DPS Budget is called into question over Pricey consultants

Detroit Public School’s budgetary woes is being called into question since State appointed Emergency Financial Manager Robert Bobb is set to spend $40 million on advisers for DPS. Robert Bobb, the state appointee overseeing the Detroit Public Schools, has set aside nearly $40 million to pay for consulting fees and perks for a turnaround team he assembled to strengthen the district's financial management, angering unions that have suffered 2,500 layoffs since summer. The deficit-ridden district has leased riverfront apartments for consultants, as well as paid $400 a week per person for food in addition to airfare to fly some out of town for weekends, according to invoices and school officials. Some of the consultants come from Washington, D.C., and Cleveland -- cities where Bobb and his top academic consultant previously worked.

DPS officials said Friday the consultants will save more money than they cost in the long run and have saved about $20 million so far in which the district has really already spent since they are over budget by $21 million in less than 3 months into the school district according to a Detroiter News article on Friday. "Mr. Bobb has done an outstanding job of recruiting some of the best educational and financial specialists," said Steve Wasko, a spokesman for the district. Union leaders balked at the spending on consultants. "It's a hard pill to swallow when you tell people you have no money and you continue to spend money," said Ruby Newbold, president of the Detroit Association of Educational Office Employees union, whose members average $26,000 a year.

So the pricey consultants raise questions on DPS budget. After clearing out hundreds of administrators from the historically management-heavy schools system, Bobb has approved no-bid contracts to dozens of out-of-town contractors and firms to lead several departments. The short-term troubleshooters are budgeted to cost $38.8 million this year -- twice the cost of the administrators who were released from those jobs, according to documents obtained by the Free Press. Their contracts also include payments for expenses such as airline tickets, hotels, rental cars, meals, taxis, parking and office supplies. Last year, the district spent about $8.5 million on outside consultants, records show.

Union officials and school board members are crying foul because the consultants' pay and perks come after 2,500 DPS employees were laid off. More budget cuts loom because of state education funding reductions. The district has an estimated $259-million deficit from previous years and has overspent by $21 million so far for 2009-10. Keith Johnson, president of the Detroit Federation of Teachers, said it's hypocritical of Bobb to budget so many consultants. "When you look at how we got into this financial mess in the first place, a lot had to do with getting into contracts with consultants and vendors," Johnson said. "The very things Robert Bobb said he's seeking to clean up, he seems to be perpetuating."

But school officials said the consultants will more than pay for themselves. In the past six months, the contractors have identified about $20 million in savings so far in the areas of health care, transportation and overdue vendor payments, according to a statement the district released Friday. About $6.5 million has been saved so far because of layoffs. The DPS consulting bills could balloon to $94 million because an additional $54 million is budgeted to hire a private company to run facilities maintenance. "The fact of the matter is that DPS staff, as it was constructed, did not have the capacity to effectively operate a school district," DPS spokesman Steve Wasko said by e-mail Friday. "Children and parents have been suffering the pain of a grossly mismanaged school district. The cost of consultants are virtually a nonissue when compared to the enormous problems DPS faced."

At the end of the 2008-09 school year, Bobb eliminated about 72% of the curriculum and instruction department -- about 181 people, including 11 department heads. Those cuts are to save DPS about $16 million a year, Bobb announced this summer. For now, vendors and consultants with connections to Bobb and the chief academic accountability auditor, Barbara Byrd-Bennett, run major departments. For example, Kevin Clinton, the executive director of the Department of State and Federal Programs for DPS, and Bobb worked together for Washington, D.C., and for the city's school district. Clinton was a fiscal officer for the Office of the State Superintendent of Education for Washington, D.C., and Bobb was the state school board president.

DPS budget director Angela Joyner and Bobb worked together in Oakland, Calif., when he was city administrator and she was a budget analyst and again in Washington when he was on the state board and she was the district's budget director. Byrd-Bennett, a former chief executive officer of Cleveland's public school system, brought with her at least six consultants who are collectively being paid more than $700,000 for about nine months of work. Their addresses were redacted on the contracts obtained by the Free Press, but public records confirm they have worked with Byrd-Bennett in Cleveland or New York. Her office has already overspent by $40,000 its $754,000 budget for consultants, according to DPS data.

Byrd-Bennett's $176,828 contract spans from May 11 to March 2. She also has a personal driver -- an armed DPS police officer. One of the more controversial contracts was given to the Philadelphia-based PFM Group, which used to employ Bobb as a senior managing consultant. PFM received a $972,000 no-bid contract to help develop a new financial plan for DPS, according to officials. The contract with DPS was not made available, however, despite a Free Press request under the Freedom of Information Act.

With the top consultants' contracts set to expire as Bobb's contract expires March 2, it is unclear who will pick up the baton when he and the consultants leave town. Bobb said last week that his administration is creating a road map for DPS to follow. "What's really important is putting in place the controls for whether I fall off the face of the Earth, the business" of DPS "will go on," he said. Tom White, a consultant and former executive director for the Michigan School Business Officials, said it's typical for school leaders to bring consultants whom they trust to a new mission. "All of the people probably realize they're not in a lengthy gig, so DPS is going to have to pay a premium. It's a specific, difficult," White said. "You'd have to look deeper to make sure they're doing everything right, but conceptually, there's nothing extraordinary."

