BHAS gaining control July 1st along with millions of debt

BENTON HARBOR, Mich --- There's a possible payless payday coming July 1st if the Benton Harbor Area Schools doesn't fix its financial situation.

Benton Harbor Area Schools will be back under local control but that will be changing in upcoming months.

Benton Harbor is currently the only district in the state overseen by a school reform officer, but changes in state law will bring that to an end July 1st.

A special meeting was held to discuss that change but along with that power will be millions of dollars in debt.

In Saturday's special meeting CEO/ Superintendent Dr. Robert Herrera brought in a managing director of finance. Along with that director, he brought a 36-page packet, filled with current and up to date financial conditions the board is facing.

The district is $18.3 million in debt, that amount includes $10.8 million in emergency loans over the last few years.

Last year budget was based on inaccurate projections, shorting the budget $400,000.

Dr. Herrera noticed the issue so he brought in a specialist Brian Lefler from Baird; a wealth management company. Lefler works with schools who are in the same financial bind as Benton Harbor Area Schools.

Lefler spoke with the board and broke down the financial numbers.

"When you lose students, you get less state aid," Lefler said. "Nobody is going to lend to this district through that state aid note. No program at the state if your state aid note is more than 50-percent of the state aid. You're at the cap."

Lefler discussed if the district continues on this route it will run out of money by July the same time the board will be gaining back authority, but that doesn't mean that can borrow more money but that will mean more debt.

Dr. Herrera feels in terms of making adjustments to the program and bringing the district back financial, the focus needs to be improving learning environments.

"Over the fact finder the past 6 months, we put together and looked at different scenarios and we’re to the point there is no easy solution to this," said Herrera. "Like you said there is no easy solution to this, there is no quick fix like you said it took a long time to get here so it's going to take time to get out."

The strategic plan was brought up, the plan must mention the biggest issues the district is facing; teaching and learning and debt elimination.

"We're talking about doing less and less and less with doing business with less and fewer resources every year and thinking things are going to change and I'm just going to say that it's a tough situation as a board and an administration staff trying to make improvements under those conditions," Herrera said.

To keep the process going the board is asking Dr. Herrera to continue to provide information to help solve the issue and turn things around. Dr. Herrera said he is planning another meeting in the next couple of weeks along with the treasurer to talk more.

His goal is to have an accurate budget by June.