Muskegon heights school district

Lindsey Smith / Michigan Radio

Three of the five school districts that face more scrutiny from Michigan’s Department of Treasury have reduced their general fund deficits last school year. That’s according to independent audits recently filed to the state. But some still face serious, ongoing problems. Here’s a breakdown of how the districts ended the 2013-14 school year.

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Two years ago, Muskegon Heights made history by becoming the first school district in Michigan to convert entirely to a charter district, and turn the operation of its schools over to a for-profit company. 

This week, Michigan Radio's Dustin Dwyer and Lindsey Smith take an in depth look at the changes in the Muskegon Heights School district and what that could that mean for other troubled districts in the state in a new State of Opportunity documentary called Tiger Pride.

Why focus on Muskegon Heights? How does it impact other struggling school districts in Michigan?

Dwyer and Smith joined us today to give us a preview of the documentary. 

Tune in tomorrow afternoon at 3 pm to hear Tiger Pride

Lindsey Smith / Michigan Radio

Mosaica Education, the charter company running Muskegon Heights schools, only has a few days left in its contract. But the district still has lots to do to get everything in place for the fall.

Last night the district hired its superintendent at a special board meeting. But it still has to finalize agreements with a staffing agency to hire all of its teachers and few other vendors by Monday.

This summer it has to finish building repairs, and rearrange all the grade levels because an elementary school building will close.

Lindsey Smith / Michigan Radio

Muskegon Heights schools’ emergency manager thinks a new setup to run the district next year will be more economical than hiring another charter company.

For the last two years, a for-profit company ran Muskegon Heights schools. But it ran into cash flow problems. The state had to give the district two cash advances this spring to pay staff and give it an emergency loan to keep schools open through the end of the school year.  

“We are in a survival mode,” Muskegon Heights schools emergency manager Gregory Weatherspoon said at a press conference Tuesday. “We will go for whatever will work and save us money and this was a cost savings to us,” he said.

Lindsey Smith / Michigan Radio

Updated: Emergency manager says new arrangement will be more economical than charter school company

Muskegon Heights schools will not hire another for-profit charter company to run the district. Instead, the district plans to hire its own superintendent, a staffing company and the intermediate school district in Muskegon County to run schools for the next three years.

MichigansChildren / YouTube

State Superintendent Mike Flanagan says the consequences of turning entire school districts over to for-profit charter school companies deserves more consideration from state lawmakers.

Flanagan told a state panel last week it’s not clear if the Muskegon Heights school district, or the for-profit charter company that ran it the last two years, will face any consequences for running up a deficit big enough to require an emergency loan worth $1.4 million and two cash advances to keep schools open through June. It’s unclear exactly what the deficit is for the 2013-2014 school year.

The Muskegon Heights school district is now looking for a new operator. That’s after the district and its emergency manager agreed to end its contract with Mosaica Education Inc. when the company couldn’t turn a profit.

“Now that (Mosaica) is leaving, they pretty much told us they’re not going to do (the district’s) deficit elimination plan. To follow up on that, we should wait for the new management company and deal with them,” Dan Hanrahan, Michigan Department of Education’s director of state aid and school finance, told the panel.

Mercedes Mejia / Michigan Radio

If you've got a charter school management company and you'd like to run the chaotic, broke school district of Muskegon Heights, today is your last day to submit a bid.  

That's because the school system's emergency manager recently announced a mutual split with their previous contractor, a company called Mosaica Education.

Mosaica was losing money.

And it was getting a lot of flack for hiring teachers without proper certification (which earned the district state fines) and not delivering all the required special education services. 

Lindsey Smith / Michigan Radio

State law gives a special board up to $50 million to loan to schools in financial distress. The long-term, low-interest loans are supposed to help school districts restructure and pay down their debt.

But it appears $50 million isn’t going to be enough.

With the loans the Emergency Loan Board issued Monday, it's nearly reached that cap, four years ahead of schedule. Treasury Spokesman Terry Stanton says the board has issued $48.5 million to schools so far.

Lindsey Smith / Michigan Radio

Updated 5:10 p.m.

Mosaica Education and Muskegon Heights Public School Academy have come to a mutual agreement to end their working relationship.

