At a Nov. 17 school board meeting, District 65 financial consultant Susan Harkin presented a series of financial projections estimating potential savings from budget cut measures at $2 million less than the estimated savings she presented two weeks earlier.
These differences resulted primarily from lower projections for what Harkin described as “achievable” revenue increases and expenditure decreases. Harkin did not identify the specific reasons for these changes at the meetings, though.
“For section savings, at this point because we’re still working through some of the carve outs and some of the exceptions, the section savings amount has come down,” Harkin acknowledged during the board meeting (“section savings” refers to money saved by the district reducing its total number of classrooms). “We do believe that those numbers should be achievable.”
Some categories of saving projections also increased or decreased from the Nov. 3 to Nov. 17 presentations. Harkin cited efficiencies in transportation routes as a reason for a change from transportation losses to savings and noted a potential $100,000 in savings due to a partnership agreement with Right at School.
“Financial modeling and projections are inherently dynamic tools that are designed to be updated and refined as new information becomes available or as the Board provides direction,” district chief financial officer, Tamara Mitchell, told the RoundTable via email on Monday. “The differences between the two dates reflect this process and present a refinement of the levers that have been presented and discussed with the Board over the past several weeks.”
Operating costs and revenues
On Nov. 3, Harkin presented current expectations for the district’s upcoming cost savings and revenues as it considers school closures and preps for the opening of Foster School.
The image below shows Harkin’s projections for revenue increases and decreases for the 2027 fiscal year as “expenditure levers” and “revenue levers” within the district’s operating fund. It identifies a rough $1.35 million in additional revenue and $2.48 million in cost savings, resulting in a combined $3.83 million in additional funds available for the district.
Two weeks later, at the board’s Nov. 17 meeting, similar graphs showed different figures for these expected costs and revenues, and different breakdowns of categories. The expected revenue increase dropped from around $1.35 million to just $350,000.
Cost savings in the operating fund shifted an expected $1.4 million, down from the $2.48 expected in savings presented at the Nov. 3 meeting. This brings the total projected savings to just $1.78 million in the district’s operating fund, roughly $2 million less than the previously projected $3.83 million.
What exactly changed?
Harkin noted at the that the district had “refined” its financial projections in discussions with the administration prior to presenting at the Nov. 17 board meeting.
The District has since confirmed this was the case to the RoundTable, and broke down the specific costs and savings that they removed from their projections.
In transportation, previous district estimates showed an increase of $50,000 annually per school closure. As the district has progressed in projections, though, they now expect closing schools to actually reduce transportation costs between $300 thousand and $800 thousand a year, Mitchell said.
When it comes to school closure savings, the district is also deliberately choosing a lower estimate to remain conservative in potential funding gained.
“Because section savings can vary significantly from year to year based on student movement and program shifts, it was important to use an estimate that would remain realistic across scenarios,” Mitchell said.
The district also removed several of the revenue levers from projections, including paid before and after school care, education foundation donations, summer school tuition increases, student and sport fee increases, paid events for families, targeted state grants and parent foundations.
This list of revenue generators, prior to Nov. 17, included community suggestions, which were “taken under consideration by the administration and presented to the Board.” Ultimately, the district decided to move forward only with the revenue generators that were “realistically actionable and appropriate to include in conservative long-range financial planning.”
“Several of the previously listed levers presented practical or policy-related constraints,” Mitchell said. “For example, the Board has not taken action to approve a significant increase in student fees, targeted state grants often require matching expenditures and typically cannot be used to supplant existing costs (which would be necessary for them to produce true savings), and parent donations would more appropriately flow through the PTA or foundation rather than be relied upon in operating projections.”
On the expenditure side, the district removed expected savings from potentially reducing crossing guards, extending device replacement and centralizing purchasing to “avoid overstating expenditure reductions that may not be reasonably achievable within the required timeframe.”
Legion of Data Nerds question change
An active group of District 65 parents and community members, which has dubbed itself as the “Legion of Data Nerds,” has circulated a memo questioning these changes.
In their memo, the group questions why these numbers changed so significantly in the course of just a couple weeks. They also point out that these projections do not include revenue from the potential sale of the Dr. Bessie Rhodes School of Global Studies, which upon closing after this school year could be another source of revenue for the district.
On top of these questions, the group noted that further administrative cuts have not been considered in these financial projections.
Prior to the school closures portion of the strategic deficit reduction plan, the district did eliminate 32 administrative positions. Despite these cuts, though, the district still faces a massive budget deficit that may result in school closures.
The number of full-time employees has also increased by 10.3% since 2019, according to the district’s summative data, while student enrollment has decreased by 24%.
“We highlight these differences to emphasize the uncertainty and variability in the district’s own estimates” the group wrote in their memo. “The implications could be an underestimate of potential savings, which leads to an inaccurate representation of required cuts and could drive a decision to close more schools than necessary.”