Politics

Letter To The Editor: EAA's Covington Questions A Darrell Dawsey Column

May 15, 2013, 7:38 AM


John William Covington

Your recent column by Darrell Dawsey, DPS Loans To State Education Authority Smell Mighty Foul, reflects a fundamental misunderstanding of the loans that were taken by the Educational Achievement Authority to help address some start-up cash-flow issues.

The focus of the column is Dawsey’s assertion repeated again and again throughout that the loan in question was a loan from the “cash-strapped” DPS Detroit Public Schools to the Education Achievement Authority.  That is not true.  The loan was made to the EAA through the Michigan Finance Authority.  Every year the authority arranges loans totaling $600 to $700 million for several hundred of school districts all over the state under their State Aid Note Program to help them work through cash flow issues.  This was one of those routine loans.

Because the EAA is not codified in state law as a school district, the loan was made through DPS, which forwarded the state money to the EAA.  It was a pass through.  The loan did not involve a dime of DPS funds.  In fact, DPS was paid processing fees of more than $168,000 fee just to process the loan.  The loan is being repaid on schedule and will be fully repaid in July.  DPS does not have to worry about being stuck with the loan because the payments come directly out of the EAA’s state school aid payments.

So when he asks, “Why not go directly to the state itself for the cash?” he is in fact endorsing the approach that was taken.  The loan was entirely State money through the Municipal Finance Authority, not DPS money.

The EAA , which is using 15 buildings owned by DPS to educate Detroit students, is not “getting the buildings for a song.”  The EAA is paying DPS rent totaling $11 million this year for the buildings.  That can hardly be described as “for a song” under any reasonable interpretation.

Later Dawsey writes “DPS even gave the state district school buildings that were newly renovated with bond money voters had earmarked for Detroit education.”  DPS did not “give” the EAA as noted before.  Perhaps more importantly, the buildings are being used for “Detroit education.”  It is Detroit children who are being educated in those buildings.

Most start-up organizations, whether in the private sector or the public sector, encounter glitches along the way, including cash-flow glitches.  The EAA started operation July 1, 2012 but did not receive its first scheduled state aid payments until Oct. 22.  The loan from the State to the EAA was designed to help the EAA get through that initial cash flow pinch.  The loan will be fully repaid to the state by July 22 of this year.

The EAA was formed to transform schools that have been failing Detroit school children for years.  The schools that were assigned to the EAA were the 15 lowest performing schools in DPS and were all in the lowest 5 percent of schools in the state. 

At the beginning of the school year, baseline testing showed only 2% of elementary and middle school students coming into the EAA were proficient in math — none in the sixth grade — and only 18% were proficient in reading.  Clearly something needs to change if these young people are to receive the education they are entitled to and must have if they are to prosper in a 21st Century economy.

Early test results already show dramatic improvement in student performance.  Tests administered in late January and early February showed that in reading, after just four months under the new system, more than 27 percent of EAA students in grades 2 through 9 had achieved one full year’s growth or more and in mathematics 22 percent have already achieved one or more year’s growth.

The most significant growth was in high school mathematic scores grades 9 and 10, where 40 percent  of students already had achieved one or more years growth and an additional 16 percent were on track to achieve one or more year's growth by the final assessment in late June.

After his recent visit to an EAA school, Brenda Scott Elementary/Middle School, Secretary of Education Arne Duncan, who has visited schools all over the country, said, “Obviously I’m just in for a day but talking to some of the young children today at this school compared to last year, they feel safer, they’re learning more.  They feel they’re in an environment where they have a chance to be successful.” 

You would think that people professing to care about urban students would welcome this increase in student performance, not look for ways to nit-pick it to death and return students to the old schools that have been failing them.  It’s a sad commentary when we fail to want for other children what we would demand for our own.

But the very least we should expect from critics, if they are determined to criticize for whatever reason, is that they base their assertions on fact, not fiction.

Dr. John William Covington 
Chancellor, Education Achievement Authority of Michigan

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Darrell Dawsey responds: 

Unsurprisingly, John Covington tells half-truths and bald-faced lies.

First off, the loan to DPS came from a bank, not the state. Interest accrues and payments must be made. How isn't that a loan?

That DPS took out the loan -- rather than lend EAA money directly from its accounts -- is immaterial since DPS is on the hook for the loan.

EAA doesn't start paying on the buildings until August. So far it hasn't paid a nickel. My column doesn't say it wouldn't ever have to pay, but that they got into the buildings for next to nothing. That's true.

Also, taxpayers who agreed to refurbish and build schools did so with the express intent that that money be used for DPS schools, not EAA experiments. That was my point, not what Covington suggests in his disingenuous misinterpretation.

Further, Sen. Bert Johnson's concerns were obviously well-founded, as reporters discovered that another $6 million in loans were acquired earlier. That's $12 million total in loans.

If the EAA still has ties to the type of foundation cash that was used to help start it, why not go to the foundations for cash? 

What credible third parties have vetted and verified his stats about improvement? He doesn't say. I would expect him to claim vast improvements after four months. Doesn't mean taxpayers and readers should believe his PR.

What's truly a sad commentary is that the state and city would hand our schools and students over to an educational bureaucrat who's best known for leading the Kansas City school district into loss of its accreditation. Saddest of all is that taxpayers are now on the hook for two broke school districts. Encoding this EAA nonsense into law will only further exacerbate our problems.

Mike Duggan didn't step down because this was an above-board, business-as-usual deal. The EAA took secret loans from DPS and is using the money to fund its educational experiments.

 Covington would rather we all use the more palatable terms he prefers -- like "pass through" -- but these loans are what they are.

No one questions whether DPS, which has been overseen by the state for much of the past 15 years, has failed many of its students. But this EAA foolishness is merely a pathetic educational shell game designed to take advantage of Detroiters' educational woes, not solve them. Detroiters deserve quality public education, not this hustle that Covington and his Lansing paymasters are trying to run on parents and children.

I stand by what I wrote.



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