Detroit — Detroit’s public school district is struggling with two realities: Most of its buildings are broken, but it can’t collect a single penny of taxes to address nearly $543 million in needed repairs.
Inoperable boilers. Corroded plumbing fixtures. Missing ceiling tiles in classrooms. Exterior walls with cracks. Roof leaks. Incomplete fire alarm systems. Electrical panels in classrooms known to be fire hazards.
These expensive, growing capital needs exist across 100 school buildings at the Detroit Public School Community District where facilities were neglected for nearly a decade under emergency management.
Waiting another four years to deal with widespread poor building conditions would cause the price to soar to nearly $1.5 billion, according to an assessment by engineering consulting firm OHM Advisors.
But waiting is what DPSCD must do. The district cannot issue debt to fund school construction through the state’s School Bond Loan Fund — the program most Michigan schools use to fund expensive school construction — because it has already borrowed the maximum permitted by law.
Faced with the conundrum of needing to provide safe and adequate facilities for students and staff without having access to the state fund, Superintendent Nikolai Vitti is moving ahead with a two-part plan: spend $9.7 million to make repairs at 46 school buildings using general funds and then ask the community to decide the fate of what is left to fix.
Starting next month, Vitti said the district will hold meetings across the community to ask parents and residents whether and how to fix the remaining schools; whether to close, consolidate or build new schools, or seek an alternative financial solution in Lansing.
"We need to have an honest conversation with the community based on the amount of money needed to upgrade the facilities," Vitti said. "Is this where the investment should be? Or where should it be? Is there an opportunity to consolidate? Should we maintain?"
Some DPSCD schools are actually overcrowded, Vitti said, but others suffer from low enrollment and need to be rightsized.
The board and Vitti have decided the best way to approach the problem of repairing the remaining 54 buildings is to examine feeder patterns from K-5 and K-8 schools to high schools and meet with community members in those areas.
"We want the community to come out and own the problem and be part of the solution," Vitti said.
Based on community feedback from the meetings, the district will create a new facilities plan, Vitti said.
"That moves us into advocacy work around lobbying lawmakers to change the way the debt is repaid or to give us more flexibility to incur debt based on the fact we're capped now at current 13 to 18 mills and our debt isn't secured beyond that," Vitti said.
Under Vitti's facility plan for the 2018-19 year, the district will first fix and invest in 15 schools with high utilization rates, high enrollment and multiple repairs that rank low on the district's facility conditions index, which indicates better overall condition.
"We ranked schools so we knew if we were going to invest in a new roof in a building or improve an HVAC system that would be a school used beyond this decade," Vitti said.
"There are some schools with immediate needs like roof replacement, work to HVAC systems. The $9.7 million is not being used randomly. It is analytically done where best investments are made."
Those schools include Marquette, Cass Tech, Bates, Mumford, Clemente, Bennett and Clark. Repairs include paving, fencing, roofing, windows and athletic fields. Total cost: $1.9 million.
Another 31 schools called “outliers,” which don’t meet all three conditions but have immediate needs for repairs, will also get some improvements. Those include Thirkell, Carver, Brenda Scott, Osborn and Spain. Fourteen of the 31 buildings need roof repairs. Total repairs: $7.8 million.
Since coming to the district in 2017, Vitti has made systemic changes, including replacing an outdated curriculum, reducing chronic absenteeism and amassing a budget surplus.
But building conditions described by some as deplorable have vexed the superintendent for their sheer size and cost.
As Vitti moves forward with a plan to fix some schools, The Detroit News reviewed 100 reports from OHM Advisors, which found that about 25 percent of DPSCD buildings are in unsatisfactory condition and another 20 percent are in poor condition. An executive summary of the OHM report can be found online.
A total of 100 buildings were assessed, including 33 elementary sites, 42 middle school sites and 25 high school sites.
