DISTRICT SEEKS BUDGET AID ADVISERS TO HELP SCHOOLS CUT SPENDING.

Byline: Karen Maeshiro Staff Writer

LANCASTER - Forced to make nearly $4 million in cuts to balance next year's $97 million budget, the Lancaster School District for the first time is seeking advice from a state agency to help the district avoid future financial trouble.

The district, like others around the state, is facing the results of higher energy prices and health benefits costs, coupled with past pay raises for staff and state cuts in funding for year-round schooling and reducing class sizes.

``When you have a $3.7 million barrel of a gun looking at you, it's kind of scary. That's a lot of money,'' said Ned McNabb, assistant superintendent for business services.

The lean budget, which has no money for staff pay raises, must still be approved by the board, McNabb said.

Cuts were made in proposed funding for either new positions or new funding for existing positions and will not result in any layoffs, McNabb said.

To save money, the district will forgo hiring two assistant principals, a budget director, a psychologist and physical education aides, and cut back district's funding to help pay for part-time health aides at each school, McNabb said.

Conference costs will be cut by $25,000, and $250,000 will be pared from the information technology, purchasing and facilities departments. Special education and preschool programs are being asked to cut more $700,000 total.

The district also recalculated revenue forecasts. For example, the district expects to get $500,000 to pay for multitrack, year-round schooling, up from an earlier estimate of $300,000, and $150,000 more in state lottery money.

The district also included $750,000 in funds it will receive from doing well in the Academic Performance Index, the state's ranking of public schools. And instead of matching $375,000 in deferred maintenance funds with operating money, the district will use developer fees, McNabb said.

The state agency, called the Fiscal Crisis and Management Assistance Team, was created in 1991 by state legislation prompted by the bankruptcy of a school district in Northern California, officials said.

FCMAT provides school districts with fiscal advice, management assistance, training and other related school business services.

Agency officials say they have received a record of number of requests for help this year from districts like Lancaster, who are finding themselves in a tight fiscal bind and needing to adopt budgets by the end of next month.

``This year we are busier than we've ever been. The previous high was last year, when we conducted 38 studies, the highest year since 1992. This year we are on a pace to exceed 60 studies,'' said Tom Henry, FCMAT chief administrative officer.

Many California school districts gave hefty raises to employees, in some cases double-digit increases, after the state released considerable discretionary funds for schools.

The Lancaster district gave teachers an 8.2 percent raise this school year.

The district expects a 40 percent increase in energy costs, impacting the budget by $600,000 to $700,000. Health benefit costs are expected to rise by 18 percent, officials said.

``Districts are finding themselves in difficulty because of contracts that have been ratified, anticipated energy costs for next year, and increased health benefits costs next year,'' Henry said. ``The districts are developing budgets for next year and have not been able to cut enough to address raises given or accommodate expenditure patterns they've become accustomed to.''

The district will begin meeting with FCMAT staff in June.

``We look at internal controls, food service, sometimes personnel practices, transportation routes and instructional matters,'' Henry said. ``We examine the current conditions, determine how the district got into that situation, and provide a recovery plan, including how to manage resources more effectively.''

Belt-tightening advice from an outside agency may be easier to take than something coming from district budget officials, McNabb said.

``They come in and have no political stake. They are not going to get elected or fired. They will tell you what you need to do to clean up your act,'' McNabb said. ``It's more of a long haul with FCMAT. We have got a lot of cost increases. We've reached a point where financially our forecasts indicate it will be difficult to hold in the future.''