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Deonte Bridges moved the audience with his Valedictorian speech before fellow graduates, faculty, staff and parents at Booker T. Washington High School’s graduation ceremony on May 28, 2010, at the Boisfeuillet Jones Atlanta Civic Center. Kudos to APS’ Department of Learning Technologies for this production!

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Published: October 13, 2010

Expectations were high when Gov. Jennifer Granholm announced early in 2008 that she was appointing Robert Bobb to serve as the emergency financial manager of Detroit’s struggling public school system.

With the district burdened by a cumulative budget deficit of nearly $220 million at the time, Bobb faced a daunting task — made all the more difficult by the city and state’s mounting financial crises. But Granholm left little doubt in her faith that Bobb was just the man for the job.

“Robert Bobb is a proven leader who brings valuable expertise in financial and executive management and a passion for urban education,” Granholm said at the time. “Robert has the ability to get the Detroit Public Schools’ fiscal house in order so the district can devote its attention to ensuring that every student receives a quality education.”

As the district’s emergency financial manager, Bobb was given full financial authority over Detroit’s public schools, a task that, according to the governor’s statement, included “balancing the district’s budget, managing spending, and establishing strong and reliable financial systems that support sound academic decisions for the students of Detroit.”

Now, 18 months after Bobb took control of the district’s finances, its fiscal house is in more disarray than ever, with critics saying that the public is deliberately being kept in the dark about just how bad the situation has grown while Bobb has been at the helm.

For starters, there is that cumulative budget deficit that precipitated the takeover. According to a deficit elimination plan released in July of this year, the district ended its 2008-09 fiscal year on June 30, 2009, with a cumulative deficit of $219 million.

At that time, Bobb, having taken credit for reducing the projected 2008-2009 deficit by $86 million through actions taken during his first few months on the job (a claim disputed by former School Board President Carla Scott, who says the elected board is responsible for keeping the 2008-2009 budget in check), declared that his cost-cutting measures would produce a budget surplus of $17 million by the time the 2009-2010 fiscal year came to an end.

Instead, that fiscal year — the first full year during which finances were completely under Bobb’s control — concluded with an additional deficit of more than $113 million being added to the district’s budget crisis, bringing the total cumulative deficit to $332 million. That’s an increase of more than 51 percent over a 12-month period, and one of the largest single-year deficits in the history of the DPS.

“That was all Bobb’s doing,” former DPS budget director Walter Esau says of the $113 million deficit.

But even that jaw-dropping number doesn’t tell the whole story.

Metro Times has learned that twice in the past 10 months, the state has approved two short-term loans totaling $443 million. Department of Treasury spokesman Caleb Buhs confirms that the loans, obtained through bond sales, were approved by his department. However, no mention of the loans — $256 million in March and $187 million in August — was made on the DPS, Department of Treasury or governor’s websites. Buhs tells Metro Times the loans must be repaid by August 2011. Currently, the state is withholding $45 million per month in funding to satisfy the debt, Buhs says.

“This is the state’s dirty little secret,” says Anthony Adams, president of the elected school board that has been in a prolonged, often bitter power struggle with Bobb since his appointment.

“Clearly, the district is experiencing too many cash flow issues,” observes Adams. “They’ve had to rely on this short-term borrowing to paper over the district’s growing financial problems. And the state is a willing participant in this financial charade. One consequence will be that the next governor, whoever it is, will have a major mess on his hands that he will have to address.”

One of the major hurdles facing the district is a rapidly shrinking student population. That’s not a new problem. In the three years before Bobb’s arrival, when the elected school board was fully in charge, the district lost an average of about 8,000 students per year. Since Bobb has been in charge, the district has lost about 20,000 students, according to reported enrollment numbers. Some critics contend that school closings and other cuts made by Bobb have given impetus to the exodus.

Whatever the reason, the decrease in students comes with serious financial consequences for the district. With the state providing about $7,600 a year in funding for each student, every 1,000 students lost translates into a $7.6 million annual reduction in DPS revenue.

Other factors, such as the loss of property tax revenues experienced because of the bankruptcies of General Motors and the Greektown Casino, caused a $7 million hit to the district, according to information contained in Bobb’s deficit reduction plan. Another $7 million loss was attributed to costs associated with accumulated leave payouts to more than 770 district employees who opted to take early retirements.

