PROVIDENCE, R.I. (WPRI) -- Providence schools are facing budget problems that are exacerbating existing tensions among city leaders and raising the possibility of immediate job cuts, furloughs and the end of athletic programs. Mayor Brett Smiley called a news conference Thursday to announce Superintendent Javier Montañez had called him the day before seeking more than $10 million in city funding beyond what's already been provided in the current budget year, which began on July 1. Smiley said the superintendent gave him 24 hours to respond, or else the school district -- which is under a state takeover and controlled by the R.I. Department of Education -- would start taking "mitigation steps." Those steps could include spending and overtime freezes, furloughs for central office staff and administrators, layoffs of non-union staff and the elimination of winter and spring athletic programs, according to a breakdown provided to the city. The mayor lambasted the superintendent's approach to dealing with the problem, characterizing it as an "ultimatum," and describing the district's ongoing fiscal maneuvering as "irresponsible and reckless." "This is the latest chapter sadly in a longer discussion that we've been having in problems with public schools about their current budget and financial challenges," he said. The mayor responded by letter Thursday, offering the district an additional $1 million from unbudgeted funds received in recent deals with the Lifespan hospital group and the Rhode Island School of Design. In exchange, Smiley is seeking a $3 million match from the state and is demanding a third-party audit of the department's finances, saying he doesn't trust district leaders or the state. "We have no confidence in their budgeting skills," Smiley said. Smiley charged that since the state took over the city's failing school district in 2019, budgets are created unilaterally inside the Department of Education without any checks or balances. The dynamic, he said, makes it impossible for the city to have true insight into school revenue and expenses, and he said the district's structural deficit has been a "moving target." Smiley said the school district ended last fiscal year with a $20 million deficit, and he's currently unsure where its finances stand today. Education Department spokesperson Victor Morente responded to Smiley's letter by providing a PowerPoint presentation the superintendent presented Wednesday to state education officials, outlining the district's $10.9 million need. The presentation accused the city of failing to meet funding obligations and choosing to invest in areas other than schools, "despite funding obligations to the school department." It also highlighted increased costs at the district and what it will face without an injection of cash, placing the blame squarely on the Smiley administration. "Due to city underfunding, PPSD will need to consider implementing reductions that have a significant impact on student learning in the coming weeks," Montañez reported in the presentation. The fighting between the Smiley administration and the state-run school district has been growing for months. The two sides are currently in a legal fight over the city's funding responsibility under the Crowley Act, a law that allows state intervention in local school districts. Mediation efforts so far have failed and the two sides are nowhere near reaching a settlement, according to Smiley. The mayor said he's also reached out to Gov. Dan McKee's office and spoke to the governor's chief of staff about the financing issue. A spokesperson for the governor did not immediately respond to a request for comment. Eli Sherman ([email protected]) is a Target 12 investigative reporter for 12 News. Connect with him on Twitter and on Facebook.