PORTSMOUTH — The Portsmouth School Department could end the year with a $1 million surplus thanks, in part, to the COVID-19 crisis, finance director Chris Diluro informed the school committee during a virtual meeting last week.

While it is not uncommon for the district to finish out the school year with some extra funds, Superintendent Tom Kenworthy said the move to distance learning in mid-March has made that figure “higher than normal,” with Mr. Diluro adding that about half of the schools’ savings would be coming from transportation costs. 

Though a district policy established a few years ago typically dictates that any surplus on top of the schools’ ongoing “rainy day” contingency fund — comprised of 1.5 percent of the overall budget — would go toward capital projects, Mr. Kenworthy suggested that in this case the committee consider setting up a COVID-19 emergency fund. A number of other towns are attempting to establish the same thing, he said, which could be beneficial as state revenue streams — namely, from gaming — continue to be strained.

“There’s a lot of uncertainty as to what may happen down the road,” Mr. Kenworthy said at the May 5 meeting.

The way committee member Allen Shers saw it, however, there might not really be a surplus. Although the committee withdrew its Stage II RIDE application for now, that doesn’t mean school buildings no longer need significant updates — an elevator at Hathaway Elementary School, a connector at Portsmouth High School, Mr. Shers said. Air conditioning in all the buildings alone, he said, could “easily” cost $1 million. 

“I don’t think we should forget about the issues we have on our existing buildings,” he said.

Although the Town Council had provisionally approved the district’s budget request with a $40,000 capital reduction, Committee Chairwoman Emily Copeland said committee members were encouraged to look for one-time expenses that could be directed to some of the surplus, in turn reducing their overall ask for next year.

But after taking a finer look at the budget, Mr. Diluro said he did not find any; most of the expenses come from salaries and benefits, and a reduction in recurring or discretionary items such as textbooks and technology hardware “starts to impact teaching and learning,” he said. 

While Ms. Copeland said the council expressed concerns over a reduction in the town’s own revenue streams, Mr. Diluro said some on the school side could also be impacted during the pandemic, such as pre-K tuition and the district’s after-school AlphaBEST program. Ms. Copeland said she worried about any cuts to the operating budget, fearing it would put the district in an uneven cycle for the school budget moving forward. 

“What we might want to think about doing is how can we help the town without devastating the schools,” she said. 

If they were to set up a COVID-19 emergency fund, committee member Thomas Vadney said he wanted to make sure the money would be going toward supporting education, and “not siphoning it off.” Mr. Diluro said that money would be a restricted for that very purpose, and would take School Committee action to place it back into the capital fund.

While Ms. Copeland said she would support a motion to set up the COVID-19 fund, school board attorney Mary Ann Carroll said committee members needed to establish what items they would put into it before voting on an exception to the policy. Committee members agreed to table the issue until their next meeting on Tuesday, May 19, and asked Mr. Kenworthy to draft an exception for them to look at in the meantime. 

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