In a point-by-point response to a suit filed by the School Committee for the city to fund schools at the level it did in 2009, the city solicitor and counsel to the City Council say they are either without knowledge or sufficient information to verify the information or deny school allegations and call on the court to deny or dismiss the complaint.

One of the few issues the city and the schools agree on is that Commissioner of Elementary and Secondary Education Deborah A. Gist issued a letter on Feb. 21, 2011. In her letter, Gist contends municipal funding as of 2009, which is $124 million in the case of Warwick, constitutes the required maintenance of effort. Municipalities were permitted to reduce that level by 5 percent in Fiscal Year 2010. In FY 2011, the city funded schools at $117.7 million and did the same for the current year.

The School Committee built its budget on the premise that city funding would be restored to $124 million, but that didn’t happen. The mayor and City Council level-funded schools and set aside an additional $875,000 in the city budget to fund school sports.

But while the city and schools can agree that there is a letter, they don’t agree on what it says. The city denies that Gist’s opinion is binding.

The “core” of the issue, says City Solicitor Peter Ruggiero, is what is the base year for the maintenance of effort. Representing the council in the action is John Harrington. The position of the city is that funding for the current year can’t be less than the prior year. The exception was when the General Assembly allowed a 5 percent reduction, which, in effect, set the new level.

He said that Gist’s opinion that the funding reverts to what it was in 2009 is “non-binding.”

“We disagree that she has the authority to interpret the law as it relates to the maintenance of effort,” he said.

Ruggiero expects that the parties will meet with the judge this Friday and talk about scheduling a hearing.

As defense, the city contends schools fail to state the claim upon which relief may be granted; that schools failed to exhaust administrative remedies; that schools failed to comply with Rhode Island General laws; that the action is contrary to public policy; that schools failed to mitigate damages and expenses and that the committee failed to follow statutory compliance.

In addition, the city contends the school action was improperly filed as it did not provide for the required time prior to the Aug. 19 hearing, meaning the court “must deny the motion or continue the motion” to enable the city to respond. The city has asked the court for a conference to clarify issues involving the matter.

How the committee’s complaint plays out is bound to have a dramatic impact whether schools or the city come out the winner.

A win by the committee would mandate the city to come up with an added $6.2 million in the current year. Funding that would virtually wipe clean the city’s undesignated reserves or rainy day fund. Alternatively, the city could issue a supplemental tax bill, which, on top of increases in motor vehicle and real estate taxes, would surely meet taxpayer resistance.

On a statewide basis, a win by the committee could set the stage for similar demands in other cities and towns. Municipalities are keeping an eye on the Warwick case and the Rhode Island League of Cities and Towns agrees with Warwick’s argument that Gist’s opinion is non-binding. Support of the city’s position has also come from House Speaker Gordon Fox and Senate President Theresa Paiva Weed.

Conversely, if the courts reject the committee’s complaint, it will need to make significant cuts to balance its budget. This could mean the reduction or loss of some programs and would certainly limit the committee’s reaching an agreement with the Warwick Teachers Union. Their contract expires at the end of the month and an agreement before schools open on Aug. 31 appears unlikely.

In drafting its budget, the committee assumed teacher salaries at the current level. It also left the health insurance co-pay at a fixed $11 a week, although all other school employees pay 20 percent of the cost. Putting teachers at 20 percent would reduce school costs by more than $2 million.

Schools also asked the court to require the city to allocate the $875,000 set aside for sports immediately. Ruggiero called that complaint “non-material” and a “rhetorical argument” because all payments flow through the city. “It’s their money,” he said.

Asked whether the mayor and council had the power to designate how that money is spent, Ruggiero said, “Let them argue that in court.”