Moody’s downgrades DeKalb Schools credit rating

From a report in CrossRoads News last week >>>
Moody’s downgrades DeKalb Schools credit rating

On Aug. 20, New York-based bond-rating agency Moody’s downgraded $384.9 million of the district’s debt. …

The agency said the downgrade reflects the district’s projection of negative fund balance in fiscal 2012, which is expected to remain negative in fiscal 2013 despite a tax rate increase and budgetary cuts.

“Additionally, the downgrade reflects the absence of plan to replenish reserves and Moody’s belief that the district will remain challenged to increase reserves in the near term due to limited revenue raising flexibility following a tax rate increase in fiscal 2013 and a significant reduction in staff over the last several years which we believe may limit the district’s ability to reduce expenditures in the near term,” it said.

This is the second time in two months that the DeKalb Schools had had a ratings downgrade. …

In June, the district finished the fiscal year by spending $34 million over what had been budgeted a year earlier. It spent $808.6 million in fiscal year 2012 when the School Board had set a $774.6 million budget.

Basically:

  • Enrollment has declined by over 6,000 students since 2006
  • We overspent the board-approved budget by $34 million last year (additionally, the recent letter from SACS pointed out that the board and superintendent continually underestimate legal fees and utilities) Click the link below to download and read a pdf copy of that letter. AdvancED letter of aug 28 2012
  • Countywide, the DeKalb tax digest declined by 9 percent this year from 2011 (about $41.6 million)
  • Moody’s believes that “despite projections of negative fund balance in fiscal 2012, the district’s new management team has implemented significant budgetary adjustments that should lead to the stabilization and growth of reserves over the medium term.”
  • However, “the ratings could go down with further reductions of reserve levels, if fiscal 2012 audited results show a larger than expected deficit, and if the district fails to regain structurally balanced operations.”
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67 Responses to Moody’s downgrades DeKalb Schools credit rating

  1. AnonMom says:

    I think SACS may be looking to “save face” — if DCSS is really about to run out of money (which I understand may really be the case based on zero reserves and the system’s failures to implement the passed budget from the past 2 years and not necessarily directly from lack of oversight) – SACS, which has had DCSS on “watch” status for a few years — probably doesn’t want to be discovered as having failed to have revoked accreditation as the system hits absolute bankrupt status on SACS watch and is taken over by the governor — that would not look very good, particularly given how much money they receive each year to accredit and to consult to maintain accreditation and to train….. Just saying.

  2. See Jeff Dickerson’s (I guess he was responsible for this) white-wash of this on the Dekalb website: http://www.dekalb.k12.ga.us/www/documents/news-and-info/press-releases/dekalb-schools-announces-credit-rating.pdf

  3. DeKalb Observer says:

    This explains the recent letter from SACS to Superintendent Atkinson. Moody’s is questioning DCSD’s fiscal position and stability. This is the canary in the coal mine. In its letter, SACS acknowledges it has received 50 specific complaints from the community about everything from malfeasance to corruption in regards to the practices within this enterprise. So, SACS was forced to communicate with Atkinson to preserve its own reputation. It needed to go on record and say yes, we see irregularities. As has been noted there, there are other accrediting agencies for school systems and AdvanceEd stands to lose business if it is seen as ineffectual as we in DeKalb know it is. So the letter was SACS covering its hide.

    And as to this ongoing refrain – here and on the GetSchooled blog – that “there is enough blame to go around:” it’s a specious argument made by the guilty. The profound problems we face stem from Friends and Family corruption. “Friends” have gotten elected to the School Board and promoted unqualified persons to key roles across the district – including the selection of superintendents. In truth, there were lots of Hallfords and Cherrys in years past, The difference was, they were certified, qualified and licensed for the roles they took. Those who served as classified employees – secretaries and admins – made reasonable salaries for clerical personnel. None were promoted to head the PR arm of the system, run Transportation without a shred of experience, or “coach” trained teachers. Today, Title I and other monies are directed to unqualified people who may or may not have certification, who now receive paychecks for made- up jobs, Once unqualified people subsumed leadership roles in DeKalb, the effects were felt deep into every classroom. When incompetent people are hiring teachers, when incompetent people oversee teacher training, qualified and talented people leave. Families with resources to give to improve their local schools leave. Look at the decline in enrollment.

