State bill might offer a fix for $6.5M DPS paperwork mix-up

A metro Detroit lawmaker has introduced legislation that has the potential to get the Detroit Public Schools out of a costly jam.

The bill, introduced Wednesday by Rep. Martin Howrylak, R-Troy, would provide a one-time extension for the district to file paperwork so it can receive $6.5 million in debt millage reimbursements.

The State of Michigan reimburses districts for lost debt millage funds under Public Act 86, but in order to qualify, districts must submit the necessary paperwork by Aug. 15.

The district missed the deadline and has been working with the Michigan Department of Treasury to try to receive the funds.

"This bill is a rather simple way of solving a problem that is nothing more than a missed deadline," Howrylak said Wednesday evening. "While deadlines are important, this bill is necessary as a one-time effective grace period."

Howrylak said he hadn't discussed the legislation with Detroit school officials. He said he would be having conversations with the Michigan Department of Treasury and the governor's office to see if another fix is already in the works.

Neither Detroit Superintendent Nikolai Vitti nor a spokeswoman for the district could be reached for comment.

The bill, which was referred to the House Appropriations Committee, specifies that the extension is available only for the 2017 calendar year for any municipality eligible for money that "fails to submit necessary documentation in time."

The $6.5 million would have helped DPS pay off the district's $2-billion legacy debt. The district exists solely to collect taxes and pay off debt, while DPSCD - its successor - educates students.

Because the funding snafu only affects DPS, it won't affect the day-to-day operation of DPSCD, which means it won't have an impact on school programs.

Still, if the district loses out on the money, it will mean it'll take longer to pay off the DPS debt.

Howrylak said he's unsure how his legislation will be received in the Legislature. But he said it makes sense to ensure that DPS is able to pay off its existing debt, calling it a no-brainer.

"I believe this is the right thing to do," Howrylak said.

LaMar Lemmons, a member of the Detroit Board of Education, said Wednesday night that he would be pleased if the district received another chance.

“This is a step in the right direction,” Lemmons said. “I greatly appreciate the legislation.”

At a Jan. 9 meeting of the board, Vitti outlined some changes that will take place to avoid such issues from arising again - including submitting a list of key deadlines for DPS to the board so it can monitor those submissions.

In an email last month, Vitti said the ultimate responsibility to submit the paperwork fell on former CFO Marios Demetriou and two executive directors in finance, Michael Bridges and Delores Brown. Bridges has since resigned.

But Demetriou fired back last week at the district, saying he left the CFO position six weeks before the deadline to file for the $6.5 million and is not to blame for the snafu. He attended the Jan. 9 meeting, demanding district officials stop blaming him.

Contact Lori Higgins: 313-222-6651, lhiggins@freepress.com or @LoriAHiggins