CHICAGO -- Michigan Gov. Rick Snyder Monday appointed a review team to begin investigating the finances of Benton Harbor Area Schools, a step toward a possible state takeover.
The move comes two months after a preliminary review team warned that "probable financial stress" exists in the school district.
Located in the city of Benton Harbor in southwest Michigan, the district has suffered from falling enrollment and property tax revenues. The city itself was under state control for three years until Snyder announced in March that the fiscal emergency was official over.
The school district has been in deficit since the end of the 2007 school year, the state said. The deficit has grown to $15 million in 2013 from $3 million in 2007. Its 2014 deficit is projected to be 46% of general fund revenues.
The new team has 60 days to investigate the district's finances and report back to the governor whether a financial emergency exists.
If the review team finds a financial emergency, the school district has four choices under state law: a consent agreement with the state; an emergency manager; a neutral evaluator; or requesting permission to file for Chapter 9 protection.
School officials told local reporters they welcome the review as a way to help them eliminate the deficit.
The review team includes Michael Krouse, administrator, state finance division within the department of treasury; Kyle Guerrant, deputy superintendent, Michigan Department of Education; Mike Gilliland, director, Office of Financial Services within the Department of Technology, Management and Budget; Bret Witkowski, Berrien County Treasurer; Max Chiddister, president, Chiddister and Associates, a consulting firm; and Frederick Headen, legal advisor for the state treasurer, who has sat on several financial review teams, including Detroit's.
