2012-03-01 / Front Page

N.K. files lawsuit against school board due to possible deficit

With the risk of going into the red, town manager, officials want to take reins
BY MARGO SULLIVAN

North Kingstown school leaders are facing budget problems, according to Kim Page, chairwoman of the North Kingstown School Committee. This year the school system is struggling to avoid going into the red, which is illegal under state law.

Next year, though, some sports programs, including all the sports at the middle school and possibly hockey and tennis at the high school, could be in jeopardy, according to Julia Held, member of the Jamestown School Committee and the liaison to the North Kingstown School Committee.

North Kingstown High School is Jamestown’s school of record.

“There are two different issues,” Page said. “The budget next year and this year’s.”

Page and Phil Auger, North Kingstown’s superintendent of schools, have notified the town and state’s general auditor about the risk of a deficit this year. They remain cautiously optimistic the financial picture will improve, thanks to a mild winter and other savings the school system has realized, and say the schools could still close the books safely in the black.

N.K. ran into financial pressure after counting on some extra revenues, which did not materialize. The anticipated revenues included tuitions for about 12 Jamestown students who never enrolled. The projection also assumed the settlement of an Essential Support Service staff contract, covering food service, maintenance workers and paraprofessionals, which was supposed to result in savings on employee health benefits. As it turned out, the contract dispute was never resolved and the school department has been paying $45,000 a month in expenses. N.K. also banked on $200,000 extra from the town of North Kingstown, and that money was not contributed.

Meanwhile, the impending defi- cit, which is around $700,000, has spurred the town of North Kingstown to file a lawsuit against the superintendent and the N.K. school committee. Both sides are waiting for the judge’s decision.

So far, Page said, it’s been business as usual for the N.K. schools, and the lawsuit, which could end with the town taking control of school spending, has not resulted in diminished services for the students, including the 191 Jamestown residents who attend North Kingstown High School.

Next year, however, will depend on how the North Kingstown Town Council opts to fund the schools.

“I don’t want to cut one sports, music or extracurricular program,” Auger said. He added that unfortunately he may have to do so because those are the only areas of discretionary spending in the budget.

Auger has prepared three budgets for next year and color coded them green, yellow and red. Like traffic signals, the green budget, whichassumesa4percentincrease in spending, says all school programs could move ahead. The yellowbudget,basedona2percent increase, would cut some programs. The red budget, which assumes zero increases, would cut almost all sports and after-school programs.

Page said she didn’t like to hear talk about cutting sports. In the past, that option has been mentioned, and because it didn’t happen people now dismiss the possibility as a scare tactic.

Unfortunately, she said, this might be the year the schools do cut sports. Auger said the decision to drop a sport was not connected in any way to the program’s success or failure. He uses a formula to calculate the cost of offering the sport relative to the number of youngsters participating. Football, he said, would be about the last sport to go because that sport actually brings in “a ton of revenue.”

Hockey, on the other hand, would be in danger. The program is expensive to operate and relatively few students play. A hockey squad might have 12 players, while 50 or 60 are on the football team.

“We have to wait and see,” he said. “I’m trying to preserve the programs that make the high school great and I hope the town council is willing to work with me on that.”

Held said when North Kingstown has had past money problems, town officials have looked for a solution at the tuition arrangement with Jamestown. New money problems could mean pressure on Jamestown to pay more. The two school committees renegotiate the financial terms annually. But, Held added, Jamestown does have a bargaining chip. The island provides North Kingstown with a solid revenue stream and is worth more than $1 million to the North Kingstown School Department’s bottom line.

She estimated the net revenue from Jamestown comes to about $1.4 million. “Jamestown is actually a good source of revenue,” Auger said.

Held said next year the North Kingstown School Department will consult with Jamestown about the number of students enrolling. Jamestown’s student population numbers fluctuate because of military families who get orders and unexpectedly leave. Therefore, the exact number of students is hard to predict, but Jamestown school leaders have a good estimate. The North Kingstown School Department counted about 12 too many Jamestown students, she said.

For next year, the North Kingstown School Committee has approved a $60 million spending package, which still cuts positions to the tune of about $1.4 million. Among the projected changes, the high school library and media center will lose staff and hours with one-half of a librarian’s position and one library clerk’s job on the cutting block. Also, the athletic director’s position will be essentially eliminated. Under the reorganization, several teachers, paid with stipends, would take over the director’s duties. That budget has been submitted to Town Manager Michael Embury. Monday was the deadline, Embury confirmed. No action will be taken for several weeks, he said, while the town council holds hearings.

As for this year’s issues, Embury defended the town’s decision to file a lawsuit.

“They declared a deficit,” he said when asked why the town opted to sue the schools. “We’re not the only community that has gone to court over this issue.”

He went on to say that Woonsocket city officials had resorted to a lawsuit when their school department projected a deficit. Embury declined to say how he hopes the case will turn out except to say he hopes the judge will tell the school department to obey the law and come up with a plan to balance its books.

“We’re waiting for the judge to make a decision,” he said.

Page said the judge is waiting to hear from the state auditor general.

Under state law, any red ink in a school budget would be illegal, but Page and Auger said in separate interviews this week that the schools actually are not in a deficit currently.

State law also requires schools to notify the auditor general about any possibility of a deficit. Auger said it’s possible the actual defi- cit may not show up until the last minute in June when the schools are about to close the books. Nonetheless, Page said it’s possible the schools will stay in the black all year and not be in a deficit on June 30.

Some savings in fuel and utilities, for example, have been realized due to the mild winter. “We’ve been extremely lucky so far,” Page said. She added that town officials did talk with the school leaders initially.

“Then we found out they filed a lawsuit,” she said. North Kingstown, arguing the schools were in a deficit, had wanted to take control of school expenditures, but the judge decided the school officials could continue to pay routine bills and only go to the town council for items out of the ordinary.

Embury cited R.I. General Laws Chapter 16: 2-9, which specify the steps the schools and town must take in the event of a projected deficit.

“If we continue to have savings and use rest of our fund balance,” Page said, “we actually will be in the black.”

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