Dr. Horton Defaults on Repayment Agreement

He now owes Evanston's children *more* than $25,000, potentially much more

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While leaving District 65 in 2023, former Superintendent Horton failed to provide 180 days notice to the Board, which triggered a clause in his contract, resulting in him owing $25,000 in liquidated damages. On his way out, he negotiated a Repayment Agreement with the School Board. You can read my prior story on the subject or Evanston Roundtable’s coverage.

You can read the Repayment Agreement at this Link.

This agreement states the following:

1. Payment Terms. Dr. Horton will make monthly payments of seven hundred and no/100 ($700.00) to the School District, due on the first of each month commencing on August 1, 2023, and ending on July 1, 2026.

2. Late Payment. If Dr. Horton fails to make a payment within fourteen (14) days after the first of the month, Dr. Horton will promptly pay a late charge equal to 10% of the remaining Owed Amount. The late charge shall apply to any payment that is past due.

3. Method of Payment. Dr. Horton will make all payments called for under this Agreement by sending check or other negotiable instrument made payable to "Evanston-Skokie Community Consolidated School District 65"

Dr. Horton signed the agreement on 7/11/2023. He made his first payment on time in August 2023. By September 2023, he was already in default, which is a failure to pay any amount by the fifteenth of a month when payment is required. Below is the language from his repayment agreement:

4. Default. The occurrence of any of the following events will constitute "Default" by Dr. Horton:
  a. Dr. Horton's failure to pay any amount by the fifteenth of a month when payment is required.
  b. Dr. Horton seeks an order of relief under the Federal Bankruptcy laws.

It wasn’t just September he was late. He was late every single month after September. He failed to make payments for November and December until January and as of February 29th still hasn’t made a payment for February 2024. He’s also been paying the wrong amount, sometimes $720 and sometimes $740.

Below is a summary of his payments and what I’ve to be the late fees he owes¹:

Including fees, I believe he now owes the District $34,906.63². But in the case of default, there is another remedy which the Board may exercise, which is that he now owes the full $25,000 without “presentation, demand, protest, or notice of any kind” and has to pay attorneys fees:

5. Remedies for Default. In the event of Default by Dr. Horton:
  a. The remaining Owed Amount will become immediately due and payable to the School District without presentation, demand, protest, or notice of any kind, all of which are hereby expressly waived by Dr. Horton.
  b. Dr. Horton shall pay all costs of collection of any amounts due hereunder arising from a Default, including reasonable attorneys' fees and expenses and shall make such payments within 14 days after receiving an invoice from the School District.

I reached out to the District for comment;

In reviewing Dr. Horton’s payment obligations to date, he has missed one payment and has consistently been late on payments. The District is in the process of communicating next steps with Dr. Horton that his consistent late payments are not acceptable and the District expects him to be fully caught up on payments. This is unfortunate given the good will the Board showed to Dr. Horton in agreeing to the repayment plan.

I FOIA’ed copies of his payments made to date and you can view the deposit slips below:

• August 2023 thru December 2023

• January 2024 - Payment was made in February.

Who Made the Payments?

If you inspect the deposit slips closely, you will see that for two payments, they remitted by a Sarita Smith. Ms. Smith was in the news last week for taking a new job with Dr. Horton in Georgia. She was previously the Director of Student Assignment in District 65 and has a similar role in her new job.

Note that this is also listed as Nov + Dec Payment

I reached out to Ms. Smith, who was kind enough to provide a comment.

I simply served as an intermediary between Dr. Horton and District 65. When Dr. Horton’s repayment first began, the district had no mechanism to accept a remote/electronic payment (other than mailing a check). Dr. Horton asked me to submit his repayment to ensure the district received it in a timely manner. He sent me the funds via an electronic transfer to then submit to the district.

Since the payment in question, the district has set up a system to receive payments from Dr. Horton and I have not been involved in any further payments.

She also provided proof of the transfers in and out of her bank account, confirming she acted as a proxy for Dr. Horton to make payments.

Comment & Opinion

I don’t even know where to start on this because there is just so much wrong with this entire situation:

• Like .. What did the Board think he was going to do here? Dr. Horton has had two bankruptcies, the last one being due to accruing too many fees with a public body.³

• Having a past (and future) subordinate proxy payments for you is so wildly inappropriate and puts Ms. Smith in such a bad position. This shows such poor judgement on his part. I cannot fathom asking an employee of mine to do this with their personal bank account! Like, it’s so beyond the pale of reasonable behavior from a leader, especially someone running a School District as large as DeKalb.

• I get the sense that nobody at the District was paying attention to this - there were no letters generated to him or other information I could obtain via FOIA to indicate they reached out regarding his delinquency. If he just stopped paying, would anyone besides me know?

• Also, he clearly didn’t read the contract because he seems to just throw $20 or $40 at the payment each month when he is late, like that will cover the fees.

• Dr. Horton currently makes $325,000 a year as the Superintendent in DeKalb County, Georgia. Last I checked they have both banks and Fedex branches in Georgia. The excuse that he could only make electronic payments is absolute non-sense, even my janky credit union allows me to generate a check to send to someone.

The School Board should absolutely invoke the clause of this agreement and take him to court to collect the money and the legal fees. The District’s claim that they are “in the process of communicating next steps with Dr. Horton that his consistent late payments are not acceptable and the District expects him to be fully caught up on payments.” is silly. This money belongs to Evanston’s kids, not Dr. Horton or the Board.

1. Based on the document's language, the late fees apply as "10% of the remaining Owed Amount." This indicates that the late fee is calculated based on the total principal amount remaining at the time the payment is considered late, not just the monthly installment of $700.00. Therefore, if a payment is late, the late fee would be 10% of whatever the total remaining balance is at that time, not just 10% of the $700.00 monthly payment.

2. The way these fees are structure is humorous - if he just keeps paying late, we will compound that 10% monthly fee and solve our budget holes!

3. To my knowledge, he had and still has 3-4 properties on the South Side of Chicago. He failed to maintain these properties and amassed fees and debts with the City of Chicago over $100k leading to his second bankruptcy.