Darnell Earley has resigned as DPS EM

Posted at 9:58 AM, Feb 02, 2016
and last updated 2016-02-02 18:21:09-05

Sources tell 7 Action News that Darnell Earley has resigned as emergency manager of Detroit Public Schools.

The resignation will be effective February 29, according to a statement from the governor's office. 

“Darnell has done a very good job under some very difficult circumstances. I want to thank him for his professionalism and his service to the people of Michigan,” Governor Rick Snyder said in a press release. “He restructured a heavily bureaucratic central office, set in place operating and cost-containment measures, and has taken steps to stabilize enrollment. These factors should all set the course for a sustainable, new Detroit Community Schools, as I have proposed.”

Snyder is expected to appoint a transition leader before the end of the month. 

Earley, the former emergency manager for Flint, is also refusing to testify at a Congressional Committee hearing in Washington, D.C. regarding the water crisis.

Congressional sources told 7 Action News Investigator Jim Kiertzner that committee members were informed Monday evening that Earley has hired an attorney.  

Governor Rick Snyder could direct Earley to testify as a state employee, but has not done so according to Congressional sources. 

When reached for comment on this story, the governor's press secretary David Murray said, "I'm not aware Mr. Earley's plans. Keith Creagh, director of the Department of Environmental Quality, plans to speak before the committee this week, talking about challenges faced in Flint and what the department is doing moving forward to protect the health and safety of residents."

Earley's invitation to testify was sent at the same time as all other invitee's, a total of five, who have agreed to testify.  

Read Darnell Earley's resignation letter below: 

Dear Governor Snyder:

Section 141.1562 Sec. 22. (1) Of Public Act 436 of 2012 reads in part: “If an emergency manager determines
that the financial emergency that he or she was appointed to manage has been rectified, the emergency manager
shall inform the governor and the state treasurer.”

Since you appointed me as Emergency Manager of Detroit Public Schools in January 2015, I have worked diligently
with the help of your office, the State Treasurer’s office, financial and educational industry experts, and others to
eliminate the District’s structural budget deficit. Also, working with the District’s executive leadership team, I have
implemented a comprehensive restructuring and downsizing of the system’s Central Office operations, including a
decentralization of some of its administrative responsibilities in favor of an empowered system of school support
networks allowing for school building leadership to operate with guided autonomy.

Cost containment measures involving the District’s healthcare benefits have also been implemented, which should keep that ongoing expense at a manageable level. Finally, enrollment, which has begun to level in recent years, is projected to stabilize over the next two years, which should also have a positive impact on District revenues.

These initiatives, while not all inclusive, have strengthened the District’s financial capacity to manage its
operations. This was evidenced in the District’s annual audit for fiscal year 2014/2015 which shows that current
year revenues and expenditures would have yielded a budgeted fund balance of approximately $13 million, but for
the long-term debt estimated to be approximately $515 million by June 30, 2016.

Your legislative package now before the Michigan Senate proposes to eliminate that debt, and to restructure the
District so that it can function without having to designate approximately $57 million each fiscal year to service
the debt; without resolution of this issue, the District will be rendered insolvent. In anticipation of your plan to
eliminate the debt, my efforts -- in addition to many others who have been engaged in this project with me -- have
positioned the District to move beyond the restructuring and financial imbalances of its operations, and to now
focus on improving the academic achievement of students in a new Detroit Community Schools.

It is from these premises, and pursuant to that portion of PA 436 cited herein, that I am informing you of my intent
to leave my position as Emergency Manager of Detroit Public Schools, effective February 29, 2016. While there is
still much work yet to be done, my role as an emergency manager has facilitated the expedited accomplishment of
those tasks critical to long-term financial sustainability, and therefore should not be the focus as deliberations take
place on the education reform legislation.

I have established a 3-Point Transition Plan, which over the next five months should guide the District toward
solidifying its financial and organizational position with the passage of the legislation, and an eventual return to
some form of local control.

Thank you for giving me an opportunity to assist you in your efforts to improve local government and public
education in Michigan.

Darnell Earley
Cc: Nick Khouri, State Treasurer