Marysville School District under OSPI financial oversight amid budget woes

(The Center Square) - More than 60 people showed up for a community forum Tuesday evening in Marysville, to find out more about the school district’s financial troubles, which have prompted a whistleblower investigation and administrative resignations in recent weeks.

A week ago, the Office of Superintendent of Public Instruction (OSPI) sent a letter to Marysville Superintendent Zachary Robbins, notifying the district that OSPI is convening a financial oversight committee to review the district's budget woes.

“This is the first time in Washington state history that OSPI has placed a financial oversight committee on a district due to binding conditions,” said Courtney Ramirez, UniServ Director with the Washington Education Association.

The Marysville School District entered into a binding agreement with OSPI last August in hopes of reconciling budget issues.

Ramirez led the community forum, alongside J. Hooman, co-founder of the Marysville Community Coalition.

The gathering comes after the recent departure of the district's Executive Director of Finance Lisa Gonzales, who has filed a whistleblower complaint aimed at central office staff including Superintendent Robbins, claiming the district is guilty of violations of the law, inaccurate reporting to the state and cronyism.

Human Resources Director Alvin Cooper, who was named in the complaint, has also resigned along with Board President Wade Rinehardt.

During the Tuesday meeting Ramirez and Hooman showed slides with a timeline of the districts budget issues going back to February of 2023.

Ramirez said she found attachments from the district’s former CFO showing enrollment projections for the 2023-24 school year much lower than what the district ended up budgeting for.

“They had projected enrollment at 9,344,” said Ramirez. “Why was that the projection when our current budget is at 9,815?”

MSD ended up with about 9,300 students for the 2023-24 school year. Districts receive state funding based on how many students are enrolled, so money the district received came in far below what MSD budgeted for.

The letter from OSPI reads in part:

"In accordance with RCW 28A.315.025, I have determined that the district is financially insolvent because it is reasonably foreseeable that unless action is taken, MSD’s financial situation will result in a deficit general fund balance within three years and the district is unable to prepare and execute a satisfactory financial plan.

On May 23, 2024, my office notified you that the district’s revised comprehensive financial plan was in compliance with the original binding conditions agreement dated August 18, 2023. At the same time, we said to be in compliance with the August 2023 binding conditions agreement, the district must now implement the budget reductions and adjustments described in the revised plan.

Since that letter, the district’s actions have not been consistent with the plan submitted. It has not met fund balance targets and has lost personnel in key leadership positions leaving gaps that cannot quickly be filled. These facts lead me to the conclusion that MSD is unable to fully comply with its plan to regain financial stability."

OSPI tells The Center Square the financial oversight is not an investigation, but rather “the next step in the process of supporting the district in returning to financial solvency."

OSPI recently published a new webpage with information about the process, as well as copies of OSPI’s letters to Marysville and the other four school districts on binding conditions.

Meantime MSD is scrambling to find new insurance coverage. As of Aug. 31, they will have no insurance after being dropped by Washington State Risk Management Pool (WSRMP). In a Monday letter to the community MSD wrote in part: "WSRMP cited multiple reasons for the non-renewal. The district has had some high-cost claims, a higher-than-average number of claims, and is considered a risk for its members.”