Council Votes on Warwick Schools Budget Commission Jan. 22

WARWICK, RI — The Warwick City  Council meets Wednesday, 4:45 p.m. to vote on whether to establish a Warwick Schools Budget Commission state takeover of Warwick Public Schools to remedy its $9 million deficit.

Councilman Jeremy Rix and School Committee Chairman Shaun Galligan, and the rest of the Committee believe the Warwick School Committee can right the ship without a budget commission.

The special meeting in Council Chambers, Warwick City Hall 3275 Post Road, was posted Friday. On Monday, Rhode Island Auditor General David Bergantino emailed a letter supporting a budget commission to members of the Warwick City Council, Mayor Frank Picozzi, Warwick Schools, Warwick School Committee, and General Assembly leadership including House Speaker K. Joseph Shekarchi and Senate President Dominick J. Ruggerio.

“In my opinion, the School Department and the City’s executive and legislative branches must embark on an immediate course of action that cannot be met by existing statutory tools designed to address fiscal problems of lesser urgency than those facing the Warwick School Department,” Bergantino wrote.

Warwick Schools Budget Commission Arguments

A similar school department deficit in Coventry did not invoke the need for a Budget Commission, despite years of mismanagement and late audits, thanks in part to that community’s recent change of school and municipal leadership and a healthy fund balance indicative of an otherwise fiscally sound status. In his letter to state and Warwick officials,  Bergantino noted Warwick’s fund balance will not be enough to avoid a Warwick Schools budget commission.

“The City’s fund balance reserves are not sufficient to absorb the projected operating deficit for fiscal year 2025. Warwick’s percentage of unrestricted fund balance to the annual general fund total expenditures and other financing uses was 10.59% in the City’s last issued audited financial statements as of June 30, 2023. This ratio is lower than the recommended Government Finance Officers Association reserve percentage of 17% (approximately two months of general fund expenditures) for municipalities,” Bergantino wrote.

Bergantino said a Warwick Schools Budget Commission would provide the “responsibility and authority”
needed to produce a proactive corrective action plan, as required by RIGL §16-2-9(f) to address
the projected FY25 deficit, which  should include a fiscally responsible budget for FY 26, within the deadline for this year’s FY26 budget process.

“It designates dedicated resources with the authority to enforce the adopted budget to minimize any operating deficit in fiscal 2025 and to prepare a corrective action that the City Council can rely on when adopting the fiscal 2026 budget,’ Bergantino said.”

Also, he said, a Warwick Schools Budget Commission would provide the necessary dedicated resources and expertise to
also prepare a 5-year budget forecast (required under RIGL § 44-35-10) that would allow improved planning and communication between the School Committee and City Council and minimize unexpected fiscal challenges from arising in future periods.

If established, the Warwick Schools Budget Commission would be comprised of five members: three Mayoral designees with advice and consent of the City Council;  Warwick Superintendent Lynn Dambruch; and Warwick School Committee Chair Shaun Galligan. One of the Mayoral designees will be elected Chairperson by a vote of the entire Commission.

Once the Warwick Schools Budget Commission is established, all school spending would be suspended, with no spending occurring unless approved by  the body, or in the case of an emergency, Schools Finance Director Brandon Bohl.

The Warwick Schools Budget Commission would also be empowered to:

1) Amend, formulate, and execute the annual school budget.

2) Implement and maintain uniform budget guidelines and procedures for the school system as a whole;

3) Amortize operational deficits in an amount as the City Finance Director approves and for a term not longer than five years;

4) Develop and maintain a uniform system for all financial planning for the Warwick 2 Public Schools District;

5) Employ, retain, and supervise such managerial, professional, and clerical staff as are 4 necessary to carry out its responsibilities; provided, however, that such employment, retention and 5 supervisory decisions are subject to the approval of the City Finance Director;

6) Adopt rules and regulations governing the operation and administration of the school district that permit the budget commission to effectively carry out its duties; and

7) Compel operational, performance, or forensic audits, or any other similar assessments.

8) Within one hundred twenty (120) days of being appointed, the Warwick Public Schools Budget Commission shall develop a three-year (3) operating and capital financial plan to achieve  fiscal stability in the Warwick Public Schools District. The plan shall include a preliminary analysis of the school district’s financial situation and the Warwick Public Schools Budget Commission’s initial recommendations to immediately begin to address the operating and structural deficits.

“Regardless of whether the Budget Commission is ultimately approved, my office will continue to meet with the City and School Department, as required by RI General Law, until a corrective action is completed and approved,” Bergantino wrote in response to Warwick Post questions about his recommendation.

Council member Jeremy Rix sent a letter to his constituents in response to the recommendation and impending vote expressing doubt that a Warwick Schools Budget Commission is the best response.

“This is an extreme measure that effectively takes power away from the School Committee and Superintendent, giving that power to a Commission. Of the five members, three of them would be selected by the Mayor, subject to City Council approval; but, the Mayor may remove any of his three appointees at any time,” Rix said.

Rix continued, “Warwick Schools have their work cut out for them to reduce and, as best as they practically can, try to close a deficit that was projected to be $9 million. From my understanding, the School Committee has taken action and has concrete plans for further action that would cut the deficit to under half of its current projection, but, it may not be practically possible to operate the Schools effectively and legally while completely closing that projected deficit. This is a problem and we will have to have many more discussions to figure out exactly how to address this,” he said.

The Warwick School Committee, meantime, sent their own letter arguing they can take the necessary steps to get control of the district’s deficit, and have already started that work, including freezing spending and creating a 5-year plan, mentioned among Budget Commission objectives.

“The Warwick School Committee has already demonstrated a proactive commitment to addressing these concerns by contracting independent consultants with decades of municipal finance experience, and increased communication with the Mayor’s office and Council,” the letter reads, and adds that the Committee remains open to, “Additional measures that would enhance fiscal oversight, increase transparency, and build public confidence among all stakeholders, including taxpayers and state fiscal agencies.”

“Furthermore, we have begun to construct fiscal plans for FY26 through FY30; these plans will be transformative for our school district.
Recently, we have taken deliberate steps to mitigate the risk of adverse financial projections materializing, to include freezing of discretionary spending, and line-item reductions. We are planning for additional line-item reductions, both staffing and non-staffing related. We remain steadfast in our efforts to ensure sound fiscal management,” according to the Committee’s statement.

Rix agreed with the sentiment.

“I have had multiple positive discussions with the School Committee Chair, Shaun Galligan, and commend him for his openness and willingness to do what’s necessary to address this problem – this year and into future years – while taking great care to avoid cuts that would be devastating to students, and, striving to avoid superficial budgeting tricks that don’t address the core cost-drivers but merely defer costs from one year to the next. With additional guidance from outside experts (recently hired) and instruction from the RI Auditor General, I believe that the School Committee and Superintendent are sincere and would implement the recommendations and instructions of these financial experts just as well as, or better than, a Commission could,” Rix said. He noted Galligan shares his opinion on the need for a commission.

City Council President Anthony Sinapi could not be immediately reached for comment.

Warwick City Council Letter - JAN 20, 2025-Final PROT pcr-20-25_res_to_ga_-_warwick_public_schools_budget_commission_002 School Committee and Administrative Response to City Council Budget Commission Resolution