Superintendent Leonard Seawood said the district needs $2.6 million in the next month to remain solvent. The school board is considering layoffs and closing schools.
On Tuesday, Seawood and the board held a town hall meeting for parents and teachers to voice concerns and suggest ways to cut costs. Earlier this year the district closed three schools to save money, but the cuts didn't go deep enough.
"We knew last year particularly in August when I took over that the district was in distress in terms of its finances. We assumed when I took leadership that we were $11 million [short]. Turned out to be $18 million, so immediately we went into this mode of consolidated schools and moving to address that to get our Deficit Elimination Plan approved with the state," said Seawood.
The plan was approved based on the district maintaining its current student population and adding 200 students, but after the count was taken this year the district didn’t add students. At the meeting, Seawood said he and the board are considering all options as it tries to make a decision quickly.
"There potentially will be layoffs in the next two weeks and we're going to look at that over this next week because we're under a sense of urgency in terms of our cash flow," said Seawood.
The board is also strongly considering eliminating door-to-door school bus service and replacing it with bus stops. It may also try to sell former school buildings and consolidate the remaining schools into a K-8 program and 9-12 program and eliminate athletics.
"There's no doubt in my mind that we’re going to come through this. It will absolutely be painful, but when we come through this we will be a stronger district," said Seawood.
The financial problems date back to the 1970s when the district began facing declining enrollment and a decline in state finances. According to records displayed at the meeting, spending on student instruction and transportation has not significantly decreased since 2006, despite a nearly 1,000 student decrease.
"We never really should have gotten to this point, but we're here now so we'll have to deal with it," said Seawood.
The district is already 60 to 90 days behind payments to its vendors, but if it misses a payroll payment it would automatically trigger a takeover. Seawood said he hopes the district can make the necessary cuts before a takeover is enacted because of concerns the state may not make cuts in the best interest in the students.
"The state has not convinced me that they can run school districts, they just haven’t. You see what has happened to Detroit in terms of their budget," said Seawood.
A decision must be made before the preliminary state review is completed on December 20th. If no action is taken or too little is done, the state could face an on-site review, the next step towards a state takeover.