    I believe children of every ethnicity and every economic background can succeed. But not when needed resources are driven to paychecks for Friends and Family. I have volunteered with poor children in Kindergarten classrooms and helped them learn words and catch up on skills. They can learn. They need a person to teach them. But when their needs are not top of mind with the leadership, they will continue to suffer and fail.

  4. AnonMom says:

    don’t forget that as friends and family took these jobs and each increase in salary, if they belonged to NB or a NB affiliate, NB received the tithe they expected so a portion of the salaries were diverted to NB…..

  5. Can someone confirm if those tithes can be direct deposited as well, I seem to remember someone saying that a few years ago during the reign of CLEW.

  6. This would be amusing if it wasn’t so serious.

    The majority of this board selected an unqualified superintendent, based on her color and her connection with Eddie Long — an unqualified superintendent who has at least two personal bankruptcies for such “essentials” as a vacation condo and new kitchen cabinets and private school for one of her sons while she was employed in public school — an unqualified superintendent who lied on her DCSS job application — a completely unqualified superintendent who was supposed to somehow manage a billion dollar budget. Ha! Atkinson couldn’t even provide an actual line item budget. Instead, using smoke-and-mirrors and an old-fashioned shell game, all Atkinson and her co-conspirators provided was a list of “fake” budget cuts. And, most of the board went for it! Pitiful. Really.

    On the bright side, it’s just one more reason why DCSS must be broken up into 2 or 3 manageable school systems that aren’t so large that they invite corruption, quackery and mismanagement. It’s time for Fran Millar, Mike Jacobs and Scott Holcomb and our other elected officials (the ones not on the take or beholden to Eddie Long and Ron Ramsey) to do what it takes to remove that 8-word sentence from the Georgia Constitution. You know. The sentence that inappropriately hamstrings large counties from meeting the educational needs of their children.

  7. DeKalb School Watch has filed an Open Records Request concerning payroll deductions for charaitable contributions by DCSS employees.

  8. Whoshelpingthekids says:

    Dickerson’s comments on the web site are about the June downgrading of the bond rating. Don’t see any response on the DCSS website about the August 20th down grade by Moody. Wonder why the home page encourages signing up for K12 alerts – has anyone gotten an alert in the past 2 months? Sure didn’t get one about the bond rating or the “balanced” calendar the news is reporting. How much are we paying Walter Woods & Dickerson to communicate?

  9. Teachingmom says:

    Did I miss something? Is the balanced calendar in the news again?

  10. In spite of the downgrade in our borrowing ability, the school board on Friday, approved a new construction management firm. We are a bit worried, as it seems this firm and board meeting were ‘hastily’ called and the approval was more or less, another ’emergency’.

    http://www.ajc.com/news/news/dekalb-hires-new-school-construction-firm/nRQfd/

    What Ty doesn’t mention in this article is that at the same meeting, the board approved a motion by Atkinson to declare her fleet car (valued at $15,000) “Surplus”. Looks like she’ll be getting new wheels. We will be paying attention to where the surplussed car goes. You may all recall that this was one of the earliest signs of corruption in the Lewis/Pope administration. They too, surplussed their $15,000 cars, then were somehow able to personally purchase those same cars for $5,000. They gave the cars to their children or other family members. Nice perk from the taxpayers!

    http://blogs.ajc.com/get-schooled-blog/2010/01/03/dekalb-county-schools-cars-and-credibility-now-in-question/?cp=2

    Hopefully, it’s not ‘deja vu all over again’!

  11. whoshelpingthekids says:

    On the DCSS home page, there is an article about DCSS beginning to make plans for the 2013-2014 school year. The subject is the calendar committee that will meet Tuesday. Why Dr. A and tema are starting that conversation when this year’s classes are overflowing at some schools and classes don’t have textbooks is concerning. Let’s get this year under control before focusing on next year.
    http://www.dekalb.k12.ga.us/www/documents/news-and-info/press-releases/dcsd-begins-planning-calendar-for-(2013-2014).pdf

  12. Is anyone shocked here? I believe we are watching the beginning of the end- Can you say State Takeover Coming soon to a theater near you?

