Marysville School District 25

June 24, 2024

Dear Marysville School District Community,

As the 2023 - 2024 school year ends, it's time to recharge and enjoy the summer break. We are proud of the many accomplishments of our students and staff, but we recognize that the district's challenges have overshadowed some of the pride, joy, and celebratory moments. 

Today, we are writing to provide information on areas of concern in our community. The district has made substantial progress toward financial health, and we are pleased with that progress. Some tough decisions are still ahead, but we will do so with students as our priority and the community as our compass. The information below outlines the district’s current status and intends to answer questions our families, staff, and community members may have in each of the following areas:

• Financial Binding Conditions and State Oversight

• School Closures

• District Insurance Coverage

• Allegations Related to Mismanagement

• Open Board Seat

• Timely and Accurate Communication

Financial Binding Conditions
The Marysville School District is in financially binding conditions with the Washington State Office of the Superintendent of Public Instruction (OSPI). The district entered into binding conditions when the district could not submit a balanced budget for the current fiscal year (2023 - 2024) because expenditures exceeded revenues. Binding conditions were due to an inadequate state funding model, declining enrollment, and the lingering effects of losing about $26M in levy funds. The district started the year with a negative fund balance of $17.5M. After the district reconciled its books for the previous school year, added fiscal controls, and monitored expenditures, as of February, the amount was reduced to a negative $3.2M, making significant progress over time. By July 10, 2024, when the proposed 2024 - 2025 budget is submitted for review, the estimated ending fund balance will be closer to $1.26M, as shown in the revised comprehensive financial plan. 

OSPI outlined a set of criteria in a letter to the superintendent and school board president, describing the district's steps to exit binding conditions by the end of the 2025 - 2026 school year. One of these requirements was to submit a Comprehensive Financial Plan by April 15, 2024. The district submitted the plan and received a follow-up letter on April 29, 2024, from OSPI with their feedback and the need to submit a revised plan by May 15, 2024. The district submitted the revised comprehensive financial plan and, on May 23, 2024, received an additional letter from OSPI accepting the revised plan. In the letter, OSPI updated the binding conditions to provide advanced support to the district, which includes the requirement of increasing the frequency of check-ins and the district providing monthly enhanced financial reports. In the May 23, 2024 letter, OSPI said the district may be eligible for release from binding conditions when it shows evidence that it will meet the conditions outlined in the revised comprehensive financial plan while meeting the financial benchmarks, including a 5%—about $10M general fund balance at the end of the 2025 - 2026 school year.

Concerned about the district’s ability to meet the requirements of the binding conditions and the benchmarks in the revised comprehensive financial plan, on June 18, 2024, State Superintendent of Public Instruction Chris Reykdal sent a letter to the district stating he “will be convening a Financial Oversight Committee per Revised Code of Washington (RCW) 28A.315.221 to review the financial situation of the Marysville School District (MSD) and make recommendations on a path forward for financial stability.” The letter outlines some actions that the Committee may take, for example, holding a public hearing or multiple public hearings, producing an alternate financial plan for the district, and reviewing the district's contracts and agreements before school board approval, among other things. He plans to name the committee members soon. 

School Closures
Additional reductions are planned over the next two years to meet the requirements of the binding conditions and submit a balanced budget. The revised comprehensive financial plan states that school closures or consolidations based on declining enrollment are part of the reductions. No schools will be closed or consolidated for the next school year (2024 - 2025).

Although there has been discussion about the schools named for potential closure/consolidation (Cascade Elementary, Liberty Elementary, and Totem Middle School), any closures or consolidations would occur for the 2025 - 2026 school year after a year of planning and preparation following district policy and procedure, including community meetings to learn more about the process and the final approval of the Board of Directors.

District Insurance Coverage
In March, the Washington State Risk Management Pool (WSRMP) notified the district that they were not renewing the district’s insurance coverage. The WSRMP is not an “insurance company.” It is a pool of members whose membership fees pay for school district claims or “losses.” However, it acts like an insurance company and issues coverage policies to members. The WSRMP cited multiple reasons for the non-renewal. In summary, the district has had some high-cost claims, a higher-than-average number of claims, and is considered a risk for its members. 

