The State of Michigan will conduct a preliminary review of the "critical and alarming financial situation" at Benton Harbor Area Schools. This is the first step in a process that would determine if the school district needs a state-appointed emergency manager. It doesn’t mean one would be appointed for certain.
Leonard Seawood has been superintendent of Benton Harbor Area Schools for a little more than a year. “When you are in a deficit like I inherited…there are no easy answers in terms to digging yourself out of this hole as a district,” Seawood said.
He said the district is now running an $18 million budget deficit which, he said, is around 38-percent of the district’s total annual operating budget. In a letter to Seawood this week, Michigan Superintendent of Public Instruction Mike Flanagan said the deficit "represents approximately 50-percent of the district's general fund revenues for the year."
Flanagan also had concerns about the district's distressed cash flow "even though the district has borrowed $11 million thorugh Treasury for cash flow purposes."
State officials will begin meeting with Seawood to begin the review on Monday. The review will take up to 30 days. Depending on what the team finds, the process could lead to a state take-over…that’s a possibility not a certainty. More details of the 12-step process are posted here. In the meantime Seawood said he’ll hold number public meetings to go over the situation with residents.
“If we’re going to maintain local control of our district, there’s no way around some of the cuts in expenditures that we have to make,” Seawood said, “And none of these are going to be very popular with our community.”
Seawood didn’t detail what those cuts may be. School leaders are already working under a state approved deficit elimination plan. Under it, the district is required to get concessions from unions. Seawood said they’ve been negotiating on that point between four and five months. Seawood said they lost an unexpected amount of students this year (which means fewer per-pupil allotments from the state). He also noted the state cut K-12 education this year.
“I kind of look forward, in terms of putting our heads together, to come up with some alternatives or some supportive help from the state,” Seawood said.
A similar review is ongoing in the Highland Park school district.
Detroit Public Schools are already under the control of an emergency manager. The City of Benton Harbor has been as well for more than a year and a half.