WORCESTER - The City Council has moved to address the shortfall facing the Worcester public schools this fiscal year by voting it $1.1 million in surplus funds that were generated last year.

The additional funding is expected to stabilize the public school budget for this fiscal year, according to City Manager Edward M. Augustus Jr.

He said the funding, which was requested by Superintendent Maureen Binienda, was needed because the public schools have experienced a large increase in special education out-of-district tuition costs and the unexpected, unbudgeted increase in the number of new students, many of whom have come from hurricane-ravaged Puerto Rico.

The additional $1.1 milion will result in no loss of current programs and services to students during this school year, according to Mr. Augustus.

Without the additional appropriation, he said the public schools would need to make mid-year budget cuts of $2.2 million to close its current budget gap with only half of the fiscal year remaining.

Budget cuts of that scope would have required the School Department to cut the equivalent of 25 teachers and support staff mid-year, he said.

The allocation for the public schools was one in a series of recommendations made by Mr. Augustus regarding the use of $9.2 million in so-called "free cash" that was generated last fiscal year and is available for appropriation this year.

Following Mr. Augustus' recommendation, the council Tuesday night also used $250,000 in free cash to reduce this year's tax levy to $293.5 million.

In addition, based on the recommendation of the Mayor's Tax Policy Committee, $1.7 million in excess "new growth" tax revenue that has been generated this fiscal year from new construction was also used to provide tax relief for property owners.

That, combined with the $250,000 in free cash, provided total tax relief of nearly $2 million this fiscal year.

Despite that, most property owners will still see higher tax bills this year - the median single-family tax bill will be going up by $118 while the median commercial-industrial tax bill will be going up by $331 based on the tax rates adopted by the City Council Tuesday night.

As for the balance of the free cash, the council also went along with the city manager's recommendation to adhere to the city's seven-point financial plan, with 50 percent ($4.6 million) going to the city's bond rating stabilization fund and 30 percent ($2.76 million) to the long-term liability for retiree health insurance, known as Other Post-Employment Benefits.

Mr. Augustus said maintaining that fiscal discipline will further solidify the city's bond rating and, in turn, save taxpayers millions of dollars when it comes to borrowing for large capital projects, such as building replacement schools for South High Community School and Doherty Memorial High School.

"I think this is a balanced approach," Mr. Augustus said. "It's important to keep fidelity with our financial plan. The most important thing we can do for taxpayers is to keep our bond rating high. We are on the right path and to deviate from that path would be a mistake."

The council also agreed to allocate the remainder of the free cash as follows:

• $250,000 to the Fire Department to replace six vehicles that have outlived their useful life.

The vehicles have extensive body rot and require excessive hours of service every year to keep them running. Fire officials said the vehicles will not pass inspection and are no longer safe for personnel to operate.

• $117,067 to continue a tree replacement program.

• $53,481 for Recreation Worcester to supplement in-kind donations that make its summer program possible. Because the program served more children this past summer, staffing and supply costs went up.

• $45,000 for the Police Department to purchase a new K-9 vehicle, thus enabling the Special Operations Division to add an additional K-9 officer.

• $26,000 for the Department of Public Works and Parks to supplement its fleet of winter street pretreatment equipment with a brine spray system with the addition of two smaller trucks.