Suit could hike taxes
In an action that could require taxpayers to dig deep in their pockets or, on the other hand, give the School Committee the ammunition to seek major concessions from the unions, Warwick schools have sued the city for an additional $6.2 million.
“We’re at an impasse with WISE [Warwick Independent School Employees who represent non teachers],” School Committee Vice Chair Patrick Maloney said Tuesday. And while the Warwick Teachers Union and the committee continue to communicate, it is unlikely the parties will reach an agreement by Aug. 31 when the current contract expires. At this point, Maloney said, the union has not offered any concessions that would enable schools to balance the budget.
A ruling the city rightfully funded schools at $117.7 million – $6.2 million less than schools contend is the proper level – would reinforce a school argument that it has done everything possible to fund a teacher contract and it has no alternative other than to increase healthcare co-payments and make cuts.
“I’m doing what I feel needs to be done to legally run the schools,” Maloney said of the two petitions filed in Superior Court, seeking declaratory relief and a writ of mandamus against Mayor Scott Avedisian, the City Council and City Treasurer David Olsen.
One suit asks the court that the city fund schools at the level it did in 2009 or what the Department of Education has identified as the “maintenance of effort.” The second action asks the court to find the mayor and council were in violation of state law and the city charter when it allocated $875,000 in its own budget to fund school sports and other extracurricular activities.
The mayor and the council separated the $875,000 from the school appropriation to ensure that school sports not be eliminated as a cost-cutting measure or used as a lobbying tactic to gain additional funds. Schools ask for immediate custody of the funds.
There is some question as to how the committee decided to proceed with a suit.
“It came as a surprise to me,” said committee member Eugene Nadeau, “I didn’t know that it was going through.”
Nadeau doesn’t favor the action. He said yesterday, “We have to address the problem now with these contracts [with the teachers and WISE].”
Asked whether the committee voted, committee member Teri Medeiros said, “The school committee discussed it and that decision was made.” She did not recall a vote.
Committee member Christopher Friel said a suit was discussed in executive session and a consensus was reached. Committee Chair Bethany Furtado said a discussion had taken place in executive session, but was unable to answer if there had been a vote.
She referred additional questions to school attorney and human resources director Rosemary Healey.
Although Friel believes the suits could impact teacher contract negotiations, that wasn’t the reason he endorsed the action. He thinks it “highly unlikely” that the schools and teachers will reach an agreement by Aug. 31.
Had the mayor reasoned that these are tough times and that no department would see an increase in funding, Friel would have gone along with the level funding of schools. Yet, he said, the mayor and council raised real estate and motor vehicle taxes and that “it is abhorrent that not one dime [in additional funds] went to schools…all new tax revenue is going to the city side.”
As it is, the $8 million more the city projects it will raise is within a fraction of the 4 percent tax levee cap set by state law.
“We have done our due diligence, cut costs and tried to maintain a level of service,” said Furtado. She noted that the department was able to generate a surplus last year and repaid deficits that the city was required to cover from prior years.
She said schools need concessions from the unions but that “the city also needs to tighten its belt.” Yet she said it is “unfair” that raises be provided in the city side without increases for schools.
Furtado said schools have arrived at this position after years and years of not working together with the unions. But, by the same token, she was critical of the city.
“How do you justify benefits being paid retirees,” she asked.
Coming up with the added $6.2 million to meet the city funding level of 2009would mean an additional 3.2 percent increase in taxes City Finance Director Ernest Zmyslinski said yesterday. The residential rate would need to increase by 57 cents to $16.69 per $1,000 of valuation. The commercial rate would climb another 85 cents and the tangible rate would jump $1.14.
Friel calculates schools need to come up with an additional $7.9 million in either cuts or new funds to balance the budget. Broken out the amount is made up of the $6.2 million if the city funded schools at the 2009 level; $2 million in unidentified cuts it still needs to make and $680,000 the committee added to the department’s budget request. From the total of those figures, Friel subtracts a projected $800,000 surplus from FY2011.
The maintenance of effort [MOE] argument was raised during council budget hearings when Healey said that after funding schools at 95 percent of the MOE level in FY2011, it would have to return to 100 percent for the current year. Her conclusion was based on a February 2010 memo from Commissioner of Elementary and Secondary Education Deborah A. Gist and state law.
In the complaint Healey goes deeper saying that the city may argue that the 95 percent of MOE for 2009 serves as the new base for FY2012.
“The flaw in that argument is that it overlooks the plain language in the statute which clearly recites that the reduction to 95 percent of the MOE shall only take place in FYs 2010 and 2011,” she writes in the complaint.
During budget hearings, the council sought an opinion from its own solicitor John Harrington. It also was given a letter co-signed by Senate President Theresa Paiva Weed and House Speaker Gordon Fox saying it was not the legislature’s intent to limit the 95 percent application to those two years.
Using rules of statutory interpretation developed by the Supreme Court, Harrington concluded that the FY 2012 school allocation cannot be less than the FY 2011 contribution.
In her argument Healey reasons that the letter from Paiva Weed and Fox “does not constitute competent legislative history which should be afforded any consideration. It is merely a retroactive, self-serving statement of two members of the General Assembly.”
City Council President Bruce Place is confident the council was on firm legal ground when it level funded schools at $117.7 million. Noting a decline in school enrollment since 2009, he reasons the city has maintained a suitable level of funding on a per pupil basis and he’s prepared to back his position.
“I don’t have any problem digging in my heels anytime,” he said.
The suit, which Avedisian learned of from an email, disgusts him.
“Rather than looking for savings, they’re saying give us $6.2 million more,” he said.
Asked if he knew of any developments on a teacher contract, Avedisian said he hasn’t heard anything even though he’s asked.
“Rosemary said all information is privileged because of the law suit,” he said.
Nadeau said his “overall feeling” is that the city is correct in its interpretation and that schools won’t get the added $6.2 million. Reaching that conclusion, however, he said could drag on for months.
“What are we to do, hold our breaths,” he asks.
“The time has come to address that deficit and making saving and if necessary across the board reductions.” He maintains with General Treasurer Gina Raimondo requiring increased pension unless cuts are made now, schools could face a $15 million to $18 million deficit next year.
A Department of Education spokesman said the department is aware of the suit and would cooperate with the court.
James Ginolfi, President of the Warwick Teachers Union, said the parties are reviewing dates to meet this month, but that nothing is presently scheduled.
He said he is optimistic an agreement can be reached although he didn’t say when.
“Until we have a new agreement we would abide by the current contract,” he said.
Facing a deficit of about $6 million last August, the committee unilaterally revoked contracted pay raises for teachers and imposed a 20 percent heal care co-payment.
About a month after that action, the committee learned schools would end the year with a surplus of $6 million. The union brought suit to have the cuts restored and before the complaint reached court, the department revoked the 20 percent co-payment and granted the raises.
“We’re all one community we have to find a way to figure this out,” said Furtado.