Historic Finney High School, closed in 2009 at a cost of $2.9 million from 1994 bond, replaced later by East English Village Academy at a cost of $58.6 million from 2009 bond. It bordered the wealthy Grosse Pointe suburbs.
By Marty Townsend on October 28, 2013
(VOD editor’s note: this story is several years old, but gives a clear and concise understanding, with examples, of what has happened to Detroit Public Schools bond money from 1994 to 2013, emphasizing the theft of billions of dollars for unregulated, non-public charter schools, the Educational Achievement Authority, and school closings and demolition. It does not emphasize the enormous amounts the banks have made from those bonds, which VOD will be doing in a story on Judge Steven Rhodes’ takeover of DPS, shortly forthcoming.)
DETROIT — In the city of Detroit, Michigan, a school bond of $1.5 billion was voted for in 1994 that started a cascade of debt that residents will be paying for until at least 2040. The original bond was to be used to repair and renovate school buildings to service a then stable student enrollment of 167,000 students.
Douglass Academy students walkout over school conditions 2012.
Detroit Public Schools had, at that time, 261 schools not including administration buildings. Total repair costs and construction estimates stood at $3.9 billion, well above the bond amount. Construction delays caused by problems with the building plans stalled renovations so much that by 1999, very little of the bond money had actually been used to improve schools. Enrollment had continued rising, topping out at 173,000 students. (VOD–school activists said at the time that the real reason for not spending the bond money was DPS’ majority-Black governance. An article in Education Week in 1996 alleged that only one-third of the bond was to go to refurbishing current schools; Michigan’s State Treasurer had to approve any spending from the bond. See http://www.edweek.org/ew/articles/1996/02/21/22detroi.h15.html .)
Also in 1999, citing low academic achievement and mismanagement of the district, the state enacted special legislation (Public Act 10 of 1999) for the purpose of allowing then-Governor John Engler to replace the democratically elected school board with state-appointed board members. Residents were not happy about the forced take-over of their school district and loss of local control. The immediate result was a loss of 5,000 students from the district for the next school year which began a hemorrhage of students that will continue long into the future.
The remains of the original Frederick Douglass High School on the city’s east side long after its closure. This tragic photo was posted by author to hail graffiti art. The neighborhood around the school has deteriorated to below-poverty conditions.
(VOD note: the paragraph above cites “low academic achievement” as a purported cause of the first state takeover in 1999, while in fact DPS student scores were rising rapidly, and the district had a budget SURPLUS of close to $100 million. After the takeover, the $1.5 Billion bond was handed over to national white-owned corporations like Barton-Malow, which used it for primarily for unnecessary new school construction rather than renovation.)
Detroit Public Schools was operated under [state] receivership from 1999 through 2005. When DPS was first put into receivership, they actually had a stable budget with a slight surplus. Since then, the surplus has been depleted and Detroit Public Schools has been pushed to the brink of bankruptcy. An Emergency Financial Manager was put in charge of DPS again in 2009 by then-Governor Jennifer Granholm under the provisions of PA72 of 1990, the Local Government Fiscal Responsibility Act.
Rally to stop the first Emergency Manager Law, PA 4, in Lansing, MI April, 2013.
A second bond was voted for in 2009, under Emergency Financial Manager Robert Bobb, adding another $500.5 million for building improvement, even though the district had lost over half of its student enrollment and closed dozens of buildings by then.
Whatever became of the bond money? It was spent on facilities, because by law it could not be spent on anything else such as decreasing the deficit, day-to-day operations or teachers salaries. The problem is in what happened to those buildings after renovations. Some were demolished; many have been leased to charter schools; and many more have been shuttered where they lay in disrepair attracting vandals, vagrants, drug dealers, feral animals, and scrap collectors who have gutted the structures and left nothing but barren shells of formerly majestic century-old showplaces.
Some of the more costly bond funded renovations went to the following projects:
Jared Finney High School as originally built.
Finney High School was demolished at a cost of $2.5 million under the 1994 bond, prior to the approval of the 2009 bond by voters.