  13. If something bad is coming down, it’s Dekalb’s duty to let everyone know so we peasants can plan ahead.

  14. I agree, anyone who is shocked is completely uninformed. WHERE THE HELL IS BURRELL?? I ask again, why isn’t the DeKalb county government just a little more interested? It seems to me if the schools stink, business won’t come here. Why can’t they see it is all connected?

    What do I want Burrell to do? I just would like to hear him publicly come out and give the school system a stern word or two. Let them know they are screwing with the housing prices, the business tax collections and sales tax. If people leave there is less taxes…

    But, I guess the end game is DeKalb will eventually end up receiving the school equalization grant instead of paying. True to form, why solve a problem when we can get more money “for the children”. More money to squander on their family employee plans.

  15. Whoshelpingthekids says:

    Likewise, where is the DeKalb Chamber? Our county commissioners? EduKalb? Do none of them get that poor schools, low teacher salaries, high property taxes, etc will drive businesses away and prevent DeKalb from being able to bring in others – other metro counties are much more appealing.

  16. AnonMom says:

    unfortunately, one answer is that the same friends and family in place in the school system, is the same “machine” in place at the county level (I think Burrell himself isn’t part of the system) and in the Dekalb Delegation — there’s was an effort underfoot when the last CEO became CEO, along with when Dr. Brown was Super. and when Dr. Lewis took over to start to really consolidate power — take a step “above” Dekalb politics and look down with this vantage point — think about our politicians in DC and many locally throughout all levels and things start to make a lot of sense. What to do? Hope and pray that the governor actually does something (make calls; write letters and e-mails) and maybe that the feds investigate… maybe Romney will win and the feds will really take a look.

  17. howdy1942 says:

    I’m becoming optimistic. It is always the darkest before the dawn. I think that within the next year, we will have a new School Board appointed by the Governor as well as a new School Superintendent.

    Dozens of Dekalb parents and Dekalb residents are now complaining to SACS directly. This is like a group of subordinates going around their direct supervisor to his/her boss. Whatever the case, there is something seriously wrong with the way the Dekalb County School System is being led and managed. The School Board has lost the respect of a public that has demonstrated that it is very unhappy with the Board. I would imagine that these same parents and residents have spoken before the Board which, my observations indicate, has been in denial and not listened. The coffee was brewing and the Board was not sensitive. I specifically exclude Jester and Elder from this discussion because they have been there less than two years.

    Before we can get control of the School System and begin the recovery process, we must first touch bottom. I think that this time is near. Parents are unhappy as are residents. Property values are declining and this trend must be stopped. Accrediting agencies have written numerous letters. SACS must soon take action. Otherwise it risks it reputation. My hope is that this Board will soon be forced out, that the School System will be granted an interim accreditation while we clean up the mess, and that the residents of this County will rally around the new team.

    Better days are coming. Don’t sell your houses yet!

  18. teacher/taxpayer says:

    What are NB and CLEW? Please use the long version of an acronym when you first refer to the organization. Also, wouldn’t having the governor step in at this point be a good thing? Seems like we needed someone to step in months ago. Where can we read about his power in a situation like this?

  19. Ijustworkhere says:

    I guess we “old timers” assume everyone knows the acronyms by now. Also, someone in a past posted a list of commonly used acs….NB..refers to the church in Dekalb that some employees are members of.. New Birth…CLEW refers to none other than Crawford Lewis our previous Super, now indicted for what boils down to a couple of free vacations with a little extra curricular activity on the side and some Atlanta Hawks & Falcons tickets,,,,,I suggest you go back through the threads….lots of information…..

