EAST PROVIDENCE — School leaders have decided to sue the city for more money.

The Superior Court lawsuit, known as a Caruolo action, claims the allocated $73.2 million is inadequate for the district’s many costs this fiscal year. It is seeking relief from a $2.97-million deficit.

The Tuesday filing came hours before the City Council held its first public hearing for an operating budget for the next fiscal year, which in East Providence begins Nov. 1. City Manager Richard Brown’s proposed $144-million plan — which was continued to the council’s Oct. 21 meeting — again gives the School Department millions less than it requested.

“While it is extremely distasteful to the School Committee to have to file suit against the city; the committee’s bleak financial situation, its responsibility to students, and its obligation to obey RI law leave it with no alternative,” yesterday’s news release read.

It said the committee, the superintendent, school staff, the council and the city manager have “met collectively and individually on several occasions during the past months to cooperatively find solutions to the School Department’s current-year operating deficit.” Yet their “jointly created corrective action plan” was not approved by state Auditor General Ernest Almonte.

Plans are in the works for another joint meeting, but the four-paragraph release emphasizes that state law forbids school districts from ending a fiscal year in the red. Therefore, in addition to working together and seeking relief, the department said it is “working diligently to cut spending and control costs.”

Schools Supt. Mario Cirillo and new district Finance Director Jerome I. Baron said last week that a spending advisory committee has been established to approve all purchases. Requests now have to be justified. In the month since the committee was formed, office supplies, a new swimming pool pump for the high school and other items have been rejected.

The district is also seeking “major financial concessions from its labor unions.”

Yet past bills are still not being paid. Baron said $2.4 million are more than 90 days late. Another $1.8 million are less than 30 days overdue. The delinquent bills are all from vendors, such as the electric company and from Meeting Street School, which takes some of the district’s out-of-placement special-needs students.

“We’re working on it,” Cirillo said last week before the Caruolo lawsuit was filed.

Speaking about next year’s requested school budget and the poor reception it received from the council, the superintendent said, “In order to get to the problem, we have to acknowledge it. Let’s deal with reality. Let’s deal with what we have. Let’s work together. My main concern is creating opportunities for the children to succeed and that should be everybody’s vested interest.”

The release said the Caruolo action was “necessary for the School Department to carry out its duties to oversee and manage the public schools in East Providence.”

Brown said yesterday that he understood why the committee was pursuing the action, but was “distressed” that the board was pursuing it at this time.

“The fiscal year is virtually over and any decision rendered by the court will not negate the fact that they have spent millions over the budget,” he said.

Brown also said it’s apparent school officials knew the law since it was clearly articulated in the district’s news release, but they chose to “ignore” it during the fiscal year.

That failure to live within what was allocated led to the deficit and an “absurd” and “illegal” request for the next fiscal year, Mayor Isadore Ramos said when reached for comment yesterday. The School Department requested nearly $83 million for the upcoming year. It represents a 12.8 percent, or $9.38 million, increase over this year’s $73.2-million spending plan.

Brown’s proposal doesn’t exceed the city’s tax levy ordinance, which caps the amount taxes can be raised from one year to the next at 3.5 percent. It doesn’t come close to the state’s 5-percent cap mandate either.

It raises taxes exactly 3.5 percent. If approved, the residential tax rate would go up 52 cents, to $15.43 per $1,000 of assessed valuation. A $17.60 tax rate is required to finance the School Department’s amount. It represents an 18 percent, or $2.69, increase over this year’s $14.91 residential rate.

Said Ramos, “It’s interesting that the School Committee and those others over there who sent over an illegal budget now want the taxpayers to pay for that illegal budget. I don’t know where the money is going to come from, but the taxpayers don’t have the money themselves. I don’t know what we’ll do.”

A look at other school districts

East Providence isn’t the first to travel down the Caruolo Act path. Six other communities have dealt with the legislation since it was enacted in 1995.

West Warwick’s school board filed a Caruolo action against its town in April. A Superior Court judge last week denied the town’s motion to dismiss that $1.1-million lawsuit. The two sides traded offers in negotiations immediately prior to the ruling, but a resolution didn’t pan out. They had an informal meeting earlier this week and officials say a settlement may be close.

Cranston beat a Caruolo complaint from its school district leaders in August. Superior Court Judge Judith C. Savage — she is not presiding over the West Warwick case — didn’t give the district its requested $4.5 million. She said, among other reasons, the district failed to cut costs when it knew it had a deficit looming and took the Caruolo avenue as a bailout.

An appeal to the state Supreme Court may be filed. Cranston’s School Department also notified city officials late last month that a $7.5-million deficit may occur this year.

In addition to the two this year, a judge ordered Portsmouth last year to give $544,000 more to its schools. In 2006, the Pawtucket School Committee sued the City Council, which responded with a request that the state take over the school system; that dispute was ultimately settled out of court.

And in 2005, a judge ruled the Chariho Regional School District had to live with what it was given. Johnston was ordered that same year to give an additional $2.3 million to its school system.

With staff reports from Talia Buford.

apina@projo.com