Despite claims that it is not needed and there is a better and faster way to reach the goal, the City Council last night was expected to approve the establishment of a Warwick School Budget Commission.
The five-member commission would oversee school expenditures and develop a three-year operating and capital financial plan. It would cease to exist once...
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Despite claims that it is not needed and there is a better and faster way to reach the goal, the City Council last night was expected to approve the establishment of a Warwick School Budget Commission.
The five-member commission would oversee school expenditures and develop a three-year operating and capital financial plan. It would cease to exist once the mayor and council approve a FY 2025-26 school budget and schools adopt a deficit-reduction plan approved by the commission and the state auditor general.
Assuming City Council approval based on interviews for this story, (the Warwick Beacon went to press before the council meeting), the resolution will be forwarded to the General Assembly.
Generally, as House Speaker K. Joseph Shekarchi explained Monday, legislators approve local legislation if it has the support of local officials. The resolution would also require approval of the Senate. Shekarchi thought the process of state legislative approvals could take about a month, at which time the commission could be formed and start its work.
“I’ve been extremely generous to the schools,” Shekarchi said of state appropriations. He said he has received calls about the deficit with “conflicting data” that needs to be resolved. He fears if it is not addressed it will put the two new high schools, which are slated to start construction this spring, “in jeopardy.”
The commission has the support of Auditor General David Bergantino. Bergantino sent a letter of endorsement to the City Council, mayor and school officials on Monday. He said Tuesday he is planning to attend the Wednesday meeting and would sign up to speak.
In the opening paragraphs of his letter, Bergantino writes: “In my opinion, the School Department and the city’s executive and legislative branches must embark on an immediate course of action that cannot be met by existing statutory tools designed to address fiscal problems of lesser urgency than those facing the Warwick School Department.”
In closing, he writes: “While the creation of a budget commission is an extraordinary course of action, the serious fiscal crisis in the School Department leaves no other responsible option.”
Why a commission now, and what’s the rush?
Bergantino called the commission a good idea, adding that there’s not a lot of time to look at the current fiscal year and the city needs to minimize the deficit as far as possible to maintain its bond rating and reduce the risk of higher borrowing rates on bonds for the new high schools.
The resolution for legislation notes that in spite of nearly $900,000 in additional state funding in the current budget, schools project a $9-million deficit. The resolution calls on legislators to enact a commission, noting that “the School Committee has worked to reduce the projected deficit without participation of city officials and has been unsuccessful in formulating a long-term plan; and … the mayor and the City Council have concerns in the ability and capacity of the Warwick Public School administration to produce a workable deficit-reduction plan without detrimental impacts to city taxpayers.”
The legislation spells out commission powers which includes the power to amend, formulate and execute the annual school budget; implant and maintain uniform budget guidelines and procedures; amortize operational deficits in an amount the City Finance Director approves for a long term not longer than five years and to employ, retain and supervise such managerial, professional and clerical staff as necessary to complete its task with approval of the City Finance Director.
Three of the five member commission would be named by the mayor with advice and consent of the council, and the superintendent and chairman of the School Committee would each name one.
City Council President Anthony Sinapi prefers this legislation to the administration’s initial proposal, as it strips out certain powers such as the authority to enact new policies and regulations. The revised legislation, which he believes is likely to gain approval in some form, was presented and discussed in a Friday meeting attended by four council members – Sinapi, Ed Ladouceur, Vinny Gebhart and William Muto, the mayor and members of his staff, School Committee Chairman Shaun Galligan and members of the school administration.
Sinapi would be delighted if schools see delays in establishing the commission as an opportunity to “vindicate themselves” and come up with their own plan.
That’s not likely to happen in Ladouceur’s opinion. Looking back, he sees a string of school deficits and he is amazed that the schools haven’t been able to identify where they went off the track despite the retention of two financial experts recently retained to do that.
‘We have a crisis’
“We have a crisis,” he said. “How do you expect me to have confidence in the School Committee or the department when they have no clue as to how they got there.”
Ladouceur points out that three members of the committee of five were elected in 2022 and are relatively new to the board.
“They inherited a snowball, but under their watch that grew into an avalanche. There’s no explanation of how we got here.”
In a statement, Galligan underscores his opposition to the legislation, says it is unnecessary and could disrupt ongoing efforts to address financial challenges.
“We have contracted independent consultants with extensive municipal finance experience, frozen discretionary spending and implemented substantial line-item reductions. Additionally, we are developing a comprehensive five-year fiscal plan, which will be presented publicly by Feb. 28, 2025.”
Additionally, he points out, “We have strengthened our partnership with city leadership, holding bi-weekly meetings with the mayor’s office, City Council and financial consultants to review expenditures and performance. These efforts demonstrate our commitment to fiscal responsibility and building public confidence in the governance of Warwick Public Schools.”
And should the council deem an oversight commission necessary, he says, “we encourage the use of existing state law governing budget commissions, which provides a proven and consistent framework for addressing fiscal challenges.”
Former Warwick City Councilman and School Committee member Robert Cushman says there’s already a state mechanism to accomplish the mayor’s goals, and if Picozzi continues down the path toward Warwick legislation, not only will it bring out forces opposed to such far-reaching measures but it could take months and the city would lose the opportunity to make budget cuts now.
The committee shaved about $2.9 million from its budget last Tuesday, but Cushman said it failed to address salaries and positions that are key to bringing the budget in line.
In a related matter, Cushman has called on the attorney general to investigate what he believes is a violation of the Open Meetings Law at a special meeting Dec. 30 when it discussed “budgetary items” behind closed doors. In his complaint, Cushman claims there’s nothing in the law allowing the committee to do that.
What about city finances?
However, should the city turn to the existing state law, both city and school finances would come under state review, which Cushman says would expose the city’s dire financial condition. He said with the debt of new high schools, the city’s unfunded liabilities would climb to $1.5 billion.
Cushman said state review would start with a fiscal overseer who would determine if the city faces a fiscal crisis. That would be followed by a determination that the municipality would not achieve fiscal stability without the help of a budget commission and that the tax levy of the fiscal year should not be approved. The fiscal overseer would have the ability to recommend a commission to the Division of Municipal Finance.
“We need the state to come in now. This plan [to form a school budget commission] doesn’t make sense,” he said.
A post from Cushman’s “Warwick Taxpayers’ Spin” website says a school-only commission “will continue to hide the fiscal mess on the city side of the budget that Mayor Picozzi refuses to acknowledge.”
Mayor Picozzi sees no need for an analysis of both the city and schools. He questions why schools would be so opposed to the oversight. He said reducing pension contributions, as the School Committee did last week, postpones the problem, and while he has heard schools are looking at layoffs, he hasn’t gotten any specifics.
As for an explanation of how school finances got to this point, Picozzi said he was told that it was discontinuance of federal grants tied to the pandemic for positions the schools are now funding. If that’s the case, Picozzi maintains, school officials knew of the problem when they put the current budget together.
“I have no idea what their plan is;, they are not forthcoming,” he said.
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ThatGuyInRI
This article doesn't explain anything.
How long has this problem been known? Who knew?
How does school budget end up with a "surprise" shortfall of $9 million?
The school committee "reducing pension contributions" only kicks the can down the road and further compounds the problem. Is that even legal?
So many questions. Please find some answers Beacon.
Thursday, January 23 Report this