Town sets terms for $5.4M schools bailout

The Johnston School Committee agreed on Monday to give the Town Council increased oversight over the School Department’s finances in exchange for a $5.4-million bailout from the town’s reserve fund.

The one-time payment is intended to remedy the Johnston Public Schools budget deficit for fiscal year 2026, the first step toward improving the district’s financial standing. In order for the funds to be dispersed, however, the committee must adhere to the guidelines laid out in a memorandum of agreement approved by both itself and the council during Monday’s joint meeting.

While the budget deficit for fiscal year 2026 is now erased, these guidelines will remain in effect until the School Department has eliminated the two other kinds of deficit it faces: a structural deficit and a cumulative deficit.

The department must now submit quarterly reports to the town’s finance director. In addition to comparing the anticipated budget to the department’s actual spending, these reports will include updates on the current number of full-time employees in the district.

It also requires regular conferences between the School Committee’s business manager and the town finance director, and for the latter to approve any new full-time hires that would cause the district to exceed 110% of the full-time employee positions budgeted for in fiscal year 2026. Any purchases or expenditures over $25,000, barring emergency payments or those mandated by law, must now also be approved by the town finance director.

The agreement additionally stipulates that certain construction projects must be completed according to an established timeline. The district’s new elementary school must be open to students by August 2026, and renovations to Nicholas A. Ferri Middle School must also be completed by this date. 

The special meeting lasted over three hours and drew a large audience of parents and teachers to the Johnston Senior Center. While the meeting’s agenda did not include a public comment period, town leaders permitted community members to speak throughout the evening on an unstructured basis. 

Sandy Farone, a math interventionist at Winsor Hill Elementary, expressed concern over the terms of the memorandum.

“I have a problem giving all of the controls of the School Committee now to the town,” she said. “It doesn't go away until there's zero deficit. So this could go on for years, correct?”

Council President Robert Russo asserted that the council’s goal would be to eliminate the deficit as soon as possible. 

“There's no incentive on our part to want to be part of this for infinity,” he replied. “It doesn't benefit us.”

Mayor Joseph Polisena Jr. remained stalwart in assigning blame to the School Committee for the deficit. In his remarks Monday evening, he criticized the committee for incurring deficits in spite of what he said were significant increases in funding from the town, the state and other outside sources.

“You were not insolvent five, six, seven, eight years ago,” Polisena said. “I don't know how you did it. I don't know what your previous business manager did, but your cumulative deficits have coincided with this massive increase in funding.” 

Bernard DiLullo, the outgoing schools superintendent, said the department has lost revenue in recent years due to students leaving for other school districts – which collect tuition from Johnston. He cited an increase in students requiring special needs education as another source of costs in recent years, emphasizing that budget increases were made to accommodate these circumstances.

 “Those decisions are being made because that's what's necessary to treat those kids,” DiLullo said.

In a statement sent to the SunRise on Tuesday, Polisena stated that the meeting “ended in the best possible outcome for the taxpayers.”

“With these safeguards in place — along with new leadership within the school department — the Town of Johnston can ensure the school department will end its run of annual deficits, and the school department can take its first steps toward solvency,” he wrote.

This agreement is the first step in our deficit reduction plan, and it gives us a clear path to financial health,” School Committee Chairman Joseph Rotella said in a written statement. “Some may say this agreement is not perfect, but we want to acknowledge all the hard work that went into it and thank the mayor and council for providing us with a foundation to build on to move forward on solid financial ground.”