Joint Newport City Council and School Committee Quarterly Finance Meeting - October 22, 2026

This was the first joint quarterly finance meeting between the Newport City Council and the School Committee, held on October 22, 2026 to align both bodies on the city and school budget outlook. Participants reviewed the school department's FY2026 closing results and FY2027 forecast, the city's financial condition, debt and enterprise funds, consolidation opportunities, and the path to a balanced budget.

School Department Financial Report

• School Business Manager Ronald Gonzalez reported that the FY2026 unaudited results ended with a $445,000 surplus after the city provided a $1.5 million appropriation. Without that appropriation, the school department would have recorded approximately a $1 million deficit. The plan also relied on an approximately $600,000 fund balance appropriation and a $700,000 interest-free city loan held on the balance sheet.
• Gonzalez projected a roughly $2.6 million FY2027 first-quarter deficit, unchanged from earlier forecasts, driven largely by out-of-district tuition costs. He confirmed he had not yet spoken with General Assembly members about a state proposal to cover some of these costs.
• School Committee Member Cullen reported 47 out-of-district placements as of October 15, 2026, compared with 31 in October 2025 and 33 in October 2024. The Superintendent explained that out-of-district placements are required when a student's needs cannot be met within district programs, and the district must bear the costs.
• A speaker noted that the school committee had voted 4-3 to adopt a budget that set out-of-district placement spending at zero despite known expenses. School Committee Chair Dring said he voted against the budget and called the zeroing out of the line item bad accounting. School Committee Member Powers defended the budgeting approach as a way to put the deficit in one clear location and argued the district is underfunded rather than mismanaged.
• The Superintendent said bids for an independent consultant review have been received and scored and will be presented to the School Committee in November. The RFP is public on bid.net; the second RFP removed auditing language and focuses on school funding adequacy.
• Council members and the Deputy City Manager discussed returning $445,000 of the city appropriation and reversing the $700,000 loan. Deputy City Manager Krillo said a September 28 city memo recommended deducting the $445,000 surplus from the $1.5 million appropriation, and that he supports both the repayment and the loan reversal. If the item is not placed on the October 28 City Council agenda, the city administration will bring it forward.
• School Committee Member Leary said the out-of-district line was $1.996 million last year and zero this year, representing about $2 million of the $2.6 million deficit, and said he would ask the School Committee to transfer the $445,000 surplus to the city.

City Financial Report

• Finance Director Jim Nolan reported an unassigned general fund balance of $36.798 million, with a city policy target of maintaining up to 30 percent of the next year's budget. He noted the city transferred $6 million to water pollution control for the clarifier project, expected to be reimbursed in November 2026, and $1.5 million to the schools; the city is not expected to meet the 30 percent fund balance target for FY2026.
• The city's budget-to-actual position is on target. The full $95 million tax levy is recognized up front under accounting standards, and police and fire budgets show approximately 50 percent spent due to pension contribution timing.
• Debt service includes $10.8 million outstanding for Pell School refunding, about $96 million for Pell expansion and Rogers High School construction, and $24.6 million for the infrastructure bond. The city has submitted an F-100 estimate to RIDE and plans to submit the F-105 reimbursement request in June 2027. It expects a 52.5 percent reimbursement rate; filing was delayed while regionalization remained possible. The Deputy City Manager explained that reimbursements will be amortized over three years and the city has been carrying the debt service in the meantime.
• Enterprise fund long-term debt totals $7.2 million for maritime, $40.5 million for water, and $45.4 million for water pollution control. First-quarter results, with caveats that not all invoices had been received, included maritime revenue of $780,000 and expenses of $605,000; parking revenue of $1.5 million and expenses of $500,000; water pollution control revenue of $8.1 million and expenses of $4 million; and water revenue of $9.2 million and expenses of $4.4 million.
• Councilmember Smith said the resolution creating these meetings was intended to keep the public and elected officials informed before budget season so there are no surprises, and that he is willing to revise the resolution if the scope is too broad.

Deficit Reduction, Consolidation, and School Funding Debate

• The Superintendent said the school department has left two vacant positions unfilled, is scrutinizing all spending, and will evaluate whether to fill future vacancies. Ongoing talks with the city are exploring consolidation of IT and facilities services. Deputy City Manager Krillo said combined Custom contracts are worth more than $750,000 and IT consolidation could produce significant savings; IT Director Nick Craig confirmed the savings are real. Facilities consolidation has been attempted before and faces operational and collective bargaining challenges.
• Some School Committee members expressed concern that consolidation alone will not fix shortages of intervention specialists, librarians, and support staff. School Committee Member Cullen said the district has lost 143 students since October 2025 and cannot continue spending without enrollment; regionalization had been proposed to share services.
• School Committee Member Cullen also recommended hiring a demographer to study long-term enrollment trends, moving Thompson fifth and sixth graders to Pell and seventh and eighth graders to Rogers, and potentially repurposing Thompson for city or workforce housing.
• A council member warned that if the projected $2.6 million deficit remains by January 1, 2027, he would ask the state Commissioner of Education to force action, adding that the school committee is not balancing the budget as required by state law. School Committee Member Powers disagreed, describing the district as underfunded, saying Newport's taxes are not as high as almost every other place in the state, and citing historically low allocation increases; he said this is an artificial crisis and education should be the community's biggest investment.
• Dr. Floes, who said she served 18 years on the School Committee, opposed any recommendation to turn the schools over to the state, noting Providence's problems were not solved by state takeover. She defended the district's work, warned against packing students into fewer buildings, and said Newport's diverse student population and legally required services must be respected.
• A city council member said the maintenance of effort numbers understate actual city support because the city has added hundreds of thousands of dollars outside maintenance of effort over the years, but agreed the city must examine whether schools are properly funded. A School Committee member noted prior school surplus money went into Rogers High School, contributing to current pressure, and urged giving the new Superintendent a chance.

Public Comments & Testimony

• Carrie Cassidy of Bradford Avenue said a budget shows a community's values, and the school department has to keep asking for money because the city does not appropriate enough. She said fewer students with higher needs does not mean lower costs, and the city should fund the schools adequately so they do not need to return each year.

Key Outcomes

• No formal votes were taken during this first informational joint meeting.
• The city administration committed to placing the $445,000 repayment and $700,000 loan reversal item on the October 28 City Council agenda if it is not introduced by the chair.
• School Committee Member Leary said he would ask the School Committee to transfer the $445,000 surplus to the city.
• The independent consultant RFP results will be presented to the School Committee in November.
• IT and facilities consolidation discussions will continue between city and school administrations.
• The next quarterly joint meeting is scheduled for January, with no specific date set.