Dear District 65 Community -

I hope this message finds you and your family well! We are all looking very forward to welcoming our students and staff back in a few short weeks! In my role as superintendent, nothing is more important to me than the children of this community. Our school board and administration charges our team every day to center our students and make decisions in the best interest of our schools. 

This includes ensuring we support a talented, caring team of staff and have the resources necessary to provide every student with the highest quality education. This community is generous in their support of our schools, and we take fiscal stewardship with the utmost seriousness. This is why I have always remained transparent about our budget and financial outlook.

Based on preliminary figures, the District ended FY24 with a deficit of approximately $10 million (expenses over revenues). 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. 

Outside of these two functions, our preliminary information shows that all others were in line with budgeted figures. It is important to note that some of the budget variance was the direct result of this administration’s charge to improve systems. This includes accelerating the payment process to pay bills in a more timely fashion, consistent with best practices. In several functions, including transportation, the district paid some FY23 and FY24 invoices in the same fiscal year when they should be paid in the year the invoice was received.

• The District spent approximately $10 million on transportation last fiscal year and costs have almost doubled over the past two years. The dramatic increase is tied to a national and statewide crisis created by extreme labor challenges and the logistics of transporting students who may be outplaced to best meet their needs.

• Special education costs, excluding transportation, ended the fiscal year at over $30 million. This currently represents approximately 20% of the District's operating budget. These costs have increased by $10 million over the past two years alone.
• Following the pandemic, the growing needs of students have caused expenses to dramatically increase not only in D65 but throughout the State.
• We will continue to meet the needs of students and it's clear that our new financial services leadership must develop a budget that better accounts for rising costs and continues to be equity centered, giving every child what they need for success in the classroom and in life.
• The labor crisis has hit special education particularly hard as school districts, including D65 have needed to hire staff through outside agencies to ensure compliance with students' individualized education plans.

• Of particular note, overall salaries and benefits came in within a -0.79% variance of total budgeted figures.

I am confident that the expertise of our new team will put the district in a significantly better financial position for FY25. Both the board and I believe it's necessary to take decisive action immediately to right the ship and to continue to do so in a way that has minimal impact on our schools.

The district has faced a structural deficit with revenues outpacing expenses for years now. Significant efforts have been made by various district administrative and school board teams to stabilize the district’s financial condition. Some of this work was outlined in the financial projections message I sent to our community in February.

We must continue to take intentional and swift action to ensure a balanced budget going forward. Anything less is unacceptable. FY25 will be the first budget developed under my leadership and at the direction of our new Chief Financial Officer, Tamara Mitchell, SFO, with support from Dr. Robert Grossi and the Illuminate financial advisory team. 

This spring we continued the process of stabilizing the District’s long-term financial condition and presented a plan that generated approximately $6.5 million in reductions. This included operational efficiencies and reducing staff by approximately 40 positions, with a disproportionate impact on central office. These savings will be realized beginning with the FY25 budget.

With definitive actions to further improve our financial condition, the administration will present the school board the next phase which includes the following components:

• All open, non-essential staffing positions that have not been filled will be closed.
• Freeze on filling non-essential vacancies created by December 2024 / January 2025 planned retirements.
• Reduce or freeze discretionary budget line items within FY25 budget.
• An in-depth analysis is being conducted on transportation, special education, and other functions with the objective of achieving long-term operational efficiencies.

More detailed information will be shared at the August 5 Committee of the Whole Meeting. Our school board and administration takes this seriously and wanted to ensure that we were transparent with our community in advance of the tentative budget being shared. 

Thank you for your continued support and partnership.