February 21, 2012
Review Team to Reconvene Following Court Ruling
Governor Rick Snyder, State Treasurer Andy Dillon, State Superintendent of Public Instruction Mike Flanagan, and Jack Martin, emergency manager of Highland Park Schools discussed the financial crisis affecting the school district and the most prudent way to ensure that students receive a quality education during an afternoon media roundtable. Despite repeated state advances and bailouts, including a $4 million dollar hardship loan in August 2011 and two advancements of State Aid Payments in the past month, it is believed that the district will run short of cash this week and may not be able to meet Friday’s payroll.
“We will not fail the children of Highland Park,” Snyder said. “They deserve a quality education so they can take advantage of the many opportunities that await them. The students, parents, and residents of Highland Park deserve better and doing nothing is not an option.”
Further complicating the district’s financial emergency is last week’s ruling from Ingham County Circuit Court Judge William Collette, invalidating actions of the Highland Park Schools review team. To make certain that the state is in full compliance with the ruling and to exercise an abundance of caution, Martin is temporarily standing down and decision-making responsibilities will return to the superintendent and school board.
The state is working in partnership with the Legislature to empower Highland Park parents with educational options for their children. Officials are pursuing solutions for parents who want their children to remain in their classrooms and buildings as well as for those who may want to send their kids elsewhere.
To accommodate students who want to stay in the district, arrangements are being made that will allow Highland Park schools to remain open under an operating agreement with another district or charter operator. For Highland Park families wishing to explore other districts, the Governor is urging the Legislature to immediately consider a bill that will offer “schools of choice” opportunities. The legislation will include a stipend that follows the student.
Officials will launch a comprehensive public information campaign to ensure full and open communication with parents, teachers and community leaders.
Following the recommendation of Judge Collette, the Highland Park Schools financial review team will reconvene on Wednesday, Feb. 23, 2012, in an open meeting to reassess the review team’s finding that a financial emergency exists in the district. The governor, Treasurer Dillon and Superintendent of Public Instruction Flanagan want to execute an abundance of caution in complying with the court’s orders.
The 10-member independent Financial Review Team appointed to assess the financial situation of the Highland Park School District originally concluded and issued its final report to Snyder on Jan. 3, 2012. The report determined that a financial emergency exists within the district and no satisfactory plan exists to resolve that emergency and recommends the appointment of an Emergency Manager, in accordance with Public Act 4 of 2011.
The review team cited the following conditions that led to the unanimous determination:
- The Highland Park Schools cumulative deficit increased by 51 percent over the past fiscal year, from June 30, 2010, to June 30, 2011, growing from $6.6 million to $11.3 million, according to the district’s fiscal year 2011 financial audit. Expenditures exceeded revenues by $3.8 million in FY 11.
- The district’s pupil enrollment has decreased by 58 percent since 2006, dropping from 3,179 pupils to 1,331 for FY 2011. Current estimates show a pupil count of 969.
- The district has incurred an operating deficit in five of the last six fiscal years.
- As of Nov. 15, 2011, Highland Park Schools owed more than $1.7 million in accounts payable, which range from 30 days to 6 months old. These accounts payable, particularly the most aged, pose serious risk that district residents would be required to pay additional property taxes if one or more of the accounts payable were converted to a court-ordered judgment levy.
For more information about PA 4, visit the Local Government Fiscal Health page on the Department of Treasury’s website at www.michigan.gov/treasury.