Newport This Week

Middletown Postpones Budget Adoption for Second Time



Citing uncertainty regarding the Middletown School Department’s finances, the Town Council has opted once again to temporarily stall passage of the fiscal year 2023 municipal budget.

The decision came during the June 23 hearing on the proposed $79.7 million budget, including $29.1 million requested by the School Committee. Town officials had previously signaled an intention to vote on the budget proposal during a second hearing, as is customary in most years.

The town’s comprehensive budget has traditionally been adopted in late May, but a School Department deficit now estimated at $1.6 million, and disagreements over how the town will go about plugging the financial hole, has put the 2023 municipal budget in limbo.

In a Town Hall press release issued after the meeting, town officials said the move was necessary to provide more “oversight of the School Department’s finances.”

Some councilors have pushed the department to agree to allow more of the district’s spending authority to be shifted to Town Hall, an issue council Vice-President Thomas Welch called a “lynchpin” toward coming to a final agreement. “We can’t just throw the money out of the window again,” he said.

Supt. Rosemarie Kraeger said the department will be meeting with the School Committee in the coming days to try and resolve the budgetary issues, including whether members would be willing to grant additional oversight of spending to the town. No new meeting for either public body had been scheduled as of June 28.

The council first decided to postpose deliberations on the 2023 budget in May, the result of a request by the town administrator’s office, which said it needed more time to work with the town’s finance department and school business staff to hash out discrepancies within the School Department’s books.

In response, the council took the step of temporarily taking over the spending authority of the department, requiring that all purchases first receive approval by the finance director, Marc Tanguay. Town administrator Shawn Brown has previously stated the council does not believe there was any financial impropriety involved in the deficit now facing the schools, but was likely the result of underbudgeting certain major line items, such as special education and transportation during the 2022 budget cycle.

The initial budget proposal sent to the council for review included a host of new measures to reign in the school’s budget gap for the upcoming fiscal year, including the creation of a $500,000 contingency fund, controlled by the town, that would be used for any unforeseen expenditures needed for the School Department, such as new staff hires resulting from an increase in student enrollment or state staffing mandates.

The proposal also called for the start of a five-year recovery plan to plug the district’s structural deficit, beginning with the allocation of $800,000 of federal American Rescue Plan Act funding and $100,000 in property tax revenue in the first year.

Kraeger has said that even if the department were to receive the additional $1 million that would come from a 4 percent increase of funding from the town, the school budget still includes the cutting of multiple staff positions, courses and other programming. One of the cuts addressed during the June 23 meeting was the elimination of an elective honors chorus ensemble.

“We are eliminating things that encourage kids to go to school and to thrive,” said councilor Dennis Turano. “This just burns me.”

For their part, the district had brought in an interim business director, Dina Dutremble, to assist in balancing the books after the departure of the previous finance director, Cynthia Brown, who is now on leave.

Dutremble’s tenure with the district ended on June 24, and Kraeger has said that finding her replacement may be difficult, given the ongoing negotiations between Newport and Middletown over a potential administrative merger of the neighboring districts.

Council President Paul Rodrigues asked Kraeger if she would support the transfer of spending authority from the School Department to town staff for the upcoming fiscal year. “Unfortunately, your staff is not equipped to do it,” he said. “During the budget process, not everything was laid on the table.”

Kraeger said the decision is ultimately up to the School Committee, though she is open to the concept. “What I can tell you is we are very willing to cooperate,” she said. “We need help.”

Turano reiterated his call for a consolidation of the town and school’s finance offices, saying a lack of communication between the departments has led to continued budget issues. “We wanted to do this two years ago,” he said. “If we had merged two years ago, we might not be here.”

Town solicitor Peter Regan said any change in spending authority, per state statute, would need to be limited to a one-year extension of the current arrangement that is only allowed when school districts report a budget deficit. State law places school district spending authority on school committees to determine where budgeted dollars are spent.

“This is not something you can force upon [the School Committee] unilaterally,” he said.

Rodrigues said he would not vote on a new budget until he received assurances of a one-year agreement “in writing.”

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