Muncie Schools Put Under Full State Control

By Stephanie Wiechmann and Tony Sandleben

Muncie Community Schools will come under full state control in January, after a unanimous state board vote.  This lets emergency managers make decisions about both the district’s finances and academics for the next several years.

As of Jan. 1, Muncie Community Schools will be designated a “distressed political subdivision.”

All five members of the Distressed Unit Appeals Board voted to keep MCS under state control.  But, as many said at a meeting in Indianapolis, it wasn’t because MCS officials didn’t make progress on controlling the district’s multi-million dollar debt.

“Progress has been made, great effort has been made by the school corporation," says State Examiner Paul Joyce. "But we’re not there yet.”

Over the last several months under partial state control, MCS emergency management team Administrator Assistance has restructured the district’s bonds, created a balanced budget for 2018, negotiated a new teacher’s contract, and negotiated the sale of Northside Middle School and four other parcels, including three former elementary school properties.

But according to reports filed with DUAB, the district still has $43 million in long-term debt, including $9 million in 2014 building maintenance bonds that were used instead for the general fund.

DUAB chair Micah Vincent says even if the district had been given back local control, the state legislature would have still seen financial requests from Muncie in the future

“My expectation is that you’re going to see Muncie Community Schools come and request some additional assistance from the state of Indiana," Vincent says. "And as I look at that and think about that, that’s another item that makes me think that the role of the state should continue to be involved.”

The board also designated Administrator Assistance to be the temporary emergency manager of MCS beginning Jan. 1, after its current contract expires in 2017.  The move puts the Administrator Assistance in charge of MCS for several months, until DUAB can complete a search process for a permanent manager.  Administrator Assistance is allowed to compete for that permanent contract.

After Wednesday’s vote in Indianapolis, Administrator Assistance co-founder Steve Wittenauer says the focus is on the next six months.

“That’s kind of our goal going forward is to continue the process on the finances, to look at that G-O bond and get that thing resolved, get their balanced budget in 2018," Wittenauer says. "And if once we can do all that by the end of June, we’ll feel pretty good about that, and we’d hope that they could maybe pick it up from there and go forward.”

The Munice Teacher’s Association had already announced it was in favor of a full takeover. MTA President Pat Kennedy says she feels now the district can continue to move in the right direction.  She says teachers will now be included in more decisions.

“The voices of teachers have really still been stifled except in the bargaining process, and the bargaining was with AA,” Kennedy says.

In Indianapolis, MCS Superintendent Steven Baule did not speak to the media, and the district has not released a statement.  District spokeswoman Ana Pichardo could not say when MCS would release such a statement.

As for state officials, Vincent did have a message to MCS parents from DUAB.

“School is open. School will continue to be open. This is not a situation where parents within the Muncie Community School district need to be concerned that the school district is somehow going to shut down or that the education is going to fall off," he says. "That’s not the situation that we are in, and so they should continue to send their kids to Muncie Community Schools with confidence throughout this process.”

Under the distressed political subdivision resolution, MCS needs to operate with a positive cash flow for at least two years, plus meet other criteria DUAB sets before local control can restored.