CRANSTON –– The City Council, in a 3-3 tie vote, last night rejected a proposed settlement in the schools’ lawsuit seeking $4.9 million more in local funds for its operations.

The council deadlocked on a motion to approve the deal after reviewing it in a closed-door session.

Councilman Jeffrey P. Barone, the council’s lone Republican, opposed the agreement that Democratic Mayor Michael T. Napolitano presented. Barone said that settling would have signaled that the school district could overspend and rely on City Hall for a bailout.

“Just like a drug addict,” he said. “If you keep giving them drugs, they’re going to keep taking them.”

Napolitano said he was “very disappointed” that the council had rejected a settlement that he said was “in the best interests of the city.”

School Committee Chairman Michael A. Traficante echoed those comments and said he was upset that three council members — Democrats Maria Bucci, John E. Lanni Jr. and Richard Santamaria — were not even present for the vote.

“I’m disappointed they didn’t show to at least give us an accurate reading as to where they stand,” Traficante said.

The School Committee is scheduled to vote on the agreement tonight.

Traficante said the panel might approve the deal in a largely symbolic move. The committee could then ask its lawyers to press for a revised, last-minute settlement before the trial begins, on Monday.

The outlines of the deal that came before the council last night are still a bit unclear.

But sources familiar with the proposal said the city was to offer the schools up to $3.5 million to cover outstanding expenses for the fiscal year that ended Monday.

The number could be adjusted downward after an audit of school programs and finances.

The final figure would then be built into the district’s “base” funding formula –– a minimum allocation that the city must approve year after year, according to state law.

Any money the city offered the schools over and above the $3.5 million would not be built into the base, sources said.

The agreement was designed to settle a long, often-tense battle between the city and schools over dollars and cents.

School officials had long warned that the $125.3 million the city allocated the district for the 2007-08 fiscal year was not enough.

The only question, in recent months, was how much additional cash they would demand from the city.

The district hired two experts, former West Warwick Schools Supt. Thomas Sweeney and school finance expert Walter Edge, to sift through its finances and pinpoint a number.

The two came up with the $4.9-million figure and the district filed its lawsuit, known as a Caruolo action, in May.

Since then, both sides held out hope for a settlement that would avoid a costly and divisive courtroom battle.

Negotiations heated up after a Superior Court judge rejected the city’s bid to dismiss the lawsuit last month.

Among the key questions, in city-schools talks: Would the city loan the schools cash, make an outright appropriation, or some combination of the two?

It was unclear, last night, if the draft agreement included any kind of loan provisions.

Another concern: If the city did make an appropriation, would it build that figure into the school district’s “base” funding formula?

Boosting the base has been a priority for school officials, who argue that the district will continue to face financial problems if it does not get a permanent increase in its bottom line.

Barone, who joined council President Aram G. Garabedian and Councilman Terence Livingston in rejecting the deal, said he has concerns about a long-term boost in the schools’ base funding — arguing that it would eat into the city’s reserve and threaten its fiscal health.

Garabedian added that he was hesitant to appropriate money for a district that, he says, “never demonstrated a sincere effort” to cut expenses in recent years.

School officials, who moved to balance their budget in recent months with cuts and accounting maneuvers, have rejected that kind of criticism.

Council Vice President Paula B. McFarland, a Democrat who voted for the deal alongside Councilmen Anthony J. Lupino and Emilio L. Navarro, said it had been clear for months that the schools would need more money.

Moreover, she said, if the dispute lands in court, the schools could win an award in excess of $3.5 million.

Whatever the schools win, she said, the city’s reserves will take a hit.

And at that point, said McFarland, who is running for a seat on the School Committee, the city and schools will have to get serious about cutting costs and merging duplicative operations.

“True consolidation has to happen,” she said.

dscharfe@projo.com