A state financial review board gave one school district a reprieve, but steered the city of Highland Park back toward a state takeover. Highland Park has been under some form of state receivership since 2002. The new review was required by the new emergency manager law.
Highland Park Mayor Deandre Windom said he still hopes to convince the state to accept his city’s deficit elimination plan.
“We’re going to sit down and explore our options and make sure we’re all of one accord and make sure the citizens of Highland Park are aware of us moving forward,” he said following the meeting of the state Emergency Loan Board.
The next step is for another team of financial experts to conduct a deeper review of the city’s finances before making its recommendation to Governor Rick Snyder.
Among the key findings presented to the board were chronically late billings by the city’s water department. One Highland Park resident testified he hasn’t received a water bill in two years, and he’s afraid of what he’ll eventually be required to pay. Auditors also said the city’s been using the proceeds of a bond sale to make payments to retirees instead of stabilizing investments.
One key indicator of the severity of the problem: The auditors determined the city could sell all its assets and still be unable to settle its debts.
“Obviously, it says that they’re struggling and they didn’t get there overnight,” said deputy state treasurer Tom Saxton, who sits on the board. “It’s just one of those contributing factors that says they’re under financial stress.”
The board also gave the Ecorse School District more time to get its finances in order. The board said the district has made acceptable progress in cutting costs and managing its deficit.
Thomas Parker is the Ecorse superintendent. He said student enrollments have stabilized, and the district has made difficult budget cuts, but he said there’s still more work to be done.
“We have to increase revenue and make ourselves an organization that parents and kids want to be a part of, and, honestly, we have to reduce expenditures as it relates to teacher staff, support staff, and any programs that are non-essential.”
Later this week, the board will conduct a preliminary review of Royal Oak Charter Township’s money troubles.