HOW TO SPEND SURPLUS CASH? THAT'S BOARD'S DILEMMA.

Byline: Karen Maeshiro Staff Writer

LANCASTER - After several years of tight budgets and cuts, the Antelope Valley Union High School District finds itself in the enviable position of having an $8 million surplus to spend.

The hefty balance left over from the past fiscal year is one-time money that cannot be spent on recurring costs, such as salaries.

``Our district was really prudent. Three or four years ago, as soon as the tide started to change, when we started seeing what was going on, administration said, stop spending,'' said Cathy Shepard, chief financial officer.

``We made program changes, eliminated class-size reduction. We've done so much over the last three years. We estimated we cut from the budget over $15 million over three years,'' Shepard said.

The board will now have to decide where to spend the money.

``That's the next step. The bottom line is education, students and staff,'' trustee Donita Winn said. ``A lot of things had to be cut because the last prior two years have been lean.''

Board President Al Beattie said he would like to spend the money on buying land for new schools or having start-up funds for new schools to cover expenses that are not paid for wholly or partially by the state, such as books or library supplies, Beattie said.

``I feel strongly that voters who passed the (high school district) bond would like us to look at a way to defray costs of future schools,'' Beattie said.

Beattie said money from the $103.5 million bond passed by voters in March 2002 will run out when the district builds Eastside High School, which is scheduled to break ground early next year and open next fall with a freshman class.

Another possibility is adding permanent classrooms at Quartz Hill High School to replace portables rented from the state.

``Portables are a recurring expense. It might be better to build classrooms, more permanent ones, and get rid of the portables,'' Beattie said.

The $8 million balance is almost double the $4.5 million the district originally projected that it would end the 2003-04 fiscal year with, Shepard said.

Labor costs were less than expected because the district spent less than budgeted on stipends and other forms of payments to teachers who take on additional duties or an extra class period, Shepard said.

The state also paid the district nearly $1 million in deferred revenue to help offset transportation costs and allocated more money to pay for special education, Shepard said.

In addition, encroachment on the general fund to pay for shortfalls in special or restricted programs that are not fully funded was smaller than expected, $2.2 million versus the budgeted $3 million, Shepard said.

Also contributing to the larger fund balance was savings in energy costs due to conservation measures put in place and a reduction in rates by the state Public Utilities Commission.

The district has a current operating budget of about $140 million. The board at its Sept. 22 meeting approved granting a 2 percent raise to all employees, who went two years without raises.

``It took everybody's part to get through that. It was sound prudent business management. It helps to be in the position we are today. It's a heck of a lot better than the other way,'' Shepard said.

Karen Maeshiro, [phone]

karen.maeshiro(at)dailynews.com