In all, the deficit elimination plan describes nearly $92 million in unexpected costs or funding cuts that contributed to the 2009-2010 deficit. That still leaves nearly $20 million in deficit spending unaccounted for, and completely fails to address the $443 million in short-term loans.

At this point, no one inside Bobb’s administration is providing answers to that question. And no one outside has access to the information needed to figure it out.

One problem is that information about contracts with outside vendors and service providers is being kept secret, say critics such as Adams and others. A Metro Times review of the DPS website has found that Bobb’s administration stopped posting contracts online in the fall of 2009.

A lack of transparency has been a focal point of criticism aimed at Bobb and his team with increasing frequency. Freedom of Information Act requests filed on behalf of this paper as far back as March have yet to receive a response, even though the law dictates that such requests be acted on within 15 working days.

“Bobb has thumbed his nose at disclosure,” says Adams. “He should be held accountable.”

Critics who complain that Bobb is continuing to operate in secret, and failing to give the public an accurate and open accounting of how their tax money is being spent, can point to the most recent budget document posted on the district’s website.

In the previous year, the posted budget ran hundreds of pages. This year’s budget — which totals about $1 billion — contains a single page.

Another concern is the number of outside consultants Bobb has brought on board.

“His spending pattern has increased the deficit,” alleges Adams, who was previously deputy mayor in the Kwame Kilpatrick administration. Bobb has brought in an inordinate number of consultants that added to the deficit without any real benefit to the district.”

The Detroit Free Press reported in October 2009 that, at that point, Bobb had spent $40 million on consultants. Although Bobb claimed the report was inaccurate, the paper stood by the credibility of its story.

In addition, the Bobb administration’s autonomous attitude and failure to communicate with the board and district staff is adding to the district’s financial problems.

“Bobb’s failure to collaborate with the board and the lack of oversight by the governor has resulted in costly decisions, including his unchecked spending on consultants and vendors,” says Scott, the board’s immediate past president.

One example is the $40 million spent on textbooks and testing systems that, according to highly placed school administrators who spoke with the Metro Times on the condition that they not be identified, were purchased without consultation with district administrators or teachers, as would normally be the case. Neither was a needs assessment, typical for such a purchase, conducted.

Adams, who previously served as general counsel for DPS, describes the lack of transparency as highly disconcerting.

“It is a violation of everything you know and come to understand about how government should operate,” he says. “People have a right to know how their money is being spent. In the situation where you have [an appointed] financial manager, it is even more important that people understand how money is spent. These are public dollars and they should be accounted for.”

Concern regarding Bobb’s lack of transparency prompted former DPS board member and current state Rep. Jimmy Womack (D-Detroit) to author a law requiring emergency financial managers to disclose more information so that the public and, presumably, elected boards as well, can “serve as watchdogs to prevent financial harm to school districts.”

Despite going into effect last December, Bobb has failed to produce the required financial data, Womack says.

“I would like to believe that it is not deliberate evasion,” Womack says. “I have a hopeful expectation of compliance in the near future.”

The woman who put Bobb in control, however, continues to give him her full support. And its not just moral support. When Gov. Granholm offered Bobb a one-year contract extension in March, she saw to it that he received a $20,000 raise from taxpayers. In addition, three private foundations kicked in $145,000, according to terms of the contract, bringing his total annual compensation $425,000.

“The governor supports the work Robert Bobb is doing,” says Liz Boyd, spokesperson for Granholm. “It is going to take time to resolve this financial emergency.”

Russ Bellant is a freelance writer. A Detroit resident, he serves as a volunteer co-chair on a facilities task force established by the school board. Curt Guyette is Metro Times news editor. You can reach him at 313-202-8004 or cguyette@metrotimes.com.

FOR SHOWING INFO LOG ONTO : www.chwmuseum.org/

Allegations of rigging lead to suspension of bid process for contracts worth millions

George Hunter / The Detroit News

Detroit — Controversial efforts to implement new towing rules and seek bids from companies has hit another snag after Detroit officials halted the process amid cronyism complaints.

