“What happened this year with transportation costs was unprecedented.”
So says District 65’s Chief Financial Officer Raphael Obafemi.
Obafemi and Business Manager Kathy Zalewski told a school board committee on Wednesday that rapidly escalating transportation expenses are a major component of an unanticipated $4 million deficit wrapping up the current school year. A $600,000 surplus had been projected.
While District 65 has enough money in reserve to cover the shortfall, board members wondered why expenditures are exceeding revenues by such a surprising amount.
“I hope we build in a $4 million buffer in case we see this again,” said board member Joey Hailpern.
“Had we seen this coming?”
Obafemi said that a transportation increase had been incorporated, “but we didn’t think it would go to this level.”
“It snuck up on us,” Obafemi explained. “We didn’t think it would be this bad.”
Besides higher costs for driver salaries (needed to attract employees in a tough post-pandemic market) along with increased fuel expenses, Obafemi said the district often had to use taxis to transport special needs children, often one child per vehicle.
He said the bus company usually handling special needs transit, Compass, has agreed to buy six new buses, which will be far more economical to use.
“But we couldn’t do that in the middle of the year,” he noted, because ordering buses takes time.
Most students who ride the bus use yellow buses from vendor Positive Connections. The cost for those services went up from $3 million to $4.3 million.
The committee also recommended full board approval of a 10% increase in contract expenses for Positive Connections next school year.
While the short-term transportation prognosis is rather expensive, district officials say bus costs should come down considerably once the 5th Ward School opens in 2025.
That’s because the school system will redistrict to have more walkable, neighborhood schools, with less need for busing.
“The 5th Ward School is not just a symbolic building,” said Hailpern, “but rather a big part of the financial future” in helping to reduce transportation costs.
In fact, transportation savings have been projected to cover the $40 million dollar cost of the new school over a number of years.
Higher bus costs are not the only reason for the $4 million shortfall.
“We are feeling inflation in every level of expenditures,” said Zalewski, including the cost of temporary employees due to staff shortages, computer software, and capital construction projects.
Zalewski said that a balanced budget for school year 2023-24 will be presented later this summer.
The total projected expenditures for the current (2022-23) operating buget is now $161.2 million.