How schools ended up with $4.9M deficit

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With much change occurring over the course of the past few months, an overview of where the school budget currently stands has become important to clarify. As of today’s paper, the schools are staring at a $4.9 million deficit for their FY19 budget, which runs from July 1, 2018 to June 30, 2019.

That number has indeed changed quite a few times from the original projected need of $8.1 million that was requested at budget time this past spring, for various reasons.

The budgetary impasse began in April, when the initial recommended budget by Superintendent Philip Thornton that was approved by the Warwick School Committee outlined a need for $8.1 million in additional funding from the city to counteract rising costs of education, and loss of revenue from the state due largely to declining enrollment but also due to changes in the state funding formula.

The Warwick City Council then awarded the schools $1.5 million of that request, citing their inability to even raise $6 million with a maximum tax increase, even if the entirety of the newly generated money went to the school department. Some council members openly questioned the integrity of the school department’s request, wondering how more money was not saved through recent efforts to consolidate the district by closing two schools and re-purposing another two.

This left the impasse at $6.6 million. The school committee then proceeded to approve about $6 million in cuts, in addition to a $500,000 set-aside “contingency” that they would need to find funding for at a later date – a measure that was taken in order to keep secondary level sports off the chopping block, which was being considered.

This “balanced” the budget for a time, however the cuts included measures that were deemed against state education laws, most prominently a request to waive the city’s mandated expenses in providing tuition to out of district students under the state’s Pathways program – a waiver that would have saved $690,000 if approved, but was rejected by the Rhode Island Department of Education.

In total, about $4 million of those cuts were deemed unallowable by RIDE or by a programmatic audit conducted to seek a third party opinion of the school’s fiscal situation. This $4 million constitutes the bulk of the remaining deficit that persists today.

The balance of the deficit has been realized in light of updated financial information that has become available since the closing of last fiscal year and the start of the new school year – a gap that isn’t accounted for in the preliminary budget that goes out over the summer.

Among the surprise expenses was the fact that 23 more students than were budgeted for requested out of district placement at other schools in Rhode Island, including 21 more than expected that sought to go to North Kingstown for its technical education program. This amounted to $373,722 in unexpected expense, around $18,000 per pupil, according to Anthony Ferrucci, school finance director.

Fringe benefits, unemployment costs and legal fees beyond budgeted levels contributed to a total of $1.16 million in unbudgeted increased costs. A small unexpected surplus of $157,847 lowered this amount, but ultimately adds up to a deficit of $4,942,759, according to school budget documents.

An important note to keep in mind is that this deficit includes gaps that by law must be filled before others. For example, money must be found to fill the RIDE Pathways mandate before and of the cut $750,000 can be re-allocated to restore custodians. The same goes for the $500,000 contingency that was put aside to save sports, and $1.75 million to satisfy principal and interest payments that the schools had been paying for the 2006 voter-approved, $25 million bond.

Mayor Joseph Solomon extended an offer over the summer to provide that $1.75 million to the school department to cover the bond interest, but Ferrucci has said in the past the offer would need to be officially made through the city council, and that the details of the offer have not been made clear. The council has had a resolution regarding that potential allocation on their meeting docket the past few meetings, but it has been held each time without discussion, including again on Nov. 14, when it was held until January 9 by the resolution’s sponsor, council president Steve Merolla.

School and city officials have met multiple times in the past months to discuss the impasse, but nothing of significance has been reported from those meetings. Ferrucci indicated on Monday morning that the schools were awaiting word on another meeting to be scheduled, but hadn’t heard anything as of press time. Merolla did not respond to an afternoon text asking if a meeting was in the works prior to deadline.

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Justanidiot

wats about da big raises that da teacherings got. doesn't that figger in somewheres

Tuesday, November 20, 2018
CrickeeRaven

How did the school department wind up with a nearly $5 million deficit? As the article explains, the city underfunded the schools, plain and simple.

All the continued foot-dragging by the city council proves is that they are more concerned with PR than providing the school department with the proper amount of funding, as determined by the state Department of Education.

The city council also hardly has any ground to stand on, if they think they're demanding responsible budgeting out of the school department, since they passed one budget with no tax increase that resulted in a deficit, and then passed a state-capped tax increased that also resulted in a deficit -- totalling some $8 million.

It's time for the council to lead, instead of engaging in these ultimately useless tactics.

Tuesday, November 20, 2018
CrickeeRaven

Justanidiot, those raises amounted to $4.5 million this year. But they're not optional, meaning the city is legally required to fund them as part of the bottom line budget.

Oh, and before someone comes along and suggests that the city council should ratify school contracts, maybe they should consider what kind of PR nightmare it would be if the union teachers and their supporters turned up at a council meeting the same way they demonstrated at school board meetings last year -- you can be sure that city councilors have, and they want no part of that.

Tuesday, November 20, 2018
Justanidiot

It is amazing that the deficit is almost to the dime what they negotiated with the teachers. I think the school department is trying to crucify the teacher's on the cross of debt.

Tuesday, November 20, 2018
richardcorrente

Dear Readers,

I purposely will not comment. The best thing about the current issue is that all sides are STILL communicating. Warwick taxpayers did not see that in the past. I will give the parties the benefit of the doubt as long as they all seem to be trying. I think we all should. That's just my opinion.

Happy Thanksgiving everyone.

