Gov. Gretchen Whitmer Releases Muskegon Heights School District from Receivership

FOR IMMEDIATE RELEASE 

July 19, 2021  

Contact: Ron Leix, Treasury, 517-335-2167  

Gov. Gretchen Whitmer Releases Muskegon Heights School District from Receivership 

 No Remaining Schools or Communities Under Active State Oversight  

LANSING, Mich. - Today, 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). 

The governor's actions follow a recommendation to terminate receivership from the Muskegon Heights School District RTAB. Effective immediately, the school district will regain local control without state oversight, marking the end of any school district or community under active state oversight.  

"Today is a new day for the Muskegon Heights School District and the state of Michigan," Governor Whitmer said. "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." 

Since the state oversight board was appointed in late 2016, the school district has had accomplishments toward continued fiscal stability, including:  

• Ended Fiscal Year 2019-2020 with a general fund balance of $653,744, or 46% of revenues.  
• Added to the general fund balance for three consecutive years. 
• Current on all required pension and other post-employment benefits.  
• Continued compliance with bond and note obligations to date.  

The role of the RTAB was to work with local leaders to ensure the school district continued a path toward long-term financial stability. This includes ensuring the school board adhered to its assigned responsibilities and the school district had a balanced budget, which have both been accomplished.  

Both the school district and public school academy have systems in place that will continue to govern the relationship of the board of education and academy.  

The state of Michigan will continue to support Muskegon Heights schools to ensure a quality K-12 education is provided for its youth.  

For example, the Michigan Department of Education has a Partnership Agreement with the school system to prioritize academic outcomes. Recently, the public school academy was awarded a $3 million state grant from the state Education Department to help with literacy initiatives.  

The state Treasury Department will continue to provide technical assistance as needed to support long-term financial stability, as well as monitor the district's fiscal health, including the repayment of debt obligations.  

Background 

In December 2011, the Muskegon Heights School District's Board of Education voted to engage an emergency manager to address the fiscal challenges of the district.  

In January 2012, Gov. Rick Snyder appointed a six-member Financial Review Team to examine the school district's conditions indicative of a financial emergency. The review team concluded a financial emergency was present in the district and an emergency manager was appointed.   

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. This contract remains until long-term debts are paid off. 

Upon the conclusion of the emergency manager's term in October 2016, Governor Snyder appointed the RTAB to ensure a smooth transition to local control and continued stability for the school district. 

Under state law, the RTAB's sole function is to oversee the school district's finances, including working through budgets, debt and deficient elimination plans. 

• Letter, Gov. Whitmer to Muskegon Heights RTAB (7.19.21).pdf

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