Gov. Janet Napolitano signed a bill Tuesday extending the Flagstaff Unified School District's $1.8 million overspending payback from two years to five, slicing the district's budget shortfall by $1.1 million next year.

The windfall reduces the projected shortfall from $7.8 million to $6.7 million. But that might not be enough to keep either Weitzel or Thomas elementary school from being closed next year.

A majority of the governing board voted last week to pursue the closure of an elementary school to save $350,000, and two members of the majority said Tuesday the payback extension would not automatically lead to a reversal of that decision.

A decision on the final budget is expected next Tuesday.

District administrators had been working with state lawmakers for more than a month to have the extension passed, and last week the state House and Senate passed FUSD's request to help ease its budget crisis for 2003-04.

Board members were thrilled to hear Napolitano signed the bill, cutting the remaining one-year, $1.5 million payback, or reduction in spending, to just $360,000 a year for the next four years.

"We have to look at everything and have to prioritize," said FUSD board President Judith Wilson. "One thing the board promised to do if it got extra money was to start putting things back. I'm hoping we stick to that because that's what we told the community."

The board had tentatively decided last week on about $6 million in budget cuts and new revenues to close the budget gap. Still left to be

decided is whether to increase elementary classroom size by an average of up to three students, resulting in the loss of up to 32 teaching positions for a savings of $1.1 million.

The board also is still undecided on whether to cut district-paid health benefits to some part-time employees for a savings of $365,000.

The school district accumulated a $1.8 million deficit in the 2001-2002 school year due, in part, to a bookkeeping error that resulted in a $2.3 million biweekly payroll not being posted to the district's ledger. The district was using new accounting software, but district officials did not have adequate backup systems to cover for errors in the new software.

The bill signed by the governor has a provision in it requiring "that the school district's budget for the current year is properly calculated and will not result in any overexpenditures."

FUSD Superintendent Larry Bramblett said meeting that requirement will not be a problem.

"We have that well under control," he said in a phone interview Tuesday.

Board member Mary Lord wants the extra money to go toward keeping all elementary schools open, although Bramblett said that, with enrollment falling, he is likely to recommend the board continue with its 60-day school-closing timetable.

"I'm hoping this means we don't have to close a school," said Lord. "Larry Bramblett said it's up to the board (to decide where the money will go). Sounds like good news to me."

Wilson said she would like to do more research and examine all options before she makes any decision on how the extra $1.1 million should be applied next year.

"We've been working really hard to make this happen. It doesn't exactly fix everything, but it gives a little flexibility with what we have to work with."

Pearlmutter said Tuesday he was inclined to stay the course on school closure, citing, like Bramblett, falling enrollments that have led to school overcapacity. Board member Julianne Hartzell could not be reached for comment.

District administrators have narrowed the choice to either Weitzel or Thomas elementary schools, with a hearing set for July 15 and a board decision no earlier than Aug. 14. School starts Aug. 25.

Hartzell, Wilson and Pearlmutter had traveled to Phoenix with Bramblett and Mitch Strohman, director of public affairs and marketing, a couple of times to meet with local lawmakers and the governor to explain their financial situation, Bramblett said.

He praised the FUSD contingent for taking the extra time to pursue the issue with lawmakers and the governor, whom he also praised for taking the time to understand the problem, despite their "tough questions," Bramblett.

"They made sure we answered all their questions until they were satisfied that we had a fix for the problems," Bramblett said.

After receiving highly critical audits from an outside auditor and the state Auditor General, FUSD has added backup controls to its accounting system and revamped procedures in the business and finance office. The Auditor General's office has yet to schedule a final visit to FUSD to review the books and sign off on the new procedures.

Bramblett accused Save the Heart of Education, an ad hoc group of teachers and parents frustrated with the district's financial practices, of "not being helpful" in the district's bid to get the governor to sign the bill.

Diana Laufenberg, spokeswoman for Save the Heart, denied that any member contacted the governor in any way, but she said she remains concerned about the district's finances.

"We're concerned about responsible management of funds they are currently using because of past accounting problems," she said. "I'm not sure what they are going to do with this money or how they are going to approach it."

The bulk of FUSD's budget shortfall is due to lower enrollments and state subsidies and increased insurance costs and retirement benefits.

Arizona Daily Sun

-- Anonymous, June 20, 2003