Musk Hts schools face more money problems

MUSKEGON HEIGHTS, Mich. (WOOD) – The cash-strapped charter school district in Muskegon Heights is even more in debt this year than last, the district’s management company says.

Monday evening, board members held their first regular meeting since the Muskegon Heights Public School Academy had to ask the state for an advance of more than $400,000 to pay its teachers.

“We should have a solution this week or sometime early next week,” Muskegon Heights Board of Education President Arthur Scott said at the meeting. “We appreciate your patience and we’re working hard to get this taken care of.”

But he didn’t provide answers when 24 Hour News 8 asked for specifics about how and when the problem may be fixed.

“As soon as we have something, I will share it with you. That’s a promise,” Scott said.

To pay out staff salaries, the district had to borrow 93% of its April state aid payment.

Because it borrowed so much of the payment early, the district would have received only about $32,000 from the state on Sunday, having already received the rest of the $455,000 payment.

The district ended its first school year more than $500,000 in debt. Its management company Mosaica Education said Monday that figure has only increased this school year.

CEO Michael Connelly said that the district owes Mosaica about $2 million.  He said the district hadn’t paid the company its contractually agreed upon management fee this year.  He also stated that the company had fronted the district money to cover costs for building improvements last year and payroll earlier this year.

“We no longer have the capacity, the financial ability, to lend [the district] any more money,” Connelly said over the phone Monday.

He went on to say that Mosaica is “not supposed to be in the banking business; we’re supposed to be in the school management business.”

He didn’t have specifics on how the district is going to curb its cash crisis. He said the district is able to borrow money from the state, or a bank or “any lender they choose.”

Considering the scope of the money problems, 24 Hour News 8 asked if the district would be open for business during the 2014-2015 school year.

“The school will be here tomorrow, next year, the year after that, the year after that,” Scott said. “That’s a promise.”

It was a sentiment Connelly echoed over the phone, saying “so far as I know the charter school, the PSA system will be functioning and hitting on all eight cylinders in September.”

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