School district’s finances woeful

Published 9:00 pm Wednesday, January 28, 2004

MARYSVILLE — The cash-strapped Marysville School District faces a $2.3 million budget shortfall, and enrollment could continue to drop by as many as 400 students in the next two years, according to a new financial report.

Paul Sjunnesen, a retired Everett School District superintendent hired to help Marysville through its financial travails, said he will recommend that the district consider a hiring freeze except for essential positions, and slashing other spending to soften the blow to the district’s budget next year.

In the next few months, after negotiations with teachers and classified employees, Sjunnesen also will recommend job cuts among nonteaching positions for the 2004-2005 school year. Just how many jobs are lost will be determined in part by negotiations with the district’s unions, he said.

"We need to be very clear it’s not a matter of if, it’s a matter of it will be, and we have to do it," Sjunnesen said. "I would say if it’s not dire … it certainly bodes for a very dark future unless something is done."

The Marysville district endured the longest teachers strike — 49 days — in state history in the fall and still doesn’t have a labor contract with its teachers. Negotiations are set to resume in the next few weeks.

In a new financial forecast, the district projects it will lose another 200 students for each of the next two years because of the sluggish economy and other factors, such as a lull in Snohomish County births several years ago resulting in declining numbers of kindergartners.

Many districts in the county are making similar enrollment projections.

Sjunnesen and finance director Jim Baker are outlining Marysville’s financial straits in meetings with district employee groups in the next two weeks.

The district adopted an $82.25 million budget in August, assuming it would have 10,900 full-time students this year. Between parents choosing to send their children elsewhere because of the strike and families moving because of the economy, the district lost more than 460 full-time students this fall.

Districts receive about $5,200 from the state per full-time student, according to the Office of the Superintendent of Public Instruction.

Lost enrollment also affects the amount of money the Marysville district can collect from a three-year, voter-approved maintenance and operation levy. Districts can collect in local taxes only 24 percent of what they receive in state and federal money. In the next three years, if enrollment continues to fall, that could cost the district another $3.36 million in local levy money, according to district projections.

"We simply will have less money to work with," Baker said. "There are some huge storm clouds ahead."

The latest report projects the district’s actual revenues at $80.95 million this year, about $2.3 million less than estimated. Without midyear spending cuts, the district’s reserves would fall from $3.96 million to $1.53 million by the end of the year.

Negotiators for the school district and the Marysville Education Association don’t yet have mediation set for the first time since talks broke down in October. They are considering Feb. 13. Elaine Hanson, president of the 650-member teachers union, said she could not comment on the financial report until she has a chance to review it.

However, she said Sjunnesen’s involvement gives it credibility.

"I trust Paul," she said.

Sjunnesen, who spent many years as a finance director before becoming a superintendent, was hired to study the district’s finances, help the school board with negotiations with teachers and classified employees, and make recommendations about district operations.

Sjunnesen was hired in part to bring an independent analysis to the district. Relations have been strained between the district and the teachers union and between the newly elected school board and Superintendent Linda Whitehead. The new board has met twice in executive session in the past two weeks to discuss a possible buyout of Whitehead’s contract, which has 2 1/2years remaining and amounts to about $130,000 a year.

The philosophically divided school board has begun searching for some areas of the budget to cut. Three new board members — Vicki Gates, Carol Jason and Michael Kundu — recently voted to cut travel by school board members for the year. The district earmarks about $15,000 annually for out-of-district travel.

Incumbents Ron Young and Helen Mount tried unsuccessfully to persuade the other three board members to cut $50-a-meeting school board stipends instead, arguing that workshops and training are important. Annually, the stipend is around $25,300. Mount and Young said they will no longer collect their stipends for the rest of the year.

Gates, president of the school board, said the district needs to make sure it shares its financial reports with the community.

"I think it is vitally important that everyone knows exactly where we are with our finances and the budget," she said. "We want everybody to know where we stand."

Reporter Eric Stevick: 425-339-3446 or stevick@heraldnet.com.