The DPS debt issue is the elephant in the room that nobody wants to deal with. But it has to be dealt with,” Richard DeVore, a regional president for PNC Bank, said in the report.
The district actually has two primary types of debt.
The first is capital debt — bonds issued to fund school construction and building upgrades; that obligation is repaid through a property millage that costs residents and business owners about $174 million a year, according to the report. Local taxpayers will continue to foot that bill.
The other is debt incurred to cover accumulated operating deficits. In order to make up for annual shortfalls, emergency managers have repeatedly borrowed in an attempt to keep the district financially solvent.
“The state of Michigan should take responsibility for past operating debt that occurred on its watch: $53 million a year,” stated the report.
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