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Detroit Public Schools’ Proposed Fiscal Year 2015 Budget focuses on advancing academic quality, stabilizing enrollment, extending successful programs and leveraging resources


Detroit Public Schools’ Proposed Fiscal Year 2014-2015 Budget, which reflects an anticipated revenue decline of approximately $49.3 million, is focused on the district’s ability to create and offer increasingly relevant programs, undertaken on new platforms, presented to new markets, leveraged by public and private resources, while devoting new across-the-board energy to retention strategies.

Importantly, for the first time in six years the budget does not call for the closure of any schools for the 2014-15 school year, which the district has come to understand can have an extremely adverse impact on enrollment recruitment, retention and revenues.

“Success will be defined by Detroit Public Schools’ ability to advance academic quality and raise standards while stabilizing and growing enrollment,” said Emergency Manager Jack Martin. “The Detroit Public Schools budget plan is centered on creating high-quality seats for Detroit’s children through neighborhood-centered quality schools situated in 21st century learning environments, and an increasingly relevant portfolio of educational services to students from birth through career readiness, adult education, training and retraining of residents.”

The budget plan also includes plans for the launch a new gifted and talented school program, extension of successful dual immersion bilingual programs into a 9th grade collegiate prep setting, expansion of career academy and adult educational regional center programming, support for a K-12 International Baccalaureate program, an additional prep period for K-8 teachers, as well as programs for early childhood families, through reorganizing current programs and securing private and foundation support.

“In Detroit’s recent history, there has never been a time when marketplace, technological, social, housing, employment and economic trends shifted at the rate of change witnessed during the past several years,” Martin said. “Detroit Public Schools is poised to become a driving force for accelerated positive growth in the city, region and its schools.”

In 2013 the district engaged customers and implemented the initial stages of a set of strategic, customer-focused initiatives aimed at halting and reversing market share losses. As a result, Detroit Public Schools increased market share of Detroit school-age children in Fall 2013, while Detroit-based charters and suburban traditional districts’ “choice” programs declined in enrollment.

Since 2006 the District has been faced with budgetary and financial challenges. The general fund deficit has ranged from as high as $327 million to a low of $76.5 million. The current deficit is projected at $127,054,101 for FY 2014. 

This proposed FY 2015 Budget reduces that legacy deficit to $125,747,592. Factors contributing to the FY14 deficit increase include general fund charge-backs for planned grant expenses in middle school instruction and special education services, prior year Medicaid services overpayment, enrollment, increases in rates from the Detroit Public Lighting Dept. and Detroit Water and Sewerage Dept., and additional campus security. Overall, DPS anticipates a revenue decline of approximately $49.3 million.

Detroit Public Schools is in line to eliminate the legacy deficit and show a positive fund balance by the conclusion of the 2017-18 fiscal year. There has been strong progress. For example, over the last five years DPS has reduced expenditures, in areas that will not directly harm its classrooms, by over $225 million. There has been substantial financial and operational progress confirmed by external reviews, as evidenced by this past year’s action by the United States Department of Education to remove the district from High Risk status, as well as a resolution of $53 million in audit findings and a sharp reduction in audit findings from 84 in 2008 to 9 this past year.

The school district is committed to constantly review all expenditures for further, responsible reductions. All Central Office Units participated in a Zero Base Budgeting process for the third consecutive year and presented strategies to reduce expenditures by 10-20% for each department. “Decision packages” were developed and final reductions represented those actions that would not negatively impact the educational programs or result in potential enrollment declines. Through the implementation of Zero Base Budgeting throughout central administration departments, DPS has identified $20 million in cost savings and a reduction of 41 full-time positions.

The FY 2015 budget is based on a total membership for funding purposes of 47,750, which is a conservative decrease of 2% over the FY2014 Amended Budget.

 Other significant adjustments assumed in FY15 planning include:
_$50 annual increase in Foundation Allowance: $2.2 million
_Increase in Sale of Capital Assets: $11.7 million
_Revenue Enhancement Millage: $14.8 million

_District Reorganization and Technology Implementation savings: $4.4 million
_Employee Severance Plan savings: $5.8 million
_Restructured Health Care Benefits savings: $13.3 million

The proposed budget maintains class sizes for children in the early formative years in grades K-3 (at 25 students), and raises class sizes by 5 students in grades 4-12. The budget provides an additional prep period for teachers in grades K-8 to allow teachers to remain effective and efficient in providing students instruction and support.

From December 2013-February 2014, the district conducted a comprehensive survey completed by 7,271 participants (21% of total families). Insights derived from the results are that districtwide parental satisfaction on program quality, customer service, facilities, parental involvement and safety equates to 4.0-4.1 on a 5.0 scale, with the lowest satisfaction regarding “outside” safety (safe routes to schools). With individual results by school and level provided to every building, taken alongside data on contacts to the new Parent Help Line and District Ombudsperson, substantial new ability exists to identify areas for improvement and resulting targeted resources and energy. Doing so provides additional substantial opportunity to strengthen the existing customer base and increase retention rates.

“We look forward to continually working with our leadership team, staff, bargaining units and external agencies to put the district on a path of long-term and sustainable fiscal stabilization,” EM Martin said.

The Public Hearing for the FY 2015 Budget will be held at 5:00 p.m. on Thursday, June 26, 2014 at Renaissance High School, 6565 W. Outer Drive. Copies of the proposed budget will be available for public inspection at the Office of Management and Budget located in the Fisher building, 11th Floor, 3011 W. Grand Blvd., Detroit, MI 48202 from 8:00 a.m. until 5:00 p.m. and the District’s website on Thursday, June 19, 2014 through Thursday, June 26, 2014.


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Revised: 06/24/14 21:17:37 -0700.




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