Despite some heated debate Monday night between District 65 officials and school board members over closing out fiscal year 2024 with a $10 million budget deficit, they all agreed at least on one thing – the way the school system operates needs a massive overhaul.
“If the expectation was for me as interim superintendent to really untangle all of the things as it relates to everything in this district, I’m just going to name it: That was unrealistic,” said Superintendent Angel Turner, who became the interim superintendent July 1, 2023 and was named to the job full time in March.
“I want to be clear. Every area and aspect of this organization lacks. There are some places where we’ve got some clean things, but we still need to tighten it up.”
Turner noted that several members of her senior leadership team only joined the district a little more than a month ago, and all of her own new hires are “competent, quality folks who are really trying to be thoughtful about creating the systems, processes and structures” that work the best for the district.
But she and school board Finance Chair Joey Hailpern openly wondered aloud if they can commit to achieving all of their goals after running a combined budget deficit of $20 million over the last two fiscal years according to data new Chief Financial Officer Tamara Mitchell and financial consultant Robert Grossi presented on Monday.
As Turner alluded to, the board operates under a strategic plan with five goals related to equity, accountability, curriculum, human resources and fiscal management.
“The reality is, financially, we’re not going to be able to do all of those priorities, and so I’ve got to make some hard decisions,” she said.
Hailpern and board member Biz Lindsay-Ryan quickly sought answers from Grossi for the 2024 shortfall, saying they hired him back in October 2023 to make sure a deficit like the previous one in 2023 would never happen again.
“I just don’t think it was a very good budget” for 2024, he replied. Running a deficit again was somewhat unavoidable, he argued, because “by the time the budget’s approved, you can’t really alter it.”
Instead, his team put together an “aggressive, very time-consuming plan” to reduce the budget permanently, starting with $6.5 million in cuts that will go into effect in the 2025 fiscal year. That was the only way to avoid a negative impact on student services and experiences, Grossi said.
“I’m not sure we can avoid impacting children,” Hailpern said. “If we want to fulfill hopes and dreams, I think we’re going to have to go a little bit lower before we go back up, because I’m not willing to take another risk that we’re going to have a balanced budget that we approve, and then we have another $8 million [deficit] every year. I don’t know how to trust the process now.”
Diving into the details
Two areas that Grossi and Mitchell stressed as part of the problem were transportation and special education costs. According to their presentation, District 65 went $5.3 million over budget on purchased services, mainly for buses and cabs, and $3 million over budget on private school tuition and specialized services because of an “increase in out-placed students and services required.”
For context, Mitchell estimated that 15% of the district’s spending in 2024 was on purchased services. You can compare District 65’s spending to the Evanston Township High School budget in the charts below – ETHS devoted 8% of its budget to purchased services.
The additional graphs below show more details about the district’s revenues and expenditures in 2024.
“As you can see, total revenues were about $14 million less than total expenditures,” Grossi said. “If you take away the fact that the district had a $4 million deficit in the capital projects fund – that fund should always be kind of kept separate when assessing the district’s structural surplus or deficit – the district incurred a deficit of about $10 million, which is similar to the deficit that it incurred during the last fiscal year.”
Based on their presentation, the district finished the 2023 fiscal year with a $9.81 million deficit, which is beyond the $7.5 million deficit that former CFO Raphael Obafemi and former Business Manager Kathy Zalewski presented a year ago. That’s because Grossi excluded capital projects from his financial analysis.
Grossi, who said the state has brought him in to help fix two school districts with struggling finances before, also outlined “Phase 1.5” of his budget reduction plan, which includes freezes on all unfilled non-essential positions and certain budget line items.
The expense report attached to Monday’s board meeting packet doesn’t exactly match up with Grossi’s presentation, though. That report says the district had spent 97.7% of its total budget by June 12, just a few weeks before the end of the fiscal year. It also only has transportation cost overruns listed at $1.5 million for the year up to that point.
“We are in an urgent situation,” Mya Wilkins, board vice president, said. “Looking at our numbers, it’s still not very clear where we’ve gone over budget.”
More information about the 2025 fiscal year budget will be presented at the board’s next meeting Aug. 19.
District 65 superintendent on budget woes: ‘Every area and aspect of this organization lacks’ is from Evanston RoundTable, Evanston's most trusted source for unbiased, in-depth journalism.