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After six years and four state-appointed managers, Detroit Public Schools’ debt has grown even deeper



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In July 2013, Snyder announced that Roberts was being replaced by Martin, then chief financial officer for the city of Detroit. Among other things, Martin had also served a short time as the emergency manager of Highland Park's public schools.

"Detroiters and Michiganders alike are thankful for Roy's leadership, and we are deeply committed to continue improving the city's educational system," Snyder said. "The students, teachers, administrators, and families of Detroit Public Schools have benefitted from Roy's work on fiscal stability and improving academic standards and school safety. There is still work to be done, and Jack Martin's problem-solving skills, expertise, and strong management and leadership abilities will help continue the positive transformation of Detroit Public Schools."

Snyder's claim that there was work remaining to be done didn't quite do justice to the challenges that awaited Martin.

By the time Roberts left, with the district under state control for more than four years, the student population had fallen to 51,318, and the budget was continuing to hemorrhage red ink. In yet another attempt to stop the financial bleeding, DPS officials noted in the financial report covering the 2012-13 financial year that the district had "called together over 600 stakeholders from all corners of the Detroit community to assist with the development of a strategic plan to help guide the District forward. The strategic plan was completed in April 2013 and provided the District with fresh new ideas and a focused look into its future and what needs to be done to deal with the declining pupil challenge that has continued to drain revenue from the District."

While media accounts of the school district's finances tend to focus on annual budget deficits — which fluctuate from year to year — another budget line that doesn't get attention is what's referred to in financial reports as the "total net deficit," which weighs shortfalls against assets and provides a clearer picture of the ledger.

Using that measure, the district's financial situation has grown consistently worse while under the control of state-appointed managers.

At the end of the 2007-08 fiscal year, the last full year in which the elected school board was in charge, the total net deficit was $369.5 million.

By the time of Martin's appointment, the figure had ballooned to $686.5 million. As a result, according to the district's financial report, "The unrestricted net position deficit balance highlights a potential inability to meet future operational needs as well as working capital and cash flow requirements."

One year later, at the end of the 2013-14 fiscal year, the figure had reached $763.7 million. Another dire warning was issued.

Also growing steadily worse has been the district's long-term debt, which, due in part to repeated borrowing to cover annual budget shortfalls, jumped from $1.5 billion in 2007-08 to $2.1 billion at the end of 2013-14.

Like the district's other former emergency managers, Martin didn't respond to interview requests left at his Bloomfield Hills accounting firm.

Also reluctant to answer questions was Steve Wasko, the district's assistant superintendent, community relations and chief spokesman for all of the state-appointed managers who have been running DPS since 2009.

Wasko did not respond to repeated requests for an interview and refused to answer even basic questions submitted by email.

He did, however, provide a few documents touting the successes of emergency management in recent years. Among those claimed accomplishments:

• Most of our employees are at the top of the District's pay scale. As an example, it costs DPS an average of $93,333 for each teacher. This condition represents one of the components of the District's structural deficit. The DFT and other unions have agreed to work with us to resolve this problem. Phase I of the Employee Severance Plan saved the District $5.9 million; Phase II which was rolled out this month is projected to save the District approximately $11 million in FY 2015 and approximately $60 million over the next five years.

• DPS recently recorded a fall enrollment of 48,904 students. This represents a decrease of only 1.8 percent, or 920 students, from the previous year. This is significant for a number of reasons, including the fact that our demographer projected that we would have only slightly more than 46,000 students attending our schools this year; and previous enrollment losses had been averaging at least 10 percent for the last decade or so.

• DPS reorganized its police department, employing law enforcement veterans and opened a $5.6 million police headquarters and command center, a 23,000-square-foot high-tech facility built from the ground up in six months to provide an improved 24-hour security system to enhance public safety on campuses. The command center is part of a larger $41.7 million districtwide security initiative to improve safety and security through advanced technology and infrastructure and a reorganization of the police department.

