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Council approves one-time transfers and $700,000 zero‑interest loan to cover Newport Public Schools’ 2026 shortfall
Summary
The City Council approved a resolution authorizing a mix of school fund balance, a transfer from the 2026 surplus and a $700,000 interest‑free loan to reduce Newport Public Schools’ projected $2.8 million FY2026 operating deficit; the loan is repayable in three equal payments in April 2027–29 and the appropriations are conditioned on Department of Education review.
The City Council voted to authorize city support to reduce Newport Public Schools’ projected fiscal year 2026 operating deficit of about $2.8 million.
The resolution directs the school department to apply its remaining fund balance (about $596,031) and authorizes the city to appropriate up to $1,503,969 from the city’s 2026 surplus and to provide a $700,000 zero‑interest loan. Chair (S1) read the resolution, which conditions the appropriations on the funds not being included in the state’s maintenance‑of‑effort computation and on Department of Education approval if required.
Jim Nolan, the city’s Director of Finance, outlined the package as a two‑part path forward: “There’s two pieces to it. It’s going to be the fiscal year 26 projected deficit mitigation … a reduction of the school’s fund balance of $596,000, a $700,000 loan and a transfer from the city's projected 2026 surplus.” He clarified that the loan would be repaid over three years beginning in fiscal 2027 through the school department’s operating budget.
Councilors asked how the district could meet the payback given current shortfalls. Nolan acknowledged concern but said repayment and repayment line items are included in budget planning for FY27–29. The school finance representative present described the repayment plan as mirroring a prior agreement and said the city and school department had worked to ensure the arrangement would be feasible.
The resolution passed and the council moved on to consider a second resolution addressing FY27 funding needs; the meeting record notes follow‑up actions and oversight language were debated later in the session.
