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Judge to schools: Balance budget

November 15, 2010

WOONSOCKET — Mayor Leo T. Fontaine has won his bid for a court order directing the school department to balance its budget, at least for now.
Judge Bennett R. Gallo issued the “writ of mandamus” on Friday and specified in the ruling that school officials must “adopt and adhere to a balanced school budget for fiscal 2011.”
The order also directs the school department to prepare a corrective action plan “that limits spending to the amount actually appropriated for fiscal year 2011 and otherwise complies with all statutory requirements.”
The ruling came after Gallo held several court sessions on the dispute between the school department and the city and weighed arguments from the sides as to how much funding is actually available for the current fiscal year.
Fontaine on Monday said he was pleased Gallo supported the city’s request for quick action on the budget but noted a move by school officials to appeal the decision at a further hearing today has clouded the timing of its implementation.
“I just received notice this afternoon that the school department is going back to court to have the order overturned,” Fontaine said.
“Clearly, we are happy with Judge Gallo’s order and it is necessary for us to move forward on this matter,” Fontaine said.
While the school department has opposed the city’s request that it cut its current $62 million spending plan to a figure of approximately $59.7 million based on revenues approved by the city and the state, Fontaine argued it does have options to achieve that step without further reductions in school programs.
A review of school operations completed by a performance audit firm hired by the city showed areas where such budget reductions could be made without the elimination of extra-curricular activities or further cuts in staffing, according to Fontaine.
“The audit report gives them a road map showing them how to cut the budget without eliminating programs,” Fontaine said.
By accepting the directives of the order, Fontaine said the school department would be able to shed spending oversight by the city Finance Department and get back to running its finances on its own.
“We do have to deal with the fact that we have a deficit,” Fontaine said.
School officials could not be reached for comment about the court ruling or the department’s appeal on Monday. The school committee is expected to meet on Wednesday and could discuss its options for corrective action at that time.
Gallo noted that the ruling would not “prejudice” the school department’s right to seek additional funding for schools through a Caruolo Act law suit.
The school department had in fact begun that process two years ago but it ended when the parties agreed the difference in funding involved in the action had already been incurred by the department making the suit moot.
The sides, however, have continued to disagree on whether that conclusion added the disputed funding to the budget on an annual basis.
The budget approved by the city this year for schools is actually $3 million less than the budget that was involved in the past Caruolo case.
The school department in turn has argued that it did take significant steps through negotiations with its union employees and reductions in staffing to balance its initial spending to the $62 million included in the city’s budget projection for 2010-11.
And while the city has maintained that subsequent cuts in state aid require additional cutting, school officials have argued those cuts cannot be made without impacting the department’s ability to meet state basic education program requirements.
City Finance Director Thomas Bruce on Monday echoed Fontaine’s contention that a budget adjustment can be made without impacting student programs and activities.
“The auditor issued an interim report that offers them analysis and recommendations for balancing the budget,” Bruce said.
The recommendations show that the school department could balance its budget by reducing funding allotted to specific line items such as health insurance and Medicare reimbursements and revising its accounting of personnel vacancies, Bruce said.
The order specified that the school department should take that step immediately, he noted.
It also has to be done to the “satisfaction of the city administration,” Bruce said. “It has to be a budget that is balanced and sound,” he said. The only other course of action would be for the school department to gain increased state aid, a process not likely in the current budget, or for the city to seek a supplemental tax increase.
The $1.6 million deficit now shown by the school department would require an additional tax rate hike of 40 cents, Bruce said, a change that would add $80 to the tax bill for a home valued at $200,000 on city tax rolls.
With such an increase unlikely to be approved by the City Council, Bruce said the only course for the school department is to adjust its budget as recommended.
How the school department’s appeal will affect that process remains to be seen according to Fontaine. “I’m not sure. We will have to revaluate that at some point. Clearly, they are in a situation where they have a deficit and Mr. Bruce is oversee their finances and I’m sure they would like to get back a normal way of conducting business,” he said.

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