HPHS-DHS Consolidation Among Options To Address Costs, Deficits

HIGHLAND PARK, IL — Warning that a structural budget deficit and unmet facilities needs would burn through the district's finances, Township High School District 113 officials on Tuesday floated the idea of consolidating the two-school district.

District officials also announced plans for a pair of town-hall style meetings next month to discuss the district's long-term financial sustainability.

The district has a fund balance of $50 million this year, but if it remains on its current fiscal path, its annual deficit will grow from $1.1 million to more than $5 million and consume more than half of the balance in the next decade, according to a district forecast. Allowing the balance to be depleted puts the district at risk of higher borrowing costs and challenges with unexpected expenses.

The district also faces significant infrastructure and construction costs at both Deerfield and Highland Park high schools.

Superintendent Bruce Law said there are major issues with the DHS auditorium, which has had at least one prolonged shutdown due to safety issues and requires regular inspections to ensure it meets minimum safety standards.

"It has issues. There are ADA issues. There are issues in the fly loft," Law said. "There are a lot of issues in the auditorium. I think everyone knows that this is a space that it's maybe not too far to say it's inoperative because people can't be in it."

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Similarly, the HPHS library needs a significant investment, the superintendent said.

"The roof is failing. The HVAC is failing," he told the board. "You can see these stairs. Now there is a way for a person in a wheelchair or a walker to access the library but in terms of accessibility it fails our students and staff if they're in a wheelchair or on a walker.

Infrastructure alone will cost an estimated $76.1 million. Fixing the auditorium would cost about $34 million, while the library needs nearly $8 million in work, according to district estimates.

The estimated bill for needed infrastructure, top-priority capital spending and fixes for the Deerfield High School auditorium and the Highland Park High School library is more than $177 million and rises to nearly $228 million with lower-priority spending is included.

Without a referendum, the district can only raise about $88 million in construction funding over the next decade, according to administrators.

Administrators said more than $78 million of the district's approximately $104 million annual budget goes to salaries and benefits that are growing at a rate faster than the district's property tax revenue, which is tied to inflation.

At the same time, the district faces a decline in enrollment without a proportional decline in the number of employees needed to provide the same services, according to district officials.

Estimates from a demographer hired by the district as part of its master planning process found the population of 3,300 students is likely to decline about 10 percent and settle at about 2,900 students by the end of the decade

"Sobering doesn't even begin to describe the size of the issue," said board member Jaime Barraza, who said it was important for the board to confront it publicly. "I think it's a very responsible thing to do not to bury that and — we keep on saying, 'kick the can' — keep on kicking the can."

District 113 administrators and board members have identified at least three possible pathways to address the issued forecast.

It could maintain two campuses — "knowing we will either fix and replace infrastructure or attempt to pass a large property tax increase through a referendum" — while making drastic reductions in spending, including from student programs if needed.

Alternately, the district could use one high school for a freshman campus that feeds into another campus for sophomores, juniors and seniors, which could reduce needed construction costs while still requiring annual budget cuts and almost as large a property tax referendum.

Or the district could gradually combine both schools into a single campus over a period of years, which would limit overhead and infrastructure cost and require a smaller referendum to pay for construction at a consolidated school.

That option would provide the board about $4.3 million in savings in the fiscal year of consolidation, not counting transition costs, according to a presentation on the state of the district's finances and facilities. The consolidation would cut about 25 percent of salaries and 50 percent of non-personnel spending and allow the board to run a surplus for four years before the deficit returned.

"No option has been selected," Law said. "There are more options. These are the three. Nothing has been decided."

Board Secretary Gayle Byck said the district would not be able to continue providing the same services it does today amid structural deficits, declining enrollment and spending needed on facilities.

"Nothing's going to be painless. It just doesn't work like that," Byck said. "And trust me, after the last 18 months that we've all had, it's very tempting to kick the can down the road but this is what we were elected for, it's to deal with these kinds of hard decisions, to have the fiduciary responsibility to the taxpayers."

Guided building tours and town hall-style meetings are scheduled for Oct. 5 at Highland Park High School and Oct. 19 at Deerfield High School. The building tours are scheduled to begin at 6 p.m. with listening sessions to follow from 8 to 9 p.m.

Board President Jodi Shapira said district officials would seek to ensure community members can participate in remotely. She said the board is committed to seeking input from residents and making the hard steps to address difficult long-term questions about the future of the district.

"We are here and we are here to listen and we're here to learn. And come up with a solution and I'll name a school after you," Shapira said. "Just kidding — but I might."

Watch discussion from Sept. 28, 2021, Township High School District 113 school board meeting:

More information is expected to be added to the "Future 113" portion of the district's website focused on its long-term planning and sustainability. Questions, comments and ideas can also be sent by email to future@dist113.org.