Whitmer reaches tentative agreement to save Benton Harbor high schools

Gov. Gretchen Whitmer has reached a tentative agreement that would avoid the closure of Benton Harbor’s high schools and dissolution of its district.

The tentative agreement, which still needs approval from Benton Harbor's school board, came out of a meeting Whitmer's office held Wednesday with Benton Harbor school officials and members of the state education and treasury departments.

A copy of the agreement was not immediately available.

"Representatives from the governor’s office and the Department of Treasury had a productive meeting with Benton Harbor school board members regarding a tentative joint plan that requires the district to meet attainable benchmarks and goals to show improvement in academic outcomes among Benton Harbor area students while stabilizing the finances of the district," Whitmer spokeswoman Tiffany Brown said.

Brown noted Wednesday that the state has "has identified national experts who have experience turning around school districts that are struggling and we would like to engage in a day of learning alongside the board and community partners."

Asked about the tentative agreement, school board secretary Patricia Rush said on Wednesday the board would be putting out a statement on Friday and is planning a meeting on July 2 and another meeting the week of July 8.

Asked if the plan would be publicly discussed during the meetings, Rush declined to comment.

Benton Harbor Mayor Marcus Muhammad did not attend the meeting but spoke to a member of the governor’s staff to learn details on Wednesday.

“It’s a one-year agreement, and there will be resources allocated and restructuring of the debt,” Muhammad said.

After one year, academic and financial progress will be reviewed and next steps discussed, Muhammad said.

“Some would say you can live to fight another day,” Muhammad said. “However we hope the fight to shut down is over and the fight to improve begins.”

State Board of Education president Casandra Ulbrich and board member Judy Pritchett said the development was encouraging.

"Today, all sides came together for an open and honest dialogue about the next steps for Benton Harbor schools and demonstrated a real commitment to developing a plan that is future-focused and anchored in student success," the two said in a statement late Wednesday.

Benton Harbor parent Apollonia Williams said she was relieved upon hearing news of a tentative agreement and is ready to get to work to help the district.

Williams has three children in the district and her daughter graduated this month.

“I hope everybody else is ready to work and go above and beyond to bring our school system back and bring it where it needs to be,” Williams said. “We know we have work to do.”

Two Democratic lawmakers issued a statement immediately after the meeting on Wednesday, saying the announcement is a step in the right direction.

”Benton Harbor High School alumni are a proud, committed bunch, so we’re pleased to see Governor Whitmer incorporating their input and concerns — rather than trying to replace local stakeholders as the previous administration did,” said a statement from Erika Geiss, D-Taylor, and Adam Hollier, D-Detroit.

On June 14, Benton Harbor school officials proposed a plan to Whitmer to ask voters to approve bonds to pay off the district's $18.4 million deficit in lieu of closing its two high schools or dissolving the district, according to documents obtained by The Detroit News.

Whitmer’s administration had proposed closing the high school to avoid complete dissolution of the predominately African American district, arguing a smaller K-8 system would make it easier for officials to pay off debt.

After the Benton Harbor school board formally rejected Whitmer's plan earlier this month, the school board pitched its own financial and academic plans to Whitmer.

The proposal, obtained by The News, called for issuing school financing stability bonds as "unlimited tax bonds," which school board attorney Christopher J. Iamarino says gives the district the authority to levy a debt tax to pay debt service on the bonds.

"School financing stability bonds are equally subject to the same process of voter approval as school building bonds, and, if approved by voters, the school board may impose an unlimited tax debt levy for the payment of debt service on those bonds," Iamarino said in a June 12 letter to the governor.

Iamarino said in the letter this solution does not "simply write off" or otherwise cancel the district's existing deficit.

"Instead, it allows the electors of the district to choose whether they are willing to assume a tax to pay off that deficit. ... The electors of this district have an express opportunity to voice their commitment to preserving this district as an independent entity and to resolve the current deficit that is causing the governor to offer the current proposed plan,"  Iamarino said.

