Detroit schools transition manager: No EAA debt relief
A dispute over millions of dollars owed by a state reform school district to Detroit's public school system took another twist Thursday, with the head of the Detroit district saying he's not forgiving the debt.
Steven Rhodes told labor activist Robert Davis in an e-mail that the Detroit Public Schools Community District is in "intense negotiations" with the Education Achievement Authority for a repayment agreement.
"I have no intent to forgive or waive any debt that EAA owes to DPS or DPSCD," Rhodes, the DPSCD transition manager, wrote in an e-mail Davis provided to the Free Press. "That is not in the best interest of the students of DPSCD."
EAA chancellor Veronica Conforme told the Free Press on Tuesday that Gov. Rick Snyder said the rent debt, which was $12 million as of April, had been resolved. The EAA even built its $81.9-million budget for 2016-17 on the assumption that the debt was wiped away by recent legislation.
In April, the state school district owed $14.8 million for outstanding rent and other services for fiscal years 2015 and 2016 to Detroit Public Schools, according to a Michigan Department of Treasury official.
Rhodes said in his e-mail to Davis that the governor's office said the EAA and DPSCD have to resolve the issue. He also said there's no evidence that the person who led the district before him, former emergency manager Darnell Earley, agreed to any debt relief.
"I have seen no evidence that my predecessor agreed to do that," Rhodes wrote. "In addition, the governor's office has assured me that they take no position on this matter, and that is strictly between EAA and us."
Rhodes told Davis he wants the matter resolved as quickly as possible. When a payment agreement is done, he said, there will be an announcement.
Rhodes' message was in response to an e-mail Davis sent him threatening to sue the EAA and the state over the debt matter. Davis wrote that any attempt by the EAA for debt relief on the back of DPSCD would be illegal.
DPSCD officials have not publicly said how much money they believe the EAA currently owes. Chrystal Wilson, spokeswoman for DPSCD, reiterated Rhodes' statement that relieving the debt would not be in the best interest of students.
In June, lawmakers passed a $617-million restructuring package for Detroit Public Schools that split the district in two: an "old" DPS district to pay down debts and the "new" debt-free DPSCD to educate kids.
EAA officials say the district's lease agreements with DPS say the EAA will pay rent as long as the Detroit district has an operating debt.
"Our stance is that legislation solved the operating debt for DPS," EAA spokesman Robert Guttersohn said in an e-mail. "Our lease agreements are 100% based on DPS carrying operating debt. It was our share of the burden of operating debt."
The controversy over the back rent erupted this week after Davis, an activist who spent time behind bars for embezzling $200,000 from Highland Park schools when he was a board member there, received and shared with reporters copies of April 2016 e-mail conversations involving then-Michigan Chief Deputy Treasurer Thomas Saxton.
Saxton wrote that Conforme had asked Earley in February to sign a lease amendment that would have forgiven the EAA's rent debt. Saxton said he cautioned Earley against signing it.
The EAA owed the Detroit school system $14.8 million for the past two years, a figure that included $12 million for rent and the rest for information technology and security services, Saxton wrote at the time.
"The governor has been clear with me that the debt was solved for all of us," Conforme said Tuesday in an e-mailed statement. " As such, we presented a budget to our board that eliminated the lease obligations to Detroit Public Schools."
It's unclear how the dispute will ultimately impact the EAA, which has 15 schools that used to be part of DPS. The EAA, which has struggled with falling enrollment, poor academic performance and other problems since its 2012 launch, will eventually be dissolved under the legislation.
Ari Adler, spokesman for Snyder, did not return messages seeking comment.
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