By Christin Ayers

SAUSALITO (KPIX 5) — A state report is giving the Sausalito school district a failing grade. It claims funds are being funneled away from a mostly-black public school, straight into a charter school.

Sausalito is world famous for its spectacular location and beauty, but a battle over education is brewing that some say tarnishes that fairy tale picture.

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It’s a tale of two schools: One in the exclusive and mostly white hillside neighborhood that overlooks the waterfront.

The other is in Marin City, the historically black and poorer side of town on the other side of the freeway.

“I don’t think there’s favoritism going on,” parent Kurt Weinsheimer said.

Weinsheimer has three children attending Willow Creek Academy, the district’s K-8 charter school, and sits on its board of directors

“It’s a pretty magical place that we are really passionate about,” Weinsheimer said.

There’s an emphasis on a rounded education, art, music and academic achievement at Willow Creek Academy.

But it’s a completely different story at the district’s public middle school, Bayside Martin Luther King.

District officials wouldn’t allow reporters to talk to anyone inside. But, according to district data there have been major funding cuts. There’s no longer an art teacher, music teacher, or even a fulltime gym teacher.

Even credentialed teaching positions in math and science have been cut this year. As a result, test scores have plummeted.

Zero percent of students tested at grade level in 7th and 8th grade at Bayside MLK in the 2014-15 school year.

“Its criminal to have a school have those kind of performance outcomes,” Bettie Hodges, who runs an after school study program for Bayside MLK students, said.

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Hodges says she gets middle schoolers who can barely read or write.

Yet, when she brought the test scores to the attention of the Sausalito-Marin City School Board, she was surprised by what she heard.

“One of the supervisors said we have never seen this data before. And I am, like, ‘how is that possible?’” Hodges said.

Along with others in her community she complained to the Marin County Board of Education, and Superintendent Mary Jane Burke.

“It’s totally unacceptable. So what we have to do is look at what is going on.  What is happening?” Burke said.

So, Burke commissioned a state education task force to write a report, which just came out this month.

It concludes the Sausalito-Marin City School District diverts money and resources, possibly as much as $1.9 million this school year alone, to Willow Creek. And, that’s at the expense of the mostly minority, low income children at Bayside MLK.

“There is money available, but it is currently being provided to the independent charter school, rather than caring first for these children,” Burke said.

The district’s superintendent originally declined to talk to us, then he agreed to an interview, which he canceled later. Instead, he sent a statement acknowledging that the report raises questions and concerns and saying he plans to create some sort of action plan.

But, at Willow Creek, they had plenty to say. “It is shocking that first of all you would have a report that would get so many facts wrong,” Weinsheimer said.

Weinsheimer says more money’s going to Willow Creek because there are more than twice as many students, including half the kids from Marin City.

Burke says she’s asked the state to intervene.

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“There is a deep-seated feeling that there is segregation happening in this community. It does need to change and it needs to change immediately,” Burke said.