Analysis and viewpoint: How much will District 65 save in transportation costs with new school?

School District 65 officials have repeatedly said they will save $3.2 million in transportation expenses each year for 18 years once the new school in the Fifth Ward is opened. They say these savings would enable them to pay off $40 million in lease certificates that were issued to fund the construction of the new school.

On March 14, 2022, administrators presented a plan to save transportation expenses by eliminating distance busing, which is busing students who live more than 1.5 miles from their school. Distance busing is required by state law.

At that time, the district planned to save these transportation expenses by not only establishing the new school and eliminating the need to bus students who reside in the attendance area of the new school, but also by redrawing the attendance areas of existing schools in such a way that no student would live more than 1.5 miles from their school. By eliminating distance busing by these two methods, the district claimed it would save $3.2 million each year. In the 2022-23 school year, the district provided distance busing to 875 students.

When Devon Horton, then Superintendent, advised the community about this plan in a May 16, 2022, letter, he told the community that the district would save the $3.2 million in transportation expenses as a result of establishing the new school in the Fifth Ward, thus eliminating the need to bus 500 students who lived in the attendance area of the new school. Horton said the costs of the new school will be “fully covered … without raising taxes or putting a financial burden on our community.”

Significantly, this letter said the district would save the $3.2 million “as a result of establishing the new school.” It did not rely on savings resulting from redrawing attendance areas.

 This distinction is an important one. Costs saved by redrawing the attendance areas of existing schools could be achieved even if the district did not establish the new school. So these costs savings are not a result of establishing the new school.  

The District’s plan to save transportation expenses has evolved. On Aug. 16, 2023, Raphael Obafemi, then the district’s Chief Financial Officer, told the RoundTable that the district planned at that time to eliminate not only distance busing, but also what is called “hazard” busing. The district may provide busing to a student living less than 1.5 miles from school, if the route to walk or bike to school crosses a road that constitutes a serious hazard to the safety of the student due to vehicular traffic. In the 2022-23 school year, the district provided hazard busing to 868 students.

Obafemi said the attendance areas of the schools would be redrawn in such a way that it would eliminate the need for hazard busing. Doing this would save additional transportation costs. He also said that the assumption was that the district would also eliminate busing for the magnet schools and the TWI (Two-Way Immersion) program.

On Sept. 7, 2023, District 65’s administration told the RoundTable that some of the cuts envisioned by Obafemi would not be made.

Even if the transportation savings from both a) the establishment of the new school, and b) redrawing the attendance areas of the district’s existing schools are considered, the savings appear to fall short of the $3.2 million needed each year to pay off the Lease Certificates.

If only the transportation savings due to the establishment of the new school are considered, the savings would be much less.

 In any case, the district has still not provided a written analysis detailing how it will save $3.2 million in transportation savings each year.

Initial plan focused on eliminating distance busing

In a memo dated March 14, 2022, Horton, Obafemi, and Sarita Smith, Director of Student Assignments, recommended that the School Board approve a new K-8 school in the historic Black area of the Fifth Ward which would be a) an attendance area school for students who lived in the area, and b) a magnet school to house the TWI program that is currently at Bessie Rhodes. Bessie Rhodes would be closed after the new school opened. In addition, Horton, Obafemi and Smith recommended redrawing the attendance areas of seven K-5 schools.

Their memo also proposed a way to fund the new school: “The District 65 Administration is recommending that the Board approve a resolution to issue Lease Certificates to fund the new construction. The estimated cost of building a new school in the 5th Ward is $40 million. The annual debt service payments on Lease Certificates are estimated to be $3,200,000 per year for 18 years.”

Administrators said in the memo that the $3.2 million needed each year to pay off the lease certificates would come from savings in transportation costs after the new school was opened and new attendance areas drawn. Their March 14 memo also said, “In FY’22, the district is projected to spend over $6.2 million for transportation services. The proposed school in the 5th Ward will allow the District to save money by reducing the funding for transportation costs to only those for early childhood, hazardous routes, and students with Special Education needs (IEPs). Overall, the district could save over $3 million in FY’25 and beyond. These funds would be transferred annually to the debt service fund to pay debt service on the $40M lease certificates beginning in FY’2025 through FY’2042.” (Italics added)

Also on March 14, 2022, a representative of the district’s financial consultant presented a report to the School Board. One graphic contains data showing the number of students bused for various reasons. The graphic is reprinted below.   