  20. It is a pipe dream to think that the Governor has the power or the desire to step in and take over DeKalb Schools. This has been attempted elsewhere and shot down by State Supreme Courts (see this case in Connecticut) Before the Governor can even ponder such serious action, the system must show a loss of accreditation, or a full out bankruptcy or some kind of out of control serious breach of trust. We don’t have the documented issues at the level to require state or other intervention. It would be as if the bank repossessed your car because you have never washed it, never changed the oil, got a speeding ticket, and a ticket for reckless driving, was caught smoking pot in your car, was late with your payment (but still paid), and had no air in your tires. You may be a horrible driver and possibly endangering your passengers, but you haven’t yet reached the legal bar for repo.

  21. justwatch says:

    Actually, what happens in other states, on state issues, is irrelevant. GA’s constitution is unique and the powers invested in the Governor here may be different than there. When it is a federal case, then it may have cross jurisdictional implications, but not state cases.
    Right now, the GA Board of Education is involved in Sumter County. It appears that the State Board has given them an opportunity to make things right…
    https://eboard.eboardsolutions.com/Meetings/Attachment.aspx?S=1262&AID=399402&MID=21851

  22. Interesting, JustWatch, but again, the state isn’t really ‘doing’ anything except writing up warnings. Wooooo! And SACS did put Sumter on probation. I would pretty much guarantee that DeKalb would simply file a lawsuit and we would find ourselves in yet another expensive legal battle and the state knows this. (We spend far and away more on lawyers than most school system’s ENTIRE annual budgets.)

  23. Whoshelpingthekids says:

    Sumter is on probation for board governance issues and only had 5 required actions??? DCSS has received numerous warnings about board governance and had 8 action items! How is it possible DCSS is not on probation? Something fishy is going on here. Elgart, what say you?

  24. An additional note: Governor Deal is very political, so he doesn’t make a move unless he can determine which way the wind is blowing, politically. He also has his own legal issues. If he jumps in, his political enemies would see it as a case of the pot calling the kettle black. So, don’t look for him to do anything until after the November elections. If then. For SACS and corrupt DCSS, money — grabbing as much as they can — is the name of the game. For Governor Deal, it’s both money and politics. As far as SACS, DCSS and Deal are concerned, children — the education opportunities they lose — are just collateral damage. If not, any one of the three — SACS, DCSS or Deal — would have done something by now.

  25. howdy1942 says:

    I didn’t particularly care for Bowen and felt that he was a very weak Chairman of the School Board. However, my understanding is that he did choose to step down and not run again. Hopefully his reasoning considered that he no longer was effective in making Dekalb County Schools better and creating a more positive environment. How wonderful it would be if Cunningham, Copelin-Wood, and Walker could also come to that conclusion. Their continued presence prolongs our agony in Dekalb and hurts our tax base. This makes it more difficult to pay for fire protection, police protection, and other important services. I hope that these three will choose the choose the harder right instead of pursuing the easier wrong.

    We need to get the Crawford/Pope matter behind us, we need to find some resolution to the Heery Construction case short of continuing to bleed in the courts, we need to bring the light of day to the hiring process and end the shady shenanigans that were all too present in the hiring of a Superintendent. (By the way, what ever happened to the School Board’s promise that they were going to investigate to see who leaked confidential information on the other candidates for Superintendent?)

    In short, I have absolutely zero confidence in this school board and support any and all legitimate means to replace them (except for Jester, Elder, and those recently elected). I would even support a tax increase to improve our schools if we had a new board – but not as long as these three are on the Board.

  26. justwatch says:

    Well, the tax increase happened. I am concerned that we are going to be in worse shape with Bowen’s replacement than with Bowen. The people who supported him are bad news, showing up at board meetings to protest the changes in the status quo in the central office. Many of his supporters simply want the jobs program to continue. I am willing to give him the benefit of the doubt. Time will tell though.

