Rhodes’ pay $18K a month to Sept. 30

The Detroit News

Retired U.S. bankruptcy Judge Steven Rhodes will be paid $18,750 a month to be Detroit Public Schools’ emergency manager through Sept. 30 at the latest, according to his contract.

A copy of the agreement, posted on the Michigan Department of Treasury website, says Rhodes was appointed effective Tuesday under Public Act 436, the state’s emergency manager law.

The contract states that Rhodes will appoint an interim superintendent for the district and that he could leave office June 1 if legislation to rescue and overhaul DPS hasn’t been enacted.

The state House and Senate are debating competing versions of legislation to pay off $515 million in DPS debt and finance creation of a new Detroit district.

Under the agreement, Rhodes is appointed as “an emergency manager,” though the contract also says he will act as “the transition manager for Detroit Public Schools.”

“In this transitional period for the district, the governor wants to engage the manager to focus on working with the Legislature and others in securing enactment of the legislation, implementing the legislation after enactment, and supervising related administrative functions as a transition manager for the District,” the contract states.

“For legal purposes, Judge Rhodes is serving as the emergency manager for DPS,” said Ari Adler, a spokesman for Gov. Rick Snyder. “However, the governor thought it was important to send a clear message that this is not a person who is being appointed for up to 18 months as allowed by the emergency manager law.

“Rather, this is a short-term appointment of a person put in charge of leading the transition from state control to local control as quickly as possible. That’s why Judge Rhodes was given the title of transition manager.”

Rhodes, who oversaw the city of Detroit’s Chapter 9 bankruptcy case, replaces Darnell Earley, whose last day as DPS emergency manager was Monday. Rhodes’ salary, on an annual basis, is equal to the $225,000 a year that Earley was paid.

The contract also says Rhodes will not recommend that DPS file for Chapter 9 bankruptcy. “The parties believe that enactment and implementation of the Legislation is a reasonable alternative to rectify the District’s financial emergency.”

The contract says Rhodes is expected to spent about 96 hours a month -- “about 60% of his professional time” -- on his DPS duties and that he will continue to work as a lawyer.

According to the agreement, Rhodes may “engage in the practice of law, including the representation of nonparty clients if the activities do no interfere or conflict with the Manager’s performance in Duties under this agreement.”

Rhodes is the fifth state-appointed leader at DPS since the district was placed under state control in March 2009.

District officials have warned that DPS, which has struggled with falling enrollment and rising debts, could run out of money by April.