School Board’s Budget Turns Projected Deficit Into Surplus : Education: Newfound cash heads off projected deficit. Official warns against dipping into reserves to balance books.

Without laying off teachers, increasing class sizes or closing a school, the Simi Valley Unified School District has turned a projected $6-million deficit by 1998 into a $370,000 surplus, as outlined in a budget approved Monday by the school board.

The improved fiscal forecast, produced largely by savings on insurance and by changes in accounting practices, prompted some trustees to suggest ways the district could spend the newfound cash.

Board member Debbie Sandland said that now that the board has escaped the specter of a giant deficit, it should consider spending more money on textbooks and school supplies. She said many teachers now pay for supplies out of their own pockets.

“I think we have an obligation to look at this,” Sandland said.

The $74-million budget includes $2.9 million for such materials, a decrease of $1.5 million from the 1994-95 fiscal year.

Along with Trustee Carla Kurachi, Sandland also urged the board to consider hiring another teacher specially trained to help students who have trouble reading.

But the majority of the board, along with the district staff, gave a chilly reception to the suggestions for additional spending.

Lowell Schultze, the district’s acting business manager, warned that the district is dipping into reserves to balance its budget.

“We are continuing to spend more than we receive,” Schultze told the board. Without the reserve money, the district’s deficit would be $1.1 million for fiscal year 1995-’96, Schultze said.

Trustee Norm Walker said if that trend continues, the district’s reserves could eventually dip below the $3 million it is required to have by law. By the end of this fiscal year, officials project the district will have $7.5 million in reserves.

Trustees Judy Barry and Diane Collins cautioned against spending money on more books or teachers until the district resolves its contract talks with the Simi Educators Assn.

“Nothing is in here for any kind of salary increases,” Supt. Mary Beth Wolford said.

Indeed, some of the teachers, who have been without a contract for almost a year, saw the erasure of the deficit as an opportunity to get long-anticipated pay raises.

“The deficit, which didn’t exist, was used as an excuse to deny a cost-of-living increase to employees,” said Peggie Noisette, a member of the Simi Educators Assn. “Teachers need a contract and a cost-of-living increase.”

The school board and district administrators worked for months to reduce the deficit, and at one point they considered closing an elementary school to cut costs.

Schultze said the budget, which was approved unanimously by the board, will be revised after Gov. Pete Wilson signs the state budget. If more money is available, trustees could then explore additional spending.