The bankrupt Michigan school district that closed its doors in May and needed a state bailout to reopen and complete the school year will be dissolved under a new state law, Michigan officials said.
Buena Vista, a tiny, low-performing district near Saginaw could not convince banks, philanthropies or others to loan or grant it money to operate for the coming school year, triggering its closure under state law.
Approximately 400 students who would have attended the district’s three schools will now be reassigned to another school district. A similar fate lies ahead for students in the Inkster community, a second bankrupt district that will also be dissolved.
“State Superintendent Mike Flanagan and State Treasurer Andy Dillon determined that the Buena Vista and Inkster School Districts were no longer financially viable and were unable to educate students,” said a statement released by the state.
In May, Buena Vista officials sought a bailout from the state, but Michigan officials initially declined, citing legal obstacles. Teachers offered to work without pay to keep the schools open, but the school board refused, offering its own legal reasons. Meetings were held in the small community and at the state capital. Parents fumed.
After a week of shuttered schools and growing media attention, state officials agreed to funnel money to the district to resume classes and finish the school year.
Buena Vista’s problems appear to be a combination of both internal fumbles and external forces. State officials said Buena Vista took more than $400,000 in state money during the last school year to educate 90 students at the Wolverine Secure Treatment Center, an alternative school. But it took the money after its contract with Wolverine had ended, and it never returned that money to the state or explained how it was spent, Michigan officials said.
Meanwhile, the federal government has pumped $2.5 million into the school district since 2010 as part of a plan to transform Buena Vista. The district also gets about $1.3 million a year in federal Title I funds, which are designed to help high-poverty schools.
But little progress appears to have been made.
On 2012 state exams, no eighth-graders were proficient in math, reading or science. Enrollment has dropped from 760 students in 2011 to about 400 this school year, a 47 percent decrease. That has led to a corresponding plunge in state funding.
As enrollment dropped, costs — such as building operations and salaries — remained constant or even increased as economies of scale disappeared.