DATE: Wednesday, August 20, 1997            TAG: 9708200445

SECTION: LOCAL                   PAGE: B5   EDITION: FINAL 

SOURCE: BY ALETA PAYNE, STAFF WRITER 

DATELINE: VIRGINIA BEACH                    LENGTH:   41 lines

BEACH SCHOOLS EXPECT SURPLUS OF $16.4 MILLION FOR 1996-97 THE DISTRICT WAS IN THE RED BY MORE THAN $12 MILLION JUST TWO YEARS AGO.

The school district should close its financial books Friday with a $16.4 million surplus for the 1996-97 fiscal year.

The surplus is a dramatic turnaround from just two years ago, when the district was more than $12 million in the red.

School leaders have been saying for months that they expected to end the fiscal year with at least $12 million unspent. And speculation in some corners had pushed that figure as high as $20 million.

At Tuesday night's School Board meeting, administrators announced that $16.4 million appears to be the actual figure, with the understanding that the official books won't close until Friday and then must be audited.

``This isn't a final, final, final document,'' said Superintendent Timothy R. Jenney. Still, school officials appear confident with the number.

The money has already been allocated. During the budget process last spring, municipal leaders told school officials that any surplus funds must be used to cover a variety of one-time district needs.

City leaders at that point estimated the surplus at $16.5 million. Among other things, the money will be used to cover $5.4 million in one-time costs pulled from the 1997-98 operating budget, to purchase $1.2 million in buses and other vehicles, and to reduce a backlog in building maintenance.

Some school leaders bristled at being told how the surplus should be used, but the money reverts to the city's general fund and is returned to the division at the option of city leaders.

Several factors contributed to the surplus, including state and federal revenues that came in at a higher rate than expected.

On the expenditure side, the division saved money when it budgeted for some positions that were not filled when enrollment did not meet projections and a mild winter kept fuel costs down.

Last year the division finished with a surplus of about $138,000 after stringent spending measures were put in place to correct for problems in the budget. KEYWORDS: VIRGINIA BEACH SCHOOLS BUDGET

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