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- Emergency Financial Manager
November 6, 2009
I want to extend my profound thanks to everyone who supported the passage of Proposal S.
This is a time of change for the City of Detroit, change away from the old methods and old solutions, from the old players and the old games, from regressing about everything that went wrong to marching forward together for the bright future of our city and its children.
We will now move forward quickly and aggressively to implement this $500.5 million bond, including eight new and ten modernized buildings. We will put the systems and people in place to ensure both strong oversight and first source programs aimed at hiring Detroiters on these projects. We will work closely with the City of Detroit to ensure that the process is streamlined and efficient at every point. We also plan to engage the community and work closely with our academic team to build schools that are driven by our academic plan.
We will never let the mistakes of the past happen again with the public’s precious resources intended to improve our children’s learning environments.
We now look forward to building and renovating schools to suit 21st-century learning needs and creating learning environments that our students certainly deserve.
Again, we thank all of you for supporting DPS. We could not have done this without all the hard work of the many volunteers who sought to do what is right for Detroit’s children.
Robert C. Bobb
Emergency Financial Manager for Detroit Public Schools
Detroit Public Schools plans to build eight new schools and modernize 10 schools thanks to the passage of Proposal S, a bond referendum voters approved on Nov. 3 to take advantage of $500.5 million in stimulus dollars that President Barack Obama made available to build new schools and modernize existing schools.
The funds come to DPS in the form of no-interest and low-interest bonds available under economic stimulus packages. These dollars must be spent quickly—within 3 years. DPS received the 6th largest allocation of qualified school construction bonds in the country.
There is no tax increase from Proposal S. Taxes will remain the same.
Under Proposal S, $246 million — nearly half of the bonds — will be re-paid at a 0% interest rate.
The program also will stimulate the economy. According to the State of Michigan’s formula, Proposal S will create nearly 11,000 jobs and will result in $500.5 million being spent in Detroit neighborhoods within a 3-year period beginning in January 2010.
Proposal S will improve the district’s progress toward creating safe, new, state-of- the-art Centers of Excellence in Detroit neighborhoods and public schools. It is the district's goal that any Proposal S fund savings would be redirected to improve the safety, technology and quality of life in the district.
Under the 1994 $1.5 Billion Bond Program, the District built 3 new High Schools, renovated 2 others, built 16 other new school buildings, in addition to providing over $600 million in capital improvements to over 175 schools within the District, including bathroom and kitchen upgrades, lighting and electrical improvements, athletic facilities and wiring for the internet.
Detroit Public Schools is moving toward a universal PreK-8 school model. The Proposal S bond program will deliver 5 new and 5 renovated PreK-8 schools with in the next three years. These schools will follow a consolidated schools model that creates “academic centers” within a single school / campus. The centers will typically group administration, PreK – 5, academic support (media center, resource rooms), Arts and Athletics, and 6 – 8 into these separate but contiguous areas.
A bond issue is a way to borrow money to finance capital projects. Capital projects include building new schools; school renovations such as new heating and cooling systems, electrical repairs, security provisions or window and floor replacement; and installing the latest education technology equipment in the classroom. Bond issues must be approved by voters.
Financing from the passage of Proposal S will be used to build eight new schools and modernize 10 other schools. Schools that are modernized will be renovated with new heating, electrical and security systems and equipped with state-of-the-art technology. These projects can include:
No. If voters approve Proposal S, there would be No tax increase. The current bond repayment millage, which is now scheduled to expire in 2033, would remain at the current level through 2039.
Yes. The state of Michigan estimates Proposal S will create nearly 11,000 new jobs in Metro Detroit, including 3,725 direct jobs and 7,000 indirect jobs. Direct jobs are those directly connected to each project, such as construction workers, painters and architects. Indirect jobs include jobs like truck drivers and restaurant workers.
Yes. The bond program will include Local/Small Local Business Enterprise programs and incentives such as First Source programs to encourage hiring Detroiters and mentoring and student employment programs to train a new generation of construction professionals.
Money from a bond referendum can only be used for capital projects. It cannot be used to reduce debt.
The 18 schools selected for the bond project were chosen based on a number of criteria including number of students, how much of the building is used and the condition of the building or the cost to keep the building a first-class school. Schools that met these criteria were considered for renovation or rebuilding.
Savings from the project budgets will be used to support a district-wide security initiative, which will include:
It will also be used for technology upgrades in the classrooms, such as Smartboards and creating access to the Internet.
Nearly half of the bonds, $246.5 million, will be repaid at a 0% interest rate. The remainder, $254 million, will be repaid at a 0 to 2% interest rate. Both rates are far below what DPS would receive if it attempted to sell bonds on its own at this time.
A full report on the 1994 Bond Proposal and the use of funds is available at www.detroitk12.org/ProposalS.
DPS Emergency Financial Manager Robert Bobb will establish an oversight committee of respected community leaders that will review every aspect of ongoing construction and funding. The DPS Bond Advisory and Fiscal Responsibility Committee will include parents, as well as government, industry, labor and community leaders who are committed to ensuring that the project has proper accountability and oversight.
Detroit Public Schools has aggressively pursued more than $800 million available in American Recovery and Reinvestment Act stimulus funds for K-12 school systems.
