School & District Management

Detroit Schools Bankruptcy Analysis Wrapping Up

By The Associated Press — August 06, 2009 2 min read

The Detroit schools’ emergency financial manager on Thursday backed off of earlier statements that the cash-strapped district may be headed toward bankruptcy.

Robert Bobb announced in July that his office had meetings with lawyers and a former federal judge to debate the merits of Chapter 9 bankruptcy to help bail out the district.

See Also

Read this story for more on Robert Bobb and his efforts to close Detroit’s budget deficit.

Bobb said Thursday during the unveiling of an ambitious student retention campaign that he is not sure whether bankruptcy “is the best course of action” for the district, which faces a deficit of at least $259 million and plummeting enrollment.

Chapter 9 allows government units to restructure debt, and potentially, even contracts. But Bobb said the district already has worked with most of its creditors to slash more than $3 million in debt.

Keith Johnson, president of the 7,700-member Detroit Federation of Teachers union, argued against bankruptcy, saying it would imply the district is “broke” and send the wrong message to the parents it’s trying to keep.

“Bankruptcy would be the most expedient way to eliminate the district’s deficit, but I believe the adverse impact would offset that,” Johnson said Thursday.

Salaries and benefits for Detroit Public Schools employees take up about 85 percent of the district’s budget. The administration and unions are in contract negotiations leading up to the Sept. 8 start of school.

Bobb has been on the job 157 days. Appointed by Gov. Jennifer Granholm to correct district finances, he ordered 29 schools closed by this fall and laid off 1,700 employees, including more than 1,000 teachers.

A number of audits have revealed unchecked spending, fraud and little oversight.

One recent check revealed more than 500 ineligible people on district health care plans. Without those health and life insurance costs, the schools will save $127 million annually.

A separate public safety audit found an undocumented inventory of 11 motorcycles, 160 BlackBerries, 97 two-way phones and dozens of medal detecting stations and wands.

Indictments or arrests stemming from the audits are expected, Bobb said.

“We continue to dig,” he told Detroit-area media executives in a meeting Thursday. “You have to be serious about fraud, waste and abuse, and ferret those things out.”

During the meeting, Bobb pitched the “I’m In” campaign, designed to halt the exodus of students from the district and persuade some parents to return their children to Detroit schools.

Detroit’s falling population, along with competition from charter schools and suburban public schools, helped reduce the district’s enrollment to less than 100,000 last fall.

Fewer students mean less money coming in. The district receives $7,550 per student from the state.

Symbols of the “I’m In” effort will be 172 blue wooden doors. The doors — one for each of the district’s schools — are meant to remind parents about an improved curriculum and commitment to excellence. They will be displayed later this month in downtown’s Hart Plaza and on Belle Isle over Labor Day weekend.

The campaign also will feature snappy radio and television ads extolling the benefits of a Detroit Public Schools education, Bobb said.

Related Tags:

Copyright 2009 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.


School & District Management Live Event Education Week Leadership Symposium
Education Week's Premier Leadership Event for K12 School & District Leaders.
This content is provided by our sponsor. It is not written by and does not necessarily reflect the views of Education Week's editorial staff.
Law & Courts Webinar
The Future of Criminal Justice Reform: A Sphere Education Initiative Conversation
America’s criminal justice system is in crisis and calls for reform are dominating the national debate. Join Cato’s Sphere Education Initiative and Education Week for a webinar on criminal justice and policing featuring the nation’s
Content provided by Cato Institute
This content is provided by our sponsor. It is not written by and does not necessarily reflect the views of Education Week's editorial staff.
Student Well-Being Webinar
Equity, Care and Connection: New SEL Tools and Practices to Support Students and Adults
As school districts plan to welcome students back into buildings for the upcoming school year, this is the perfect time to take a hard look at both our practices and our systems to build a
Content provided by Panorama Education

EdWeek Top School Jobs

Teacher Jobs
Search over ten thousand teaching jobs nationwide — elementary, middle, high school and more.
View Jobs
Principal Jobs
Find hundreds of jobs for principals, assistant principals, and other school leadership roles.
View Jobs
Administrator Jobs
Over a thousand district-level jobs: superintendents, directors, more.
View Jobs
Support Staff Jobs
Search thousands of jobs, from paraprofessionals to counselors and more.
View Jobs

Read Next

School & District Management Has COVID-19 Led to a Mass Exodus of Superintendents?
This year has been exhausting for superintendents. Some experts say they're seeing an unusually high number of resignations this spring.
5 min read
Chicago Public Schools Superintendent Janice K. Jackson, right, speaks on Feb. 11, 2021, during a news conference at the William H. Brown Elementary School in Chicago. In-person learning for students in pre-k and cluster programs began Thursday, since the district's agreement with the Chicago Teachers Union was reached.
Chicago Public Schools Superintendent Janice K. Jackson, right, announced earlier this week that she would depart the school system. Jackson, who assumed the superintendency in 2018, has worked for more than 20 years in CPS.
Shafkat Anowar
School & District Management Most Schools Offer at Least Some In-Person Classes, According to Feds' Latest Count
A majority of 4th and 8th graders had at least some in-person schooling by March, but inequities persisted.
3 min read
Image shows empty desks in a classroom.
Chris Ryan/OJO Images
School & District Management Opinion Education Researchers Should Think More About Educators: Notes From AERA
Steve Rees, founder of School Wise Press, posits AERA reflects a community of researchers too focused on what they find interesting.
4 min read
Image shows a multi-tailed arrow hitting the bullseye of a target.
DigitalVision Vectors/Getty
School & District Management What the Research Says High Costs, Outdated Infrastructure Hinder Districts' Air-Quality Efforts
A national survey finds the pandemic has led districts to update schools' ventilation systems, but their options are limited.
3 min read
Mayor Bill de Blasio, center, checks the movement of a window inside a classroom at Bronx Collaborative High School, during a visit to review health safeguards in advance of schools reopening on Aug. 26, 2020, in New York.
New York City Mayor Bill de Blasio, center, checks the movement of a window inside a classroom at Bronx Collaborative High School, during a visit to review health safeguards in advance of schools reopening earlier this school year.
Bebeto Matthews/AP