The leader of a small, urban school district in western Michigan is completely privatizing the public school system there. The case may become an example for other school districts facing major financial problems.

The problems are academic and financial

The situation at Muskegon Heights Public Schools was dire. It ran $18,000 in the red each day school was open last year.

After more than six years of spending more money than it took in, the school board threw in the towel. They voted to give up their local authority to the State of Michigan.

This spring, the governor appointed an emergency manager who laid off everyone on staff including Leonard Vines. He was not surprised when he got a pink slip.

“It was a letter with everybody’s name on it. And you had to sign it. And it said officially, on this day, we was laid off because – oh the crisis of what was happening,” Vines said.

Vines was a special education aid for 15 years. He says everybody knew the end was coming.

Falling property taxes and declining student enrollment are common for school districts in Michigan these days. But Muskegon Heights is also one of the poorest cities in the state. The average household makes just $20,000 a year.

Test scores are dismal. Muskegon Heights High School is a staple on Michigan’s "Persistently Lowest Achieving Schools” list.

Emergency manager says charter was his only option

Don Weatherspoon was the emergency manager brought in to try to fix the situation. He decided the only choice was to turn operations over to a charter company.

“I am not against unions, but this is the way I have to go, because I don’t have any other options,” Weatherspoon said at a public meeting in late May.

Weatherspoon was appointed to avoid bankruptcy. And merging the district with another public school system nearby wasn’t an option either. No other school district wanted to take on $4 million in debt and a $12 million spending deficit.

This week, he announced Mosaica Education Incorporated will run the entire public school system for the next five years.

Mosaica Education Inc. gets 5-year contract – but details are still not available

“The game is on, and we’re totally committed to have competitive sports and excellent band and also much better academics than what’s been here before,” exclaimed Gene Eidelman, the president of the for-profit charter company Mosaica.

About 60 people in the audience applauded Eidelman.

Eidelman says the biggest challenge for the fall is the district’s empty coffers, so Mosaica will chip in its own money up front.

“We have provided a $5.5 million commitment to have the funds here so we could open until the first check arrives,” Eidelman said.

So far, the details of the contract with Mosaica are still secret. Though the document was approved in an open meeting, it wasn’t available to the public. And attorneys refused to share the information with reporters -- basic information-- like how much money the district will pay Mosaica.

Weatherspoon brushed off concerns over disclosure. He says the information will be available within the next week or so, and no one in the audience seemed to mind either.

Angela Ogden is a former Muskegon Heights teacher and local union leader. She compares the whole situation to a prolonged death or a nasty divorce.

“Denial to anxiety and stress and sadness and, you know, you’re just you’re up, you’re down, you’re everywhere. And so to have something like this – it provides a sense of hope and excitement for everyone,” Ogden said.

She and Vines are applying for their old jobs this week.

The charter option could become a model in Michigan. An emergency manager of another struggling school district, Highland Park near Detroit, says he’ll try to do the same thing.