Detroit Public Schools generates annual operating surplus, reduces legacy deficit by $43 million, focuses resources on high standards in a rigorous curriculum

Along with $200 million financing, DPS deficit is projected to be $83.9 million, although  challenges remain to maintain balanced budget with enrollment and State Aid reductions, continue deficit elimination plan and move schools to EAS 

Detroit Public Schools generated its first annual operating surplus since 2007 and reduced its negative fund balance by over $43 million (13 %) for the 2010-11 fiscal year. DPS accelerated the elimination of its $327 million legacy deficit, reduced total expenditures by over 8% and reduced debt service cost by almost $6 million. The announcement was made today by DPS Emergency Manager Roy S. Roberts and the results are presented in the district’s FY 2010-2011 Consolidated Annual Financial Report (CAFR) which was submitted as required to the Michigan Department of Education by the November 15 deadline.

Roy S. Roberts Financial Update — Romanian

Roy S. Roberts Financial Update — Hmong

Roy S. Roberts Financial Update — English

Roy S. Roberts Financial Update — Bengali

Roy S. Roberts Financial Update — Arabic

Roy S. Roberts Financial Update — Spanish

Taken in conjunction with the October 2011 $244.9 million financing which effectively results in eliminating $200 million of the school district’s legacy deficit, DPS’ deficit is projected to be $83.9 million.

The CAFR reflects the audited results of the District’s financial operations for the fiscal year ended June 30, 2011. The complete document is available on the District’s web site. In it, the CAFR demonstrates that:

  • Total expenditures decreased by $98 million or approximately 8% under last fiscal year. This decrease was primarily due to reductions in spending on instruction, support services and debt service.
  • Support services expenditures decreased by $14 million due primarily to savings in pupil services, business services and operations and maintenance.
  • Debt Service costs decreased by approximately $6 million due to lower interest expenditures.
  • Capital outlay expenditures increased by $3 million due to increased spending on Adult Education capital projects.
  • Expenditures on Instruction decreased by $83 million due primarily to a reduction of approximately 10% in student enrollment.

Total revenues increased by approximately $54 million, or about 5% over the last fiscal year, primarily due to an increase in federal revenues. Revenues from State sources as well as Local sources both decreased.

“These reports, submitted on time, reflect the fact that we are moving solidly in the right direction. Careful financial planning, sacrifices across the board while maintaining a focus on teaching and learning have paid dividends,” Roberts said. “Amidst the District’s financial and budgetary challenges we are determined to educate all students. To do this we are redesigning the District and its educational programs, and will not waiver from focusing available resources on ensuring high standards in a rigorous curriculum and creating accountability systems for student achievement.”

Roberts stressed that the challenges ahead include maintaining a balanced budget with declining student enrollment and related State Aid revenues, enhancing support services systems with limited resources, continuing to eliminate the deficit as called for by the District’s deficit elimination plan, and preparing for implementation of the new Educational Achievement System, into which persistently low achieving schools will be placed starting next school year.

Roberts, who was appointed six months ago by Gov. Rick Snyder, said the audit demonstrating a reduction in the deficit is one of a number of key financial accomplishments established during his tenure, including:

  • Adopting a balance budget for FY 2012
  • Completing a $200 million financing transaction at an attractive interest rate of 4.7 %, reducing DPS’ cost of borrowing by almost 200 basis points (2%) and extending the final maturity from less than one year to ten years
  • Receiving a favorable A+ Standard & Poor’s credit rating
  • Michigan Department of Education’s declaration that DPS is in compliance with state and Federal requirements for Special Education for the first time since 2007, reinstating $4.8 million in Federal funding
  • Student enrollment exceeding budgeted projections by 234 FTE (unaudited)
  • Issuing an Order reducing wages and benefits
  • Emergency Manager announced the creation of the Education Achievement Authority as a mechanism to provide much needed additional support to our schools in greatest need
This entry was posted in Info News Center, News and Press Releases and tagged , , , , .
Share | Email