State Puts Financially Troubled Murphy School District In Receivership

By Mariana Dale
Published: Monday, June 25, 2018 - 4:43pm
Updated: Tuesday, June 26, 2018 - 5:20pm

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Jackie Hai/KJZZ
The Alfred F. Garcia Elementary School is in the Murphy Elementary School District.

The Arizona State Board of Education on Monday voted unanimously to place the financially challenged Murphy School District into receivership.

The move appoints a receiver, essentially a consultant, who will investigate the district’s finances and create a plan to help the district become solvent once again.

The south Phoenix school district is projected to be short between $400,000 and $500,000 this school year and $1.2 million next fiscal year.

“We don’t look at this as something punitive, rather just something to help this district get their finances back in order,” said Charles Tack, associate superintendent of policy development and government relations.

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The Murphy School District serves about 1,400 students in four schools. Between 76 and 95 percent of students at those schools qualify for a free or reduced price lunch.

“It’s a very small community. A very vocal community,” said Interim Superintendent Lori Black. “A lot of members work there. So there’s emotion tied to it.”

Black has worked in the district for six years, but Monday was her first official day as interim superintendent.

The Maricopa County School Superintendent’s office reports it found out Murphy could exceed its budget in early fiscal year 2018, which started in July 2017.

In January, the district was estimated to be $2,138,245 over budget. The county superintendent’s office worked with the district and consultants who volunteered their services to whittle the overage down to hundreds of thousands of dollars.

“We are moving forward. We are taking action,” said Eric Buckmaster, a former governing board member who has volunteered his expertise to the district in recent months. “We are doing the best that we can right now with the resources that we do have.”

Throughout the turmoil, the district has lost several top-level administrators. The governing board had only two members for “much of the 2017-18 school year,” according to board documents.

The county superintendent has appointed three new members to the school board.

The district’s chief financial officer resigned in 2017 and Superintendent Jose Diaz retired in March.

MORE: Financially Embattled Murphy Elementary Board Votes Down 5% Teacher Pay Cut

Hundreds of students have left the district’s four schools in recent years.

“No offense to anybody in Murphy, but it’s just very dysfunctional at this point in time,” said Arizona Superintendent of Public Instruction Diane Douglas.

Simon Consulting LLC will be the receiver. The firm is also the receiver for the Cedar Creek Unified School District in a rural northern Arizona district, which is currently the only other district in the state under receivership.

What is receivership?

The rules for receivership come from ARS 15-103.

A school district can be found insolvent for seven reasons including not being able to pay debts in the “usual course of business,” failing to pay salaries for 45 days and in Murphy’s case, operating with a deficit of 5 percent or more of its revenue control limit.

The receiver, in this case Simon Consulting, takes over the district, investigates its finances and creates a plan to help it improve.

It’s an uncommon measure and the most severe of several steps to try and remedy a school district’s failing finances.

The receiver’s decisions override those of the district superintendent and governing board.

Simon Consulting is also the receiver for the Cedar Creek Unified School District, a rural northern Arizona district which is currently the only other district in the state under receivership.

District Ready For Help

Jackie Hai/KJZZ
Bob Donofrio, former superintendent of Murphy Elementary School District, visits his old stomping grounds. Donofrio thinks the district is headed for financial ruin.

The possibility of the district being placed under outside supervision has divided district employees, parents and supporters, several of whom spoke at Monday’s meeting.

“I think we’ve done good work, but it’s not enough,” said former district superintendent Bob Donofrio, who, until last week, also served as a consultant.

When he lead the district 14 years ago it was a higher-performing urban district that linked schools to local businesses and nonprofits.

“When I came back here, just about a year ago, and saw this, I was brought to tears,” Donofrio told KJZZ in January.

He supported the board’s decision to place the school into receivership.

Corina Mejia is a community liaison in the district.

“We need a chance to prove that we can do it before just putting us into receivership,” she said.

Patricia Blanton, director of student support services and an occasional district bus driver, tutor and substitute teacher, says the district’s problems are the fault of poor leadership.

“Whatever decisions are made, we are going to live with them, because we care about the kids,” she said.

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