Evanston/Skokie School District 65 has revised its financial projections — upping the estimated $17 million error disclosed last week to $27.35 million, according to slides that administrators showed parents Tuesday. The slides also show that the district did not include payments on the lease certificates used to build Foster Elementary School in its financial projections.
In addition, the slides, which were reviewed by the RoundTable, showed that the district has revised projected savings from the proposed closure of Lincolnwood and Dewey elementary schools to $2.3 million, down from $2.9 million presented at the Oct. 26 board meeting.
The $27.35 million error overstated costs, and though district officials said that correction improves the district’s financial outlook, they emphasized that the situation is still serious. Factoring in the Foster lease certificates adds expenditures into the equation, they said — but a RoundTable review of the figures found that including those costs did not offset the additional savings from the most recent error.
These financial projections were one basis for the plan administrators unveiled Oct. 13 to cut millions from the budget by fiscal year 2028, including closing Dewey and Lincolnwood elementary schools and to cut some non-mandated programs. On Thursday, the district walked back its plan to cut one such program, School Age Child Care. But parents interviewed by the RoundTable called on the school board to delay action on moving the budget plan forward, citing multiple errors from the district.
The school board is scheduled to vote on that plan Nov. 9. At its last meeting, on Oct. 26, after admitting to the $17 million error, administrators said there was no intention to significantly alter the plan.
In a statement late Wednesday, District 65 communications director Melissa Messinger wrote that the district recognizes that the $27.35 million correction is “significant” and understands why it raises questions “particularly for families and staff facing the possibility of school closures and other difficult changes.” Messinger wrote that the district takes the error “seriously” and appreciates the community’s “thoughtful engagement.”
“Our continued review has provided a more complete understanding of the previously identified capital expenditure error, which impacts our financial projections by approximately $5.47 million annually, on average, over the next five years,” Messinger continued, adding that the $27.35 million figure is not “new or additional” but instead, a “more complete accounting” of the impact of the previously disclosed error.
“While these funds,” Messinger wrote, in reference to the $27.35 million, “are unrestricted and could be used for operating expenses, we must maintain adequate financial reserves and support the district’s substantial and long deferred capital needs. This includes making meaningful improvements to building conditions for our students and staff.”
Lincolnwood parent Kerrie Dvorak and Dewey parent Ben Van Laan attended Tuesday’s private meeting with Chief Financial Officer Eric Miller and Finance Director Patrick Leow. Dvorak, who works as an accounting executive (but is looking into the district in a personal capacity), said that she was glad the district included her in these conversations, but also expressed discomfort.
“But if we got to Monday and the general public didn’t have all the information that I have, and they had to watch this play out and then the board vote on it in the same meeting, that would feel really bad to me,” she said.
“I don’t want to be holding on to information that is a really important public good, and not say something,” Dvorak continued. “Because I feel like people deserve to understand the specific information that’s being used to make these very consequential decisions for our kids.”
The $27.35 million error
Dewey parents Alexandra Miller (no relation to the District 65 CFO) and David Azari, who discovered the initially confirmed $17 million error, published a letter in the RoundTable Oct. 30 saying they believed the error was even larger. In an Oct. 29 email to Azari and Alexandra Miller, Eric Miller did not confirm or deny that the error was larger.
But Dvorak and Van Laan, the two parents who attended the meeting with Miller and Leow Nov. 3, said the district admitted to a $27.35 million error behind closed doors. Van Laan said that his understanding was that after initially discovering the $17 million error based on the analysis of parents, further study found the error to be closer to $27 million. (Van Laan, who also works in finance and is a CPA, said he has been looking into this in a personal capacity.)
Alexandra Miller said Wednesday that she and Azari originally identified — and the district confirmed — at least $17 million in duplicated spending in the “Capital Outlay” and “Other financing sources and uses” sections of the district’s five-year financial projections with intervention. In other words, the district’s financial projections double-counted expenditures meant for building repairs and improvements twice. The error the district initially confirmed was $1 million in fiscal year 2028 and $4 million in each of fiscal years 2029 through 2032.
But, as Alexandra Miller and Azari wrote in their RoundTable letter last week, they believed the actual difference was an error of $2 million in fiscal year 2028, and then just over $6 million in each of fiscal years 2029 through 2032, amounting to a $27.35 million error over a five-year period. The district’s statement Wednesday said the error was $5.47 million annually “on average.”