The cost of repairs ranges from $4,223 at Earhart Elementary/Middle School for special needs accessibility improvements to $30.23 million at Pershing High where systems within the building vary from fair to poor condition. That price tag jumps to $3.43 million and $45.56 million respectively in 2023 for additional systems that are expected expire, the report says.
"Plumbing fixtures and domestic water distribution were reported to require constant maintenance and experience regular failures," the report says of Pershing, which was built in 1929. "Leaks from many of the plumbing fixtures were observed by the handles and base of the units when in operation. This is indicative of fixtures beyond their service life. ... Most surfaces have been vandalized and have tiles which are either cracked or missing."
Five school buildings house less than 200 students each but have facilities needs from $1.46 million to $14.14 million.
Frederick Douglass Academy for Young Men, which has about 149 students in grades 6-12, is in poor condition, according to the report, and needs $14.14 million in work.
Water has penetrated and ponded on its built-up roof, which is causing leaks in several areas of the school. Some exterior doors have rust damage, scratches and dents.
"Ceiling finishes were observed to be stained and broken. Floor finishes are damaged and in need of replacement. The 9 x 9 tiles were observed that may have asbestos. Carpeting throughout the facility is stained, torn, and in poor condition," the report stated.
Michigan is one of 13 states that provide no state aid for facilities, according to a Michigan State University report on school finance.
Building repairs for local school district facilities are the responsibility of each local district. School districts, with voter approval, can levy debt or sinking fund mills to pay for facilities and capital improvements.
Voters in Detroit continue to pay on $1.5 billion in approved school bonds from 1994 and $500.5 million that were approved in 2009.
According to the district, DPSCD has a total of $1.64 billion in outstanding debt as of April 22 from both bond and its balance from the state's school loan program.
District spokeswoman Chrystal Wilson said $1.09 billion remains due on the 1994 bond while $485 million is due from the 2009 bond. The school loan balance is $60.6 million.
Vitti says he is having conversations about facilities and possible solutions with the governor, state treasury, local elected officials and city business leaders and is seeking out talks with local pastors and the broader community to "build an understanding of the problem and inequity."
Asked whether a bond is on the table, Vitti said he wants to engage the community before moving into finance questions.
"Talk of any kind of bond is premature," Vitti said after his state of the school address on April 10. "Looking at how bond money was spent in the past, I would be skeptical myself. We are going to define the problem and come up with a clear solution."
Michigan schools usually fund school construction by issuing debt through the state’s School Bond Loan Fund or issuing mills for a “sinking fund,” said Ron Leix, spokesman for the state treasurer.
However in the case of DPSCD, Leix said the district cannot issue debt to fund school construction through the state program because the old district, DPS, has already borrowed the maximum permitted by law.
"DPSCD cannot use the SBL program because there is no capacity within the 13 mills currently being levied to issue more debt based on the current taxable value of properties within the city of Detroit," Leix said.
DPSCD could, Leix said, ask voters to approve a sinking fund levy or to approve unlimited tax unqualified bonds, which are bonds issued without the state backing through the state's school bond program.
David Arsen, professor of education policy and educational administration at MSU's College of Education, said it's rare for districts to try to issue bonds without going to the state fund program.
"It’s a more costly way to go unless the district has a lot of taxable value per pupil," Arsen said.
The current system of relying on property taxes to fund facilities is unfair for both taxpayers and students, Arsen said, and that variations across communities in taxable value per pupil translate directly into the ability to pay for school facilities.
"The amount of revenue generated per 13 mills per pupil varies directly and that is the fundamental inequality here," Arsen said. "This is well understood. It’s the unfinished business of Proposal A. No one defends the way we do facilities in Michigan."
Changes in the borrowing limits for DPSCD could provide some relief and would require legislative change. Arsen noted there were several instances during emergency management when the state made special provisions to permit DPS to continue borrowing beyond its legal ability.
"When it became important to prevent default the state got into action," Arsen said.