It's unclear whether the state accepted any part of the school district's proposal.

Treasury Department spokesman Ron Leix has said “the state Treasury Department has no emergency loan dollars available to lend.” Leix said the school district's short- and long-term debt is $18.4 million but is expected to rise to $21.5 million at the end of fiscal 2020.

Treasury officials have referred further questions on Benton Harbor to the governor's office.

The school board presented Whitmer with an alternative 34-page academic plan on June 14 and a letter dated June 10 proposing another option to turn around the district, instead of closing the high schools — a traditional high school and an alternative school — or dissolving the district.

As part of the option, school members sought help from the governor in addressing the district's debt and asked the state education department to designate the district as a "critical shortage area," which would allow the district to recruit from retired teachers and an administrative pool.

The proposal also outlined plans the board says it already approved for its 2019-20 school year budget, including:

• Developing individualized "education development plans" for each high school student to track course credits to ensure graduation
• Relocate middle school students to an existing but vacant district school building with a large playground
• Develop partnerships with local universities to accelerate certificate of long-term substitute teachers
• Expand programming including music, arts, athletics, robotics
• Partner with MDE to set academic performance and growth targets

The board also said it will undergo additional training, perform a self-assessment and is committed to "full transparency." For students, it is partnering with local service agencies to provide wrap-around services and has provided free laundry facilities at several schools.

Whitmer sent the school board a letter earlier this month saying "doing nothing" is not an option when it comes to addressing financial and academic challenges and asked the school board to focus on finding a solution.

David Arsen, a professor of education policy and educational administration at the College of Education at Michigan State University, said school financing stability bonds are not well known and the section of state law that allows them is fairly new.

"My overall take here is that this provides an interesting component to what could be a resolution to the Benton Harbor schools case," Arsen said on Wednesday.

"Their lawyers say this is equivalent to the ability to ask voters to pay for capital and building improvements. So they ask for voters to pay for debt. This creates a whole new realm of wiggle room, subject to the state's approval. It's subterranean."

To make the plan work, the state would have to offer debt relief without reducing the foundation allowance it gives the district in future years, Arsen said.

"It's part of a plan through which the state can offer them debt relief," Arsen said.

Arsen says when he looks at the proposal to close schools, he does not see how it will stem an enrollment decline. He says it could in fact accelerate it.

"If kids know that they are leaving in ninth grade, they will start looking for other schools before that," Arsen said.

To keep Benton Harbor schools intact, the state would have to assume some or all of the debt, implement enrollment stabilization practices that could mean managed choice and no new charters, and provide external support from academia or the intermediate school district for both academics and finances.

"It's going to be uphill," Arsen said. "Are they able to agree to credible experts to right this ship? This is tough work any time you're in a high-poverty area."

Craig Thiel, research director at the nonpartisan Citizens Research Council of Michigan, said Benton Harbor schools remain safe from the state's dissolution law — only until Monday.

"Come July 1, however, the district will likely satisfy all the conditions necessary for the state superintendent of public instruction and state treasurer to move forward with closing all Benton Harbor schools as early as fall 2019," Thiel said.

The high school closure plan, which had been eyed for the 2020-21 school year, sparked fierce opposition in a city that has struggled amid decades of white flight, racial strife and a shrinking student population. 

Benton Harbor has operated a deficit budget in its general fund since the mid-2000s, Thiel said. Enrollment has fallen 45% between the 1999-2000 school year and 2018-19.

Of the 3,755 children residing within the Benton Harbor School boundaries in the 2018-19 school year, the state says 1,922 attended Benton Harbor public schools while 1,833 attend school outside the district. Benton Harbor schools officials said the number of actual students in school this year is closer to 1,800 students.

Of those attending school outside Benton Harbor public schools, 1,463 are at charter schools and 370 attend nearby traditional public school districts, including St. Joseph Public Schools, Berrien Springs Public Schools, Eau Claire Public Schools and Coloma Community Schools.

jchambers@detroitnews.com

Staff Writer Jonathan Oosting contributed.