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Benton Harbor School Board looks to state for money to cover payroll this month

Jun 10, 2015

Credit Lindsey Smith / Michigan Radio

Benton Harbor’s school board is working to please Michigan’s Department of Treasury so it can get an emergency loan.

The school board approved plans to let Berrien County’s intermediate school district run its business office Tuesday night. Plante Moran currently runs the office. But the switch to the county district is expected to save around $125,000 a year.

The district first requested the loan back in March, but the treasury staff felt the district hadn’t done enough to cut costs.

Sharing services was something treasury staff insisted on before it would allow the Emergency Loan Board to consider the district’s request for a $1.4 million loan.

But Benton Harbor’s school board doesn’t have time to wait for that loan. So they’re also asking Michigan’s Department of Education to give the district its monthly state aid check early. These monthly payments to the district were between $1.1 and $1.6 million this school year.

“We’re coming into a problem with this where we need to make this payroll,” School Board President Sharon James said.

James says she hears the Emergency Loan Board could approve a loan for at least $1 million. If it does, this would be the district’s third emergency loan. One was issued in September 2012 and another in December 2013. Those two loans amount to about $4 million in total.

Benton Harbor schools avoided an emergency manager last fall, but has been working under a consent agreement with the state. The district’s deficit is nearly $16 million.