Under the new bond, construction of a new high school on the former site of Finney HS was completed at a cost of $56.9 million. The new high school was named East English Village Preparatory Academy in 2012 and remains open to service DPS high school students. The school concentrates on Science, Technology, Engineering, and Mathematics (STEM) and Fine and Performing Arts. Students must undergo an application and admissions process to attend this public school, so it is not an open admission neighborhood school available to all DPS students.
Demolition of historic Mumford High School, contracted out to Walbridge Aldinger, whose CEO John Rakolta is a close ally of Michigan Governor Rick Snyder.
Mumford High School was demolished and replaced with a new building at a cost of $56 million.
Upon completion in 2012, Mumford High School was immediately leased to the Educational Achievement Authority, a newly created statewide school reform district comprised of the 5% lowest performing schools in [the state–all in Detroit]. The lease amount is for $1 million per year, which will amortize the construction cost in a mere 56 years.
The EAA has benefited greatly from bond money intended to improve DPS buildings. Southeastern High School and Central High School both received renovations and repairs amounting to more than $50 million for each building and are also being leased to the EAA.
Kettering High School students walked out in 2009 to protest closure of the famous “K.” Sign supports the school’s principal. Photo: WSWS
Kettering High School, renovated at a cost of $6.9 million, was closed in 2012 and remains vacant. Kettering was specially outfitted to service physically disabled students, with one entire wing converted for this purpose. Southwestern High School was closed in 2012 and remains vacant following a $6.5 million bond investment that included revamping the auditorium.
The bulk of the bond money paid by the residents of Detroit to improve their school system was spent between 1999 and 2006 (from the 1994 bond), and from 2009 through 2012 (from the 2009 bond). During all but a short period of time in 2006, Detroit Public Schools has been under the control of state appointed school board members or an Emergency Financial Manager.
Gov. John Engler (R)
Gov. Jennifer Granholm (D)
Gov. Rick Snyder (R)
For years, the waste of funding has been blamed on Detroiters and poor election choices, but that is certainly not the case when it comes to the problems incurred by DPS. Those issues lay solely at the feet of the state, under three different governors (Engler until the end of 2002, Granholm from January 2003 through December 2010, and Rick Snyder from January 2011 to present). Money that was spent to build new buildings or improve buildings seems to be overwhelmingly benefitting the EAA reform district and not DPS students.
Chadsey High School, permanently closed, after several student walkouts, was renowned for its multi-racial, multi-cultural student population.
There are currently 87 vacant or underutilized buildings belonging to DPS that are for sale or lease. A total of $78.6 million was spent on improvements or renovations to 83 of those buildings. There have been 26 buildings demolished at a cost of $27.4 million. Another 28 buildings received a whopping $295.4 million investment and are now leased to community organizations, the EAA reform district, or charter schools. DPS has also sold several buildings that received a total $36.4 million in renovations and repairs prior to the sales. That is a lot of expenditure for buildings not being used by DPS. In fact, just over half of the bond money was spent on buildings that are still in use by DPS for Detroit students.
The previous two decades has been full of misspent funding by governor-appointed school boards, elected officials, and governor appointed Emergency Financial Managers. The toll this has taken on the Detroit Public Schools district has been devastating. But the biggest change in district enrollment numbers has an entirely different source– the rapid increase in Charter Schools following the enactment of the charter school law in 1994 (Public Act 362 of 1993).
School choice has been the single most devastating fact that has caused the decline of Detroit Public Schools. Residents are currently liable for the two bonds, plus interest, for building renovations on school buildings that the district is now leasing to charter corporations that are in direct competition with DPS for declining student enrollments. Over the past ten years, DPS has been forced to shut down a full two-thirds of their neighborhood schools. Enrollment in DPS has decreased to fewer than 50,000 students, while enrollment in competing charter schools has increased to 68,000.
That is the real cost of unlimited charter school expansion.
Detroit Public Schools teachers walked out across the district in 2001 to rally in Lansing against bill that would have opened the way to more charter schools. They succeeded for the time being, only to face the devastation to come.
