‘Financially insolvent’ Marysville schools to get unprecedented oversight

MARYSVILLE — After weeks of turmoil in Marysville schools, state Superintendent Chris Reykdal will impose an oversight committee on the district, he wrote Tuesday, citing the high-profile departures of three district leaders.

It’s the first time the state has done so in any school district.

“I have determined that the district is financially insolvent,” Reykdal wrote Tuesday in a letter to district leaders, “because it is reasonably foreseeable that unless action is taken, (the district’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.”

In an email, Marysville schools spokesperson Jodi Runyon wrote leaders were not yet sure what the committee would mean for district operations. School board meetings would continue as scheduled, she wrote, “unless we are instructed otherwise.”

The committee will have two representatives from the state superintendent’s office, as well as one “nonvoting representative” from the local educational service district and one representative from another service district. Marysville is in the Northwest Educational Service District, an intermediary between school districts and the government. It’s one of nine educational service districts statewide.

The superintendent’s office expects to identify committee members in the next weeks, spokesperson Katy Payne said in an email Wednesday.

The new oversight committee will examine Marysville’s situation and make recommendations to the state superintendent. Possible recommendations include: an alternate financial plan, prior approval of district contracts and “delayed release” of some state funds “to meet the final fund balance requirement,” Reykdal wrote in his letter.

The committee could also recommend the state dissolve the district.

Runyon wrote it was too early to know what dissolution would mean for schools, students and staff in the district.

“While that is always a concern, we won’t know if it will happen,” she said.

“There is much work to be done between now and that potential decision,” she continued.

If the district was dissolved, neighboring districts would step in to serve Marysville students, Payne said. The state has never dissolved a school district before, though Vader School District in Lewis County was dissolved years ago and annexed into the Castle Rock School District.

State law requires the committee hold a public hearing as it investigates the district’s finances.

Since August, the district has been in so-called “binding conditions,” meaning it must work with the state to solve its budget crisis. Marysville is the largest school district in Washington to enter into binding conditions.

In April, the state agency warned the district it would convene a so-called “Financial Oversight Committee” if leaders didn’t fix major issues with their financial plan.

Reykdal’s office later approved a revised version of the plan, though in a letter noted concern that district leadership’s actions “have not demonstrated an intent to implement the budget reduction measures described in the revised plan.”

Since then, “the district’s actions have not been consistent with the plan submitted,” Reykdal wrote Tuesday. “It has not met fund balance targets and has lost personnel in key leadership positions leaving gaps that cannot quickly be filled.”

Marysville “is unable to fully comply with its plan to regain financial stability,” Reykdal concluded.

In May, the soon-to-be-former district finance director Lisa Gonzales urged the superintendent’s office to investigate explosive allegations about mismanagement and intimidation in school leadership. The following day, Gonzales wrote in a public letter, she was put on leave without explanation. A district spokesperson confirmed Gonzales’ contract, expiring at the end of June, would not be renewed.

Gonzales accused Marysville schools’ Human Resources director Alvin Cooper of “abusive behavior.” Roughly two weeks later, Cooper resigned.

On Monday, school board President Wade Rinehardt abruptly quit his position, too. His reasons for resigning weren’t immediately clear, though the board’s vice president cited “personal reasons.”

The departures of Gonzales, Cooper and Rinehardt “leave three significant gaps in the district’s leadership structure that could significantly impede the district’s ability to operationalize and implement its revised financial plan as approved,” Reykdal wrote.

Lack of planning for future school closures and an inaccurate month-end fund balance estimate for May caused further concern.

Before the district closes schools, Runyon wrote, the state superintendent’s office “will receive a copy of the (comprehensive financial) plan, and Dr. Robbins will make a formal proposal to the board.”

“There is much work to do to carry out both of these items before we can talk about finalizing anything related to school closures,” she wrote.

The finance and Human Resources director jobs are posted, she wrote, adding the hiring process could take two to four weeks or longer.

“I am hopeful that convening the Financial Oversight Committee will lead to a solution that brings the district back into financial stability in a manner that represents the needs of the students and the values of the community,” Reykdal wrote.

In a district news release, Marysville Superintendent Zachary Robbins said he felt the committee would benefit the district.

He said: “The district takes the binding conditions very seriously and will continue to work hard to meet each of the required conditions.”

Sophia Gates: 425-339-3035; sophia.gates@heraldnet.com; Twitter: @SophiaSGates.