BEAVERTON – The Beaverton School District received some good news last week in a letter from the Michigan Department of Treasury. The Department informed the district that their finances have improved enough that they were no longer considered to be in financial distress and no longer subject to the periodic reporting process required of districts in distress. The letter went on to thank the district for its cooperation and commended it for its improved financial status.
Due to some large accounting errors several years ago the districts fund balance fell below five percent for two years in a row, which triggered a process that included quarterly meetings with the department and the submission of monthly financial reports. “It was an arduous task to meet their monthly demands,” said Beaverton Superintendent Joseph Passalacqua, “but it forced us to really watch the dollars in and out.”
The financial crisis began prior to Passalacqua’s appointment as superintendent, but he was aware of the problem when he accepted the job. “I had been following the district due to my close ties.” He had worked for the Beaverton Schools for fourteen years before moving to Shepherd to take over as principal of the high school. “It broke my heart,” he said, but “I had confidence that we could get out of the mess.”
When he returned to Beaverton there was less than a one percent fund equity and not a lot of money projected to come in from the state. The district was also hit with a “double whammy” during his first full year on the job. First the pandemic struck in March forcing the closure on schools for in person learning. Latter in May the dams on Wixom and Sanford Lake failed which also forced a drawdown of the water on Small Wood and Secord Lakes. Things looked bleak for the district forcing some difficult financial decisions.
“I felt that once I had a good idea of the problems we could make decisions quickly and make the necessary adjustments.”
Those adjustments also required some cuts. The district was forced to eliminate an administrative position and shift some employees around. They also had one administrator retire and another take a position with another district allowing some of those duties to be split up providing cost saving benefits.
“The City of Beaverton has also provided a lot of support,” continued Passalacqua. “Heath Kaplan is serving as our business manager on a part-time interim basis while still maintaining his position as the full time city manager.” Kaplan is an experience financial manager and the Clare Gladwin Regional Education Service District (CGRESD) has provided support to help familiarize him with the differences between school and municipal accounting practices. The district saves money with Kaplan because they do not have to provide a benefits package. In return he is giving part of his district salary back to the city for the time he spends with the schools.
Several veteran teachers have also retired in the past year, which also provides some cost savings. “We were able to hire some quality teachers and in several instances pay them more than they were making at their previous district and still save money.”
Last June the state was projecting that budget shortfalls due to the pandemic could cause a $900 reduction in per pupil spending, by August those projections had changed and more money became available for schools. “We were in the process of making gut wrenching decisions about staff reductions then the cuts didn’t take place.” Schools also received federal relief dollars that covered many of the expenses incurred from going to virtual learning. “We would have been in trouble without the relief dollars.”
While the current administration wasn’t involved with the original problem they have learned a lesson from it. “We are redesigning how we do things,” said Passalacqua. “We have two sets of fresh eyes (Kaplan, and new payroll/benefits clerk Marybeth Lyons) along with Karen Carpenter and I looking at everything we do. We are confident that we have the fail safes in place to prevent something from happening again.”
Along with the good financial news the district has also received word that due to demand caused by the pandemic Saint-Gobain will need to hire a large number of new full-time employees. “It is huge for the City of Beaverton and we are ecstatic, because it is good news for us,” said Passalacqua. “With that coming and the potential for a bond, things are on the right track.”
More information about the bond will be forthcoming from the district soon. It is intended to address three needs: opportunity, safety and security. The pandemic has shown that technology needs to be addressed. The district hopes to be able to provide access to technology for every student. Improvements will also be made in every classroom most of which have not been updated recently. Safety and security issues will also be addressed including: internal safety systems in the buildings, intercoms, boilers, ventilation, and overall site improvements at the buildings. The track, press box, and bleacher situations will also be addressed.