Muskegon Heights schools emergency manager: 1 year to local control, 28 to pay off debt
With a little luck and another loan from the state, Muskegon Heights Public Schools’ Emergency Manager Don Weatherspoon is predicting the district will pay of its debt the year 2041.
Don Weatherspoon told a small crowd gathered in the high school auditorium Monday night he hopes to hand local control back to the district’s elected school board in one year.
“We can’t have someone like me standing here for 28 years. Number one I’m too old for it. Number two it would be something that places the district in terms of what I like to call a progressive move towards regaining control over its own future,” Weatherspoon said.
The old school district really exists in name and debt only. That’s because its Emergency Manager, Don Weatherspoon, laid off almost everybody, and created a new charter school district. All responsibilities for educating kids went to a new charter school district authorized by the former district. Charter school company Mosaica Education was hired to run things for five years.
The former district and Weatherspoon still have some oversight responsibility. Weatherspoon says he’ll turn his focus now to academics. He’ll host another community meeting to discuss academic-related issues on Friday, August 9th at 6p.m. at the high school auditorium.
Path to local control
Paying off the debt relies on two important factors; that property values in Muskegon Heights go up, and that the state will provide another loan to restructure the debt.
MHPS has $25.7 million in long term debt. Weatherspoon is using the non-homestead property tax of 18 mils to pay the bulk of that back.
During the presentation, he estimated that the debt will decrease to about $240,000 by the time that 16-year millage renewal expires in 2028 if the taxable value increase by 1%. However, if it decreases by 1% the debt will stand at $10.8 million. Taxable values in Muskegon Heights have declined over at least the past three years according to Weatherspoon.
Weatherspoon thinks he can declare the emergency over in August 2014. But that depends on another state loan. He's already borrowed $11 million dollars from the state’s Emergency Loan Board. He'll have to convince the state treasurer’s office that the city of Muskegon Heights will have enough taxable value to pay the state back.
“What I’m trying to do with treasury is assure them that there’s going to be a continued existence of this community and that it will sustain itself as far as the tax revenues are concerned,” Weatherspoon said.
He says there’s an “unofficial guideline” or limit, MHPS is bumping up against; it says you can borrow one dollar for every 1.5 dollar in taxable assets.
“All I’m doing now is projecting for a point in time in the future that I cannot see. But I am confident that there will be sufficient money to pay the non-homestead tax,” Weatherspoon said.
He did not make the updated operating plan available to the public during the meeting. Weatherspoon said it would be posted on the district’s website Tuesday morning, when he expected to submit the plan to treasury.
MHPS a “canary in the coalmine”
MHPS is Michigan’s first all-charter district. The school board faced some tough decisions that forced it to ask for an emergency manager. Weatherspoon says now, with a number of other school districts in the state facing the reality that they may not be able to open in the fall, he’s been getting a lot of phone calls.
“They want to know ‘how’d you do this? What do you think about this or that?” Weatherspoon said, “So we’re finding ourselves operating in a totally different mode than we were year ago when we were frantically trying to get things cleaned up so that we could have an operator come in.”
One set of bills making its way through the legislature would make it easier to dissolve a school district that’s not able to afford to open the doors in the fall.
“You need to think of Muskegon Heights as the canary in the coalmine,” Weatherspoon said.