Emergency manager: Mosaica ‘wasn’t a gamble’

MUSKEGON HEIGHTS, Mich. (WOOD) — The company hired two years ago to try to turn around the beleaguered Muskegon Heights school district has a history of running schools with poor academic performance and lawsuits in Michigan, Target 8 found.

Muskegon Heights schools is cutting ties with Mosaica Education — the private for-profit company that signed on to run the fledgling charter district — three years before its contract is set to expire. They say the break-up was a joint decision.

When Mosaica failed to pay its teachers on time in late March and the district had to ask for an advance from the state to cover payroll, Target 8 started digging into its past and uncovered a history of problems in Michigan school districts reaching back a decade.

Former Muskegon Heights Emergency Manager Don Weatherspoon — now the emergency manager for Pontiac schools — proved difficult to get on camera, initially telling Target 8 in an email he “wasn’t inclined” to talk about Mosaica.

When Target 8 tracked him down in Lansing Monday at an Emergency Loan Board meeting, he first asked that the camera be turned off.  But after talking to the treasury department’s press secretary, Weatherspoon agreed to answer a few of Target 8′s questions about his 2012 decision to hire Mosaica to run the newly created Muskegon Heights Public School Academy.

That decision was made despite Mosaica’s past, which includes several Mosaica-run schools in Michigan shutting down.

In 2011, Capital Area Academy in Lansing was forced to shut its doors after its charter wasn’t renewed because of low MEAP scores and concerns about the academy’s leadership practices and curriculum.

Similarly, Detroit Advantage Academy shut down in 2005 due to low MEAP scores and poor student performance.  A year before the school shut its doors for good, the district’s board had fired Mosaica.  The company took the district to arbitration and was awarded more than $2 million for management fees, payrolls the company had advanced the district and building improvements.

Target 8 asked Weatherspoon why the state decided to gamble taxpayers’ money on a company that had a history of problems.

“It wasn’t a gamble,” Weathersppon said. “The decision was made on those people who responded to the [request for proposals] and during the interview process all that was disclosed to us.”

He said the district took action to prevent what happened in Lansing and Detroit.

“We put conditions in the contract for very close oversight and we did monitor them very carefully,” Weatherspoon said.

But in January 2013, four months after Mosaica took over Muskegon Heights, questions were raised about how the new district was working.

A letter from an attorney representing Weatherspoon, who was the Muskegon Heights emergency manager at the time, and the public school district to the company stated there was never a clear list of the “state and federal educational mandatory requirements in all areas” and that Mosaica was slow in meeting state mandated transparency requirements. It also said there should be stricter academic supervisions.

“If you look at the contract, it did say that they had to perform at a level where the kids could graduate from college. Now given the academic status of those children, some of them could not move forward fast enough to get at grade level for reading, etc.,” Weatherspoon said.

In May 2013, Weatherspoon himself wrote to Mosaica, saying it needed to let him know about all financial transactions. About a year into the contract, he requested quarterly reports to avoid what he called “past misunderstandings” about borrowing and expenses.

Western Michigan University Professor Gary Miron, who assembles yearly reports on charter schools and the companies that run them, said the contract was to Mosaica’s benefit.

“It’s more beneficial to the  management company. It’s set up so that they’re going to get theirs, no matter what their performance,” Miron said.

He said his experience shows poor relationships between Mosaica and many of the districts with which it contracts.

“If we look at the relations with the boards and the number of times they’re being fired, Mosaica stands out,” he said.

And, he said, the company is more prepared to sue after being fired from a district.

“It becomes expensive for the board and the taxpayers in the end to cover that. So that’s why we see a lot of Mosaica in the news in different states — it’s because of this very difficult separations that occur,” he said.

In Muskegon Heights, however, state and district leaders said the split was mutual. They also said that despite Mosaica having filed and won previous suits, legal action will not be taken this time.

“There’s a provision [in the mutual separation agreement] that they won’t sue neither side will sue,” Terry Station of the Michigan Treasury Department told Target 8 Monday.

And then there’s the big question: Will the Muskegon Heights district be open in September?

“Yes,” said current Muskegon Heights emergency manager Greg Weatherspoon, the brother of Don Weatherspoon. “That’s a definite.”

Mosaica’s CEO Michael Connelly did not return calls Monday for comment.

Also Monday, members of the state’s emergency loan board approved a $1.4 million emergency loan for Muskegon Heights that will help pay off costs and keep the district open through the rest of the school year.

State and district leaders said they hope to have a new company in place for the district by the end of June.

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