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On March 13, the District 65 School Board discussed for the third time the District’s revised financial projections for the next five years. On Feb. 13, District 65 administrators presented financial projections dated Feb. 10, 2012, that show a very different picture from those prepared five months earlier on Sept. 14, 2011.
On Sept. 14, the District was projecting deficits for the next four years of $3.3 million, $4.1 million, $6.4 million, and $8.7 million, successively.
On Feb.13, District 65 administrators presented revised projections dated Feb. 10 that show surpluses for the next three years of $329,000, $1.1 million and $34,000, respectively, and then deficits for the following two years of $2.7 million and $3.9 million (these numbers are adjusted to reflect prepaid expenses).
These projections do not take into account the cost to operate the proposed new school.
On March 13, in an effort to clear up misconceptions, District administrators explained in more detail the budget-balancing strategies that they are proposing and that substantially reduce expenses in the latest financial projections. They said the District would be able to achieve the budget balancing strategies with minimal impact on the classroom.
Kathy Zalewski, comptroller, said an increase in the Consumer Price Index for 2011 resulted in an increase in the revenues projected beginning in 2013-14. Ms. Zalewski said this accounted for the main change in revenues between the two projections.
She also presented a written summary listing 32 permanent positions that administrators propose to eliminate next year and described staffing efficiencies to achieve a reduction of approximately $2.9 million in salary expenses next year. These include:
• a reduction of 10 one-to-one aides for special education students and 6 teaching assistants for the Two-Way Immersion (TWI) Program. Administrators have emphasized that students who have an IEP calling for a one-to-one aide will receive one.
• a reduction of 7.5 instructional coaches; 1 speech therapist and 1 psychologist; 2 teachers; and 8.5 administrative or custodial positions;
• a reduction in funds of $50,000 for substitute teachers, $100,000 in stipends for providing extended-day services, and an additional $29,000 in stipends.
• a high number of teachers – 29 so far – have elected to take early retirement, which enables the District to replace senior teachers with less experienced teachers at lower salary levels. The full benefit of these savings will be felt in 2015-16, said Ms. Zalewski. In addition, the District plans to replace all employees leaving the District, including teachers, with less expensive employees, at a cost savings of $423,750 next year.
After the cuts in 2012-13, administrators say they are not proposing any cuts in teachers or teacher assistants in subsequent years. Mary Brown, chief financial officer, said the projections build in a slight increase in the number of DEC employees (which includes teachers, librarians and social workers) to coincide with increased projected enrollment in the subsequent four years.
The District is also projecting to reduce non-personnel expenditures by a total of $1.5 million in 2012-13, $2.4 million in 2013-14, $3.2 million in 2014-15, $1.7 million in 2015-16, and $1.8 million in 2016-17, said Ms. Zalewski. She presented the Board with a breakdown of the reductions in those areas.
Ms. Zalewski said the projections were prepared in consultation with PMA, the District’s financial advisers, and that they employ some of the strategies suggested by the Ad Hoc Budget Citizens Committee. The same methods appear to have been used by District 65 in the past.
Dr. Brown said the projections are “broad in scope” and “very fluid” because they extend out five years and “we know a lot of factors can change during that period.” She said the projections are used in the budget-building process,a more detailed exercise which is constantly updated as additional information is obtained.
Attempting to Keep Cuts Away
From The Classroom
Dr. Brown said District 65 is not alone in developing budget balancing activities. She said, “Districts throughout the State, and in fact the nation, have had to balance their budgets by making substantial reductions in staffing.” She said that the budget building strategies selected by District 65 administrators have been able to keep most cuts away from the classroom.
Superintendent Hardy Murphy said, “I feel good about the fact that it looks like we’re going to get through at least the next two, maybe three years, without the massive layoffs and disruption of our lives and schools that other school districts are experiencing.”
He added, “There’s not an increase in class sizes in our District. That’s very important.
“Everything that spills out beneath that is a matter of looking at the resources that we have so that we can provide supports to those low-average class sizes,” Dr. Murphy continued. “And that seems to be where the discussion is heading and we’ll be happy to have that discussion.”
Board member Richard Rykhus noted that while the District was proposing to cut some positions, it did not mean that the people currently in those positions would not have a job with the District. He said some of them would be moved into another position.
He added that he appreciated that the District was able to identify $1.5 million in non-personnel budget reductions.
Moving Ahead to the Budget-Building Process
At a previous meeting, Board members expressed concerns about many of the proposed cuts. See link to article below.
On March 13, Mr. Rykhus asked the administration to provide a descriptive rationale for the proposal to cut TWI aides and literacy coaches, for projections on the number of one-to-one aides for special education students needed next year, and a description of the staffing for co-teaching as the inclusion program moves up one grade level next year. He said he would like to see the data or qualitative information administrators were relying on in making those proposals.
He also asked that the Board discuss the target level of experience the District would focus on in hiring less-experienced teachers at a reduced cost. Dr. Murphy said the target level was three-years experience. Dr. Murphy added that the District receives a high number of applications each year from highly capable and trained applicants who have that level of experience.
Mr. Rykhus said he thought it would be worthwhile to have a discussion about targeting a higher level of experience and to see what the impact would be on the budget.
Ms. Quattrocki asked for information that would provide a better sense of “what our plan is for professional development and if we are restructuring or redirecting.”
Andy Pigozzi said the Board needed to decide what direction to give to the administration. “Are we going to say ‘live within the confines of what we know we can get in terms of revenues’ or are we going to say ‘no, we have a certain quality level we want to maintain and we can’t diminish, whether it be a perceived number of teacher aides or reading coaches’,” he said. “Over the course of the year, I think we’ll hash that out. But I think we have to come to some form of agreement. What is the direction? Or is it maybe somewhere in between?”
Dr. Murphy said he thought the Board should define the outcomes they wanted the administration to achieve and it would be the administration’s responsibility to make an informed decision on how to use the resources allotted to achieve the goals and objectives of the Board.
Ms. Quattrocki said the information she and Mr. Rykhus asked for was an attempt to see what the impact would be on the classroom. “What we’re trying to get at is whether we can live with it when we see the particulars.”
Board President Katie Bailey said the Finance Committee will be looking at the proposed cuts in more detail in the budget building process that will take place over the next three months.
Update on Pushing Teacher Pension Costs to School DistrictsOn March 13, School Board member Eileen Budde brought up that Illinois legislators have been talking about shifting a part of the teachers’ pension cost currently borne by the State to the school districts and that there are other discussions under way in Springfield that might impact school district finances.
Mary Brown, District 65 chief financial officer, reported that School Districts 65 and 202 each calculated the additional cost they would incur if state legislators shifted the state’s portion of the teachers’ pension cost to school districts. She said District 202 was estimating its additional cost would be about $2 million annually and District 65 estimated its additional cost would be about $4 million annually. She said these numbers were “”worst-case scenarios.””
Dr. Brown said she joined other Evanston officials in a recent trip to Springfield and that she discussed the pension issue with state legislators. “”The sense I got in talking to the legislators is that it’s not likely to be a drastic all-at-one-time change,”” she said. “”They’re looking at all sorts of possibilities and nobody was very specific about any of them. But I also did pick up that they would not make any changes in at least the next year or so.””