Ryan Mack's Message to Detroit: Pay Close Attention to the Financial Review Commission

The Michigan Financial Review Commission Act established the Financial Review Commission which was tasked with overseeing the financial operations of the City of Detroit, as it emerged from bankruptcy. In March of 2016, that statute was expanded to allow the FRC to oversee the financial operations of the Detroit Public Schools Community District. Given the new statutes which permit City residents to elect their own governing school board, and the recent confusion with respect to the proper authorities of the FRC over the school board, it is critical that an memorandum of understanding between the FRC and the newly elected board of the DPSCD be discussed immediately upon the election of a new school board. This MOU will clearly define the specific roles and authorities possessed by the FRC as it relates to the newly formed DPSCD board. As a concerned citizen, I also strongly support Judge Rosen’s suggestion that the memo recently submitted by Ron Rose, ED of the FRC, which stated they can exercise oversight of administrative matters, academics, AND finances should be retracted until such MOU is agreed upon.

It is undeniable that the Detroit Public Schools have been plagued with financial issues in the past. However, many of these problems cannot be laid at the feet of the citizens and their ability to elect a fully-empowered school board. At the time the school board lost its power initially, in 1999, it had a surplus of nearly $100 million. The state legislature acted to remove this elected board from power at that time, and a reform-board governed the school board for six years. In 2005, when the elected school board briefly took over power again, the reform-board left the elected school board with a $200 million deficit. The school district deficits, mostly while under direct state control, have slid downward ever since.

The financial problems of the school district are intricately linked to the circumstances causing the financial downfall of the City of Detroit itself - circumstances not uncommon to many Midwestern urban centers. Detroit’s population has been sliding since the 1950’s, as many families with the means to leave for the suburbs have done so. Further, in 1994 the state changed its method of funding education – from property taxes to a “per pupil” grant issued by the state. As the school district’s enrollment slid from 95,000 in 2009 to less than 48,000 currently, the grant funding left as the students left to enroll in other districts.

Here’s the point. The financial problems are societal ills which extend far beyond the board room of the school board – elected, appointed or otherwise empowered. And notwithstanding their intellectual and experiential prowess, these problems are well outside the capacity of a Financial Review Commission to fix. It is important for the elected school board and the Financial Review Commission to work together to respond to these societal ills. However, we must move beyond blaming the prior board for the current challenges; and certainly must avoid hamstringing the future school board with the board’s historical challenges.

Section 6 of the Michigan Financial Review Commission Act obligates the FRC to perform certain oversight functions over the school board. Section 7 of the Act permits, but does not obligate, the FRC to perform certain oversight obligations. These required and permitted oversight functions are unspecified and vague in many respects. The FRC may waive the obligations of these Sections after 3 years of deficit-free budgets and other financial requirements are met.

It is critical that the FRC and the newly-elected school board of the DPSCD discuss an MOU for clarity, transparency, and accountability for all. Even during this three year period, it is important that the roles of FRC and the school board are clearly defined further than outlined within the law. The school board must be given the autonomy and flexibility to operate the district and assure fiscal soundness.

There is precedent for this approach. When the City elected its mayor in the midst of emergency management, in 2013, the Mayor and Emergency Manager wisely negotiated an arrangement. This arrangement was meant to clearly define the roles of the mayor and the emergency manager, and more importantly established accountability for the elected mayor in certain critical functions.

The election will take place on November 8th. Before the end of November 2016, the transition process for the new school board should be well under way. I propose that the new board and the FRC spend this month to discuss an efficient and appropriate MOU.

As a candidate for the Detroit Public School Board I come to this election with 16 years of leadership in urban communities and 20 years of financial analytical experience, having reviewed the budgets of Fortune 100 companies and colleges. As Chairman of the Board for the Medgar Evers College Education Foundation, we worked to analyze its budget documents and financial statements to successfully resolve its financial issues and balance its budget. There are other well-qualified candidates in this election including those on my team. The new DPSCD board should be more than qualified to employ our talents to maintain balanced budgets. I trust that the people of Detroit will elect a Board of Education that will consist of committed, well-qualified civic leaders who will have earned the right to have both autonomy and flexibility within the constraints of the state law.

We live in a society where the most important franchise of each citizen is “one person = one vote”. On that day when each Detroiter enters the ballot box, he/she is of equal value and influence to this function of our society. For that right to be denied or even compromised undermines the voice of the people and their vote. Even under the guise of financial distress, there is no justification for compromising this franchise. The Michigan Financial Review Commission Act is the current law….we must follow the law…but even while operating under this restrictive authority we must ensure the peoples’ voices be heard by adhering to a well-defined memorandum of understanding.

If you agree with these recommendations, and would like to express your voice to the Financial Review Commission, join me with others as we attend their next meeting on September 16th at 2:00pm. Cadillac Place, 3062 West Grand Blvd, Suite L-150.

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