********************************************************** Agnes Hitchcock, Marie Thornton, Diane Bukowski to appear on WHPR 33 Black History Month show Sat. Feb. 27 at 10:30 a.m. to discuss 22-year dismantling of the Detroit Public Schools by white power structure.
The Electronic Intifada
Judge Hathaway, dressed in wrinkled clothing and at times mixing up facts, painted Stafford as an incorrigible villain guilty of extreme offenses.
Date one: In December 1982 I, met Clifford Stafford based on blind date. In December of 1983, we went out for dinner and after that we said let’s get together after the New Year. We got married May 9, 1983 in the State of Ohio, Lucas County. Clifford was married and got divorced. He had 2 children in that union, Clifford L. Stafford Jr. and Lashawda Stafford. One year later I gave birth to our son, Kevin L. Stafford born on May 18, 1984. Clifford received full custody of his children, at that time, Lashawda was 14 years old, Clifford was 12 years old, and also Monique was 12 years old.
I would like to go to March 2000. This is when my sister Rosalind Green and my daughter Monique M. Stafford, also my brother Larry Sheridan, moved in to the same home that my husband and I had. This gave me and my family an easy way to take care of my sister and daughter.
No Flint water crisis if no Karegnondi Water Authority 
Published on Jan 28, 2016
Karegnondi Water Group members get Bond Buyers’ “Midwest Deal of the Year” award in 2014. Without them, the poisoning of Flint would not have happened.
The two parties are battling the matter out in electoral debates, with Michigan’s Republican Governor Rick Snyder justifiably though hypocritically castigated by Democratic candidates like Hillary Clinton for his role in this unspeakable catastrophe.
“The governor of that state acted as though he didn’t really care,” Clinton said during the NBC News debate in Charleston, S.C. “If the kids in a rich suburb of Detroit had been drinking contaminated water and being bathed in it, there would’ve been action.” Clinton’s Democratic opponent Bernie Sanders simply asked Snyder to resign.
In the most cynically exploitative campaign move so far, Clinton just published the video below. It calls for donations to a Flint non-profit, rather than pledging billions from the U.S. Treasury to save Flint, just as the U.S. Treasury bailed out General Motors, which left Flint, taking with it 72,000 jobs.
No politician has expressed any intention of locking Snyder and cronies up for life without parole, the only sentence appropriate under Michigan law, or of providing the billions of dollars necessary to rebuild not only Flint’s water infrastructure, but the city itself, devastated for decades by its abandonment by General Motors and other corporations.
Ten Flint residents have already died from Legionnaire’s disease linked to contamination of the city’s water. Tens of thousands more, especially children and babies, face irreversible life-time damage due to the neurological and behavioral effects of lead, according to the World Health Organization.
But make no mistake—getting rid of Snyder will not cut out the cancer of racism and profiteering that has devastated Flint, Detroit, and cities across the U.S. for years.
The most blatant example of the bi-partisan midwifery of the Flint water catastrophe is the creation of the Karegnondi Water Authority (KWA), in what a Detroit Water and Sewerage Department (DWSD) spokesman called “the greatest water war in Michigan’s history.”
He was quoted before the creation of the Great Lakes Water Authority (GLWA), which has since robbed the people of Detroit, the largest Black majority city in the U.S., of the entire DWSD, the country’s third largest water and sewerage system, founded in 1836, which had been serving 40 percent of Michigan’s population.
The poisoning of the city of Flint, which is also a majority Black, would not have happened without the creation of the KWA at the instigation of Genesee County Drain Commissioner Jeff Wright, a white Democrat who has been Drain Commissioner since 2001 and spent 23 years prior to that in the department under former Drain Commissioner Anthony Ragnone.
According to U.S. Census figures, Genesee County is 75.2 percent white, and 20.6 percent Black, with a 21 percent poverty level. Flint is 37.4 percent white, and 56.6 percent Black, with a 41.5 percent poverty level.
In 2013, the KWA began building a 63-mile pipeline to Lake Huron that runs parallel to DWSD’s pipeline for the region. While boasting it will lower water rates, the Authority admits the pipeline will only deliver raw water, unlike the DWSD, which delivers fully treated water. Communities which sign on to it will have to treat their own water, creating ways to do so at additional costs to customers and profits to contractors. Wright said in 2011 that he wanted to bring raw water in for the benefit of businesses in the area.
