THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Thursday, May 11, 1995 TAG: 9505110415
SECTION: LOCAL PAGE: B3 EDITION: FINAL
SOURCE: BY ELIZABETH THIEL, STAFF WRITER
DATELINE: VIRGINIA BEACH LENGTH: Medium: 98 lines
Schools Superintendent Sidney L. Faucette acknowledged Wednesday that the school system is grappling with bigger money problems than he had estimated previously.
He now says he must make about $12.4 million in spending cuts and money transfers to keep the budget in the black, up from the $7.4 million shortfall he had projected until recently. But he continues to stress that he plans to have a surplus of up to $1.9 million on June 30, the end of the fiscal year - instead of a deficit.
The higher estimate includes $7.5 million more in salaries and fringe benefits than projected. Faucette said he and the School Board did not budget enough to pay for all the employees the school system needed this year.
One of the biggest problems, Faucette said, was that the special education department needed 64 more teachers than it had originally requested, a $2.5 million miscalculation.
``I wasn't a very happy camper when they told me they needed 64 extra people,'' he said.
``They told me that as schools move more and more toward inclusion,'' which places special education students in regular classrooms, ``. . . they needed 64 more positions to meet the ADA (Americans with Disabilities Act) regulations.''
Also, Faucette said, the School Board added 38 teaching positions in the fall - a $1.4 million revision - to adjust for student enrollment figures. School officials had been conservative in their allocations.
School officials also this year reduced budgets for salary and fringe benefits to account for employee turnover. Mordecai L. Smith, the school system's chief financial officer, said those cuts went too far, although he could not say how much the mistake cost. Smith also said a midyear pay raise in January 1994, last fiscal year, strained this year's budget.
Faucette said that information is not new; he told the School Board about the salary shortfalls earlier in the year, spelling out details in a report.
``Quite frankly, I think we've done the whole thing in the sunshine,'' he said.
Some School Board members, however, said they were not aware of the extent of the overspending for salaries and fringe benefits.
``I don't know that we've ever heard that figure,'' said board Chairwoman June T. Kernutt. ``There was discussion at some board meetings about whether the salary figures were correct, but that was some time back.''
``If salaries were figured incorrectly from the beginning, that alarms me,'' she said.
``I don't think I've been kept completely informed'' about budget matters throughout the year, said board member Robert W. Hall.
City Council members also have expressed concern about the school system's financial situation, and the revised shortfall figures heightened that.
``I must say, my mouth is wide open and my eyes are rather large,'' council member Nancy K. Parker said.
Faucette warned the board in December that he was expecting to come up about $7.4 million short in the 1994-95 budget. Of that, he attributed $2.8 million to overspending in 1993-94, which had to be covered this year. He attributed another $4.6 million of the shortfall to getting less state money than budgeted.
He now says he expects only a $2 million reduction in state money.
The school system's numbers fluctuate, in part, because state and federal revenues are difficult to predict. State and federal agencies make periodic payments to the school system, with some large payments coming at the end of the fiscal year. So school officials may not know until the year is closing how close they will come to the amounts budgeted for state and local funds.
Impact aid, federal money given to localities to offset the cost of educating military dependents whose parents may not pay taxes where they are stationed, is always a question mark. The Beach school system's Smith, for example, budgeted about $13.4 million for impact aid this year. So far, he has received only about $8.5 million. The federal government has not told him when or how much the last payment will be, or even if it will come.
Congress has debated reducing or eliminating the program. Smith said he will travel to Washington Friday to get some answers.
Louisa Strayhorn, a council member and former board member, pointed out this week that it is not unusual for the school system to have $10 million to $12 million in impact aid unaccounted for toward the end of the fiscal year.
But the School Board's Hall said he has been clamoring for months for better tracking of this year's spending and provisions to cover line items that have been in the red.
Faucette was supposed to provide a report at a board meeting last week, but postponed it.
He is due to present the board Tuesday with a 16-page list of money transfers, from line items that are in the black to line items that are in the red, which he says will balance the budget.
``The budget, when we bring it home in July, is going to surprise a lot of people'' by being in balance, he said. ``. . . And no one will have suffered.'' MEMO: Staff writer Karen Weintraub contributed to this report.
KEYWORDS: VIRGINIA BEACH SCHOOLS BUDGET SHORTFALL by CNB