First amendment to the District’s FY16 Budget projects year-end deficit to be $35.7 million less than originally predicted when it was adopted on June 30, 2015
DETROIT, February 26, 2016 – DPS Emergency Manager Darnell Earley today adopted an amendment to the District’s FY16 budget that projects the school system’s annual deficit will be $35.7 million less than originally predicted when the budget was adopted on June 30, 2015.
DPS’ FY16 adopted budget had forecast an annual deficit of $96.9 million. Budget Amendment #1, projects that it will decrease to $61.2 million.
“This budget amendment is further proof that the restructuring reforms put into place at DPS over the last year are continuing to show real results,” said Earley. “Although there are serious financial challenges that still exist, it is clear that FY16 is trending toward further improvement and that the course has been set for DPS to achieve long-term financial sustainability. As we continue to stabilize enrollment, I believe we will be able to operate the same as any school district in the State of Michigan.”
Other positive indicators of the District’s progress include its FY15 audit report (showing a $22 million reduction in its annual deficit, as compared to budget), continued non-classroom cost containment measures, and a comprehensive restructuring of Central Office Operations, which in FY16 reduced the number of departments from 60 to 16, pushed staffing and resources to the school building level and resulted in an overall $16.6 million reduction in salary and benefit expenses over the previous year (as of 12/31/15).
“While we recognize that there is still much hard work ahead to ensure that we have a balanced budget for the current year, this continued progress is clear evidence for the Michigan Legislature that the District is not only ready to receive the financial investment necessary to stand it up on its own as a “New Co,” but will be able to operate in a sustainable way as the new Detroit Community School District,” said Earley.
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