The pipeline was supposed to have been up for operation by 2015.
Jeff Wright, CEO of KWA, Genesee County Drain Commissioner
The KWA now includes the “Genesee County Drain Commissioner, Lapeer County Drain Commissioner, Lapeer City, Sanilac County Drain Commissioner and the City of Flint,” according to its website. St. Clair County is reportedly also considering membership as Wright courts more regional customers.
Wright, who has a history of shady dealings with water contractors, began the push to create the KWA in 2006. Snyder’s appointee, Flint Emergency Manager Ed Kurtz, later endorsed it as well. In 2013, Wright got the Democratic City Council of Flint to agree to disconnect the city from the DWSD, which had supplied high-quality water to Flint residents since 1967, and connect with the KWA instead.
Due to KWA construction delays, however, Snyder and Kurtz ordered the ultimately disastrous long-term use of the polluted Flint River in the interim, falsely claiming that Detroit had refused to negotiate better rates for its Genesee County customers. While the Flint Water Treatment Plant, using the Flint River, has always been a back-up water supply to DWSD, which gets its water from Lake Huron, the plant was never outfitted to operate with river water for more than 20 days, on an emergency basis.
DTE’s Greenwood Energy Center in Avoca, MI is on the proposed Karegnondi line.
VOD reader Peter Bernard wrote, “DTE has been involved in the formation of KWA since the beginning. DTE didn’t need treated water to run its turbines. Was it the demand of DTE for untreated water as soon as Flint withdrew from DWSD that caused Flint to pump untreated water into its supply system? I worked for Detroit Edison as a summer intern 60 years ago and they always thought pure water was an extra expense since super-heated stem automatically purified the water driving the steam turbines.”
In 2011, Ron Fonger of the Flint Journal reported that DTE told the KWA board it was interested in purchasing up to three million gallons of untreated water per day from the Authority for its Greenwood Energy Plant.
“Genesee County Drain Commissioner Jeff Wright called the news ‘very encouraging’ during a meeting of the KWA Board of Directors today, and said others could follow ‘as more businesses are made aware of (what we are doing and) the lower cost of untreated water,'” Fonger wrote, adding that Wright said KWA would work with DTE.
Map shows KWA pipeline in red, DWSD pipelines in blue.
In 2014, the Bond Buyer magazine gave KWA the Midwest Bond Buyer of the Year award during an elaborate ceremony in New York’s Waldorf Astoria Hotel, for its second sale of $220 million in bonds to finance the pipeline, an intake facility, and two pumping stations.
It earlier sold $35 billion in bonds despite Detroit’s bankruptcy filing.
“Long before Detroit filed its Chapter 9 bankruptcy case in the summer of 2013, Flint and Genesee County, Michigan saw the need to break away from their dependence on the Detroit water system,” the narrator of a video shown at the ceremony said in a disingenuous, factually inaccurate introduction.
“In 2010 they formed the Karegnondi Water Authority, the two governments’ long-term strategy to deliver a more reliable water supply at more reasonable rates. After years of planning and crafting a bond structure with dual backstops to protect investors, the Authority hit the market in early April with its inaugural issue for $220 million in bonds. . . .The governments expect to cover the debt repayments with system revenues, and both put their limited tax GBO payments behind the bonds.”
The narrator said that Genesee County also pledged to cover Flint’s portions of the bonds if it is not able to do so under state emergency management.
Former Detroit CFO Sean Werdlow and former Mayor Kwame Kilpatrick receive Bond Buyer award in 2004 for disastrous $1.5 billion COPS deal.
“Entering a market where local governments across Michigan faced heightened penalties, the authorities sold the bonds to more than 30 investors and achieved borrowing costs below projections,” the narrator said. “The deal paves the way for the County to trade in annual rate increases of about 11.5 percent for ones closer to five.”
