money matters

New safeguards to be implemented following Detroit district’s $6.5 million snafu

Superintendent Nikolai Vitti's staff is working on safeguards to prevent another error.

A $6.5 million mistake made during schools chief Nikolai Vitti’s transition last summer has prompted a new system for setting deadlines for the Detroit district.

Vitti plans to use the new strategy to prevent missed deadlines like the one the finance department mishandled in August when district staff failed to submit paperwork on time to receive a reimbursement from the state.     

Vitti told Detroit school board members at a public meeting Tuesday night that his staff is working on a plan to put safeguards in place to prevent another costly error.

The mistake isn’t likely to affect the district’s 50,000 students because the money was owed to the old Detroit Public Schools, which was replaced in 2016 by the new Detroit Public Schools Community District. The old district has no schools or students and exists only to pay off debt.

“One thing we are planning to do is create an outline of deadlines … and the board would be made aware of those deadlines,” Vitti said. “That’s one kind of enhancement that would allow the board to monitor the submission of those kinds of documentation.”

The district submitted a request to the state Treasury Department that included legal arguments on why the state reimbursement should still be awarded. The request was made Sunday evening, and the district is now waiting for a response.

Board member LaMar Lemmons asked what response the district would give to former chief financial officer Marios Demetriou, who has vocally denied any blame.

“The former CFO has made allegations that this body has somehow harmed his reputation and I want to know what our posture and response is going to be to that,” Lemmons said.

In an email to the school board on Dec. 18, Vitti blamed the former CFO and his team, Michael Bridges and Delores Brown, for the error.

“The responsibility to submit the paperwork fell on then-CFO Marios Demetriou and two Executive Directors in Finance, Delores Brown and specifically Michael Bridges,” Vitti wrote.

However, Demetriou fired back this week, rejecting any blame for the mistake. He said the deadline was weeks after he had officially resigned, and that the paperwork was never given to him to sign and submit.  

Demetriou, who is now assistant superintendent of finance and operations in the Ann Arbor school district, spoke to the board during the public comment, reading aloud from the letter by Chalkbeat had posted in earlier in the day.

“I hope that they are successful in getting the $6.5 million. It’ll be a shame if they can’t get it,” Demetriou said, after the meeting. “I hope they put all the safeguards that they need to put in place, and I hope they have highly qualified people who know all the deadlines and they abide by them.”

The board also approved a policy that allows the body to change the names of buildings that previously were named after living people, and the district plans to launch its master teacher initiative this week, interviewing and selecting teachers for the 52 open positions.

Battle to buy a school

Judge orders Detroit district leader to appear after issuing a stay in charter school property dispute

PHOTO: Anna Clark
The former Anna M. Joyce Elementary School in Detroit closed in 2009.

A Wayne County judge charged with settling a dispute between charter school Detroit Prep and the main Detroit district on Friday issued a stay and demanded that Superintendent Nikolai Vitti or one of his top deputies, along with a school board member, appear in court next month to discuss the case.

“Let’s get somebody, a board member, the superintendent – that would be my preference – or the deputy superintendent would be acceptable with the superintendent available by phone,” Judge David J. Allen said. “I’m sure he’s a busy man.”

Allen agreed on Friday to postpone making a decision over the disputed former Joyce Elementary School until next month. By then, Gov. Rick Snyder is likely to have signed legislation that could help the charter school, Detroit Prep, in its quest to buy the former Joyce school.

“I would bet my house that the governor will sign it,” said Detroit Public Schools Community District attorney, Jenice M. Mitchell Ford.

Detroit Prep has been trying to buy and renovate the former school building on Detroit’s east side but has been blocked by the district’s refusal to waive a deed restriction on the property. The building is owned by a private developer but a deed restriction requires the district to sign off on all uses of the buildings other than residential. Detroit Prep filed suit against the district in October.

The legislation, which was fast-tracked this week by state lawmakers — and supported exclusively by GOP members — clarifies language barring deed restrictions on buildings to be used for education purposes. Detroit Prep asked Allen to postpone his ruling until that law is signed.

“If passed, the Amendment will favor the plaintiff [Detroit Prep] in this case and adversely impact the District’s position, legal argument, etc.” Vitti said in an email to the state House Education Reform Committee chairman, Rep. Tim Kelly.

Detroit Prep’s lawyer, Jason R. Gourley, said that the bill could “be on the governor’s desk as early as next Tuesday.”

Battle to buy a school

Michigan House passes bill that will help local charter in its fight against the Detroit district

State Representative Tim Kelly, chairman of the Education Reform Committee, speaks on Senate Bill 702

GOP State House representatives today fast tracked a bill that will help local charter Detroit Prep in its fight against the Detroit Public Schools Community District.

The bill, which was passed without the support of a single Democrat, clarifies language on deed restrictions, making it illegal for government entities, including school districts, to use them to block educational institutions from acquiring former school buildings.

The district rejected the charter school’s use of the abandoned former Joyce Elementary school in September, despite it having already been sold to a private developer. The district invoked a stipulation in the property’s deed that required the district to sign off any non-residential use of the property. Detroit Prep, seeking more room for its growing student population, then filed suit in October against the district.

In December, Superintendent Nikolai Vitti wrote in an email to state Representative Tim Kelly, chairman of the House Education Reform Committee, that the proposed legislation would affect the district’s ability to fight Detroit Prep in court.

“If passed, the Amendment will favor the plaintiff [Detroit Prep] in this case and adversely impact the District’s position, legal argument, etc.,” Vitti wrote.

Representative Kelly has been a vocal critic of Vitti’s actions in the case, seeing the blockage as part of a larger pushback by the superintendent against charter schools. In a heated exchange at a hearing in Lansing last November, he aimed at Vitti, saying, “The reality is that deed restrictions are illegal now. Whether you like them or not, it is state law.”

The bill passed on Thursday clarifies a law that’s already in existence, Kelly said during the hearing, “but currently being flouted in certain areas of the state.”

The matter now shifts to the Wayne County Circuit Court on Friday, where the charter and district lawyers will meet at a hearing on Detroit Prep’s request for a delay in the case to give the bill enough time to be signed into law by the governor. Meanwhile, the district is arguing for the case to be thrown out altogether.

“I’m curious about the timing of this hearing when the judge is considering this case already,” said State Rep. Stephanie Chang (D-Detroit) during the hearing. “Is it appropriate for us to be pushing this legislation when there is a court hearing scheduled for tomorrow?”