District 65 Gets an Independent Financial Review

Brief Programming Note: I said I was going into foiagras retirement but I haven’t completely made up my mind on that. I spoke with a lot of readers and this blog has a role beyond my writing and the comment section provides a lot of value to the community. So I’m not closing it down but I am going to try to find new voices to add to the mix since my professional life has been so busy lately.

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To anyone who has been reading this blog, one topic I have written about several times is the dire state of the Evanston District 65 finances.

• August 2023 - District 65's Surprise/Not Surprise Budget Problems

I’m often asked the question, “Why doesn’t District 65 hire an outside auditor to provide a non-biased report of the state of the school district’s finances?”

Well, dear reader, you’ve got your wish and the findings are not good. In fact, it is is even worse than the predictions I was making. You can read the slide deck here. The Evanston Roundtable also has excellent reporting on this story.

Here’s the brief summary of findings, with the notable slides included. In terms of scale, it is perhaps useful to recall that the District’s entire annual budget is around $150 million.

• Staffing continues to grow annually as enrollment declines. Recall that District 65 is mostly funded through local taxes independent of enrollment - more than 70% of incoming revenue would be the same whether the District had 1 or 10000 students.

  

• By 2029, the operating deficit will be $14.5 million per year. The 2017 referendum funds will be gone and there will be almost no cash reserves left.

  

• District 65 has about $188 million in facilities needs by 2030. This is just a mindbogglingly large number. That’s more than the annual budget for the entire district worth of repairs.

  

• By 2042, the total Fifth Ward School cost (all in) will be $64,500,000. The annual cost to taxpayers is $3.25m and I’ve written tirelessly on the made-up financial estimates the District put out in 2022.

Board Priorities

None of the findings in this auditor’s report are new information. The finance committee has reported on this budgetary crisis for years, going back even before COVID. 1

I think it is fair to ask, where has the School Board been and where does the community go from here?

As evidence, consider the results of the Superintendent Survey that was published in November 2023.2 Compare the Board’s desired skills in a Superintendent versus the Parents or community members. Financial expertise isn’t even in the top 10 things the Board is searching for! This is a major problem and it is hard to envision a District that can truly meet their equity goals (which is a board priority) without financial diligence even on the radar.

It’s not clear to me where the Board can go from here - surely there a few options:

• Closing Schools and Selling Land - This appears to be the case with Bessie Rhodes and it is unclear what other options are available.

• Reducing the Size of the Administrative Apparatus - According to my research D65 spends almost $2800 per student on administrative costs, one of the highest in the state.

• Additional Referendum - By State Law, the Fifth Ward School absolutely should’ve required a referendum, but one was not held because the District continued to falsely contend there were $3-$5m in bussing savings. They can certainly hold another one for building repair and maintenance

• Terminating Work on the New School - I’ve voiced support for the new fifth ward school .. but the financial burden is quite serious and it is less of a win if it’s a zero sum game and other students lose their local school. Recall that the Board promised in May 2022 that other schools would not close as part of the new construction.

I leave this one to the comment section.