The presentation recalled a similar Bond Buyer award given to former Detroit Mayor Kwame Kilpatrick and his then-CFO Sean Werdlow in 2004, for the disastrous sale of $1.5 billion in “Certificates of Participation,” or “Pension Obligation Bonds,” an amount that ballooned to $2.8 billion with default penalties and interest swaps. Detroit Emergency Manager Kevyn Orr cited the deal as one reason for his improperly authorized 2013 Detroit Chapter 9 bankruptcy filing, but never followed through on a lawsuit he filed calling it “void ab initio, illegal and unenforceable.”
Below is the video presented at the Bond Buyer 2014 awards ceremony, on the Karegnondi Water Authority and the bonds involved.
In 2013, Tucker, Young, Jackson and Tull (TYJT), a Detroit-based engineering and consulting company, was contracted by the Michigan Department of Treasury to provide a study of the proposed KWA, contrasting it with the advantages of Flint remaining with the DWSD. The study strongly contradicted claims the Bond Buyer made at the 2014 awards ceremony, and other made in a study contracted by the community of Swartz Creek. (See full TYJT study at http://voiceofdetroit.net/wp-content/uploads/FLINT-KWA-TYJT-water_report.pdf,)
DWSD spokesman Bill Johnson
“The Flint City Council’s approval of the Genesee County Drain Commission-backed idea to link Flint and a proposed multi-county connector effectively launched the greatest water war in Michigan’s history, “ Bill Johnson, communications head for the DWSD, said in a press release. “The action ignores a credible state-sponsored study that came out against the ill-advised Karegnondi Water Authority (KWA) project. And the vote makes no connection to Flint’s fiscal reality. All things considered, the City of Flint is best served by the Detroit Water and Sewerage Department (DWSD).” (See full release at http://voiceofdetroit.net/wp-content/uploads/water_war_undermines_flint-dwsd_relations-2013-14.pdf.)
The study concluded that the cheapest and safest option out of eight through 2042 for Flint’s water supply was to provide it directly through an adaptation of DWSD’s Imlay City pumping station, which is closer to Flint. DWSD has always provided water for the area through its Lake Huron Water Treatment Plant at Ft. Gratiot, Michigan, which sends it to the Imlay City station to go to Flint. Flint then supplies it to other regional customers. (See graph below.)
TYJT noted that the KWA proposal did not account for cost overruns on construction contracts, an almost inevitable occurrence, or provide a back-up water supply as does the DWSD for all its customers in the event of failure of the primary supply.
Why did Wright ignore this study? His connections with shady contractors during his tenure as Genesee County Drain Commissioner beginning in 2001, and earlier in his 23 years serving under former Drain Commissioner Anthony Ragnone, are well-known.
Southwest community organizer Denise Hearn leads protest against Synagro’s Detroit boondoogle outside the Detroit Wastewater Treatment Plant July 31, 2008.
Wright himself formerly owned a water consulting business called Tara/Aqua Management. During his term as Commissioner, he has signed multiple contracts with Synagro Technologies, Inc. for sewage sludge removal, dewatering, and land application at the county’s Linden and Ragnone treatment plants, from 2002 through 2009, according to a 2010 Flint Journal expose by reporter Ron Fonger.
At least two of the Genesee Drain Commission Synagro contracts, in 2003 and 2005, were signed by James Rosendall, former Synagro vice-president of development who went to prison for 11 months, in connection with the Synagro/Carlyle bribery scandal that brought down former Detroit Mayor Kwame Kilpatrick, DWSD head Victor Mercado, and former City Council President Monica Conyers, among other Black city officials.
Synagro VP James Rosendall.
Rosendall was the only white who was jailed, while Black officials who refused to act as FBI informants received terms as long as five years. Judge Avern Cohn barred the defense from asking why Synagro and the Carlyle Group were not charged in the RICO indictment.
Wright was an FBI informant against Conyers’ aide Sam Riddle during the probe. Many officials involved in the probe acted as informants rather than being charged as well.
Synagro was purchased by the insidious Carlyle Group in 2007, one of the largest private equity and alternative investment firms in the world which has extensive ties to the global defense industry.