The district's unaddressed facilities needs could put Detroit's recovery in jeopardy, according to Moody’s Investors Service.
Moody's said in November that without state support to address its growing capital needs, Detroit's public school system poses a potential threat to Detroit's economic revitalization.
While attending the April 18 unveiling of a $10 million investment in renovations at Breithaupt Career Tech Center, paid for through private investment in the business community, Mayor Mike Duggan said he is aware the district needs help and alternative solutions to address its facilities needs.
"You go from school to school in this city and there are some that are beautiful and well maintained and some where the condition of the building is such that I think it does discourage the learning," Duggan said.
"We need to have significant upgrades and we are talking to DPSCD about different financial options, potentially in Lansing," Duggan said, declining to cite specific options. "Something needs to be done."
Asked about state intervention, Duggan said: "We are working through a potential solution. We are in conversations."
Gov. Gretchen Whitmer does plan to assess ways to help DPSCD make investments in facilities after she gets her budget passed that proposes a $507 million increase in education spending, spokeswoman Tiffany Brown said.
Whitmer's budget proposes an increase in classroom spending and moves the state toward a "weighted per-pupil funding system" that includes additional spending on special education and low-income students.
"The best thing that we can do is get a budget passed that actually invests in the education of kids," Brown said. "The next phase would be to focus on remedying our issues with regard to infrastructure and assessing ways to help DPS make the investments in the facilities."
State of facilities
Poor building conditions are a problem for many districts across the nation.
In a 2014 report, the National Center for Education Statistics said 53 percent of the 1,800 public school buildings they surveyed had repair needs that will require $197 billion to address with the average dollar amount for schools needing to spend money was about $4.5 million per school.
In Michigan, a 2005 report released by the Citizens Research Council of Michigan and The Education Policy Center at Michigan State University found that public schools had an $89 billion in unmet capital need and a quarter of this need was concentrated in five high-needs districts: Detroit, Battle Creek, Flint, Muskegon and Saginaw.
Filthy building conditions at DPSCD schools are at the center of a lawsuit filed by Detroit schoolchildren against the state of Michigan.
Since March, the state has been in confidential mediation over the 2016 lawsuit in which Detroit schoolchildren allege they were denied the right to basic literacy in part based on "slum-like" conditions at the schools, including buildings plagued by vermin, unsafe facilities and extreme temperatures.
Attorneys in the case are asking a federal judge in Detroit to order the creation of a statewide accountability system that monitors conditions that deny access to literacy — including deplorable school conditions — and intervenes to address those conditions.
Last August, Vitti shut off drinking water at all schools after several schools had excessive levels of lead and copper.
Hydration stations are being installed across the district and are expected to be in place for the start of the 2019-20 school year, with the district spending $2.8 million for the work.
Parents across the district said they were pleased the district was investing in repairing some of the buildings but were concerned about the future of the remaining schools.
Christopher Gullet said his sons' school Greenfield Union is full of children and he would support a tax increase that pays exclusively for school repairs. Greenfield is on the list of outlier schools and is scheduled for $120,000 in roof repairs and $30,000 in unspecified work.
"Fix the schools," Gullet said. "There is a lot of kids around here. This is Detroit and Detroit is coming back, so we are going to need that, you know?"
Parent Rolando Maldonado, whose two children attend Roberto Clemente Learning Academy, built in 2001 and needs $2.1 million in site, interior and roofing repairs, said the district should consider closing some of the older schools with expensive repairs and focus on buildings that can be made whole again.
"It's too much to fix. It's better to cut our losses before taxing people," Maldonado said.
Maldonado said his first-grade daughter has been flourishing academically under the district's new math and reading curriculum, now reading a grade ahead and "out-mathing" her own father. Her school building needs to be fixed, he said, so her progress and that of other students continue.
"It's not our fault, it's not Vitti's fault," Maldonado said of building conditions. "We are living in a time where we are fixing someone else's mistakes."