“And so, you get ultimately what is almost a $27 [or] $28 million error over the five-year period. And I think … it’s also important to recognize that that $6 million is a repeating error. So, $27 million [is] just in the first five years of what the projection shows, but it would be the same every year going forward. So, over 10 years the number would end up being much higher in terms of what the error’s impact is on the finances,” Alexandra Miller said.
What’s the error related to Foster Elementary lease certificates?
Back in 2022, rather than seeking taxpayer approval to build a new school with a ballot referendum, the District 65 school board chose instead to arrange for the construction of the school by a nominee bank, leasing the school from the nominee and funding the construction with lease certificates.
The district issued about $40 million in lease certificates to pay for the school and is required to pay $3.2 million a year from June 30, 2025, through 2042. The district had been paying that money from state Evidence-Based Funding, diverting it from its Education Fund. The district may not raise property taxes to pay for the lease certificates; the money must come from operating funds.
Multiple parents, including Dvorak, Azari and Alexandra Miller, independently calculated that the district had not included those mandatory $3.2 million annual lease certificate payments in fiscal year 2028 through 2032 budget projections presented as part of the district’s budget cutting plan.
An independent RoundTable review of the fiscal year 2027 budget, approved by the District 65 school board Sept. 28, 2026, found that the budget for this fiscal year also did not include the required $3.2 million payment for Foster, a fact Messinger confirmed in her statement to the RoundTable.
“Our understanding is that, during the original budget development process, anticipated proceeds from the potential sale of the Kingsley or Bessie Rhodes properties were expected to help offset this obligation. However, neither property has been sold, and those anticipated proceeds have not been realized,” Messinger wrote.
“While the original assumption was that property sale proceeds would help cover these payments, the obligation exists regardless of whether a sale occurs and should have been reflected in the district’s budget and financial projections,” Messinger wrote. Without proceeds from any building sales, the payment must be funded through “existing operating resources,” which Messinger wrote would place “additional pressure on an already challenging financial outlook.”
The payments have since been added to the district’s financial projections, Messinger wrote, and “represent an obligation that will impact our FY27 operating budget.”
Messinger wrote that while the correction improves the district’s financial situation, it does not generate any new recurring revenue. “In fact, accounting for the lease payments further compounds our operating challenges and reinforces the urgency of the comprehensive financial sustainability plan under consideration,” she wrote.
In a statement Wednesday, Azari wrote that the failure to include the annual costs for Foster is “another fundamental error.”
“Not only is this a substantial, recurring cost at $3.2 million per year, but the financial implications on operations are explicitly noted up front in D65’s 2025 annual financial report,” Azari wrote.
School closure facility savings
Dvorak and Van Laan also confirmed Wednesday that the presentation they reviewed with Leow and Eric Miller showed lower projected savings from closing Lincolnwood and Dewey elementary schools.
Van Laan said the lower savings figures from closing school facilities came from revised estimates of how much the district would need to spend on insurance and building upkeep.
“Yeah, I obviously can’t validate that the new number is correct, but I do know that that came from inputs from the community on things that were shared, that necessitated that revision in school facility cost savings as a result of the closures,” Van Laan said.
Administrators originally projected about $2.9 million in savings from closing the two schools, in figures presented to the community Oct. 13 and 26. The slide reviewed by the RoundTable showed about $2.3 million in savings from the closures, or about $2 million once added transportation costs are factored in.
Van Laan said he wasn’t surprised because community members have consistently questioned how the district has calculated cost savings from closure of school facilities.
“I think it just further … puts pressure on when you are … planning on making big decisions like this on school closures, when you have such a small amount of cost savings from closing a school and the impacts it has to the students … that’s a big deal, right? So, it was a small number before. It’s an even smaller number now,” Van Laan said.
Messinger did not respond to a request for comment about the revised school closure savings prior to publication.
What else happened at Tuesday’s meeting?
The RoundTable asked Dvorak and Van Laan for more details about how the errors were discussed at the meeting.
“Frankly, we didn’t spend a ton of time diving into the details of these specific errors,” Dvorak said. “We had about three hours together and we spent a lot of our time digging into the assumptions because at the end of the day — I don’t mean this flippantly — but the errors are what they are, and the district has already taken a position that fixing these errors isn’t going to change their plan.
“So, I guess, in my mind, like, we didn’t spend a ton of time sort of ruminating on the errors because they already made their position clear on them,” Dvorak said. Going into the meeting, Dvorak said, “the ask was basically for us to look at the model, understand the projection and sort of align on what some of our thoughts were on that.”
