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The Price of Cutting Costs

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Detroit school-board members were surprised last month to learn that a study commissioned to find ways for the financially troubled district to save money will end up costing nearly 70 percent more than expected.

The study helped shape a successful strategy that convinced voters last month to approve a levy increase and a bond sale to help the district address its mounting budget deficit. A new leadership team in the district promised during the campaign that the school district had learned to operate with "fiscal integrity."

When the board first approved the study last April, they were told that the state and private contributions would cover its $562,350 cost.

But private donations have come in much slower than expected because the business community has also been asked to donate to the millage campaign, to help restore sports and music programs, and to pay the salaries of the new leadership team.

And late last month, well after the election, board members learned that the study's actual cost had risen to $965,922.

Some board members insisted that the study's scope was broadened to meet state requirements imposed as the district sank deeper into debt. The added expense will be more than made up, they said, by the $7 million to $11 million a year in savings that the report recommends.

"I'm laughing, but only because I don't want to cry," said Rose Mary Osborne, a board member who has asked the state's inspector general to examine the process by which the contract was awarded, and later expanded.

"The very people who are supposed to bring us 'fiscal integrity' have misused the word," she added.--ws

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