In a year hit with plenty of lows - a $70 million budget deficit, cuts in programs and layoffs of employees - Philadelphia School District administrators had something to cheer about yesterday.

An independent arbitrator has ruled in favor of the district in a salary dispute with the Philadelphia Federation of Teachers over how the district is issuing paychecks this year.

The arbitrator ruled Friday that the district's decision to spread the annual pay of most PFT members over 27 paychecks instead of the usual 26 in the 2006-07 school year did not violate the union's contract.

"We're disappointed and we don't agree with his decision," PFT Vice President Jerry Jordan said yesterday.

He said PFT officials and lawyers were reviewing the 39-page arbitration ruling to determine whether to appeal to Common Pleas Court.

Sherry A. Swirsky, general counsel for the district, said the district was pleased with the arbitrator's findings.

As for a possible appeal by the union, Swirsky said the matter had gone to a final binding arbitration.

"There are very limited circumstances under which they can do anything further with this issue," Swirsky said.

Initially, the PFT, which represents some 18,000 members, sued the district and chief executive Paul Vallas last August.

But a judge told the PFT to seek other options under its contract rather than a court order.

"The district has no authority to unilaterally impose pay cuts on our members," PFT President Ted Kirsch said at the time.

The union's position was that changing the pay system to 27 paychecks rather than 26 cost its members a 3.8 percent cut in pay every two weeks.

Union officials said the district told them that changing the pay schedule would save the district some $31 million in the 2006-07 fiscal year.

District officials said the 27 pay period issue is a "phenomenon" of the calendar and happens about every 11 years. But the union claimed this wasn't one of those years.

The district decided last May that it would change the pay periods several months before the 2006-07 school year began Sept. 1.

Then last October, the district announced it had a $21 million budget deficit. A few weeks later, the deficit was $70 million.

Had the district lost the arbitration ruling, the deficit hole would likely have gone deeper. *