EAA (Update Crain's: Rich Baird)

Snyder transformation manager defends financing, mission of Education Achievement Authority

CRAIN'S DETROIT BUSINESS

Gov. Rick Snyder's transformation manager, Rich Baird, was involved in the formulation of the blueprint, design, execution and financing of the EAA.

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One of the key architects of the controversialEducation Achievement Authority said many misconceptions still persist about its financing, its ultimate goals and whether it has taken money fromDetroit Public Schools.

Gov. Rick Snyder's transformation manager, Rich Baird, was involved in the formulation of the blueprint, design, execution and financing of the EAA, he said. The EAA is a new school system that began operation last year and put Detroit's 15 worst performing schools under one administrative roof and designed a whole new model for educating those students.

Baird said the numbers show the students are progressing and those that continue to attack it are doing so because they don't want it to be shown it can work for fear of it being replicated elsewhere.

"The reason people are upset about what is going on there, is that once it can be shown that the 'unlearnable' can learn, then it's going to raise the bar everywhere else in this state, and rightfully so," Baird said. "Every parent should challenge every teacher, every superintendent, everyplace in this state and say, 'if it's working that well there, why aren't we doing it here?' And that's exactly what we want."

Baird said EAA is not about creating the state's biggest school district and said he doesn't care if it ever gets any bigger than it is now. Legislation (HB 4369) is now pending in the Senate to expand the EAA to no more than 50 schools statewide.

"The proof of concept is already there," Baird said. "The value proposition is there."

Where did the money come from?

What hasn't always been there is the financing, and it was anticipated that private funding would cover many of the costs early on. But that did not materialize as much as was hoped, and the EAA has received two $6 million loans and a $2 million advance on its state aid payment.

But those loans were not from Detroit Public Schools, said Baird, as has been previously reported and often repeated by Democratic lawmakers opposed to the EAA.

The money came from the State Aid Note program, which typically is used by school districts to do short-term borrowing that often is necessary because Michigan's fiscal year does not match up with the fiscal year of schools in the state.

But the EAA does not have the authority to borrow from the fund, so Roy Roberts, the emergency manager for DPS, allowed it to flow through DPS.

"They only got to wave at the money as it went by, it wasn't their money to begin with, it wasn't borrowed from them, it was simply a vehicle," Baird said.

Baird said he saw some of the same cash flow issues with the EAA as with just about every start-up he's ever been involved with.

"Did I engage in creative financing? You bet. Was there anything illegal or intended to be secret about it? Absolutely not," Baird said.

The first $6 million loan was made last September and paid off in January. The second $6 million loan was taken out in February and is due to be repaid by July 22. Baird said about half of it has already been paid, and he expects it will be fully paid off by the end of June.

Baird said he wasn't the one to make the decision to take out the loans, but, "I was the guy pulling all the dots together and working with treasury saying, 'guys, we can't let this crater. We can't close schools to solve our cash problem. We just got started, and look at what they are doing in these schools.' "

That money was needed because there was a large amount of up-front work that had to be done last summer to get the buildings, classrooms and teachers, he said.

Most of the buildings that now house EAA schools were far below state code, he said, so millions had to be spent on them, and the state allocated $10 million to do so.

"You would never put your children in these schools, given the dangers … we are so lucky that something never happened in any of these schools prior to bringing them up to code," he said.

And all of this was done in roughly a three-month period during the summer break. The EAA also had to pay for teacher training and a new technology platform.

Teachers had to have a full month of eight to 10 hours a day of training to learn a new way of facilitating content tailored to how individual students learn, he said.

This was all done before the first state aid payment arrived in October, which is why the loan was needed, he said. The EAA now receives about $5.8 million per month in its School Aid payment, according to the treasury department.

Quiet campaign to continue funding

And the push for private donations continues, Baird said. In the fall of 2011, the Michigan Education Excellence Foundation was formed to help raise money for the EAA and other educational causes. The foundation has three board members: Steven Hamp, the former vice president and chief of staff for Ford Motor Co., Carol Goss, president and chief executive officer of The Skillman Foundation, and Baird.

A currently quiet campaign has been under way since last year to raise money to support the EAA from companies, individuals and foundations, and Baird said they plan to soon go public about the campaign and announce they have already received half of the total amount they are seeking. Those numbers will become public when the campaign is officially announced, he said. Baird said Peter Remington, president of The Remington Group Inc., is leading the fundraising efforts.

One mistake they have made, Baird said, is not alerting the EAA board that the loans had been taken out, and John Covington, the EAA chancellor, accepted responsibility for that oversight.

"Everybody was running so fast and doing so much," Baird said. "It wasn't that he was trying to keep it from them, it was just that he forgot to talk to them."