Michigan is emergency-manager free for the first time in 18 years after releasing the last local entity from the state’s oversight program for governments in fiscal distress.
The state announced Wednesday the release of Highland Park School District in Wayne County from receivership under the state's Local Financial Stability and Choice Act of 2012. No municipality or school district remains under control of an emergency manager.
“Today’s achievement is really about the hard work our communities have accomplished to become financially sound,” state Treasurer Nick Khouri said in a statement. “I commend the efforts of our local units to identify problems and bring together the resources needed to help problem-solve challenging financial conditions."
Highland Park School District’s locally elected school board will oversee the contract for Highland Park Public School Academy and the cooperative agreement with the Detroit Public Schools Community District for the continuing education of students. The board will also manage the repayment of long-term debt obligations.
The district has a plan in place to address its $7.5 million general fund deficit, with revenue from property taxes imposed on non-homestead property dedicated to outstanding debt. An approved two-year budget is also being implemented. According to financial statements as of June 30, 2017 the district has $2.4 million in general obligation bonds outstanding.
The Highland Park district had been under emergency management since January 2012.
In July 2012, the emergency manager established Highland Park Public School Academy to provide educational services to district students while the school district paid off long-term debt obligations.
Since 2015, the public school academy has been educating students from Pre-kindergarten through eighth grades and a cooperative agreement with the Detroit Public Schools Community District has been providing educational services to students from ninth through 12th grades.
The state continues to maintain an oversight role in a limited number of Michigan communities. School districts in Benton Harbor and Pontiac are operating under a consent agreement with the state, and the Muskegon Heights school district is overseen by a receivership-transition advisory board.
In April, Flint was released from state financial receivership and in May, Detroit earned its exit from state oversight.
Flint had been under state oversight for seven years. It was under emergency management when the decision was made to change its water source to the Flint River in April 2014. The switch triggered the city's water crisis. The city’s experience under state oversight exposed flaws that critics say highlight how the law can fail citizens and ultimately hurt the state's credit.
