As of Monday, there are no schools in Michigan under state oversight after Gov. Gretchen Whitmer released the Muskegon Heights School District from receivership under the Local Financial Stability and Choice Act and dissolved its Receivership Transition Advisory Board (RTAB).
This marks the first time the district has had local control without state oversight since 2011, when the Muskegon Heights School District’s Board of Education voted to engage an emergency manager to address the district’s amassed debt.
“Today is a new day for the Muskegon Heights School District and the state of Michigan,” Whitmer said in a press release Monday. “The efforts of the school district and community to identify problems and bring together the resources to solve complex financial challenges are to be commended. I am proud to say that we no longer have any school district or community under state oversight.”
The governor’s actions follow a recommendation to terminate receivership from the Muskegon Heights School District RTAB.
But the unique thing about the Muskegon Heights School District is that it doesn’t have any students or teachers.
In July 2012, the Muskegon Heights School District entered into a charter agreement with the Muskegon Height Public Schools Academy System to operate the district’s K-12 education system.
In Michigan, charter schools are public schools that are operated independently of public school systems, either by nonprofit or for-profit entities.
This contract remains until long-term debts are paid off. Muskegon Heights Public Schools Academy System Superintendent Rane Garcia says the district’s long term debt is around $42 million.
Garcia told the Advance Tuesday there is some confusion in the community now that the state is no longer overseeing the district, with some residents believing this means the charter system is not in place anymore.
“That’s not the case. The charter system is in place until the debt is paid,” Garcia said. “I think that’s something that probably deserves some more thought down the road, because this is the only community that the source for education for the children in the community is charter. And it’s served its purpose. We’ve had successes. But the funding structure has to be looked at.”
The dissolution of the RTAB in some ways actually creates some confusion for the charter system, Garcia said, because it had a role in stepping in if there was an impasse between the district’s board and the charter system’s board.
Specifically, the charter system has two open seats on its board of education, but needs the approval of the district’s school board before the new board members can be approved. If the district’s board does not approve the appointees after two attempts, the task to approve the board appointments moves to the RTAB.
“If the district says no to them, then the contract says, if an RTAB is in place, then the RTAB appoints someone, anyone of their choosing,” Garcia said. “It doesn’t say what happens if the RTAB isn’t in place.”
That’s the position the charter system is in now. The district board hasn’t approved or denied the last two charter system nominations yet, but if it denies them, there isn’t the RTAB to fall back on to ensure those seats get filled.
“It’s the only place where you have the district board and then there’s the appointed board. So if we really want to get to local control, we would look at an option that doesn’t have this kind of relationship, and I think that needs some real exploring.”
A spokesperson for Whitmer did not respond to a request for comment on whether the dissolution of the Muskegon Heights RTAB would be means to renegotiate the contract between the district, the charter system and the state.
According to the state, the district has had some luck toward fiscal stability, including ending Fiscal Year 2020 with a General Fund balance of $653,744, or 46% of revenues, adding to the General Fund balance for three consecutive years, staying current on all required pension and other post-employment benefits and continuing compliance with bond and note obligations to date.
In Whitmer’s press release, it states that the charter system will continue to be supported by the state through the Michigan Department of Education’s Partnership Agreement with the school system to prioritize academic outcomes.
The Michigan Partnership Model was designed in 2017 to improve the state’s lowest-performing schools through personalized three-year achievement plans based on the needs of each school or district.
Garcia noted that the Partnership agreement has helped boost academic successes for the charter systems, including reaching a 95% teacher stability rate for two straight years, which had been a hurdle for the district previously.