Evanston/Skokie School D65 was asked to consider pausing school in historically Black area: memo

Financially strapped Evanston/Skokie School District 65’s Board of Education was asked to consider pausing construction of a school it is building in Evanston’s historically African-American Fifth Ward in order to reduce the district’s deficit, according to a mid-September memo from a financial consultant.

With the district’s deficit standing at more than $10 million, the best financial course of action would be to pause construction on Foster School, Robert Grossi, the financial consultant, suggested in the memo, while also acknowledging the historic significance of the district’s desire to provide a neighborhood school for 5th Ward children.

Many in the community have voiced support for building Foster School, however, and some public commenters at an Oct. 15 special Board meeting saw the building of the school as necessary to further racial equity in Evanston.

The Foster School project’s construction manager, Cordogan, Clark & Associates, also supplied the Board a list of implications if construction were to be paused or scrapped. That firm also considered the idea of putting a school funding referendum on the spring election ballot.

In September, Grossi told the Board of Education that the district would need “bold and immediate” budget cuts to avoid financial woes that could eventually lead to being taken over by the Illinois School Board of Education.

“Status quo will lead the district into either financial or academic bankruptcy,” Grossi said. “Unless decisions are made that are bold and immediate, it is my assessment that the District is heading in that direction.”

In Grossi’s Sept. 15 memo to the board of education, first reported by Tom Hayden of the FOIA Gras blog and obtained by Pioneer Press through the Freedom of Information Act, Grossi wrote, “my first alternative for the Board of Education to consider in the solution package (the district’s plan to balance its budget) is to pause on the construction of the Foster School until the financial condition of the district is stabilized.”

“I recognize the historic significance of Foster School to this community and the commitments made by the School Board and Administration. However, it will be a daunting task to both address the structural deficit that existed before the construction of this building and the added deficit created by the new construction,” Grossi wrote.

The district in 2022 borrowed $40 million in the form of lease certificates, he explained in a phone call, and must pay back about $3.2 million annually through the 2041-2042 period. The first payment is due this year.

While the original borrowed amount was $40 million, the district now has $39 million in that account, Grossi said.

“The Board of Education should consider taking the approximately $39 million of remaining lease certificate proceeds and fold the funds into an escrow account dedicated to making the annual $3.2 million in debt payments,” Grossi wrote in the memo.

“This would immediately reduce the annual deficit by $3.2 million beginning with this current budget (2024-2025 budget) and would preserve $6 million in fund balances that were earmarked to complete the project. This decision would save jobs and programs.”

District 65’s Freedom of Information Officer Adeela Qureshi  said the district will be able to fund Foster School’s construction as long as the district implements a deficit reduction plan, which will consist of closing schools, laying off staff, and cutting special education and transportation expenses.

“Based on the Board’s continuing commitment to the construction of Foster School, administration and the Board are determining those necessary cuts to be further discussed in open session at the Board’s January meeting,” Qureshi said.

In a Sept. 28 letter from Brian Kronewritter, Cordogan Clark’s principal, to District 65 Superintendent Angel Turner, Kronewritter wrote “As requested, we have prepared a list of project impacts should the Board of Education decide to pause the Foster School project at the end of October 2024 and pursue a referendum in April 2025 for a restart in the project in May of 2025.”

The consequences of pausing construction for a referendum would create additional expenses from renting fences to the cost of rebidding construction work, which could add $3 million to $4 million in total project costs, among other implications. It would also delay Foster School’s opening a year to the fall of 2027, Kronewritter said.

Canceling construction at Foster School would create $5 million in sunk costs, Kronewritter said. The district would also likely see additional costs in restoring the construction site, paying back the interest on lease certificate bonds sold for it and paying back the city of Evanston for its grants, among other implications.

At the Oct. 15 special meeting, school board members said they were not going to pause construction at Foster School.

Board member Mya Wilkins said at that time that it felt disingenuous, and would “sacrifice a community that has gone literally 50-60 years without a school.”

The Board did not need to officially vote on pausing construction because no motion to do so had been made.