We wish that we could say we were surprised to learn last week that the City Council is keeping the schools off the docket, essentially holding the fate of necessary, voter-approved capital projects for safe fire alarm systems and school roofs in the balance in what appears to be a heavy-handed bargaining tactic to attempt to get the schools to drop their lawsuit against the city and settle for less than the additional $4.9 million schools seek.
Unfortunately, in Warwick this is just par for the course. Instead of responsible cohesion between the schools and the part of government that approves funds for the schools, there are lawsuits. Instead of cooperation to reach an amiable solution, there is a political chess match with undertones of dishonesty and distrust.
It is unclear at this point exactly how this situation can come to an end that is anything but negative.
As outlined by Anthony Ferrucci, school finance director, in the news article that ran this past Thursday, delaying the release of bond funds that are already marked for crucial infrastructure projects intended to make long overdue safety improvements within our schools – utilizing bond money that was overwhelmingly approved by Warwick voters in November and approved by the city council to get it on the ballot, mind you – is akin to the city shooting itself in the foot.
Not only would critically important projects in our schools be delayed by at least a year, it will only end up costing the taxpayers even more. If capital projects aren’t completed in five years, the city loses its 40 percent reimbursement funding aid from the state for projects completed outside that time window. This means the city would have to eat potentially many millions of dollars if it wishes to complete the original scope of work outlined within the $40 million bond – significantly more money than a lawsuit would potentially cost.
The argument from City Council President Steve Merolla that the schools could utilize the offered $1.75 million from Mayor Joseph Solomon – an offer made last summer that, at the time, was advertised as an olive branch to cover the remaining principal and interest costs from a 2006 bond – in order to fund expenses for the new capital projects slated for the next two upcoming summers is disingenuous.
Firstly, the schools cannot pay for new capital projects through a random infusion of money from the city’s road paving budget. Even if they did, this could cause legal issues when it came time to get reimbursement from the state and they found that city’s approved bond money had not been used. Not only that, but the city council has on numerous occasions accused the school department of misusing its bond money. Would this wholly unorthodox method of avoiding releasing bond funds to pay for bond-funded capital projects not reek of hypocrisy?
Secondly, that $1.75 million has always been and continues to be a poor negotiating chip that is willingly ignorant of the gravity of the school’s financial situation. The schools continue to struggle with a roughly $5 million budget gap. All that money would do is cover one known encumbrance that the schools have. It does nothing to address cut custodians, out of district tuition that is unfunded or a $500,000 unfunded placeholder utilized to save sports from being cut – and to suggest otherwise is misleading.
Mr. Merolla has tried to paint the school department as playing politics with suspect information, pointing out how they walked away from that $1.75 million offer and how they are now seeking more through the lawsuit filed just before Christmas. However, one could make the same assessment of his statement that a $4.9 million pending lawsuit could have a negative effect on the city’s bond rating, leading to higher interest rates and too much risk for the city to release bond funds.
Mr. Merolla is also quite aware – and has spoken to great length – about the unfunded pension liability in the area of $100 million facing the city and the financial threat that this poses. He is also aware that the city’s rainy-day fund is reportedly much lower than was shown in the FY18 audit – although we don’t know exactly how much lower at this time.
Certainly, if the city turns out to have half as much in its reserve fund as previously advertised, like has been stated by the mayor, and if the city’s OPEB liability continues to grow at a rate of clear instability, then an approximately $5 million lawsuit – where the schools are by no means guaranteed to emerge victorious – is not likely to have been a significant factor if there is indeed a downgrade to Warwick’s bond rating looming.
Adding more complexity to the mess is that, if the mayor and the city council get what they want from the new school committee and the suit is dropped, it opens the door wide open for the Auditor General to come in and look at every single possible area for cost savings, since the schools can’t operate without a balanced budget. That could include examining recent collective bargaining agreements, specifically any pay increases held within.
There’s a classic rock and a hard place situation for new committee members who want to please both the council and the teachers’ union.
Once again, as we have seen all too many times in Warwick, the district’s students are the ones who will suffer from the inability of the adults in the room to negotiate in good faith. While we don’t profess to have all the answers, holding safety improvement projects hostage for mendacious reasons and refusing to show negotiable flexibility will not do anything to find a solution either.