Norwich — The projected deficit for the current school budget dropped to just under $2 million after the city received an additional $400,000 in a state special education reimbursement grant, school officials told the Board of Education on Tuesday.

The deficit for the fiscal year ending June 30 has been one point of contention between school officials and the City Council in the past two weeks, after Mayor Peter Nystrom accused the school system of intentionally overspending its budget. School board members and administrators adamantly denied the accusation during Monday’s budget public hearing and again during Tuesday’s school board meeting.

The issue won’t end with the close of the current fiscal year. The City Council last week adopted a preliminary school budget total of $80 million — $3 million below the board’s 2019-20 request. School officials said the $83 million request for next year is reasonable, because this year's budget will end up being $80 million and there will be tuition and contractual increases just to maintain current programs and staffing next year.

School Business Administrator Athena Nagel told the board’s budget expenditure committee Tuesday that the current deficit projection now stands at $1.89 million with the receipt of additional state reimbursement for special education costs that exceed a local spending cap set by the state. Nagel said the deficit amount is still subject to change, especially with three months of transportation invoices still outstanding for the current school year and ever-changing special education costs.

The deficit projection already has fluctuated greatly in the past few months, ranging from $1.1 million to $2.7 million. The school system started the year with a projected $4.5 million projected deficit after the City Council a year ago approved a bottom-line school budget of $78.46 million — $4.5 million lower than the board had requested — and the Board of Education angrily said it could not cut teaching staff and programs and instructed administrators to seek savings wherever possible.

Nagel said Tuesday the final figure won’t be known until about mid-August, when all bills are in and the 2018-19 fiscal year books are closed. At that time, the Board of Education will report the final deficit to the City Council and request that the gap be covered using the city’s general fund surplus.

Spending freezes were enacted on all discretionary purchases, leaving schools short of paper products, pencils and daily supplies now that the school year is winding down. Nagel said some delayed purchases will have to be made, but the school system will get through the school year without some budgeted items.

Nagel has provided the board with monthly updates in budget summary spreadsheets. Norwich teachers voluntarily switched health insurance coverage to high-deductible premiums, saving more than $1 million early in the school year. The school system received some responses from vendors to a request to cut contracted fees by 5 percent. But Superintendent Abby Dolliver said while several vendors agreed, the board froze spending and wouldn’t make those purchases anyway.

c.bessette@theday.com