A second graphic shows that if distance busing was eliminated, the district would save a total of $3 million, plus $250,000 in administrative expenses. That graphic is reprinted below.

In a presentation to the school board on March 14, 2022, the consultant noted that the student assignment committee recommended that all students be assigned to neighborhood schools within 1.5 miles of their home, and if that was done, those students would not have to be bused. Based on information provided by the business office, the consultant said, the transportation savings would be around $3 million each year.

The School Board approved the new school, the student assignment plan and the sale of lease certificates at the March 14 meeting.

At that point the plan was to save $3.2 million a year by eliminating distance busing beginning in the school year 2024-25 (FY’25).

In September 2022, the School Board adopted a budget for the school year ending June 30, 2023 (FY’23) which included transportation expenses for six categories of transportation as shown in the table below. This budget was adopted before the new school was established and the new attendance boundaries went into effect, so it does not incorporate any savings in transportation expenses. However, it shows what the district’s budgeted expenses were in FY’23 and gives some idea of the potential for savings.

The budgeted amount for the category “pupil trans/regular,” is just under $2.3 million, which includes “bus transportation for general education students and McKinney Vento [homeless] students and includes distance and hazard transportation and magnet school transportation,” District 65 Business Manager Kathy Zalewski told the RoundTable. Because the expense for distance busing was only a part of the $2.3 million, it is unclear how the district could save $3.2 million by eliminating distance busing.  

The district did not provide any written analysis showing how such savings would be achieved.

It does not appear that the other transportation categories are applicable. The budgeted amount for the first category, Pupil Trans/Taxi, is just over $2 million, and includes “taxi costs for special education students and students transported due to discipline and safety,” Zalewski told the RoundTable. The third category, Pupil Trans/Special Education, is just over $600,000, and it is also for transportation of special education students. The district did not plan to eliminate transportation for special education students.

May 14 letter focuses on savings due to establishing the new school

On May 14, 2022, Horton posted a letter to the community saying the district will pay $3.2 million annually for 20 years to pay off the $40 million in Lease Certificates. He said, “The Lease Certificates would be paid back through the district’s operating budget using transportation savings resulting from a new neighborhood school in the 5th Ward.  Over 500 students will no longer have to be bused to other schools, which will provide significant savings in annual transportation costs. These savings will be repurposed and used towards largely making the necessary debt service payments.” (Emphasis added.)

Horton added that the costs of the new school will be “fully covered … without raising taxes or putting a financial burden on our community.”

As shown in the table above, the budgeted amount for the category “pupil trans/regular” is just under $2.3 million, and that amount includes “bus transportation for general education students and McKinney Vento students and includes distance and hazard transportation and magnet school transportation.”

There were 1,743 students bused for distance and hazard in FY’22. If the district eliminated busing for 500 students attending the new school, it would eliminate busing for about 30% of the total. One way to estimate the savings on a very rough basis is to assume it would be 30% of $2.3 million, or about $690,000.

This is a very rough estimate, but the district has not provided any written analysis showing how it could achieve savings of $3.2 million by eliminating the need to bus 500 students.

Evolving plan eliminates hazard busing

On Aug. 16, 2023, Obafemi told the RoundTable, “The only kids that we plan on transporting once the student assignment work is done, and the new building is open, are special needs kids.” He added that the district would also provide transportation of students who are classified as homeless and who are “truly McKinney Vento.”

So the district’s plan evolved from eliminating distance busing to eliminating both distance and hazard busing.

Obafemi explained, “The way we are hoping to assign the students, there will be no need for hazard transportation, because kids will be assigned within walking distance of the school, and so they don’t need to cross major streets, like McCormick [Boulevard].” He added, “When you draw the map, you have kids walking to school, and you make sure they don’t have to cross major roads. They may cross roads, but no major roads. For the busy roads that they cross, we have crossing guards assigned there, one or two.”

When asked about transportation for students who attend the TWI program, he said, “That will be eliminated. There will be no special program transportation. That’s what we’re working through in the student assignment committee meetings that we’re going through right now. So a neighborhood school will actually be exclusively a neighborhood school. So, if we have kids who need TWI, that program will be provided in each of the individual schools instead of us busing them all over for that.”

When asked if there would be busing for students attending King Arts or for permissive transfers, Obafemi said the assumption is that there would only be busing for a) special education students whose IEP called for transportation and b) students who truly qualified for transportation under McKinney Vento. The assumption eliminates busing for students who attend King Arts or who have permissive transfers, he said.

