Detroit Public Schools considering bankruptcy!
DETROIT, Michigan - June 29, 2009 - Detroit Public Schools is considering bankruptcy in addition to cutting 2,451 employees - a massive 17.7 percent of its workforce - to reduce the district's multiyear deficit, Robert Bobb, the district's emergency financial manager, revealed before a budget presentation Monday.
The cuts won't eliminate what he calls a "legacy deficit" that now totals $259.5 million, said Bobb, who took over the district's finances in March. Bobb said the district overspent its budget for seven years, and that eliminating the deficit in one year would bring too much harm to students' education.
"To solve the sins of the past ... the budget cuts would be too radical," he said. Missteps include hundreds of unbudgeted employees, fiscal mismanagement, theft and more, he said.
In addition to staffing cuts, Bobb's $1.2 billion fiscal year 2010 budget seeks cost-savings by cutting textbook purchases in half to save $3.3 million, pursuing managed competition for physical plant operations and security officers to save a combined $8.6 million, and privatizing payroll operations to cut $156,000. He also plans to reduce overtime and cut memberships and consultants in the school board office and has already announced the closure of 29 schools.
The staffing cuts impact every corner, including more than a thousand teachers out of about 5,500 and a reduction of counselors from 203 to 45. But Bobb stressed that he will continue to invest in the system to improve education. For instance, he is exploring finding private funding to enhance music and art instruction, which he deems critical.
To gain revenue, his plans include selling additional closed schools, investing in an enrollment drive, rebidding contracts and other initiatives.
The cuts won't eliminate what he calls a "legacy deficit" that now totals $259.5 million, said Bobb, who took over the district's finances in March. Bobb said the district overspent its budget for seven years, and that eliminating the deficit in one year would bring too much harm to students' education.
"To solve the sins of the past ... the budget cuts would be too radical," he said. Missteps include hundreds of unbudgeted employees, fiscal mismanagement, theft and more, he said.
In addition to staffing cuts, Bobb's $1.2 billion fiscal year 2010 budget seeks cost-savings by cutting textbook purchases in half to save $3.3 million, pursuing managed competition for physical plant operations and security officers to save a combined $8.6 million, and privatizing payroll operations to cut $156,000. He also plans to reduce overtime and cut memberships and consultants in the school board office and has already announced the closure of 29 schools.
The staffing cuts impact every corner, including more than a thousand teachers out of about 5,500 and a reduction of counselors from 203 to 45. But Bobb stressed that he will continue to invest in the system to improve education. For instance, he is exploring finding private funding to enhance music and art instruction, which he deems critical.
To gain revenue, his plans include selling additional closed schools, investing in an enrollment drive, rebidding contracts and other initiatives.
