The city school system exceeded its operating budget by close to $10 million last year and wound up adding to an existing multimillion-dollar deficit, despite assurances by district officials two years ago that the shortfall would be eliminated by now.

Although the school system overspent its $900 million budget by a slightly more than 1 percent, the recent red ink more than doubled the district's deficit, bringing it to $18.6 million.

"We have had somewhat of a setback," Chief Operating Officer Mark D. Smolarz said at a financial advisory committee meeting this week.

The financially strapped school district had been saddled with a $19 million deficit when Chief Executive Officer Carmen V. Russo took over in 2000, and nearly $11 million of that had been eliminated by the end of the 2001 fiscal year.

Smolarz said that four major items contributed to the reversal of financial fortunes last year: contracting for special education instructors; the cost of the district's growing summer school program; repairing aging facilities; and replacing the district's vehicles.

School board member Sam Stringfield said that even legitimate reasons for exceeding the budget do not exempt the system from its obligation to be fiscally sound.

"We told the public we'd be out of debt by now," he said at the financial meeting Thursday. "We said we would do it. We have some credibility that we have to have with the public."

Officials outside the district also were dismayed by the growing deficit.

"That's just absurd," Del. Howard P. Rawlings said. "That just harkens back to five years ago, when we were out of control and when the state insisted on improved management performance.

"I put the responsibility back on the Board of Commissioners and [Russo]," Rawlings said.

Russo said that she and Smolarz will discuss with the nine-member board ways to reduce the deficit during the next several years. A new chief financial officer, Don Biles, was hired last month, and the budget staff has been increased, she said.

Although Russo said better planning is necessary to prevent further worsening of the system's financial situation, she defended the system's spending last year.

"It's categories where you really had to provide service," she said yesterday. "Nobody likes this [deficit], but if I had to do it all over again, I would do the same with summer school, and of course I am always very careful about special education."

The school system is in the final phases of resolving an 18-year-old lawsuit regarding the way it educates and tracks special education students. A federal judge ruled last month that Russo and other top officials could face sanctions if a computer system that tracks those students isn't working properly by next week.

Russo said the district spent $5.2 million more than it had budgeted in that area to hire contract instructors for special needs students.

"The bottom line is, you cannot have a break in service for students [in special education]," she said.

The district also spent nearly $4 million more than it had anticipated for its summer school program last year. In addition to more than doubling student participation - from 8,000 to 20,000 - the system also increased the wages for summer school teachers, from $25 to $36 per hour, to compete with surrounding districts.

"A lot of our teachers were going to Baltimore County, and we wanted them to stay with our kids," Smolarz said.

A number of unexpected problems with aging school facilities cost the system $3.7 million more than planned.

"Boilers explode, roofs leak, pipes burst, doors break," Smolarz said. "All that stuff happens, and you have to fix it. You can't say no."

Christopher N. Maher, education director of Advocates for Children and Youth, a local nonprofit organization, said that despite school officials' justifications, the increased debt makes him concerned about the system's financial standing.

Maher also said that revenue the city school system hopes to realize as a result of the state's Thornton Commission legislation could be jeopardized by the school system's debt.

"It is more critical now than ever that the Baltimore City Public School System demonstrate a capability to handle its finances," Maher said. "If there is a perception of mishandling of funds ... then the pressure on the legislature to carry out their promise [of increased funding to city schools] will not be as strong."

School officials said they will present an adjusted budget for the current fiscal year next month. That budget, they say, should show an improvement in the deficit picture.

"It means some very serious tightening of the belt," Russo said, "and clearly some tough choices, because we can't do everything we want to do."