Benton Harbor school board votes for consent agreement to deal with financial emergency

Benton Harbor school board members decided to enter into a consent agreement with the state of Michigan, just one day after Governor Rick Snyder declared a financial emergency in the district.

The school board had four options: consent agreement, bankruptcy, evaluation or emergency manager.

“We want to settle this district and this community in terms of quelling talk of a takeover or emergency manager,” said Superintendent Leonard Seawood. “Although those might be options out there, it’s not the options this board is considering.”

A consent agreement would provide the district with more time to get its finances in order. The agreement would also require the district to be in close contact with the state regarding financial decisions.

“We are looking into flexibility of nine to 11 years so we can reinvest in the district,” Seawood said.

A financial review team found that the district’s cumulative general fund deficit decreased from $16.1 million on June 30, 2012, to $15.5 million on June 30, 2013, that was primarily due to a $2 million emergency loan. Without the loan, the deficit would have increased nearly a million and half dollars to $17.5 million over the same period.

“The deficit is 46 percent of our budget,” Seawood said. “It is very deep.”

Members said they have already been in an informal consent agreement with the state because they have been regularly reporting the budgetary decisions.

“We are already steps ahead,” said school board member Sharom James. “It’s the best fit for us.”

Seawood said slashing the budget too much, too quickly would hurt students.

“Everyone knows the city has to have a strong, viable school system,” he said.

So, board members wanted to send a quick message to state officials. They had seven days to respond to the governor’s office – but they only waited one day.

“The intention was to signal to the governor’s office the direction we want to go in,” Seawood said.

Now, the state must approve the decision to go with a consent agreement.


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