Special City Council Meeting on Newport Public Schools Fiscal Recovery Plan - June 3, 2026

The Newport City Council held a special meeting on June 3, 2026, at 5:30 PM in City Hall Chambers to address the Newport Public Schools’ projected deficits and a fiscal recovery and structural realignment plan for fiscal years 2026, 2027, and 2028. The council received a memorandum from Finance Director Jim Nolan and voted on two resolutions: one addressing a $2.8 million operating deficit for FY2026, and another addressing projected funding needs for FY2027, which amounted to approximately $2.69 million. After extensive discussion, including amendments focused on teacher rehiring and financial oversight, both resolutions were approved.

Consent Calendar

• None observed; all items were discussed individually.

Public Comments & Testimony

• Stephanie Winslow, Newport School Committee: Expressed exhaustion, anger, and frustration, stating that the school department is being "nickel and dimed" and urged council to vote so the committee could focus on educating children. She noted that teachers and administrators have the hardest jobs and invited council members to run for school committee if they think it is easy.
• James Dring, Chairman of the Newport School Committee: Acknowledged the school department’s need for the money and committed to following conditions set by the council. He opposed any immediate change to the finance director position, warning that with a new superintendent starting July 1, a simultaneous finance director change would be a "disaster."

Discussion Items

• Memorandum from Jim Nolan (Finance Director): Nolan summarized the memo covering two parts: FY2026 deficit mitigation and FY2027 projected deficit mitigation. For FY2026, the plan included a $596,000 drawdown from the school’s fund balance, a $700,000 zero-interest loan from the city repayable over three years (FY2027-2029), and a transfer of $1.5 million from the city’s projected FY2026 surplus. For FY2027, the proposal included a $1.19 million loan from the city’s unassigned fund balance (reimbursed by future housing aid receipts) and a $1.5 million restricted reserve for special education tuition overruns.
• Discussion on FY2026 Resolution: Councilors questioned the school’s ability to repay the $700,000 loan given the current deficit. Director Gonzals (school finance) explained that the repayment plan mirrors a previous arrangement and that the school department has made deep cuts (approximately 40 positions over two years) but needs to maintain staff to serve students. Councilor Napolitano expressed concern about how the deficit occurred, noting that the education fund balance of $6 million 24 months ago had been depleted. Councilor Carlin criticized the school department for allegedly using federal COVID-19 relief funds (ESSER) for ongoing hires, which he called fiscally irresponsible. Superintendent Dr. Germain defended the spending, stating that all plans were approved by the Department of Education and that the district had faced unexpected cost increases (e.g., school building project). Councilor Smythe called for better joint workshops to avoid future issues.
• Discussion on FY2027 Resolution: Councilor Carlin argued that the additional $2.69 million, on top of the 4% maintenance of effort increase, would bring total extra funding to $5.51 million. He questioned whether the state would allow such appropriations to be excluded from maintenance of effort calculations. Solicitor Bean noted that the resolution conditions the funding on approval by the Commissioner of Education that it is a non-recurring expense. Councilor Carlin also raised concerns about the lack of guarantees that laid-off teachers would be rehired or that administrative costs would be reduced. He proposed an amendment requiring a one-to-one ratio of administrators to laid-off teachers, but it did not receive a second. Another amendment to tie the loan to the number of non-union employees also failed for lack of a second. Councilor Napolitano offered an amendment with two parts: (A) requiring certification that additional funding be used to reinstate and rehire laid-off teachers, and (B) requiring the school finance director to report directly to the city’s finance director on matters involving city appropriations. After debate, Councilor Segley proposed an amendment to change the language to "as many teachers as fiscally feasible," but she withdrew it after clarification that Napolitano’s wording did not specify "all" teachers. Following further discussion, Councilor Napolitano’s amendment was adopted 5-1, and the amended FY2027 resolution was also approved.

Key Outcomes

• Vote on FY2026 Resolution: Approved with the following actions: (1) School department applies its remaining school fund balance (~$596,031) to reduce the deficit; (2) City appropriates up to $1,503,969 from FY2026 surplus; (3) City provides a $700,000 zero-interest loan repayable in three equal payments of $233,333 in April 2027, 2028, and 2029. All councilors present voted in favor (6-0).
• Vote on FY2027 Resolution as Amended: Approved. The resolution authorizes: (1) up to $1,191,523 loan from the city’s unassigned fund balance, interest-free, to be reimbursed by future housing aid receipts; (2) up to $1.5 million restricted reserve for special education tuition overruns, also reimbursable via housing aid. Conditions: (A) The Newport School Committee and Superintendent must certify in writing that funding will be used to reinstate and rehire teachers laid off, maintain continuity of instruction, and minimize adverse impact; (B) The Newport Public Schools Finance Director shall report directly to the city’s Director of Finance on matters involving city appropriations, budget administration, financial reporting, forecasting, and fiscal controls for FY2027 and FY2028, and thereafter if the school department requires supplemental city assistance. The appropriations are conditional on not being counted toward maintenance of effort, subject to approval by the Commissioner of Education.
• Next Steps: The council will consider a presentation on solar panels at its next meeting, which could reduce electricity costs (noted as $700,000 annually). Councilors also agreed to explore quarterly joint workshops with the school committee and to review operational and staffing audits, facility consolidation, and enrollment trends to address the structural deficit.