To solve $17.5M shortfall, Marysville schools could borrow millions

MARYSVILLE — The Marysville school board unanimously approved a new budget this week as it works with the state to solve its staggering $17.5 million deficit.

Before Monday’s special meeting to approve the budget, dozens of employees protested outside the board room over union contracts, budget cuts and the district’s financial transparency.

The board adopted the budget weeks after entering “binding conditions,” a requirement to work on budgeting with the state since the district spent more than its revenue last school year. The district plans to borrow millions from future revenue, funded by a Snohomish County treasury loan with interest, to balance out the deficit over the next three school years. District leadership is waiting on loan terms from the county to find out exactly how much they can borrow.

The district has cut over 50 positions and at least three learning programs so far, and may leave several empty positions from retirements and resignations unfilled. Educators can be hired back depending on school enrollment.

The district is planning more layoffs and considering furloughs with hopes to get out of the red by the 2026-2027 school year, according to Monday’s budget presentation.

Becky Roberts, the Marysville Education Association president and a former Marysville Pilchuck High School teacher, said the district’s financial conditions put student success at risk.

“This is going to affect staff and students for years to come,” she said in an interview last week.

The Marysville School District is not the only one with financial challenges, but it is the only district of its size facing binding conditions in the state. Leadership has blamed flat enrollment, inadequate state funding and a steep drop in local support for a district tax levy. Voters rejected the levy twice in 2022, creating a $25 million loss according to the district.

Roberts said educators are confused about how the deficit has reached this point. They believe the district isn’t taking accountability for overspending after the levy failed.

“The district didn’t understand what was happening with their own budget, which made it hard for them to communicate to us,” Roberts said.

District spokesperson Jodi Runyon said leadership is working to provide clear, factual information about the budget.

“Our annual budgets are audited and reviewed by the state,” she said. “There’s no hidden money or slush fund. … We’ve been very transparent.”

Outside staff cuts, the district has limited travel and reduced spending by 10%. Leadership restricted access to p-Cards — charge cards employees used at their discretion that made it hard to track spending — from 200 cards to five.

Marysville Education Association members examined the district’s finances available online through the state Office of Superintendent of Public Instruction, Roberts said.

“I think they overspent last year, and they didn’t plan appropriately,” she said.

The district’s full financial records from last year are set to be available by mid-September.

Lisa Gonzales, the district’s new financial director, said the double levy failure is the main reason the district is in the red. Although the levy passed the third time it was on the ballot, the district will not start receiving money until 2024.

“If you added $25 million to the revenue, we wouldn’t be having this conversation,” she said. “Financial mismanagement is not an accurate depiction at all.”

Gonzales will begin hosting public meetings this month to share information and answer questions about district finances. She has started the video series “Budget Bytes” to help people understand the district budget process.

Leadership hired Gonzales in June to guide the district toward financial health. Prior to coming to Marysville, Gonzales managed finances at Mt. Diablo Unified School District in California. After the 2020-2021 school year, several unions in the Mt. Diablo district brought a “no confidence” resolution claiming Gonzales had “presented incorrect and damaging information” to the school board.

Gonzales said the vote was a tactic union members in the Mt. Diablo district used prior to going on strike.

“If any of it were true, I wouldn’t have received a $30,000 salary increase and the district wouldn’t have renewed my contract,” Gonzales said. “I wouldn’t have been voted business leader of the year.”

In 2022, the Association of California School Administrators awarded Gonzales “Business Services Leader of the Year” for her work at the district. Gonzales had served as the association’s president from 2017 to 2018. Gonzales said the Mt. Diablo district had approved $21 million in staff raises when the pandemic hit. The district struggled financially, she said, but she helped turn it around.

Roberts said the Marysville Education Association reached out to educators in the Mt. Diablo district about the accusations.

“Language in the resolution was very concerning to us, especially given our financial situation,” Roberts said.

Mt. Diablo Unified School District leadership declined to comment, and a Herald reporter couldn’t reach the district’s unions.

“I am the same ethical, honest leader that I was in California,” Gonzales said. “People can say what they want to say. The proof is in the pudding.”

Runyon, the Marysville spokesperson, said the claims about Gonzales’ past work “are typical during difficult fiscal times and may be unsubstantiated,” and if staff have concerns they can reach out to Superintendent Zachary Robbins.

To further transparency, Gonzales is forming a budget committee that will include district leadership, union bargaining groups and community members.

“We are here, we are an open book and we are more than willing to talk,” Runyon said. “We care about students, staff and families and we all have to work together.”

The district will meet with the state every quarter to review its finances as part of its binding conditions agreement. Updated information about the budget can be found on the Marysville School District website.

Sydney Jackson: 425-339-3430; sydney.jackson@heraldnet.com; Twitter: @_sydneyajackson.