By: Jennifer Chambers
Source: http://www.detnews.com
After years of ever-growing deficits, Detroit Public Schools broke into the black during the past school year, with a $43 million surplus, the district said Monday.
A 10 percent enrollment drop, federal stimulus money and belt-tightening measures allowed the district to reduce spending by $98 million in 2010-11.
But even as Emergency Manager Roy Roberts announced the district's first surplus since 2007, the Michigan Department of Education warned that the district could slip back into the red this year.
"DPS continues to have a substantial budget deficit and current monthly reports indicate this year's deficit is continuing to grow," department spokeswoman Jan Ellis said Monday.
This year, still in receivership and under state control, DPS slashed its deficit from $327 million to a projected $84 million, primarily through a $244.9 million bond sale completed last month.
Announcing the surplus for last school year, Roberts acknowledged that DPS still has a lot of work to do.
"I'd love to tell you the war is won. The war is not won," Roberts said. "Detroit Public Schools is a $1.2 billion business that needs to be run like a business. If you don't run it like a business, you will be in a horrible position."
According to documents filed with the state, by Sept. 30 DPS projected it would spend $93 million more than it budgeted this school year in classroom instruction. The district had to hire more teachers for higher-than-expected enrollment this fall and had to cover other costs, such as summer school.
DPS officials on Monday disputed the $93 million figure, saying it's outdated and does not reflect $45 million in vacant positions. When reconciled, the overage for instruction will be closer to $30 million, DPS spokesman Steve Wasko said.
Roberts focused on the district's improved financial condition, which resulted in part from an increase in federal aid from the previous school year — including $45 million from stimulus funds, $35 million from Title II grant funding and $51 million from Title I funding.
This budget year, DPS is not getting any stimulus funds because the program expired.
"We are not going to get a whole bunch more money. … We are going to have to do the job with the resources we have," said William Aldridge, DPS' chief financial officer.
Aldridge said DPS still has about "half a billion" in debt obligations related to the district's two bond sales — one in 2005, when the district borrowed close to $210 million to avoid bankruptcy, and the $245 million it owes from last month's bond sale.
The recent bonds, sold at an interest rate of 4.7 percent, will be paid off during the next 10 years, essentially deferring a large chunk of the district's deficit.
For the district's capital projects, including a number of new and renovated schools funded through a $500.5 million construction bond passed by voters in 2009, DPS owes $2 billion, Aldridge said.
Source: http://detnews.com/article/20111122/SCHOOLS/111220372/DPS-shows-first-budget-surplus-since-2007#ixzz1eYdm4J8H
Source: http://www.detnews.com
After years of ever-growing deficits, Detroit Public Schools broke into the black during the past school year, with a $43 million surplus, the district said Monday.
A 10 percent enrollment drop, federal stimulus money and belt-tightening measures allowed the district to reduce spending by $98 million in 2010-11.
But even as Emergency Manager Roy Roberts announced the district's first surplus since 2007, the Michigan Department of Education warned that the district could slip back into the red this year.
"DPS continues to have a substantial budget deficit and current monthly reports indicate this year's deficit is continuing to grow," department spokeswoman Jan Ellis said Monday.
This year, still in receivership and under state control, DPS slashed its deficit from $327 million to a projected $84 million, primarily through a $244.9 million bond sale completed last month.
Announcing the surplus for last school year, Roberts acknowledged that DPS still has a lot of work to do.
"I'd love to tell you the war is won. The war is not won," Roberts said. "Detroit Public Schools is a $1.2 billion business that needs to be run like a business. If you don't run it like a business, you will be in a horrible position."
According to documents filed with the state, by Sept. 30 DPS projected it would spend $93 million more than it budgeted this school year in classroom instruction. The district had to hire more teachers for higher-than-expected enrollment this fall and had to cover other costs, such as summer school.
DPS officials on Monday disputed the $93 million figure, saying it's outdated and does not reflect $45 million in vacant positions. When reconciled, the overage for instruction will be closer to $30 million, DPS spokesman Steve Wasko said.
Roberts focused on the district's improved financial condition, which resulted in part from an increase in federal aid from the previous school year — including $45 million from stimulus funds, $35 million from Title II grant funding and $51 million from Title I funding.
This budget year, DPS is not getting any stimulus funds because the program expired.
"We are not going to get a whole bunch more money. … We are going to have to do the job with the resources we have," said William Aldridge, DPS' chief financial officer.
Aldridge said DPS still has about "half a billion" in debt obligations related to the district's two bond sales — one in 2005, when the district borrowed close to $210 million to avoid bankruptcy, and the $245 million it owes from last month's bond sale.
The recent bonds, sold at an interest rate of 4.7 percent, will be paid off during the next 10 years, essentially deferring a large chunk of the district's deficit.
For the district's capital projects, including a number of new and renovated schools funded through a $500.5 million construction bond passed by voters in 2009, DPS owes $2 billion, Aldridge said.
Source: http://detnews.com/article/20111122/SCHOOLS/111220372/DPS-shows-first-budget-surplus-since-2007#ixzz1eYdm4J8H