“This was a difficult decision for us and our board,” Mosaica Chief Executive Officer Michael Connelly said in a written statement.

“We are very proud of the academic turnaround we were able to achieve under the leadership of Alena Zachery-Ross, our regional vice president and the superintendent for the system,” he said.

Lindsey Smith / Michigan Radio

Muskegon Heights' charter school board acknowledged at a meeting Monday night it doesn’t know how it’ll fund operations for the rest of this school year. But it is reassuring the community it’ll figure something out by next week at the latest.

“As soon as we have something I will share it with you. That’s a promise,” Muskegon Heights Academy’s school board president Arthur Scott said.

Lindsey Smith / Michigan Radio

The Muskegon Heights charter school district owes the company that’s operating its schools a little more than $2 million. That’s according to Mosaica Education’s CEO. 

The new charter district was created in Muskegon Heights when severe cash problems prompted a state takeover of the traditional school district by an emergency manager in 2012. Now the charter district is having cash flow problems of its own.

Photo by penywise / morgueFile

This Week in Review, Rina Miller and Jack Lessenberry discuss the latest with the Detroit bankruptcy, the continuing controversies over the General Motors recall, and the money problems involving the charter school system running Muskegon Heights schools.


Lindsey Smith / Michigan Radio

Muskegon Heights Public School Academy System is asking the state to front $191,000 to cover paychecks that are set to go out this Tuesday.

It’s the second time this month the district has asked for an advance.

The advance would come out of the district’s state aid payment April 20. Earlier this month the state advanced $231,000.

State treasury officials say the district typically gets roughly $455,000 a month after debt obligations.

School board officials have previously declined requests for comment from Michigan Radio. Reports out today say board members also declined to comment to reporters at the special board meeting today, which lasted approximately five minutes.

Charter company Mosaica Education is running the district. The company’s CEO has not returned repeated requests for comment this week.

Mosaica’s Regional VP of Operations Alena Zachery-Ross says advancements for struggling school districts aren’t completely uncommon. She says the district is working on a plan to meet payroll for the rest of the year but couldn’t comment on the details of those negotiations.

Lindsey Smith / Michigan Radio

State officials and the Muskegon Heights School Board are trying to figure out how they’ll be able to pay staff for the rest of this school year, although the district’s emergency manager is “confident” they’ll work something out.

Lindsey Smith / Michigan Radio

Updated 4/2/14:

An attorney for the MHPSA board says all employees have been paid as of today. He said there was a "glitch" in payroll but declined further comment on this story at this time.

Original post 4/1/14:

The state is fronting $231,000 to the charter school district in Muskegon Heights so it can pay its employees. Teachers and staff didn’t get paid like they were supposed to on Monday.

The new Muskegon Heights Public School Academy System was set up in June 2012 when the old school district there went broke.

The former emergency manager of two Michigan school districts is moving onto help Pontiac schools.

Donald Weatherspoon was the emergency manager of the Highland Park and Muskegon Heights schools.

Now, he’s a consent agreement consultant for the Pontiac schools. The Pontiac school board chose to enter a consent agreement after a state review found the district was in "fiscal stress."

Lindsey Smith / Michigan Radio

On average, students under the state’s first fully privatized public school district are learning at a faster rate than under the old system. That’s according to data released Monday night by the charter company running the Muskegon Heights district.

Muskegon Heights schools’ emergency manager set up the charter system in the summer of 2012, when the existing district couldn’t afford to open. Highland Park Public Schools is under a similar arrangement.

Sarah Alvarez / Michigan Radio

Last night, Buena Vista School District held meetings to discuss two important issues.

Overall, while the board made decisions for the 2013-2014 school year assuming the school district would open this coming fall, the future of the district depends on whether or not higher ups decide to dissolve the struggling school system.

First, the board made decisions on the school district’s budget and layoffs.

Lindsey Smith / Michigan Radio

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.

Lindsey Smith / Michigan Radio

Muskegon Heights Public  Schools had nearly a $12 million deficit at the end of last school year. That's when the district’s newly appointed Emergency Manager Don Weatherspoon said the district couldn't afford to open school in the fall. He laid off most all the staff and hired charter school company Mosaica Education to run the schools for five years.

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