Smaller towers have long alleged bid-rigging, and at least three pending lawsuits allege some towing firms are being shut out of the lucrative towing process. The contract is worth millions of dollars, since the city estimates 180,000 cars will be towed a year at $75 apiece.
City officials issued a Sept. 7 request for proposals for companies wishing to tow for the Detroit Police Department. But firms flooded the city with concerns, including complaints that the city had rigged the process so that only one company, AutoReturn of San Francisco, would get the contract.

AutoReturn’s subsidiary, AutoReturn Detroit LLC, in April filed papers with the state indicating its agent is David Baker Lewis, an adviser to Mayor Dave Bing. Lewis is a member of Bing’s volunteer crisis turnaround team of business leaders and others who advise the mayor on how to improve city services. Lewis also co-chaired Bing’s inaugural committee.

Bing’s spokeswoman Karen Dumas said the city is working to eliminate any “improprieties or appearance thereof” and that Lewis’ involvement is incidental.

“David Baker Lewis is a well-respected attorney who is involved in many projects throughout the city,” Dumas said.

Phyllis Hernandez, owner of Casino Towing, picketed outside the Coleman A. Young Municipal Building on Thursday, protesting how the city was handling the towing issue. Hernandez also has filed a lawsuit against the city, claiming the bidding process was rigged.

“It was obvious the (request for proposals) was written so that one specific company would get the contract,” Hernandez said.

The Rev. Jerome Warfield, chairman of the Detroit Board of Police Commissioners, said the request should never have been sent out by the city before the police board had a chance to look at it.

Warfield last week sent a letter to the City Council, asking members to hold off making any decisions.

A few days after Warfield’s Sept. 17 letter was delivered, the Purchasing Department pulled back the request, and sent a document to towers outlining dozens of concerns expressed by towers.

Warfield said the police board is still working on new rules governing tow companies.

“I don’t know why the city sent out that RFP so quickly,” said Warfield, who is scheduled to appear before the City Council on Wednesday to discuss his concerns.

Hernandez said the towing situation in the city is “a mess.”

“A lot of people don’t know how much money there is to be made in this,” she said. “We’re talking about multi, multi million dollars here.”

There are 27 towing companies that do business with the city, although they have been operating on month-to-month contracts for several years.

ghunter@detnews.com (313) 222-2134

From The Detroit News: http://detnews.com/article/20100927/METRO01/9270330/-1/ARCHIVE/Detroit-towing-rules-draw-complaints#ixzz10pM7gKCi

By Craig Schneider

The Atlanta Journal-Constitution

Eddie LeGrande admits that he wasn’t a big part of his son’s life. He also admits that he knew Bishop Eddie Long had taken on the role of father in his stead when the boy, named Spencer, was a teenager.

In fact, he resented it.

“He was doing all these things for him. I couldn’t compete,” LeGrande said in a phone interview Friday. “He would call him dad in front of me. That would hurt me.”

LeGrande separated from his son’s mother before Spencer could walk. After that, he saw him only on the occasional Christmas. But he said he started building a relationship when Spencer reached the age of 11. Then it grew to weekend visits.

Just a few years later, LeGrande says, he lost his son again — this time to Eddie Long.

LeGrande learned Friday, for the first time, that his son alleges Long used his pastoral influence to coerce his son into sex at age 17. He learned that from a reporter from The Atlanta Journal-Constitution. He had heard Wednesday about the other allegations leveled by young men against Long. And he wondered whether his son’s name was mentioned.

Spencer LeGrande filed suit against Long Friday, marking the fourth such action filed this week. He said in the suit that he met Long when he was 15 at New Birth Missionary Baptist Church in Charlotte, N.C., where he and his mother were among the founding families. He said he accompanied Long on several trips abroad and later moved to Atlanta.

“He never told me. He never gave me a clue,” said Eddie LeGrande, 55, a furniture store worker in Greensboro, N.C.

But looking back, he said, “There were red flags.” The trips, the gifts, the attention, he said.

“I’m very upset about it,” he said. “I’m very hurt about it. I’m very hurt for my son.”

If the accusations are true, he said, “I think he should be banned from his church. I think he should do jail time, and he should pay the victims for the hurt. He should be used as an example.”

His son moved back to North Carolina about a year ago.

The father and son last saw each other in January.

“I held him in my arms on my mother’s funeral day,” he said.

He said he wondered at the time why his son’s stay in Atlanta seem to end so abruptly.