When A Devious, All Too Clever Plan Goes Awry

Retired U.S. Bankruptcy Court Judge Steven W. Rhodes got just a bit too clever in his latest ploy to stampede the Michigan Legislature. He is trying to ram a $ 720 million bail out for the Detroit Public Schools through the Legislature, but wound up creating a labor relations firestorm. He even managed to grievously damage the prospects of the bail out in the Legislature. As always, it is the DPS students who are suffering the fallout.

Judge Rhodes, the DPS ‘transition manager’, sent out an email on Saturday telling all and sundry that DPS would have no money to pay teachers after June 30^th. He urged Michigan lawmakers to “act thoughtfully, but with the urgency that this situation demands”. The Detroit News later reported:

Rhodes, who warned over the weekend the district would run out of money June 30 and stop making payroll for employees who get paid over the summer, urged employees, parents and others Monday to press lawmakers to pass the rescue plan.

This is a reprise of the successful panic tactics he and his buddy U.S. District Judge Gerald E. Rosen developed to force acceptance of the phony Detroit bankruptcy Plan of Adjustment. This effort, celebrated by Michigan’s nitwit media, left a smoking, $ 491 million crater in Detroit’s post bankruptcy finances. Mayor Duggan has been reduced to chiseling money from demolition contracts. Don’t forget that the $ 720 million bail out plan also turns total, absolute DPS control over to Mayor Duggan and his crack team of demolition contract negotiators. Out of the frying pan and into the fire we go.

This is how Michigan’s devious elites now get what they want, when they want, from an embarrassingly slow and cantankerous constitutional government process which they despise.

Whoopee Ti Yi Yo, Git Along Little Dogies

Some boys goes up the trail for pleasure,
But that’s where you get it most awfully wrong;
For you haven’t any idea the trouble they give us
While we go driving them all along.

Judge Rhodes, a lifetime government employee with no real management experience [Federal courts are well stocked with administrators, not just judges], did not fully grasp the finer points of teachers’ pay. Many DPS teachers are paid uniformly over the entire calendar year for their teaching during the shorter school year. This is referred to as an extended pay plan. Thus an inability to make pay after June 30^th means that DPS teachers working today are being told that they just got a very rude 17% pay cut for the entire current school year. Unsurprisingly, DPS teachers walked on Monday in a massive sick-out which closed down the entire school system. The Detroit Federation of Teachers didn’t even bother to hide behind the fig leaf of a ‘wildcat strike’. They ordered the sick-out directly. This sick-out is continuing full force today and DPS is descending into chaos.

Judge Rhodes told Detroit Federation of Teachers administrator Ann Mitchell and some DPS teachers in March that the $ 48.7 million PA 54 of 2016 bailout would cover employees on the extended pay plan for the rest of the school year. He probably did not fully understand the ramifications of what he was saying. Judge Rhodes’ Saturday email directly contradicts his apparent promise. Judge Rhodes is now trying to carefully parse his March town hall meeting comments to DFT, but the DPS teachers and employees are livid. Hence the sick-out.

What happened here? We told you that DPS ‘discovered’ that they had diverted $ 30 million in U.S. Department of Education reimbursements intended to pay the pension contributions of Detroit Public Schools’ Federal grant-funded employees. These reimbursements were supposed to be forwarded to to the Michigan Public School Employees Retirement System, but were spent otherwise by DPS. So the $ 48.7 million PA 54 bailout didn’t go quite as far as first presumed. Like 60% less far.

Rather than simply tell the truth about the inadequacy of the PA 54 bail out and the dubious accounting at DPS; the very clever Judge Rhodes saw an opportunity to apply political pressure on the Michigan Legislature and ran with it. It is quite likely that he has finally, irrevocably broken DPS with this gambit. And the movers and shakers in Lansing are none too pleased, either.

Image Shamelessly Stolen From WJBK-TV, Fox 2 Detroit

The only good news here is that the DPS employees are beginning to line up behind a serious, forensic audit of DPS. A sudden 17% pay cut will stimulate such heretical thoughts. We haven’t converted them into right wingers yet, but they are at least beginning to question their masters’ financial competency. The element of trust required in human relations at DPS has been shot stone cold dead. Judge Rhodes claims DPS does not have the funds for such an audit, but he hasn’t any other option to restore the status quo ante. DPS is now careening out of control. Only a serious forensic audit, publicly shared, will arrest DPS’ slide into chaos.

Michigan was pretty well managed into the first half of the 20^th Century, and our state prospered as a consequence. The last 65 years have been a depressing litany of decline which seems to be accelerating lately. It is time to demand more competence and less cleverness from our elites.

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