DPS Didn’t Forward $30 million in MPSERS Payments
By Rosemary Carey, May 17, 2016
The state is investigating why Detroit Public Schools (DPS) didn’t put $30 million federal grant money earmarked for Detroit teachers’ pensions into the Michigan Public Schools Employees Retirement System (MPSERS).
Last December, DPS reported that the money had not been used properly and was spent in other areas. The $30 million was part of a Title I federal grant that was to cover the salary and benefits of teachers in the program. Since it wasn’t, the U.S. Department of Education has filed claim against DPS.
Last December, DPS reported that they did not use the money properly and spent it in other areas. New DPS Emergency Manager Steven Rhodes is working with the Department to resolve the issue.
While the $30 million made it to DPS, Darnell Earley, DPS’ former emergency manager, never forwarded it to MPSERS. Earley resigned his position after a year as emergency manager, claiming that he “helped strengthen the district’s finances.” Before coming to DPS, Earley was the emergency manager of Flint and in charge when the city left the Detroit water system and switched to water from the Flint River.
This news comes in the midst of Senate and House discussions on a reform plan for DPS to deal with its deficit. And critics of MPSERS are using the situation to justify their move to shut down the system because of the high costs of maintaining it. However, this is not a pension issue; it’s a state problem made worse by the appointment of an emergency manager who helped to create the debt.
By Rosemary Carey, May 17, 2016
The state is investigating why Detroit Public Schools (DPS) didn’t put $30 million federal grant money earmarked for Detroit teachers’ pensions into the Michigan Public Schools Employees Retirement System (MPSERS).
Last December, DPS reported that the money had not been used properly and was spent in other areas. The $30 million was part of a Title I federal grant that was to cover the salary and benefits of teachers in the program. Since it wasn’t, the U.S. Department of Education has filed claim against DPS.
Last December, DPS reported that they did not use the money properly and spent it in other areas. New DPS Emergency Manager Steven Rhodes is working with the Department to resolve the issue.
While the $30 million made it to DPS, Darnell Earley, DPS’ former emergency manager, never forwarded it to MPSERS. Earley resigned his position after a year as emergency manager, claiming that he “helped strengthen the district’s finances.” Before coming to DPS, Earley was the emergency manager of Flint and in charge when the city left the Detroit water system and switched to water from the Flint River.
This news comes in the midst of Senate and House discussions on a reform plan for DPS to deal with its deficit. And critics of MPSERS are using the situation to justify their move to shut down the system because of the high costs of maintaining it. However, this is not a pension issue; it’s a state problem made worse by the appointment of an emergency manager who helped to create the debt.
CSR-MI Looking for a Compromise on HB 5438
By Rosemary Carey, May 10, 2016
Even though no hearings have been scheduled by the Committee on Financial Liability Reform on HB 5438, work continues behind the scenes to come up with a compromise that would appeal to all parties. HB 5438 would only allow base pay to be used to calculate an employee’s final average compensation for pension benefits. It would eliminate the use of overtime, bonuses, accrued vacation and sick leave, or any payments made to employees for the purpose of increasing final average compensation
The bill, sponsored by Rep. Pat Somerville (R-New Boston) is intended to stop the practice of “employee pension spiking.” While this would help protect local pension systems, it would be a disaster for public employees—like firefighters and police who work a lot of overtime—who would face a significant reduction in their retirement benefits.
Somerville’s target is supervisory personnel who could be abusing the system by working more overtime or banking vacation and sick leave in their last years before retirement with the idea of increasing their final average compensation. It raises the issue of voluntary vs. mandatory overtime for employees.
While CSR-MI supports HB 5438 in concept, it’s working on changes to the bill that would protect workers—especially low income workers--who are required to work overtime and wouldn’t be able to use that time for the calculation of retirement benefits.
Currently, school employees are not included in the bill.
| Court of Appeals Rejects Public School Employee Lawsuit on Mandatory Pension Contributions.pdf |
Capitol Services, Inc. is proud to share a “Pollie” Award given by The American Association of Political Consultants with Stones’ Phones, the vendor with whom we worked on messaging for the Coalition for Secure Retirement-Michigan.
| MPSERS Report April 2013.pdf |
| MPSERS Annual Supplemental Report 2012.pdf |
| 2012-3 Educator Shortage Areas list.pdf |
| Post Retirement Work.pdf |
| CSR School Retirees Health Insurance Cost Increases.pdf |
| ORS Retirement Reform Update.pdf |
| PA 300 Response.pdf |
| Letter to Phil Stoddard 2012.pdf |
| Recommendations for Leaders on PA 300 of 2012.pdf |
| Impacts of SB 1040.pdf |
| Financial & Policy notes on SB 1040.pdf |
| SB 1040 as passed by the Senate 8-15-12.pdf |
| HFA Legislative Analysis SB 1040 8-15-12.pdf |
| 8-15-12-SFA-1040.pdf |
| Hybrid Normal vs. DC Normal Chart.pdf |
| Hybrid Normal vs. DC Normal.pdf |
| CSR Free Press talking points.pdf |
| SB 1040 Update.pdf |
| MIRS Coverage of Olson Addendum.pdf |
| CSR Press Release Olson Addendum.pdf |
| HFA Analysis of SB 1040 H2.pdf |
| SB 1040 H 2.pdf |
| MPSERS Report Addendum.pdf |
| MPSERS White Paper May 2012.pdf |
| Sample LTEs on SB 1040 |
| Senate Fiscal Analysis of SB 1040.pdf |
| Media Advisory |
| ORS estimates of SB 1040 |
| Talking points on SB 1040 |
| CSR SB 1040 Action Alert |
| CSR Press Release on SB 1040 |
| SB 1040 |
| SB 1040 FAQ |