Newport City Council Gives Schools $450,000 To Help Cover Deficit

NEWPORT, RI — The city will give the school district $450,000 to help cover its 2018 deficit, the council decided Wednesday. The $1.7 million deficit was caused by the school department's failure to have "prudent" spending controls in place, City Manager Joseph Nicholson wrote in a memo to Mayor Harry Winthrop. He explained during the meeting what he meant by "spending controls." Nicholson said he meant the school department did not have a handle on how much money was available in its budget to spend on a month-to-month basis and needed to correct that situation.

Schools Supt. Colleen Burns Jermain said the department has now established those controls and is meeting monthly with the city finance director and the accountants. Nicholson and the councilors stressed the school department could not continue to run deficits but said nonetheless, the city would have to help the schools with a one-time loan. State law requires the city to come up with a plan to balance the school budget, he said.

Under this plan, the schools are obligated to repay the remaining $300,000 deficit over three years.

The school district did have a fund balance totaling almost a million dollars, which it applied to the deficit. That brought the shortfall down to $751, 804. With the $450,000 from the City's General Fund, the schools will still have to make up some $300,000.

The complete meeting is on video.

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