The Carlyle Group’s board has included politicians from around the world, including former U.S. Presidents George H. W Bush and George W. Bush, and their former cabinet members U.S. Secretary of State James Baker III, and U.S. Secretary of Defense Frank Carlucci, also former chairman of the U.S. Securities and Exchange Commission (SEC) Arthur Levitt, who served under Pres. Bill Clinton. It is connected to the Bin Laden family and to former Phillippines dictator Fidel Ramos, among numerous others. Synagro went bankrupt in 2013 and was sold.
The Alabama-based American Cast Iron Pipe Company, which operates one of the largest ductile iron pipe casting plants in the world, has a contract with a starting cost of $84.1 million, while the Flint-based E & L Construction’s contract for the Imlay City pump station has a starting cost of $11.78 million. All this work duplicates DWSD pipelines and intake and pumping stations already servicing the area.
Pipe for Karegnondi Water Authority is hoisted into Lake Huron.
Recently, Channel 2 reporter Charlie LeDuff interviewed Jeff Wright in a story focusing on the profits made by contractors on the Flint water switch. They included Kurtz campaign contributors AECOM, with $18 billion in revenues in 2015, and the engineering firm hired to ensure that the switch to Flint River water would be safe, LAN (Lockwood, Andrews and Norman). LeDuff reports that firm’s original contract began at $140,000 and ballooned later to $4 million, despite the fact that it did NOTHING to ensure the safety of the city’s water.
(VOD takes issue with LeDuff’s initial contention that Flint ratepayers decided to opt for the KWA because they were paying “outrageous” rates to Detroit. That is a claim that has been made by DWSD’s wholesale customers in six counties for decades, never with an addendum that the communities involved add their own surcharges to the wholesale rates. LeDuff also appears to conclude at the end that water flowing through Flint’s pipes now from DWSD is safe, which it will not be until complete replacement of the corroded infrastructure. )
Some related stories from other media:
http://www.bondbuyer.com/video/doty-2014-midwest-deal-of-the-year-1069549-1.html
http://www.mlive.com/news/flint/index.ssf/2014/03/kwa_officials_think_credit_rat.html
http://www.mlive.com/news/flint/index.ssf/2011/05/dte_energy_tells_regional_wate.html
Related articles from VOD:
http://voiceofdetroit.net/2016/01/24/maddow-snyders-new-mdeq-chief-opposes-feds-flint-water-order-flint-town-hall-jan-27-9-pm/
http://voiceofdetroit.net/2016/01/20/boycott-michigan-jail-snyder-cronies-for-flint-lead-poisoning-domestic-terrorism-racism/
http://voiceofdetroit.net/2015/12/21/rachel-maddow-slams-gov-rick-snyder-for-poisoning-flints-water-emergency-manager-act/
http://voiceofdetroit.net/2015/11/08/layoffs-flood-detroit-water-dept-risk-public-health-rising-debt-higher-rates-more-shut-offs/
http://voiceofdetroit.net/2015/10/16/flint-water-and-the-no-blame-game-true-files-fed-complaint-re-disparate-impact/
http://voiceofdetroit.net/2015/10/13/will-regional-takeover-of-detroit-water-make-residents-of-6-counties-drink-flint-water/
http://voiceofdetroit.net/2015/08/18/judge-signs-order-to-lower-flint-water-rates-35-stop-shut-offs-tax-liens/
http://voiceofdetroit.net/2015/07/10/regional-water-czars-plan-permanent-shut-offs-to-large-parts-of-detroit-while-increasing-rates/
http://www.mlive.com/news/flint/index.ssf/2010/06/synagro_contract_provides_new.html
http://www.mlive.com/news/flint/index.ssf/2005/09/fbi_seizes_wrights_campaign_le.html
http://transmissionsmedia.com/carlyle-group-and-bushs-crusades/
#JeffWright, #FlintWater, #KWA, #FlintLivesMatter, #Waterislife, #Beatbackthebullies, #DAREA, #Detroit2Flint, #BlacklivesmatterDetroit, #DetroitWater, #OurWaterOurVote, #Right2Water, #Saveourchildren, #StandupNow, #SaveFlint, #SaveDetroit