At a recent work study meeting of the Board of Directors, Dr. Robbins provided an overview of the district's insurance coverage. During a follow-up board meeting, a representative, Katie Henry, from the brokerage firm (USI, specializing in educational institutions), presented their role and the process of obtaining replacement coverage. A PDF copy of the presentation is linked HERE; a video version is available HERE. Ms. Henry shared, “I think a big question from everybody in this room is, will there be insurance in place for the September renewal.” She added, “We can say with absolute confidence that yes, there will be insurance in place. There is no scenario where the district will not be able to meet the insurance contractual requirements.”  A team of district staff is actively working with the firm to find a suitable insurer that will best meet the district's needs by providing maximum protection at an affordable cost.

Additionally, there is a focus on Enterprise Risk Management and claims advocacy to put the district in a favorable long-term position to better support our school district community. Enterprise Risk Management is a strategic business discipline that supports the organization's objectives while creating a proactive organization-wide safety culture. The goal is to know our path forward later this month, with coverage starting September 1, 2024.

Allegations Related to District Mismanagement
On May 31, 2024, the Marysville School District announced that Dr. Lisa Gonzales’ (Executive Director of Finance and Operations) employment contract would end on June 30, 2024. The Board of Directors then received a written statement drafted by Dr. Gonzales on June 3, 2024, which included several allegations about the district. In addition, the board received a copy of a letter sent to the Office of the Superintendent of Public Instruction (OSPI), also drafted by Dr. Gonzales, making similar allegations.

The Board takes all allegations seriously and is fully committed to ensuring that the administration of the Marysville School District occurs with integrity and in accordance with the law.  As such, we have requested a third-party investigator to ensure a thorough and unbiased investigation of the facts. The board will carefully consider the advice of outside counsel on this matter with respect to next steps. We won’t make any final decisions until all the facts are known, and we are working to collect that information now.  Through the Washington Schools Risk Management Pool, the Board has secured legal counsel who will retain a neutral third-party investigator and advise the board.  It is essential that this process is conducted fairly. 

The Marysville School District Board of Directors values Dr. Robbins's leadership of the Marysville School District and the tireless work of all of our district staff, who continue to work on behalf of our students as we navigate this period of time. We are committed to the district’s students, families, and staff and will work to ensure that they are our priority focus. 

Open Board Seat
The district will announce the process to fill the open board seat recently vacated by Wade Rinehardt later this week. It will include an application and appointment process following district policy 1114, Board Member Resignation and Vacancy. 

The Marysville School District has been here for 100+ years, and we will make it through this challenging period. The district will make decisions with our students' well-being at the forefront. As we move forward and prepare for the 2024 - 2025 school year, the Board is committed to our essential work of continuous improvement and the academic success of our students.

Timely and Accurate Communication
In closing, some community members have shared that the district needs to provide the public with more accurate and timely information. District staff and the school board want to ensure that the Marysville School District community is informed on essential matters and does so through a variety of communication mediums. As the district works through the requirements of the binding conditions and the process of budget reductions, time is needed to plan strategically and make thoughtful decisions, especially when notifying employees whose jobs may be impacted or changed and keeping our families and community informed along the way. 

The district will continue to provide updates throughout the process on our dedicated budget update webpage and through other means. In addition, the school board encourages community members and staff to attend board meetings to get involved and stay informed.

In the face of systemic underfunding of public schools in our state, continued advocacy for achieving a funding system that matches student needs is paramount. Ample state funding is essential to sustaining the quality education that our students deserve. The Board knows that our community is strongest when every member participates in the work of serving students. We encourage our community to partner with the district, whether through attending board meetings, volunteering in schools, or engaging in conversations with state legislators about the full funding of schools. We are grateful for the staff and community members who have been advocating for the Marysville School District at the state level and for those who continue to volunteer time and resources to ensure our students have a quality educational experience. This participation strengthens our school district community and supports students as they work academically and plan for their desired futures.

We wish you and your family a wonderful summer filled with laughter, sunshine, and making memories! It is a privilege to serve the families and children in Marysville, and we appreciate the community’s continued support. 

In partnership,