Less than a month after Evanston/Skokie School District 65 closed out the 2023 fiscal year with an unexpected $7.5 million budget deficit, officials presented a finalized fiscal year 2024 budget at a board committee meeting Monday, projecting a surplus of $276,019.
Unforeseen student transportation costs and purchased services on items like consulting caused a large chunk of the deficit. Business Manager Kathy Zalewski – filling in for former Chief Financial Officer Raphael Obafemi, who left the district at the end of August – said a net reduction of 14.5 total classroom positions through retirements, leaves and resignations was “definitely helping” balance the budget.
That cut in the overall teaching staff allowed the district to remove classrooms no longer needed because of an ongoing decline in enrollment, which also decreased employee salary and benefits expenses, according to Zalewski. But she urged the board to stay cautious about money going forward because of how much transportation costs rose last year.
“We actually will be bringing additional reports and charts to you for your review. We will be monitoring expenses and revenues,” Zalewski told board member Mya Wilkins, who expressed concern about how “tight” the financial outlook currently is. “There are a lot of areas in this budget, such as transportation, that are really making me nervous. These are services that we provide our students, so it’s very hard just to say no. It’s a balancing act. We have to provide the services, and we also have to look at the cost and budgetary constraints.”
Interim Superintendent Angel Turner said she intends to work with her cabinet on a “transportation analysis” to ensure that transportation money is going toward the student populations that it’s intended for, including students in special education, unhoused students and those needing language services. The district also needs to scrutinize all of its purchased services and only approve the expenditures that are directly serving students, according to Turner.
“If the purchased services don’t directly impact students and improve the needs of students, because kids is what we do in this district, then we have to be very thoughtful,” she said. “What I’m asking for is the board’s support in continuing to be thought partners with us at the district, to make sure that everything we’re doing touches kids in some way.”
Despite the FY2024 budget being balanced, at least for now, Zalewski’s financial projections showed increasing deficits for the next five years, beginning with a nearly $4 million shortfall in FY2025. Those numbers, shown in the graphs below, represent what would happen if the district does not put any cost-cutting measures into place at all, and Zalewski said she and her team will look for grant funding and other ideas to deliver a balanced budget next year, too.
Starting in FY2025, District 65 will owe $3.2 million a year on the lease certificates it took out to fund the new Fifth Ward school, but the school will not be open yet to save money on busing costs. That gap is driving the projected deficit for FY2025, according to Zalewski. After that, though, she said she is “conservatively” projecting $3 million in transportation savings per year by having a neighborhood school in the Fifth Ward.
But board member Joey Hailpern said he remains concerned that “our estimated savings is still not matching the cost” when it comes to annual expenses on the new school.
“It’s the reality that we have growing expenditures in a contracting district, enrollment wise. I mentioned at our last meeting that that didn’t make sense for me. It still doesn’t make sense for me,” Hailpern said. “We have SAP [student assignment planning] phase two coming. We’re talking about programs next. I don’t know how we can move into talking about programs if we haven’t finished the first part. That’s a big conundrum for me.”
Omar Salem, a teacher at Niles North High School and the newest member of the board, said in the past he had seen that when a district has money issues, the administration often cuts full-time teaching positions first. Other board members pointed out that the district has not laid any teachers off, and staff reductions have not led to any increase in class sizes or decrease in services.
But, when District 65 has lofty goals of trying to eliminate the gap in educational opportunities by race, ability and income, among other things, teacher cuts “cannot be the answer,” Salem said.
Late in Monday’s meeting, the board also briefly discussed its upcoming search to permanently replace former Superintendent Devon Horton, who left in July to take the same position at a larger district in Georgia.
At the end of August, the board listened to presentations from four potential search firms that could assist in recruiting and interviewing candidates: GR Recruiting, HYA and Associates, Alma Advisory Group and the Illinois Association of School Boards (IASB).
IASB, which District 65 already pays membership dues to, is a nonprofit and offers a significantly discounted price of $14,900, compared with a minimum of $25,000 charged by all the other firms. Several board members spoke in favor of IASB on Monday night, touting their existing relationship with the organization and the potential cost savings.
“I am leaning toward IASB. Not everything that’s reasonably priced is going to be quality, but I think we control the quality of it as a school board,” said board President Sergio Hernandez. “It ends up being our process, we just need a firm to help us organize how we move forward and have them do the leg work for us. … What I’m hearing, overall, is we’re leaning toward IASB.”
The full board will officially vote on selecting a search firm at its next meeting on Monday, Sept. 18.