While the district plans to retain busing for special education and homeless students, Obafemi said the plan is to tighten up the practices in providing transportation for those students.  

Obafemi told the RoundTable that transportation would be provided to special education students only if their IEP called for transportation. There has been an assumption that all special education students are entitled to transportation, he said, but “Not all special ed students are eligible for district provided transportation. Only those with an IEP that calls for transportation to be provided by the district, will be provided transportation.”

He did not provide an estimate of how many students would be impacted by this change.

Obafemi also said the district plans to provide transportation for homeless students only if they “truly” qualified for transportation services under the federal McKinney Vento Act.

He said a student who is classified as homeless under McKinney Vento is entitled to stay in the school district where they enrolled for the balance of the year. But students who transition to another school district should be able to enroll in that district.

As examples, Obafemi said that at times homeless students started the year at District 65, and then transitioned to Indiana or south Chicago. But because the students remained enrolled in District 65, the district had still provided transportation for those students to attend school at District 65. Whether the district can stop transporting the students to the district if the students do not enroll in another school district is not clear.

The district has not provided an estimate of how many McKinney Vento students would be impacted if it changed its practice.

Follow-up: Some proposed eliminations will not be achieved

In an Aug. 28, 2023, email, the RoundTable asked Obafemi some follow-up questions. He responded that same day, saying policy decisions were not “in my purview,” so he had forwarded the RoundTable’s questions to the District Superintendent, the Deputy Superintendent, the Director of Student Assignments and several other administrators and asked them to respond. After a follow-up request from the RoundTable, Hannah Hoffmeister, communications specialist for the district, provided additional information on Sept. 7. That information indicates that some of the transportation savings assumed by Obafemi will not be achieved.

Hoffmeister said some distance and hazard busing may still be necessary: “While this will likely be very limited under our new student assignment plan, district-provided transportation will still be required for any students who live more than 1.5 miles from their attendance-area school or where walking/biking to school would constitute a serious safety hazard.”

There may also be some transportation for the TWI program or ELL (English Language Learning) programs. Hoffmeister said, “The district has been committed to expanding programming to reduce the number of students who may need to attend another school for services. If TWI is not offered at their attendance area school, they are offered a seat at the closest school within their feeder pattern. According to Board Policy, English Language Learners receive free transportation in these cases.”

Hoffmeister also said there would continue to be busing for magnet schools. “Students enrolled at King Arts may continue to request district-provided transportation on a fee basis and based on eligibility guidelines. Transportation costs are reduced or waived for students who qualify based on meal status.”

As to permissive transfers, she said,” We plan to continue to allow permissive transfers on a limited basis and in accordance with Board Policy. Transportation will not be provided for any student on a permissive transfer, unless the attendance-area school is unable to meet the student’s learning needs.”

The RoundTable also asked how the district will manage overcrowding at a school and manage class sizes at certain schools after the new school was established and attendance areas are redrawn.

Hoffmeister said, “At this time, student enrollment will continue to be managed in accordance with Board policy. We will likely still be able to balance enrollment by employing the same strategies. Permissive transfers will continue to be offered and King Arts will remain a K-8 magnet. In addition, while the physical location of Bessie Rhodes will change, its magnet programming will not. In accordance with class size guidelines, the same number of seats will remain available for students at the new school in the 5th Ward.”

Thus, while the district may make a substantial reduction in transportation, some distance and hazard transportation will still be needed; magnet school busing will continue; some busing for the TWI program may be needed. The district may also need to provide transportation to manage overcrowding at the schools and to manage class sizes at the schools.

In addition, at a Committee of the Whole meeting of the School Board on Sept. 11, Interim Superintendent Angel Turner said that she and her cabinet were working on a “transportation analysis” and taking a look at the use of both taxis and buses. “We’re going to have to reevaluate things differently,” she said. She added it was important to ensure that transportation money is going toward the student populations that it is intended for, including students in special education, unhoused students and those needing language services.

How the transportation analysis will impact policy or practices and how it will impact transportation expenses is not known.

Still no written analysis

In an FOIA request filed on July 17, 2023, the RoundTable asked the district to provide any written analysis that had been prepared that showed how the district would achieve transportation savings of $3.2 million per year once the new school opened and new attendance lines were drawn. Although the March 14, 2022, memo and report mentioned above were produced, no written analysis was produced.

