Thursday, January 24, 2013

More Cuts Planned for the Detroit Public Schools

January 24, 2013

Detroit Public Schools face drastic cuts to balance budget

Operations continue to shrink to balance budget by ’16 target

Detroit — The financial slide inside the state's largest school district will continue through 2016, leaving Detroit Public Schools with 28 fewer schools, 1,688 lost positions and 13,000 fewer students, according to a deficit elimination plan obtained by The Detroit News.

District and state officials say the drastic cuts will bring DPS' deficit to zero by that time and with it the possibility of emerging from state control. The district has been under an emergency financial manager since March 2009.

Despite closing schools and shedding thousands of employees, DPS still will have a budget deficit the next two years.

To reach its goals, DPS is slashing expenses by $120 million in 2013-14, by $42 million in 2014-15 and by $33 million in 2015-16.

That will allow the district to whittle its current deficit of $72 million to $46 million in 2014 and $21 million in 2015, according to the deficit elimination plan, which state officials approved last week.

By 2016, the year DPS projects a small surplus, the district expects to have less than 40,000 students — under a quarter of its enrollment in 2000.

The numbers outlined in the plan foretell a drastic and continued decline at DPS in terms of students, resources and physical presence in a city where charter schools and a new, statewide school district impede DPS' ability to retain students.

"We have been whittled down to nothing … but we are not putting together a plan to lose," said DPS Emergency Financial Manager Roy Roberts. "We need to be in strategy mode. We need to get kids back in DPS."

This is the third financial plan filed by DPS officials, who started tackling financial problems in the beleaguered district in 2009 under Roberts' predecessor, Robert Bobb. Bobb vowed to eliminate the deficit by 2014, under a five-year plan that called for 60 students in some high school classrooms and mass school closures.

Roberts filed a new five-year plan with the state that started in 2011, the year he took over. Roberts said the district is on track to eliminate the deficit by 2016 and is ready to regain the majority of schoolchildren in Detroit.

Fewer than half of the 100,000 children who live in Detroit attend DPS. The rest attend charter schools, suburban schools and schools in the new Education Achievement Authority.

"We are going on the offense to put this plan together," Roberts said. "We are convinced we are going to get some of this market share back."

Striving to be competitive

DPS expects to collect $720 million in revenues to operate the district this school year. Yet its estimated revenue stream is expected to drop to $622 million by 2014, $580 million by 2015 and $547 million by 2016 — mostly due to the loss of students and state and federal aid.

The district expects a budget surplus of $2.6 million at the end of 2016 and plans to award a 2 percent salary increase in 2015 "to maintain and recruit well-qualified employees."

Bill Aldridge, chief financial officer of DPS, said the intent of the latest financial plan is to position the district to be competitive in Detroit.

"That means to be competitive we have to be reasonably stable and have a lean cost structure," Aldridge said.

One example of that, Aldridge said, is upgrading the district's technology system, which is more than four decades old. The initial cost will be $4.3 million but the average savings each year after that will be between $13 million and $15 million.

"It's people intensive, time intensive. It's how the people have to perform their work, too many manual processes, too much paper. Our HR process is primarily based on a document that's four decades old," he said.

DPS plans to close 28 schools from 2014-16, which is expected to save $9.2 million in services and supplies and $4.2 million in utilities. More than 150 positions such as principals and clerks will be eliminated as the result of those closures.

Projecting to lose nearly 13,000 students, DPS said it will reduce support services staff — nonteaching positions — at a rate faster than the student decline to "stay ahead of the cost curve" for student-to-administrator cost ratios.

About 470 positions will be lost by 2016 at a saving of $30.9 million. Teacher reductions of 542 positions will save nearly $50 million.

Keith Johnson, president of the Detroit Federation of Teachers, said the district should be focused on halting the decline and not exacerbating it.

"Rather than focus on ways to build up student enrollment to develop magnets to bring students into the district, they are accepting accelerated attrition and the loss of student population," Johnson said.

"What really concerns me is the template has been established for the virtual and complete dismantling of a public school district in Detroit," he said.

School board President LaMar Lemmons said the plan was not provided to board members, who have been battling Roberts over control of the district, and he had not seen it on Wednesday. Lemmons said the district should focus on recapturing students by providing a quality education that includes improved safety measures, more access to social services and tutorial services, instead of cutting back.

"It's deliberately done to undermine our citizens and privatize education," he said.

Still losing enrollment

State Superintendent Mike Flanagan approved DPS' plan Jan. 17. It projects the district will go from a $1.075 billion budget and 66,000 students in 2011-12 to a $547 million budget and 38,448 students in 2015-16.

DPS has experienced drastic enrollment declines in the last two decades. In 2000, it had about 150,000 students. By 2010, that number had slipped to 75,000, the result of an explosion of charter schools across the city, the flight of families from the city during chronic economic decline and schools of choice in suburbs.

This school year, DPS enrolled about 51,000 students, but according to its deficit elimination plan the district expects to lose 12,896 students and $170 million in state revenue the next three school years.

Kurt Metzger, director of Data Driven Detroit, said that with the emergence of charter schools, schools of choice and the Education Achievement Authority, enrollment in DPS fell from 80.4 percent to 45.7 percent of all Detroit school-age children in a little more than 10 years.

"I do feel they are being very realistic in their enrollment forecasts. … The reality that Detroit faces is a continually decreasing school-age population in the city," Metzger said.

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