Not included in the material provided by Wasko was this notable fact:

According to recent reports, the projected annual deficit for the current fiscal year is nearly $170 million.

Which is why, when installing yet another EM last month, Snyder once again found it necessary to point out there is still more work to be done.

During the press conference announcing the appointment of Darnell Earley as the district's EM, Martin sat stone-faced as his replacement, who has no experience running a school district, told reporters he was ready to address the ongoing financial crisis by digging into the books and looking for areas where cuts can be made.

As if no one had thought of that over the course of the previous six years.

Throughout all of this, the elected school board, operating without any resources, has attempted to regain its authority. Three of its members are party to a federal lawsuit challenging the constitutionality of the state's emergency manager law.

The board also went to court seeking an order allowing it to exercise its option to remove an EM after he or she had been in place for 18 months. That was one of the issues being discussed at the recent meeting Aliya Moore and her girls attended.

As it turns out, that 18-month limit is largely illusory. According to the court's interpretation of the law, if an appointed manager steps down before the 18-month term expires, the clock is reset.

Which just happened.

One day before his term ended, Martin, without explanation, retired, opening the way for Snyder to appoint Earley.

"Progress has been made, but there's still more to be done," Snyder said during the press conference with Earley and Martin at Burton International Academy. "That's what this transition is about. We need to keep working together."

There are, however, some key voices absent from any chorus joining hands to sing "Kumbaya."

Notably, there's the Detroit teachers union, which just elected as its president Steve Conn, who came into office vowing to fight emergency management.

A longtime member of the group BAMN (By Any Means Necessary), Conn ran 12 times to be the union's president. He said in a recent interview that his openly confrontational approach finally gained traction with the district's teachers because they had finally realized that cooperation had only led to layoffs, pay cuts, privatization, and larger class sizes.

The key to improving the district, he said, is focusing on education and not finances, and that the union under his leadership will do all it can to force that philosophy to the forefront of the debate.

There's also the elected school board, which has also vowed to carry on the fight against emergency management.

At their most recent meeting, board members discussed pursuing further legal challenges to the EM law and the way the way the district has been conducting business. Also discussed were ways to generate outside funding to pay for an independent audit to examine why, despite all the cuts already made, the district is coming up $170 million short this year — meaning that it is spending that much more than it is bringing in, digging DPS' financial hole that much deeper.

Moore and her two girls are regular attendees of these meetings. Oakman may be closed for good, but the activism its closure inspired is as strong as ever.

"To see them close that school, it showed to me that the people who did that didn't really care about kids," said Moore. "It told me what they really cared about was money.

Daughter Chrishawna, polite and poised beyond her years, talked about how much she missed the school and the way that the "general ed and special ed kids" happily meshed, with the able-bodied pitching in to help their handicapped classmates.

"We all learned to work together and share," she said.

She has her sights set on college and plans a career as a math teacher, or maybe fashion designer.

But that decision is still years in the future.

They talk about the closure of Oakman and how it has affected their lives. The girls now attend Paul Robeson Academy, part of DPS. It's not as close as some others, but it's a good fit.

"I like it," says Chrishawna. "Not as much as Oakman, but it's a good school."

And she's prepared if anyone ever tries to put it on a closure list.

"I know what to do," she said. "I will talk to my classmates and tell them what's going to happen and get them to protest with me."

Her mom has learned a few lessons as well.

"This whole thing has changed my life," she said. "I'm a quiet person by nature. But I've learned to be more vocal and to outwardly express the inner passion I have for our children. And what I've seen happening to them is so unjust, so savage, I just can't stop fighting against what's being done to them."

Curt Guyette is an investigative reporter for the ACLU of Michigan.
His work
is funded by a grant from the Ford Foundation.

Editor's note: Part Two of this two-part series looks at efforts underway to help improve educational opportunities for students throughout Detroit, as well as provide an analysis of the forces making that such a monumental task.

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