Muskegon Heights Public Schools Emergency Manager Gives Financial Update, Sets Public Meeting on Education

Andrew Trzaska | June 24, 2013

Muskegon Heights Public Schools hold $26 million in debts, but its finances in the present are under control and it has a plan to pay off its debts by 2041, according to district emergency manager Dr. Donald Weatherspoon.

Additionally, he says he will focus on education until his eventual exit, which he plans to make in the fall of 2014. Additional discussions on educational achievement in the district will happen at a public meeting on August 9.

These comments came at a special meeting held Monday night at 6 p.m. at Muskegon Heights High School.

According to documents prepared by the emergency manager’s office with assistance from the MAISD, the district has $26 million in total debt obligations, including nearly $19 million in high school refunding bonds, $3 million in energy conservation bonds, and another $4 million in other bond and revolving loan funds.

Weatherspoon expressed concerns with the declining property values in Muskegon Heights, which, even with last year’s millage extension, would decrease the amount of revenue the district could receive to pay down its debts.  However, after spelling out the numbers the district could project over the next few years, he opted to move on to other topics concerning the district [view all numbers here].

Those other details included the district’s real estate assets, as well as their current operating expenses.

Weatherspoon accounted for all buildings in the district, stating that by the end of summer the district would only own one building not leased by Mosaica Education: the Board of Education building.  Four other buildings owned by the district will be transferred to the state land bank with the eventual goal of being sold.

The City of Muskegon Heights will have right of first refusal on Glendale, Lindbergh, Loftis, and Roosevelt Schools, but few other restrictions and stipulations remain on the properties. Weatherspoon indicated Monday that offers have as of today been put in on some of the buildings, but the emergency manager’s office deemed them unacceptable, an action confirmed by Muskegon Heights City Manager Natasha Henderson last month.

As for ongoing expenses, Weatherspoon estimated current operating expenses at about $200,000 per year, mostly going toward the salary of one full-time employee and several workers operating on a contract basis.

Weatherspoon indicated there is a plan in place for paying back creditors, though it is slow moving. He specifically cited $1.5 millon owed to the Office of Retirement Services, none of which has been paid. Every month, more and more penalties and interest are being tacked onto that amount.

He also hoped aloud that he would not continue to be sued, because the litigation costs were further contributing to the district’s debt.

Among Weatherspoon’s notes was a pair of debts that involved the City of Muskegon Heights. Weatherspoon claimed the city may need to pay up to $100,000 in tax revenues to the school district, while at the same time the school district still owes the city $49,000 in water bills. Weatherspoon noted his tax revenue numbers could not be confirmed, and were only estimates as of Monday.

Switching away from financial matters, Weatherspoon stated that his new focus would be on improving the district’s educational standards “now that district finances have been stabilized and a repayment plan is in place.”

Muskegon Heights’ ACT and Michigan Merit Exams lag behind all school districts in the county, even behind Waypoint Academy, which closed last Friday partially due to low achievement. Weatherspoon made no claims that the district’s standards were of the best quality.

Weatherspoon made few excuses for Mosaica Education, who took over the district’s educational services last summer with less than two months to recruit students and reopen the district as a charter school.  High teacher turnover, issues with teachers being improperly or not fully certified in the State of Michigan, as well as student discipline hit the district in its first year.

Weatherspoon said those issues “won’t happen again because of the speed that things had to happen” last year.  But he did not give Mosaica a free pass.

“For the next month we’re going to be in closer contact with Mosaica to work through those issues that have [come up],” said Weatherspoon.

Weatherspoon set the August 9 meeting at 6 p.m. in the high school’s theater to talk about the charter operator’s contract, its future operating in the district, and any other academic shortcomings.

Weatherspoon also expressed intentions to lobby for changes in an upcoming technology millage, which currently would fund improvements to non-charter districts in the county while leaving out Muskegon Heights. This comes just ahead of the start of certain online testing requirements that take effect in 2014, and is designed to help kids prepare for those tests, as well as other things.

Other millages usually leave out charter districts, but he framed the Heights situation as extraordinary:

“The children in this district should not be penalized because their district had to become a charter.”

Among all discussions of finance and education, Dr. Weatherspoon also discussed the future of his role in Muskegon Heights. Public Act 436 requires emergency managers to eventually develop an exit plan, which he appears committed to developing:

“We can’t have someone standing here saying there’s an emergency for 28 years.”

Weatherspoon noted that he must develop a series of orders that would remove himself from the Muskegon Heights Public Schools situation and put a transition team into place.  That plan would take effect in June through August of 2014, with his exit happening soon after.

A link to the full presentation delivered Monday by the emergency manager will soon be posted on the Muskegon Heights Public Schools website.