Lori Higgins, and Tresa Baldas

Detroit Free Press

Detroit taxpayers could be on the hook for more than $31 million in debt that the Detroit Public Schools Community District owes to a company that provided janitorial services from 2011 to 2014.

During a hearing in federal court this afternoon, an attorney for Maryland-based Sodexo said an original judgment — issued by an arbitrator in 2015 and affirmed by U.S. District Judge Mark Goldsmith in August — has grown from $25 million to $31 million.

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That debt is growing "by about $10,000 a day," said Timothy Fazio, the attorney representing the company, during a hearing on several motions in the case. One of those motions, presented by the Sodexo, asks Goldsmith to force the City of Detroit to place the unpaid debt on the tax rolls so the company can be paid. The city and district are fighting that move.

"DPS has refused to comply, to honor your judgment," Fazio told the judge.

It was unclear why the massive debt wasn't addressed in the deal last summer that split the district into two — one to educate students and the other to take care of the district's debt and collect taxes. In June, the state Legislature passed a $617-million financial-rescue package that created the new district to replace the old Detroit Public Schools.

"We do not comment on pending litigation," said Chrystal Wilson, spokeswoman for the district.

Goldsmith didn't issue a ruling and met privately with the attorneys in the case after the hearing.

The janitorial services company has said the district stiffed it out of millions of dollars for cleaning services that were provided but never paid for. The district has long argued that the company did not keep the schools clean and failed to live up to the terms of its contract. The controversy wound up in arbitration, which ended with Sodexo winning a $25-million award.

In August, Goldsmith upheld that award and denied the school district's request to vacate the case.

Goldsmith's ruling follows years of legal feuding between DPS and Sodexo, whose more than 400 employees helped clean and maintain the school's buildings.

According to court documents, Sodexo and DPS entered into a contract in 2011, but "the relationship quickly became rocky." Under the contract, DPS would pay Sodexo a set rate per square foot of property that was cleaned. But by late 2011, Sodexo alleged that DPS had fallen behind on its payments.

DPS countered that Sodexo's performance "was substandard from the outset" and didn't improve.

By 2013, a payment agreement was drafted. DPS paid most of its balance, but "quickly became delinquent once again," court documents say.

In 2014, Sodexo said that it would end its contract with DPS, which continued to accuse Sodexo of leaving schools dirty and not hiring licensed and qualified personnel.

Contact Lori Higgins: 313-222-6651, lhiggins@freepress.com or @LoriAHiggins. Staff writer Ann Zaniewski contributed to this report.