She said she got “the sense from administration” that “the goal would have been potentially for us to … maybe provide some of that assurance. There’s a number of reasons why I wouldn’t necessarily feel comfortable doing that,” Dvorak said. Among them, she said, is that she is not an unbiased party and has a child in the district who would be affected by the proposed plans.
“But also just — after looking at the model and some of the assumptions, just the sheer amount of assumptions that are in there … there’s not enough time to really do the kind of detailed review that I think you would need to do to be able to say, ‘Hey, I feel good about what’s in this model.’”
Van Laan also pointed to comments that board member Maria Opdycke made at the Oct. 26 board meeting, when she asked for independent financial oversight of the district’s budget projections in light of the $17 million error.
“I would not characterize the meeting that we had as the ability to do that,” Van Laan said. He noted that each year the district hires an independent firm to audit the previous fiscal year. Fiscal year 2026 ended June 30.
“That audit is still not yet complete,” Van Laan said. “And what Eric told us is that’s still months away, which came as a surprise to me, given I do audits, and … I would expect, given the stakes involved, that that would be an important input into setting a baseline for these results.”
Dvorak said the district’s budget plan is “contingent on a lot of assumptions being true.” She said she could not say for sure that all of the assumptions were accurate. “Some of them seemed reasonable, certainly, some of them did not, to me,” she said.
Still, Van Laan said he appreciated having the chance to meet, calling Eric Miller and Leow “very professional.”
“I think it was an important process to provide transparency. And so, I was very appreciative of that meeting and certainly, you know, provided a perspective on where the district is coming from.” Van Laan said. He said such large projections from the district could play out in many ways.
“There are many different scenarios on how those can play out, and there are many different levers that can be pulled or used to have an impact on the financial condition of the district,” Van Laan said. “And so I think that’s really important to note is, you know, there is a sense that there’s basically one all-in proposal being offered.”
Labor contracts a ‘primary driver,’ parents say
In a letter Dvorak and Van Laan wrote after the meeting to Eric Miller and Opdycke, and reviewed by the RoundTable, they said they found Eric Miller and Leow “to be transparent and forthcoming.”
“They shared meaningful information, explained insights they had drawn from the data, and provided helpful context about the education environment that differs from our corporate experience. Based on the discussion, we are comfortable that there is a real financial issue the District needs to address, with the most sizable pressure driven by the existing labor agreements that expire in approximately 18 months,” they wrote.
But they said they are “less convinced” whether “the proposed solution actually resolves the District’s underlying financial issue, versus potentially providing sufficient savings to bridge the District through the expiration of those contracts.”
“The existing labor agreements appear to be a primary driver of the structural imbalance, and as such, the District’s longer-term financial sustainability will ultimately depend significantly on the outcome of those negotiations, not specifically on the outcome of the proposed plan,” Dvorak and Van Laan wrote.
In her statement to the RoundTable Wednesday, Messinger wrote that the district understands the importance of “accuracy, accountability, and transparency” as district staff “contemplate decisions that will impact students, staff, and families.”
“As such, the district has engaged external school finance professionals and two community members with a financial background to independently review the financial assumptions underlying the proposed sustainability plan,” Messinger wrote. Messinger did not respond to an inquiry asking who the people were prior to publication.
Messinger wrote that district administrators “fully acknowledge” that the staff and community “have been navigating difficult conversations and decisions about the district’s finances for years,” adding that “the thought of such significant reductions is deeply painful.”
“But we cannot continue down a path of recurring deficits, ongoing uncertainty, and difficult decisions year after year. We must fundamentally reset the district’s financial trajectory,” Messinger wrote. “Our students, families, and educators deserve stability and predictability, in fact, we believe it’s essential for the health of our school system and our community.”
She wrote that the plan is about more than “balancing an annual budget” and is about “creating the conditions for our district to move beyond the financial crisis, focus our resources where they matter most, and develop a co-designed academic vision for the growth and success of every student.”
Calls to delay the vote
Dvorak said it would be “irresponsible” for the board to vote Monday. In a written statement, Azari agreed.
“Community members should not be finding multiple, significant errors in financial projections being used to make consequential decisions,” Azari wrote. “Unless the Board postpones the Nov. 9 vote and the timeline slows to enable process improvements and meaningful reviews, more errors are likely.”
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Source: evanstonroundtable.com
