June 30, 2010 at 1:00 am

Detroit Schools budget deficit grows 66%

Bobb to announce spending cuts; power struggle with board will be in court today

Bobb )

Detroit -- The budget deficit for Detroit Public Schools has ballooned from $219 million last year to $363 million, according to budget documents released Tuesday by the district.

The 66-percent spike in the debt occurred during the first full year of leadership under Robert Bobb, the state-appointed emergency financial manager. Bobb was appointed by Gov. Jennifer Granholm to help eliminate the district's deficit. His term expires in March.

A year ago Bobb pledged to end overspending and expected a $17 million surplus that would help whittle the $219 million deficit accumulated from previous years. In March, The Detroit News reported the district's deficit was projected to instead grow to $317 million for the year, but in less than four months it has added $46 million.

"It's a revenue problem now," said district spokesman Steven Wasko, noting $7 million in uncollected property taxes, a $19 million loss in state aid, $4 million in loss in Medicaid reimbursements and $8 million in unanticipated retirement payments.

"These are outside of the district's control," he said.

If Bobb were to eliminate the entire $363 million deficit in one year, the district would have money left to fund only 9,167 students -- or about 12 percent of the enrollment, district officials say.

The figures were released as Bobb is slated to announce his 2011 budget at a public meeting at 6:30 p.m. today at Renaissance High School. The $558 million general fund budget for the year that begins Thursday calls for a $190 million, or 25 percent, reduction in spending. The budget projects 77,300 students, or about a 10 percent reduction over last year.

Major cuts include:

  • $8 million in information technology through reductions in contracts and reorganization.

  • $3 million in finance through restructuring and eliminating vacancies due to retirement.

  • $3.5 million in the academic accountability office.

  • $5.2 million in savings from managed competition for custodial functions.

  • Three more students per class in grades four through 12. The budget will protect the 25-student limit in K-3.

    Bobb expects to present a transition plan and long-term deficit elimination plan to the state by Nov. 15.

    The public budget presentation comes the same day Bobb and the Detroit Public Schools board are expected back in court as a judge examines issues involving academic control.

    A hearing is scheduled for 11 a.m. today before Wayne County Circuit Judge Wendy Baxter.

    One issue to be addressed is Bobb's request to block the school board from extending the contract of Superintendent Teresa Gueyser.

    Bobb said the board had no legal authority when it approved her contract extension at its meeting Thursday. In court papers, attorneys said the state-appointed manager has full authority over fiscal and personnel matters.

    Meanwhile, in a motion filed Tuesday in Wayne County Circuit Court, the school board is requesting a temporary restraining order preventing Bobb from laying off those in the district's Curriculum Department and entering into contracts with undisclosed vendors and consultants.

    Bobb doesn't have academic control to make such decisions, and the layoff proposal "threatens to cause irreparable harm to the district," the board said.

    "The Curriculum Department is the system that buys the books, figures out what should be taught, analyzes the tests that need to be given," said attorney George Washington, who is representing the school board. "It's the academic heart of the district. To cut that out and sign a contract with (others outside DPS), that can't be undone."

    Wasko said the district would be "vigorously challenging" Gueyser's contract extension and the temporary restraining order.

    He said there were no plans for outsourcing in the Curriculum Department, and the layoffs are within Bobb's authority as defined by law.

    "All decisions relating to finance and positions ... are clearly within his authority under Public Act 72," the 1990 act that outlines the authority for emergency financial managers, Wasko said.