Rick Corrente

The Taxpayers Mayor

Tuesday, November 20, 2018
Justanidiot

youse know whose interests get the shaft master mayer, da students. dey sit in polluted classrooms while tenured teachers count the days until they can head to floricda. burn down everythging and start over

Tuesday, November 20, 2018
CrickeeRaven

"I purposely will not comment," writes the two-time election reject, who then adds 60 more words in the form of a comment calling attention to himself and using the make-believe title that he neither earned nor deserves after two blowout election losses.

His silence would have been much more welcome, and appropriate.

Tuesday, November 20, 2018
wwkvoter

Raven I could not have said it better myself. If only I were as clear a thinker as you! But, at least I'm not a dishonest, foolish, embarrassment either...

As to the story, the short term answer that is two things - it is the only possible path, and also unpopular, is simple... tax revenue will have to be raised.

Tuesday, November 20, 2018
CrickeeRaven

Thanks for the kind compliments, WwkVoter.

One thing you may recall is that the city council approved $3 million specifically for the teachers contract last year, then held it back until the negotiations concluded. You may remember that they didn't approve the payment to the school department until after their December meeting -- and then blamed the superintendent for the delay.

You may also remember that the union and its supporters protested the school committee over the delay -- not the city council, which had every opportunity and the ability to release the funds at any point after the contract resolution was announced.

So, the higher FY19 school budget request, the majority of which is represented in the $4.5 million teacher salary and benefits increase, should not have been a surprise to the city council, nor should they be acting as if they're the more responsible group between the two.

As you rightly suggest, taxes are going to go up because of this situation. My point, all along, has been that the city council could have avoided it back in FY18 by passing the small tax increase that Mayor Avedisian proposed, which would have raised new revenue.

This is a good explanation of that -- go to the "Pocketbook issues" section: https://warwickpost.com/warwick-mayoral-matchup-handicapping-the-solomon-stenhouse-race/

Here's the relevant section:

"It’s also worth noting that the Solomon-led council passed the FY18 budget without a tax rate hike instead of Avedisian’s proposed 46-cent-per-$1,000 tax increase that would have raised an estimated $7.1 million."

I'm sure you see the problem here -- the council had a chance to raise $7.1 million in the FY18 budget, rejected it, and then approved two budgets with a total deficit of $8 million.

(That article also brings up the question of the city's accumulated surplus, which Solomon has hinted is now below $20 million from the $23.7 million Avedisian said was there in October, 2017. As I've said before, I believe the two deficit budgets are the reason for that.)

If the city council expects the school committee to budget in what they think is a more responsible way, I say the council should lead by example.

Wednesday, November 21, 2018
WarwickFreemason

Oh boy!! This is getting good!!! "As The Warwick Beacon Turns," my new favorite soap opera to watch!

Happy Waxing Gibbous Moon Mr. Corrente;

Happy Waxing Gibbous Moon CrickeeRaven;

Seriously, I wish you all a very Happy Thanksgiving!!

Warwick Freemason

The Tax Payer's Freemason

"Vertus Junxit Mors Non Separabit"

Wednesday, November 21, 2018
CrickeeRaven

Warwick Freemason, best wishes for a wonderful Thanksgiving.

I like your analogy of a soap opera -- because it would take such a writer to come up with the character that the two-time election reject is portraying. For instance, I do recall one typical soap opera plot that includes a character who suffers amnesia and thinks themselves an very important and influential person.

And I will say this about the two-time election reject: He is trying to build suspense with his refusal to actually call Mr. Carruolo.

In time, just like a character in a soap opera, the two-time election reject's storyline will get more and more stale, and he'll return to being a forgotten character in what otherwise is a compelling story.

Wednesday, November 21, 2018
Justanidiot

WarwickFreeMason, don't let the Illuminati feed you too much on Thanksgiving. They want you in a stupor so they can consolodate their base

Wednesday, November 21, 2018
wwkvoter

"Someday Mark, I may get elected Mayor"

Corrente is NO ONE'S mayor, and he never will be.

Wednesday, November 21, 2018
CrickeeRaven

Look how pathetic he is, WwkVoter, in how he hedges on even that disgraceful comment: "Maybe. Maybe not."

As you correctly note, he will never be mayor. Never.

And as usual, he compounds his pathetic behavior with more lies -- no one asked to hear his twice-failed slogans that he falsely calls a "plan."

There is no "growing number" of people who support him -- in fact, 12,000 fewer voters supported him in 2018 compared to 2016.

He remains, by his own repeated and willing behavior, a failure and a liar.

Wednesday, November 21, 2018
richardcorrente

Dear CrickeeRaven,

GOTCHA!

How could you possibly know if I DID or DID NOT contact Mark Carruolo unless you WERE Mark Carruolo?????????????

You're right WarwickFreemason, this IS getting good. When confidence becomes arrogance, failure follows.

Happy Waxing Gibbous Moon WarwickFreemason..

Vertus Junxit Mors Non Separabit to you.

Merry Christmas everyone.

Rick Corrente

The Taxpayers mayor

Friday, November 23, 2018
Justanidiot

master taxpayers mayer is slipping rather rapidly into some sort of delusional state. can someone run to cvs to pick up his meds? thanks

Friday, November 23, 2018
CrickeeRaven

You said it, Justanidiot.

"How could you possibly know if I DID or DID NOT contact Mark Carruolo...?"

Because if the two-time loser had reached him, he would have immediately learned how wrong he is and stopped this obsessive and pathetic behavior.

All the two-time loser has "caught" is a case of foot-in-mouth disease.

He'll need a really strong prescription to treat that, Justanidiot.

Friday, November 23, 2018