  27. Steve Smith says:

    These board members never learn. They just make mistake after mistake and truthfully don’t seem to care. How else to explain the board hastily calling a meeting to vote on a contract for the new construction management firm. I mean, things went so well with Heery Mitchell and then Pat Pope, what could possibly go wrong with an unvetted choice for our next disaster-in-waiting. Nancy Jester seems to be the only board member with common sense and intelligence. Sarah tries, bless her heart, but really. I’m sorry but Don McChesney and Pam Speaks quietly nodding along with things just doesn’t cut it anymore. Bye bye Don. Pam’s got two more years to file her nails and then she’s outta here.

    http://www.ajc.com/news/news/dekalb-hires-new-school-construction-firm/nRQfd/

    I googled “URS Corp” and “controversy” and look what came up:

    When URS started receiving hefty reconstruction contracts after the invasion of Iraq, the fact that the company was controlled at the time by Richard Blum, an investment banker married to U.S. Senator Dianne Feinstein (D-Calif.), made the awards among the more controversial deals given out by the federal government. An article by Peter Byrne laid out these issues in detail. Washington Group International, acquired by URS in 2007, had also received contracts related to the disastrous Iraq reconstruction effort.

    In March 2008 the Pentagon revealed that parts for Minuteman nuclear missiles had been mistakenly shipped to Taiwan from Hill Air Force Base in Utah. In 2002, a contract to manage inventory and distribution activities at Hill had been given to EG&G Technical Services, now a division of URS.

    The 10-K report filed by URS in early 2008 noted that the acquisition of Washington Group brought with it dozens of civil lawsuits pending against a subsidiary of the company that had worked on levees in New Orleans that failed during the flooding caused by Hurricane Katrina in 2005. The report also noted that URS itself is being sued by the Tampa-Hillsborough County Expressway Authority in Florida breach of contract and professional negligence in a roadway project.

    In 2003 Washington Group was hit with a fine of $55,000 by the Department of Energy, which accused the company of falsifying quality control inspection records at the Idaho National Engineering and Environmental Laboratory.

    http://www.crocodyl.org/wiki/urs

  28. Dekalbite2 says:

    @howdy1942
    “However, my understanding is that he did choose to step down and not run again. Hopefully his reasoning considered that he no longer was effective in making Dekalb County Schools better and creating a more positive environment. ”

    My understanding is that he stepped down to run for DeKalb County commissioner.

  29. Dekalbite2, you’re correct. Bowen was set to run for a commission seat. However, for some reason, he did not.

  30. Emory LaVista Parent Council (ELPC)

    The first meeting of the Emory LaVista Parent Council for the 2012-2013 school year will be held at Lakeside on Wednesday, September 19th.

    Dr. Cheryl Atkinson, Superintendent for DeKalb County Schools, will be the guest speaker and she will present “The State of the System.

    Refreshments begin at 8:45 a.m. followed by the meeting at 9:15 a.m. Meetings are open to all parents.

    To join the ELPC mailing list, please email

    emorylavistaparentcouncil-subscribe@yahoogroups.com. You can also visit our web site at http://www.emory-lavista.org/

  31. @Steve: Thanks for posting this research. BTW, does anyone know who was chosen to serve on the SPLOST IV Citizen Oversight Committee? Have they met? Did they have input on the selection of the management firm?

  32. howdy1942 says:

    Thank you for the the update on Bowen. With the School Board he led in chaos and the fact that so many of the School Board “negatives” occurred on his watch, I am amazed that he would even contemplate running for a Commission seat. The School Board under his tenure hurt property values enormously in Dekalb County and this has made it very difficult for the County to fund the basic operations in the County – fire, police, libraries, etc.

    I hope that we have seen the last of Bowen running for anything in Dekalb.

  33. And we are amazed that Bowen decided NOT to run. He would have been running in a district that doesn’t turn out to vote on the most critical issues — and the few who do bother to vote have a history of making really bad choices. Uninformed? Don’t care? Putting an “X” by the one name they can identify on the ballot? Regardless of the damage he has wrought, Bowen probably would have been elected by the voters in his district.

    After what their forebears went through to acquire the right to vote, it is sad to witness such apathy in not only African-Americans, but all people of voting age in the United States.

