For Immediate Release
August 3, 2023
Marysville School District Faces Binding Financial Conditions
The Marysville School District is facing a substantial financial challenge. The District is taking steps to enter into binding financial conditions under the requirements of the State and the Office of Superintendent of Public Instruction.
Msvl. WA - The financial challenges of the Marysville School District forced the district to make significant reductions earlier this spring to prepare to submit a balanced budget to the State later this month. These challenges are due to flat enrollment, inadequate state funding, failure to pass two levy measures during the spring of 2022, and the end of federal ESSER funding. The district made some difficult decisions to reduce spending to make up for the shortfall to balance the budget, including giving layoff notices to staff in all areas across the schools and district and reducing district-level administration and educational programs.
The District has taken several additional steps to reduce the shortfall, including freezing expenditures, minimizing overtime, reviewing and reducing external contracts, and meeting with labor groups in good faith to discuss potential concessions. Unfortunately, the District did not reach agreement. The District is now working with the state to address the financial concerns with increased purpose and resolve. The next steps require the district to enter into “binding conditions.” Binding conditions (RCW 28a.505.110) occur when a school district cannot submit a balanced budget to the State because expenditures exceed revenues. These conditions are necessary and are placed upon a school district when it cannot present a budget with a positive fund balance for a given fiscal year.
Although the district passed its levy in February 2023, the funds will not arrive until May 2024, resulting in a year of lost funding. The failures have had a major impact on its fiscal health. “School districts should not have to rely on public levy funds to operate. Levies place an undue burden on taxpayers, and when they fail, the burden falls on school districts to reduce programs that impact students, student achievement, and staff, such as our district is experiencing now,” says Superintendent Zachary Robbins. “There has never been a district of our size facing binding conditions, but it could happen to other districts as a result of how schools are funded, including non-sustainable grants and unfunded mandates, and relying on public funds to operate schools in our state. It is the perfect storm of financial challenges districts face right now,” he added.
Dr. Lisa Gonzales, Executive Director of Finance and Operations, will explain binding conditions and rationale at a work study session of the Board of Directors scheduled for August 7, at 5:00 pm, at the District’s Educational Service Center Board Room. The board will take action on a resolution to petition budget receivables at its regular session meeting at 6:00 pm.
Since entering the district on July 1, 2023, Dr. Gonzales has carefully reviewed the budget and taken the necessary steps to address the shortfall, including preparing for the binding conditions. This includes closely reviewing each revenue and expenditure area and finding the ability to save the district nearly $28,000 by paying back a Capital Projects loan early. “The District’s projections from February and March were an estimate. Starting in March and April, the District took steps to be responsible stewards of taxpayer dollars, including freezing purchase orders and hiring, minimizing overtime, closely examining external contracts, and identifying duplication of instructional technology programs, all of which allowed us to recognize the savings by July. This enabled us to pay back the loan earlier than expected,” said Dr. Gonzales. “However, we know with 100% certainty we will need to borrow money in the future to meet previously bargained agreements, including a full pass-through of the Inflationary Price Deflator (IPD - also known as a cost of living adjustment) and an additional 3% raise for the majority of staff,” she added.
“As we continue to address our budget shortfall and these binding conditions, our school district is committed to providing quality education to all students, even in the face of these financial challenges,” said Dr. Robbins. “We will continue to keep our community informed along the way,” he added.
Questions about the district’s finances may be directed to communications@msd25.org, call (360) 965-0005, or visit the district’s webpage dedicated to the budget at https://www.msd25.org/page/budget-2023-2024.
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Contact:
Jodi Runyon, Director of Communications, Engagement, and Outreach jodi_runyon@msd25.org (360) 965-0005