KCET getting its financial house in order.

After several years of painful cost cutting, KCET-TV (Channel 28) appears to be on financially firmer ground than other public television stations nationwide.

Station officials would not release final results for the fiscal year ended June 30, but sources said that the "excess of revenue over expenses," or the station's bottom line, would be sharply higher than the once-projected $279,660-as well as 2001 's $138,789.

Much of the gain comes from an increase this year in the station's contributions, grants and contracts," the primary source of revenue. Last year, KCET had $39.1 million in this category out of $46.5 million in total revenue.

"We've just been very conservative in how we prepare our, budget, knowing that the economy is unpredictable," said Debbi Hinton, the station's chief financial officer and executive vice president of operations. "(This) is pretty much a maintenance budget. There's not a lot of new stuff and there wasn't a lot of stuff taken out."

KCET has managed to reduce its budget without wage freezes or additional layoffs, according to Hinton. Savings from last year's layoffs are being realized this year.

The updated numbers come as KCET wrestles with maintaining its underwriting commitments at a time when much of Corporate America has pulled back on its support of public television. Foundations, many of which are invested in the stock market, also have cut back.

KCET President Al Jerome was vague about the funding outlook for the coming year, other than to say "this will be a year where we will attempt to continue projects that we have spent a considerable amount of time working on. It's not a year where I see an enormous amount of expansion."

In particular, two original productions introduced during this past year, "American Family' a drama about a Latino family living in East Los Angeles, and "PBS Hollywood Presents" have attracted national notice but their continued funding has not been secured.

Market effect

Reflective of the funding uncertainty is "California Connected," a weekly public affairs show created by KCET and other PBS stations that is on hiatus until grants for a second season can be secured.

The program had been underwritten in part by the William and Flora Hewlett Foundation, whose assets plunged this year because they are made up largely of Hewlett-Packard Co.'s depressed stock.

"We certainly want to continue conversations with them," said foundation President Paul Brest about funding "California Connection." Problems in the stock market "affect, in some sense, all of our decisions but it does not have any particular implication for this program." So far, the foundation has provided $2 million.

Jerome says he hopes to have "California Connection" back on the air next March.

Successful productions can boost a station's reputation and make it a more attractive investment for corporations and foundations. That's especially important for KCET because of the dearth of corporate headquarters in L.A., which means that the station must seek much of its underwriting from companies outside the area.

Despite its proximity to so many film studios, the station for years has failed to produce much national programming and thus play in the same leagues with WGBH-TV in Boston and WNET-TV in New York. KCET's last major undertaking came in the 1980s with "Cosmos," the national science series that was over-budgeted and resulted in several layoffs.

"As KCET produces a body of work that people feel is credible and excellent, I think foundations and corporations and major donors would feel that they would be comfortable investing in a new KCET project because we have become reliable," Jerome said.

Woes at PBS

Overall, public television saw a slight uptick in federal funding, which totaled more than $400 million this year, but it isn't enough to make up for the losses that its stations have suffered. Several PBS stations have resorted to layoffs, reductions in management compensation and cuts in local programming.

Maryland Public Television last week announced it would lay off 32 employees and cut pay among its remaining top executives. Stations in Chicago, Dallas, Kansas City and Philadelphia have also made cuts this summer. Last year, PBS reduced its staff by 20 percent, eliminating 100 positions.

Public television productions also have taken a hit. "NewsHour with Jim Lehrer" was saved in December when SBC Communications agreed to become a corporate underwriter for the show through at least the end of 2002.

"This has been a difficult year for public television... We presume next year is going to be equally difficult," said Wayne Godwin, chief operating officer for PBS.

Although it has trimmed its full-time staff over the past six years to 170 employees from 260, KCET is pulling its belt tighter.

The station reduced its operating budget to $48.2 million, down from $49 million a year earlier. The decrease comes after several cost-cuffing efforts last year, including the elimination of 26 positions (11 of which were unfilled).

KCET officials had begun cost-cutting efforts long before the Sept. 11 attacks, after which many non-profits were left scrambling to make up for cutbacks in giving.

Even so, the station faced a shortfall of about $1 million at the end of last October, which was partially made up with on-air appeals and help from major donors.

Figures for KCET's most recent fiscal year, which runs from July 1 to June 30, are being audited and the final numbers will not be released until October. But preliminary figures show that expenses fell more than 3 percent, with spending on production and programming, by far the station's largest expense, dropping 10 percent. The category includes program acquisitions and productions for third parties.

The station also paid off $3.6 million of $9-million debt related to federally mandated digital upgrades.