2015-03-12 / Around Town

School Budget Talks Outline Challenges

By Barry Bridges

With Newport’s Fiscal 2016 budget soon to appear on the agenda for City Council discussions and public workshops, school finances are again a topic of conversation.

Last March, the schools asked the council for assistance with a projected deficit for Fiscal 2014, and a supplemental appropriation of $395,000 was approved. Education leaders were later pleased with the final budget for Fiscal 2015, when the city effectively met the schools’ request for a $918,000 increase in funding through additional appropriations and the transfer of some capital expenses to the city’s books. But Superintendent Colleen Jermain said at the time that financial challenges would remain.

Another deficit is now looming. Officials anticipate a $1.3 million shortfall for the schools’ 2015 budget year that ends this June 30.

When the City Council and School Committee convened for a joint meeting on Wednesday, March 4, for a preliminary review of a proposed 2016 budget, attention quickly turned to the “elephant in the room” – 2015’s unfinished business.

Committee members had already discussed various options to fill this year’s gap, including borrowing from employee trust accounts or asking the council for a loan. Jermain brought up the latter possibility at the joint session.

“We are hoping to work with the City Council and request a loan and set up a payment plan to move forward…. We’d like to work out something where we’re accountable and responsible to pay back [the loan] in order to get us through this year and then through aggressive realignment of resources for next year,” said Jermain. She added that that the district has implemented other actions to improve the picture, such as freezing funds and delaying hires.

One idea to reduce the deficit is to transfer the Triplett School to the city so that an associated $300,000 in capital improvement monies would be freed. But Triplett has been mentioned as a possible future home for the city’s preschool and Head Start programs, which are currently housed at the former Kennedy School in Middletown.

Committee member Rebecca Bolan said, “Even if we give Triplett back to the city, we still have a space issue at Pell.” She reminded the group that in the next academic year the district will continue to rent space at Kennedy and will be short two classrooms at Pell.

“We really need to address future housing,” agreed Committee Chair Jo Eva Gaines.

Responding to questions from Councilor Marco Camacho, Jermain said that relocating pupils to Rogers, where there is some available capacity, could present difficulties because the building would have to be retrofitted for younger students.

Camacho noted the additional transportation costs incurred in taking students to Kennedy and said he’d prefer to keep students in Newport. “I’m interested to see what kind of plan there could be for a Pell expansion,” he said.

Looking to 2016, Jermain confirmed that the school district will once again request a four percent budget increase from the city, the maximum allowed by state law. That would be roughly $900,000.

Councilor Justin McLaughlin wanted to know more about the present hole. “We’re talking a lot about how we’re going to fix the $1.3 million, but I haven’t heard what it consists of. An additional $900,000 for next year won’t be easy, period, but you’ve got to make the case for what it is that you’re buying and why you need the money.”

“We have identified three drivers for the [current] challenges,” explained Jermain, pointing to transportation, pension costs, and retiree benefits.

Benefits have been the subject of ongoing negotiations with retirees. The district wants to transfer the group to a different health plan to save money, but an agreement has been elusive and is contributing to the budget problems. “Contracts in the past guaranteed individuals that they would have life benefits,” Jermain said. “$1,800 per student, instead of going into the classroom, goes to retirees. That’s an outlier and it’s the largest in the state. It is something that is not sustainable, and if it continues the structural deficit that we already have will just continue to rise.”

She emphasized that “no one has ever, ever, ever wanted to take benefits away from those retirees, nor has anyone ever, ever, ever, wanted to change the quality of those benefits. With the passage of time and with the other health care and prescription options that are available these days, there are comparable services at a lesser cost.”

Bolan reminded those convened that the “other elephant in the room” was the fact that strained finances do not allow for staff raises. “We want to do for our employees what was done for the fire and police,” she said. “A two-and-one-half percent raise is $500,000 for one year, just so you have a ballpark estimate.”

Mayor Jeanne-Marie Napolitano said, “The size of the looming school deficit is going to be extremely difficult for the city, and I hope you’re working on things where we can derive some efficiencies.”

She agreed with the views of several committee members that borrowing from pension funds should not be the answer to balancing the books. “We’ve been down that road on the city side and we’ve learned from it,” she said. “But we really have to get into the meat of things. I don’t want to be sitting here three and four years from now in the same situation. We need to address the problems, for both the taxpayers and the kids.”

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