Why in the blue hell is DPS loaning millions of dollars to anyone?

**brizee** · April-26-13, 01:34 PM

Why did a mayoral candidate have to be the one to bring it to the newspapers attention?

Why was Roy Roberts name not mentioned once in that article seeing as he's the chief grand pubah?

Is this why the governors secret cabal to further privatize education was instructed to use private emails instead of government issued? So they would be safe from the citizens who supply the money they're playing games with?

**Detroitnerd** · April-26-13, 01:41 PM

Originally Posted by brizee

Why was Roy Roberts name not mentioned once in that article seeing as he's the chief grand pubah?

I KNOW! How weird! A not-very-engaged reader might well read that article and say, "Well, there's that effed-up old DPS up to its old tricks again. Deep in debt, closing schools and now lending money to this group. Why it's a wonder the state doesn't take it over!"

**Gannon** · April-26-13, 02:41 PM

I'm wondering what a "languagen" is...?!

**Zacha341** · April-26-13, 04:48 PM

At this point nothing surprises me - it's really all about the benjamins [[money).

The only variance is who the money is flowing to and when.

**Wesley Mouch** · April-26-13, 07:22 PM

I'm glad to see DPS and EEA playing well together and sharing assets as necessary. Article didn't say that EEA was 'stealing' money like phantom DPS employees were. Its just a loan between bureaucracies.

**313WX** · April-26-13, 07:26 PM

Originally Posted by brizee

Why did a mayoral candidate have to be the one to bring it to the newspapers attention?

Why was Roy Roberts name not mentioned once in that article seeing as he's the chief grand pubah?

It's the SE Michigan...I mean Detroit News, that's why.

**bailey** · April-29-13, 08:12 AM

Originally Posted by Detroitnerd

I KNOW! How weird! A not-very-engaged reader might well read that article and say, "Well, there's that effed-up old DPS up to its old tricks again. Deep in debt, closing schools and now lending money to this group. Why it's a wonder the state doesn't take it over!"

Just as a point of fact, DPS didn't loan the money out of it's own coffers, it borrowed the money and then transferred it to the EAA because, it would seem, the EAA didn't have a high enough borrowing limit to bridge the start up.

"DPS loaned the EAA the $6 million by borrowing the money through the Michigan Finance Authority, with repayments guaranteed based on the EAA's future state funding payments, said Caleb Buhs, spokesman for the state Treasury Department, which approved the loans."

From The Detroit News: http://www.detroitnews.com/article/2...#ixzz2RrEQgBSc

And the repayment is guaranteed....

"This was a good arrangement for both as DPS has a vested interest in the success of the EAA and DPS' payments are protected by state aid from EAA," Buhs said late Thursday."

I mean, did anyone actually read the article before they got outraged?

"I need to study and review these documents," ~~Duggan said~~ said a guy running for mayor and desperate to remain relevant while equally desperate to direct all attention away from his shady history in City and County government.

**Zacha341** · April-29-13, 08:45 AM

Well that's point.... after all EEA is using [[taken over) buildings that our millage taxes approved with the understanding that those were DPS property, so the more mixing the merrier.

Originally Posted by Wesley Mouch

I'm glad to see DPS and EEA playing well together and sharing assets as necessary. Article didn't say that EEA was 'stealing' money like phantom DPS employees were. Its just a loan between bureaucracies.

**brizee** · April-29-13, 10:28 AM

Originally Posted by bailey

Just as a point of fact, DPS didn't loan the money out of it's own coffers, it borrowed the money and then transferred it to the EAA because, it would seem, the EAA didn't have a high enough borrowing limit to bridge the start up.

"DPS loaned the EAA the $6 million by borrowing the money through the Michigan Finance Authority, with repayments guaranteed based on the EAA's future state funding payments, said Caleb Buhs, spokesman for the state Treasury Department, which approved the loans."

From The Detroit News: http://www.detroitnews.com/article/2...#ixzz2RrEQgBSc

And the repayment is guaranteed....

I mean, did anyone actually read the article before they got outraged?

It's getting billions of dollars of refurbished and constructed buildings for literally dollars from a cash strapped district.

And it can't sustain itself, so it borrows money, again, from a cash strapped district.