  34. In reply to your comment, “These board members never learn”: They don’t learn because they don’t want to learn. “Called” board meetings are simply a ruse by the crooks and the corrupt to hide decision-making from the public. They can keep the money flowing into their pockets and into the pockets of friends and family if no one can track what they are doing. Yes, those “called” meetings are open to the public. But, they are always held in the middle of the day, if not mid-morning, to discourage public attendance. Even though we have repeatedly requested that “called” meetings be videotaped and streamed, Atkinson and her minions refuse. Atkinson certainly has Gene Walker by the throat — and certain other unmentionable places — so that, even though Walker voted for Atkinson and is the board chair, she has managed to render him impotent.

  35. justwatch says:

    For those of you who think changing a few board members will make a hill of beans difference in the dysfunction that is DeKalb….

    Philandrea Guillory is back. She is the liason for parent support at Freedom Middle school. Here is the a job description for a similar position for Lithonia MIddle School.
    Under general supervision of the Principal, the Community Outreach Liaison is responsible for supporting the school’s implementation of parental involvement activities in support of the school’s improvement plan. This position will serve as a resource to parents in an effort to effectively communicate and assist with establishing opportunities for parents to be leaders and advocates in their child’s education. This position will serve as a liaison between parents and the school by providing support, motivation, information, and training.
    Salary $19514.388 to $28610.6592

  36. No Duh says:

    I do not understand why that called meeting didn’t immediately cease when Wilkins was unable to positively answer the most basic questions (What is this company’s litigation record? and Did you check their references?). Wilkins should have been excoriated by his boss in front of the BOE and made to apologize for wasting their time. I cannot imagine this happening in a $1 billion corporation. First of all, the company president would have damn well studied very carefully what her employee was about to present to her Board and she would have already asked and demanded answers to such basic questions.

    It is stunning that SCW voted “yes” after asking a great question that got a “screw you” response. What would have been an UNacceptable answer to her?? Her exposing the administration’s incompetence (or secret dealings — who is related to whom in this company?) is great. Her signing off on it with a “yes” vote makes her look like the idiot she clearly is.

    How could 7 of these BOE members vote “yes” to this contract? How come they did not laugh Wilkins off the lecturn? This is clearly yet another “done deal” that was negotiated behind closed doors with BOE members.

    We are in another dimension. We are in the Twilight Zone.

  37. No Duh says:

    Guillory is a paid PTSA president!!! Geez, some of us did that sort of thing for free. Boy, do I feel like an idiot…

  38. No Duh says:

    So who runs the audio visual/technology department now, if Philandrea is taking this other position? And where do the commas go in that salary that’s listed?

  39. truthmissile says:

    LOL @ NY saying “Dekalb sucks!”

  40. howdy1942 says:

    I still think that there is a better day coming. Sooner or later, I think that a majority (4 when the board is trimmed to 7) will see that their common fate is tied to improvement in Dekalb County.

    The economic best interests of Georgia are tied directly to the quality of its schools – otherwise, corporations will not locate here. That begins with Atlanta and its suburbs. Dekalb County, for better or worse, borders Atlanta on its entire east side and a good portion of its north side. Accordingly, it must have a good school system in order for Atlanta and Georgia to be economically attractive. For Dekalb to continue in its present educational dysfunction will hurt the City of Atlanta and the State of Georgia. It must be changed if our State is to be competitive with our neighbors. Governor Deal will understand this sooner or later.

    I know the School Superintendent in Columbia, South Carolina and, rest assured, he has none of the issues we have in Dekalb County. We have a cabin in the mountains of South Carolina near Greenville and that city has none of the issues we have in Dekalb County. BMW, Michelin, and other great companies continue to expand there. Go to Charleston, South Carolina where Boeing is now building its 787 Dreamliner and you’ll see tremendous expansion in supporting industry. That city has an outstanding Mayor who had led it back from the abyss of the closure of the Naval Shipyard there as well as from the devastation of Hurricane Hugo. That city is thriving.

    Georgia cannot continue to wallow in its sea of complacency and return to the economic greatness it once enjoyed. We must tend to the fundamentals that attract industry and that begins with a good education system. The Dekalb County School System is spiraling out of control and that must be fixed now – time is of the essence. The State can’t wait and that’s why I think things will get better soon.

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