district about $33 million for renovations to 16 schools. But because of higher than expected construction costs and the district's decision to do more work at certain schools, the money is running out with only 13 of the schools improved.

After complaining about the district's financial management, the council decided Tuesday to increase its debt load by $1.9 million to complete the renovations at First Colonial and by $2.95 million to pay for additions to Kellam High School, which had been slated for expansion. The council also decided to add money for other dropped schools, Kempsville and Plaza middle schools, next year.

The money for First Colonial is less than what the district had requested, City Manager James K. Spore told the council, because he did not include money for extra classrooms. Spore and several council members disagree with the board's decision not to reduce crowding at the school by redistricting.

In trying to comply with the city's budget request, Superintendent Sidney L. Faucette on Tuesday recommended some areas for reduction.

Faucette suggested that the board could avoid replacing eight obsolete buses and hiring 19 new workers, including a new principal for an academic magnet program for middle school students scheduled to open in the fall. The magnet school instead would be led by other staff members. All told, those changes would save $723,754, Faucette said.

Faucette further recommended that the board let him ask his department heads to cut their budgets by a little less than 1 percent, to save $2.1 million. He also said he believed state funding for next year would be about $1 million more than he had estimated.

Faucette's proposals were rejected, however, with a 5-5 vote of the board. One board member, Tim Jackson, abstained because he said he had not had enough time to study the issue.

Board member Joseph D. Taylor said he believed Faucette's proposals were fair. ``We have to adopt a spirit of compromise,'' Taylor said. ``We have to be realistic.''

But board member Robert W. Hall said the board had approved an operating budget that reflected the school system's needs. To change that now, Hall said, would be wrong. ``I don't think they (city officials) are playing fair,'' Hall said. ``I don't think we should go back to them with any reductions.''

The School Board, however, gave Faucette the nod to appoint some of his staff members to a joint city-school system committee proposed by Spore to study the $107 million technology referendum the board has proposed.

The board also gave him permission to engage in ``cautious'' discussions with Spore about consolidating some city and school services. ILLUSTRATION: Graphic on How to Track the Budget

KEYWORDS: BUDGET VIRGINIA BEACH SCHOOL BOARD VIRGINIA BEACH CITY

COUNCIL by CNB