by Scott McClallen
The Detroit Financial Review Commission (FRC) on Monday voted unanimously to immediately grant a waiver that releases Detroit Public Schools (DPS) and Detroit Public Schools Community District (DPSCD) from active state oversight.
The elected DPSCD School Board and its appointed Superintendent manage the district with DPS, which solely functions to manage the district’s legacy debt.
The commission no longer has final decision-making authority over the districts’ budgets, collective bargaining agreements, and contracts. DPSCD also regains the ability to make budget changes without the commission’s approval.
“This is a monumental day for the state of Michigan,” State Treasurer Rachael Eubanks, chairperson of the Detroit FRC, said in a statement.
“Our largest school district has shown leadership in having three consecutive balanced budgets with minimal oversight of day-to-day operations. I congratulate Detroit residents, parents, families, students and district officials for this historic accomplishment.”
DPS and DPSCD had to adopt deficit-free budgets for three consecutive years, obtain the ability to sell and guarantee municipal securities or other similar debt, follow generally accepted accounting practices, and other technical requirements to receive the waiver.
Dr. Nikolai P. Vitti, Superintendent of DPSCD, celebrated the accomplishment.
“Without question, this is one of the greatest accomplishments of this School Board and Administrative Team over the last four years,” Vitti said in a statement.
“We met several financial requirements while enhancing student programming, increasing teacher pay, and shifting away from contracted services for greater full-time employment. When we look back at our turnaround and rebuilding work, this will be one of those concrete examples of strong leadership.”
The Detroit FRC will continue to meet monthly to ensure both school districts meet the waiver’s conditions, although it will play no active role in day-to-day operations.
The school districts will be required to submit monthly financial reports, adopted budgets and financial plans each year. If the school districts continue to balance their budgets and meet other basic fiscal requirements, the commission will have limited oversight in the future.
The Detroit FRC was initially created in 2014 to provide oversight of the city of Detroit. In 2016, the commission was given additional oversight of the Detroit Public Schools and Detroit Public Schools Community District following state law changes.
Detroit Public Schools Community District was established to educate Detroit students, while Detroit Public Schools exist to repay outstanding debt.
Detroit Public Schools is paying off an 18-mill debt worth about $350 million due by 2025 and $1.5 billion in bonds due by 2050, the Detroit News reported.
The Detroit FRC is responsible for oversight of Detroit, Detroit Public Schools, and the Detroit Public Schools Community District, and ensures they meet statutory requirements, reviews and approves their budgets, and establishes programs and requirements for prudent fiscal management, among other roles and responsibilities.
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Scott McClallen is a staff writer covering Michigan and Minnesota for The Center Square. A graduate of Hillsdale College, his work has appeared on Forbes.com and FEE.org.
Photo “Cass Technical High School” by Albert Duce CC3.0.