'Extreme Labor Challenges' Blamed As District 65 Ends Fiscal Year With $10 Million Deficit

EVANSTON, IL — One week before the start of orientation for new teachers for the 2024-25 school year, Evanston/Skokie School District 65 Superintendent Angel Turner announced the district recently ended the fiscal year with a $10 million deficit.

"The variance almost exclusively occurred within the transportation and special education budgets. While the deficit is in line with the prior year, it exceeded the budgeted deficit adopted in September 2023 by approximately $8 million," Turner said.

"Outside of these two functions, our preliminary information shows that all others were in line with budgeted figures," according to a Monday night message from the superintendent.

But the budget presented the public last fall shows a $276,000 surplus, balanced with savings from not having to pay 14.5 full-time salaries for vacated or unfilled classroom positions, administrators said at the time.

Turner noted the salaries and benefits came in nearly 1 percent below the budgeted amount for the fiscal year that ended June 30.

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"The District spent approximately $10 million on transportation last fiscal year and costs have almost doubled over the past two years," Turner said, citing a statewide crisis and "extreme labor challenges" associated with moving students around.

The district budgeted $9.3 million for transportation as part of the budget. According to a June memo from Transportation Services Coordinator Lou Gatta, the district was still looking to come in $1.1 million below his projections, despite having to pay $1.2 million from fiscal year 2023 that was not paid until the following year.

Patch on Tuesday morning asked two of District 65's full-time public relations professionals to provide evidence for a "budgeted deficit adopted in September 2023," data showing actual spending for each district fund during last fiscal year and how transportation costs could possibly be responsible for the $10 million deficit if the district spent approximately the same amount as it budgeted.

No answers had been received as of Wednesday morning. (Update: District 65 Communications Manager Hannah Dillow responded late Friday, telling Patch " We understand the need for more information," but declining to provide answers to any of the questions, suggesting instead that they would be included in a presentation at a committee meeting on Monday.)

Financial projections from September 2023 suggested operating deficits will continue to grow for the 2024-25 school year, as the $3.2 million annual payments of money borrowed to build the new Foster School in the 5th Ward, which are due to continue through 2042.

Meanwhile, the district's remaining reserves from its 2017 referendum that raised the property tax levy by $14.5 million a year, hiking the property values of the median home by about $450 a year in an attempt to stabilize the district's finances and support its educational programs, were projected to be depleted by 2027.

Board member Joey Hailpern described a feeling of deja vu last September as the board agreed to staff cuts to lower its budget deficit.

"We've done this presentation for seven years, and every time we go through the exact same thing. We seem to have a balanced budget the first year, but it's a little bit worse the year after, and then it grows," Hailpern said.

Hailpern, a longtime administrators in North Shore School District 112 who is operates an educational data analytics firm, said most school districts eventually call for a referendum to authorize borrowing more money.

"I think we have enough money to afford what we're doing here, but we have to make the changes. The administration has to recommend to the board so that we can pay for what we need and not have all the extra stuff," Hailpern said.

"Another name for that is budget deficit reduction, which I hate, but it's the reality. We have growing expenditures in a district with contracting enrollment, maybe not at the same rate, moving in opposite directions," he added. "I mentioned at our last meeting that it didn't make sense to me, and it still doesn't. I'll probably repeat that every time until it does make sense."

Earlier this year, the District 65 board approved a plan to cut $6.5 million in spending, which eliminated about 50 staff positions.

To deal with the continuing shortfall, Turner announced on Monday that the district had implemented a freeze on hiring and discretionary budget items.

The superintendent promised to provide more detailed information about the district's financial challenges at an Aug. 5 committee meeting.

Earlier:

• Groundbreaking Held For New Foster School In Evanston's 5th Ward
• With Looming Deficits, District 65 To Close Only Bilingual School
• Devon Horton Defaults On District 65 Debt Payment Plan
• $4 Million Budget Shortfall Passed To Interim District 65 Superintendent