Why does this parasite exist?

As far contracts and guaranteed money goes. Are you living in the same state I am? Where agreements, and decrees and even signed contracts even amount to jack and shit?

**Detroitnerd** · April-29-13, 10:43 AM

Originally Posted by brizee

It's getting billions of dollars of refurbished and constructed buildings for literally dollars from a cash strapped district.

And it can't sustain itself, so it borrows money, again, from a cash strapped district.

Why does this parasite exist?

How the hell is this nascent "education industry" going to ever be profitable unless it gets all kinds of goodies from the "inefficient" public system it beggars?

**bailey** · April-29-13, 11:00 AM

Originally Posted by brizee

It's getting billions of dollars of refurbished and constructed buildings for literally dollars from a cash strapped district.

And it can't sustain itself, so it borrows money, again, from a cash strapped district.

Why does this parasite exist?

As far contracts and guaranteed money goes. Are you living in the same state I am? Where agreements, and decrees and even signed contracts even amount to jack and shit?

Critique of the EAA notwithstanding... the allegation was that DPS loaned this money to EAA. It did not really do that. It used it's borrowing ability to get the EAA a bridge loan. The EAA is the party ultimately responsible for it.

I believe the reason the EAA can't "sustain itself" was/is due to the fact the start up costs exceeded the private donations and the state aid doesn't cover the shortfall until they are all up and running. Which to me, indicates a problem with planning the roll out.

At least they're doing something for the worst performing, but I also don't really understand exactly what the EAA is doing to ensure it isn't going to be worse than the problem was to begin with.

**corktownyuppie** · April-29-13, 11:10 AM

Originally Posted by bailey

Critique of the EAA notwithstanding... the allegation was that DPS loaned this money to EAA. It did not really do that. It used it's borrowing ability to get the EAA a bridge loan. The EAA is the party ultimately responsible for it.

DPS isn't loaning their money to EAA. They are essentially acting as co-signers on an EAA loan in order to facilitate the loan. The loan showing up as originating from DPS is an accounting matter. This is no different than if my mom co-signed my $20,000 car loan in order for me to get one.

Now there is a very reasonable argument that my mom shouldn't be co-signing any loan that for which I am financially unable to qualify on my own. But still, that's very different than my mom just writing me a $20,000 check out of her savings and then hoping that I pay her back.

But that doesn't stop the media from reporting it as "CTY Mom makes $20,000 loan to son."

**brizee** · April-29-13, 05:11 PM

Originally Posted by corktownyuppie

DPS isn't loaning their money to EAA. They are essentially acting as co-signers on an EAA loan in order to facilitate the loan. The loan showing up as originating from DPS is an accounting matter. This is no different than if my mom co-signed my $20,000 car loan in order for me to get one.

Now there is a very reasonable argument that my mom shouldn't be co-signing any loan that for which I am financially unable to qualify on my own. But still, that's very different than my mom just writing me a $20,000 check out of her savings and then hoping that I pay her back.

But that doesn't stop the media from reporting it as "CTY Mom makes $20,000 loan to son."

More like asking a a family member for a personal loan, then telling the banks it's collateral in order to get a mortgage you'd normally never get.

In many states this can and will get you a subpoena to court to explain yourself.

Nobody in this thread has called it illegal.

But if some of the partisans can't even admit it looks shady...

**corktownyuppie** · April-29-13, 09:02 PM

[[1) I think that the communication around how this went down is WAY shady. This is a totally explainable event that, when done in secret, only raises red flags.

[[2) The media doesn't do any favors. "DPS acted as a pass-through borrower for EAA with state guarantee" is very different from "DPS loaned $6 MM of its cash on hand"

[[3) Lipton doesn't do anyone any favors with is remarks. "D-Huntington Woods, questioned how the cash-strapped city school district could afford to loan the EAA such large sums of money."

The answer: DPS isn't loaning the EAA any of its money.

[[4) From a political point of view, WTF?? This is the very kind of thing that board members would do minor due diligence and then ok without problems.

[[5) DPS has some blame on this as well. They approved the loans. Where are they on this?

The whole thing is political mismanagement. But at the end of the day, it doesn't appear that anything wrong was done.