On Aug. 16, 2023, the RoundTable asked Obafemi and Business Manager Kathy Zalewski if there was a written analysis showing how the district would save $3.2 million in transportation costs. Obafemi said, “We don’t have a written analysis per se. What we do have is we know there will be a substantial reduction in transportation.”

So, 18 months after the representations were made, the district has still not provided a written analysis showing how it will save the $3.2 million in transportation costs, including:

 a) what types of transportation will be eliminated (e.g., distance; hazard; TWI program; magnet school; etc.);  

b) how many students are currently receiving transportation in each category and how many will no longer be receiving transportation once the new school is opened and new attendance boundaries are adopted, and what is the basis for such estimate;

c) what have been the historical costs of providing transportation for each category of service, and what are the projected cost savings for that category of services and how were the cost savings calculated; and

d) whether the cost savings for each category of transportation are due to the establishment of the new school, or to the redrawing of attendance areas, or to implementing new policies or enforcing existing ones.

The District’s “Expenditures by Category” reports show the actual cost of transporting students in FY’22 and FY’23 and the tentative budgeted cost of transporting students in FY’24 for six categories of transportation. The table below shows those costs.

 The table shows there were big increases in actual transportation expenses between FY’22 and FY’23; and the budget for FY’24 appears to carry forward the increases. How much of the increase is due to inefficiencies or policies or practices that were not adhered to or is due to a lack of bus drivers and the use of taxis or BriteLift instead of buses – or even inflation – is not clear.

But the category “Pupil Trans/Regular” includes transportation of general education students for distance and hazard and also transportation for some students attending magnet schools and for McKinney Vento students.  For FY’23, the total cost for this category was about $3.7 million. The cost of transporting McKinney Vento students (which is mandated by law and must continue) was about $1.2 million in FY’23, Zalewski told the RoundTable. If that amount is subtracted, the total cost for transporting general education students for distance, hazard and magnet schools would be about $2.5 million.

If the cost of transporting bilingual students is taken into account, the total cost of transporting general education students for distance, hazard and magnet schools and transporting bilingual students is about $2.75 million.

Again, this is a rough estimate, but it suggests that $2.75 million is the maximum potential savings if the district eliminates all distance and hazard busing, all magnet school busing and all busing for the TWI program. The district acknowledged on Sept. 7 that it is not likely that all these expenses will be eliminated.

This number – $2.75 million – also represents the potential transportation savings from both a) the establishment of the new school and b) redrawing the attendance areas. The savings due solely to the establishment of the new school would be much less.

Hailpern raises questions

At the June 12, 2023, School Board meeting, Finance Committee Chair Joey Hailpern said, “We make the claim that we can pay for the lease certificates with the savings from transportation. I’d like to map out even in a hypothetical, if 700 students are going to go to the Fifth Ward school, and we decrease our demand for busing by 80% of that, how many buses does that take off the roll? And how might that change the contracts that we’re signing for the expense of transportation? And does that match the amount that we’re talking about? This is something that we’ve done as an exercise in the planning, I think we need to also kind of map that out.”

Obafemi responded at that time: “I’m thinking we should be able to do a projection that is forward facing like that. I’m thinking probably around this time next year, because we will have broken ground. We expect to break ground in the spring of next year, February or March, based on the weather conditions. Once we get off the ground, I think we’ll be in a better position to start doing a projection that is reasonable.”

No School Board member pressed for an earlier date.

Obafemi resigned, effective Aug. 31, and will take on the role of chief financial officer of Oswego Community Unit School District. So Obafemi will not be available to prepare the analysis.

At the Committee of the Whole meeting of the School Board on Sept. 11, Hailpern said he was concerned the estimated savings on transportation was not matching the cost of paying the Lease Certificates. For purposes of preparing the financial projections, Zalewski said she assumed that the transportation savings each year would be $3 million, compared to the $3.2 million cost of repaying the Lease Certificates.

But there is no analysis showing how the district will save $3 million a year by eliminating busing for kids who reside in the attendance area of the new school, or that it will reduce transportation costs overall by $3.2 million.

From a different angle, it appears that on an overall basis transportation costs have increased significantly. On March 14, 2022, administrators said the total transportation cost was about $6.2 million. This year the district is budgeting transportation costs in the amount of $9.3 million.  

In the interest of transparency readers should know that Larry Gavin and Mary Helt Gavin posted an essay on March 14, 2022, supporting the new school in the Fifth Ward, with several recommendations.