Bobb has a loyal following of parents and students who surrounded him at last week's enrollment count day. Parent Tanya Cooley personally thanked Bobb for setting a no-nonsense tone in DPS. "Last year was chaos; it's more calm this year," she said. Meanwhile, critics and school board members who lost control over the budget when Gov. Jennifer Granholm appointed Bobb, wonder whether his team of consultants can study and fix the district in a year's time. Board member Ida Short said the governor and Legislature need to track Bobb's spending. "We've been pimped, we've been hoodwinked and the public needs to get wind of this," she said. "He's supposed to be here remedying our debt, not spending our money. This is what the last state takeover did to us."

A closer look at some key consultants with significant roles in the restructuring of Detroit Public Schools:
-- Comprehensive Financial Management Consultants, with an office in Southfield, sent DPS bills for $493,325 for dozens of auditors to work for one month to reconcile the schools' financial records and bank deposits.
-- The Portolan Group, based in Berkeley, Calif., was contracted to fill the role of chief operations officer to assess and make recommendations about the performance of facilities and food services. The firm was to be paid $193,800 for 1,160 employee hours. The dismissed chief of facilities and food services had earned $127,906 a year plus benefits. In an amendment to the contract, the company will be paid an additional $196,700 from Aug. 1 to March 1 for one full-time executive and other part-time staff to work one to two weeks per month.
-- The New York-based firm Alvarez & Marsal was contracted at $500,000 -- including travel and lodging -- for a four-month period to review special education services, then design and implement an improvement plan.
-- Fanning Howey Associates, an architectural firm in Alexandria, Va., is contracted for $647,150 to assist in the summer construction program and long-range planning for the capital bond application to the state.
-- Thompson, Cobb, Bazilio & Associates, PC, of Washington, D.C., have billed the district $333,606 for 2 1/2 months of financial consulting, including about $45,000 in travel expenses for nine workers.
-- McCrary Security Consultants of Florissant, Mo., billed DPS $58,960 for two consultants working two weeks to assess the DPS security department, including expenses. Afterward, a contract was signed for $53,600 a month, plus $5,360 for expenses for the two experts to work as needed through October.

Thus as I have reported previously, Bobb has done some things good for the district but at the same time, paying these high salaries to several consultants and the fact the district has already overspent 3 months into this school year is not what Bobb was hired to do. It doesn’t sound like we are reigning in spending to me and it definitely doesn’t sound like we are making sure as much money go toward the classroom as we can deliver there. So when reading about what the consultants were paid to do, I can begin to tell you that if we hired a consulting firm to asses DPS security department for only two weeks and got billed for $58,960 that doesn’t sound right to me and from being in the schools and hiring from several other educators, it seems as if DPS security department or police, whatever you want to call them, they haven’t approved under Bobb’s watch when I see kids in the hallway during class time and outside of the school building particularly high schools between 1-1:30p.m. Therefore it is clear that our state legislator and Governor Granholm need to question this type of spending and the amounts given especially considering that one state EFM is currently under trail for paying himself more than what he was suppose to get paid by the state.

So in order to avoid another black eye, Governor Jennifer Granholm and the state legislator should properly investigate Bobb’s spending habits and all the large sums of money these consultants are being given especially since the last consultants Bobb hired to be over high schools such as Edison don’t have a stellar track record of academic success. Detroit we can’t be fooled no longer. I know we all want to see a more viable and better DPS where all our kids are learning what they need to learn to succeed and our district knows how to balance its budget and not overspend. However that can’t happen until we get the truth about who is getting what of our money and how does their services justify the amount they are getting. Bobb can’t continue to say DPS is broke but pay what seems to be top dollar for all these consultants to do less than a month of work in some cases that hasn’t yielded any positive results in certain areas based off the amount of time they spent in assessing that area. We deserve better Detroit and people like Steve Wasko need to stop trying to protect Bobb when Steve himself has simply been making a paycheck for supposedly marketing the district but has failed at it for years until now with Bobb’s efforts to promote all the good the district has to offer.

Nonetheless, we as Detroiters have to hold Bobb, the Governor and the state accountable for how our money is being spent and why we are paying for consultants at a time when Bobb was hired to simply reign in spending and fix our budget but so far Bobb has overspent the first 3 months of the 2009-2010 school year but he wouldn’t tell you that but instead would love to promote the fact the district has save quote unquote $20 million but let’s talk about the $21 million the district has already overspent this year. Detroit demand more accountability from Robert Bobb, Governor Jennifer Granholm and our state legislators who sent Bobb to DPS to balance the budget and reign in our spending habits but so far his spending habits are just as badly as the status quo of DPS. So to a degree Detroit, we are being hoodwinked, tricked and bamboozled by Bobb and the state. Where’s the accountability people that’s what we as Detroiters need now more than ever.

So until we get real accountable and reign in DPS’s spending habits, we can’t support Proposal S and we can’t allow Bobb or the state to get away with the hiring of consultants who get paid over $50,000 for only doing two weeks’ worth of work. What does that sound like you? It sounds more like Wall Street rather than a struggling school district trying to stay afloat. A Change has to come to DPS and it is clear that Bobb’s idea of change has both successes and consequences that remind me of the status quo rather than a change in the right direction to put DPS on stable footing. What is DPS’s budget because it is clear the district isn’t as broke and bankrupt as some would want us to believe? The pricey consultants call DPS into question and for good reason and the state needs to investigate this properly.