Red ink not new to chief; W-H isn’t first district to go broke under superintendent’s watch

By Joshua Benton
Staff Writer

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The financial mess at Wilmer-Hutchins ISD isn’t the first such crisis presided over by Superintendent Charles Matthews.

In tiny Karnack ISD, amid the cypress trees of Caddo Lake on the furthest edge of East Texas, a healthy fund balance quickly went away when Dr. Matthews became superintendent in 1998.

In Karnack, as in Wilmer-Hutchins, Dr. Matthews insisted the district’s finances were strong while they spiraled downward.

Those who dealt with Dr. Matthews then say they weren’t shocked to hear of Wilmer-Hutchins’ financial collapse, which peaked Friday with word that teachers would go more than two weeks without paychecks because the district is out of money.

“I happened to be in Dallas this week, and I woke up one morning and saw the news,” said Judy VanDeventer, a former Karnack board president. “I said, ‘I’m not surprised. I knew it would come out sooner or later.'”

Dr. Matthews has not returned more than a dozen phone calls seeking comment for this and other stories in the last week.

Karnack’s financial state never reached the point that the district couldn’t meet payroll. But it had a very comfortable fund balance in 1997-98, the year before Dr. Matthews arrived: $560,000, more than twice the level the state considers healthy.

Over the next three years, the number took a tumble: to $275,000, to $4,000 and finally a $91,000 shortfall in his final year in the district.

“Right after we got him in there, I started hearing different rumors about financial problems,” said Elaine Davis, the Karnack board president who hired Dr. Matthews in 1998. “After getting involved with him, I wish we hadn’t hired him at all.”

When Dr. Matthews arrived in Wilmer-Hutchins in 2002, state auditors said the district had a fund balance of $1.6 million. Within a year, that balance was gone, and the district was $139,000 in the hole.

The district’s estimates for the current shortfall range from $100,000 to $600,000.

“He’s a very pleasant man, a likable person,” said Jim Gibson, another former Karnack board president. “But that’s about it. I don’t know how you could rely upon his abilities to be the superintendent.”

Promising beginning

Charles Matthews was born in 1938 in Lecompte, La. He attended Paul Quinn College when it was in Waco, and his first teaching job was in the southeast Texas town of New Waverly in 1968.

The next year, he took a job teaching at North Forest schools, on the northeast side of Houston. Over the next 15 years, he worked his way up – to principal and, in 1980, to deputy superintendent.

In 1984, he was hired to lead Wilmer-Hutchins ISD, the small majority-black school district on Dallas’ south side, even then known for being one of Texas’ most-troubled.

At the time, Dr. Matthews told The Dallas Morning News that “the ultimate goal in everything we do from now on is to improve student achievement.”

“We’re embarking on a new and exciting time for Wilmer-Hutchins. It will take some work, but we’ve got a lot to work with,” he said.

Dr. Matthews remained for 10 years. He instituted Saturday sessions and after-school tutoring for students who needed extra help, and the district established an early-childhood program and worked to improve its management.

There were signs his methods were working. In 1985, the Texas Education Agency removed a set of monitors who had overseen the administration. In 1987, TEA granted Wilmer-Hutchins full state accreditation for the first time since 1980.

But all was not well. State officials demanded an investigation into testing irregularities at one Wilmer-Hutchins school. A TEA analysis found that the district was not “using prudent business practices” and was spending too much on legal fees. The state launched investigations into the district’s bilingual program and payments to contractors.

And in 1987, the Dallas County district attorney’s office started an investigation into claims, raised by residents, of mismanaged funds and other criminal activity. No indictments were ever returned. Dr. Matthews at the time said the investigation was motivated by racism.

Within Wilmer-Hutchins, Dr. Matthews was praised for bringing a measure of stability. In 1991, he was named State Superintendent of the Year by the Texas Association of School Boards.

The district’s test scores had improved, as did the scores of nearly all Texas districts, but Wilmer-Hutchins remained near the state’s bottom. In 1994, students’ poor academic performance was cited by board members in their request that Dr. Matthews resign.

Under his severance agreement, he stayed on the payroll until 1996.

Fresh start

After Wilmer-Hutchins, Dr. Matthews told people he was finished leading school districts.

“He said he wanted to do something different,” said Helen Curtis, then the principal of Dunbar Middle School in Fort Worth. “It was my understanding that he was really done being a superintendent. He was burned out, and he wanted to get into counseling.”

In 1995, Dr. Matthews became a middle-school guidance counselor. Ms. Curtis says he did a fine job in his year at Dunbar, helping students schedule courses, talking with them about their problems and assisting with tests.

According to his resume, he then worked in Dallas ISD as “Wellness Programs Director” from 1996 to 1998. He also returned briefly to Fort Worth as a counselor at Atwood McDonald Elementary, according to district records. Then Karnack ISD came calling.

Karnack, like Wilmer-Hutchins, is a mostly black school district with declining enrollment. When Dr. Matthews took over in the fall of 1998, there were 385 students. Districts that small don’t have finance departments.

“We just had the superintendent and a bookkeeper,” said Ms. VanDeventer, who ran for the board and became president out of concern for Dr. Matthews’ financial management. “It was hard to know how big the problem was because he’d tell you things were good when they weren’t.”

Two former Karnack board members said Dr. Matthews refused to adjust the district’s budget to reflect declining enrollment.

In 1997-98, the year before he arrived, Karnack had 433 students. The district’s operating budget spent $6,245 per pupil – about $1,100 above the state average but not unusually high for such a small district.

In 1999-00, the first year Dr. Matthews controlled the whole budgeting process, enrollment had dropped to 361 students. Even though fewer students meant fewer dollars from the state, Karnack’s budget went up. Operating spending per pupil jumped to $8,052 per pupil – more than $2,000 above the state average. The payroll grew, too, with more teachers and staff.

“He hired a bunch of people we just couldn’t pay for,” Mr. Gibson said.

Like Wilmer-Hutchins, Karnack had dilapidated buildings, and Dr. Matthews pushed a bond issue to build a high school, Ms. VanDeventer said.

“They were in no financial condition to do anything,” she said. “But he tried to make it appear that they were. He kept saying, ‘We can afford it, we can afford it.'”

The bond issue was defeated after Mr. Gibson, Ms. VanDeventer and others campaigned against it.

Over time, some former supporters turned against him.

“I don’t dislike anybody, but I didn’t like some of the things he did,” said Ms. Davis, the board president who had voted to hire Dr. Matthews. “He’d tell me one thing and tell somebody else something else. He caused problems.”

Dr. Matthews still had some support in the community. He used some of the newly hired staff to start popular programs such as Saturday tutorials.

“He was probably the best thing that had happened to Karnack since I was on school board,” said former trustee Jake Haywood, who said some of Dr. Matthews’ critics are motivated by racism. “He was one outstanding individual.”

As spending went up and Karnack’s cash reserves dwindled, several residents decided to run for the school board and put the district on stronger financial ground.

Over two elections, they gained a four-seat majority on the seven-seat board.

“The night before I was elected, he told me, ‘I’ll resign because I know you’re going to get elected,'” Ms. VanDeventer said. “He knew I was determined to get to the bottom of the district’s finances.”

At the first board meeting after the election, Dr. Matthews announced his resignation. He said he wanted to spend more time in Dallas, where his wife and family had lived while he commuted to Karnack.

Ms. VanDeventer said sorting out the books after Dr. Matthews’ departure was a challenge.

“We found bills that hadn’t been paid,” she said. “We found bills that had been paid twice.”

She said it took three years to get the district back to a positive fund balance.

Dwindling fast

After Karnack, Dr. Matthews went back to counseling. He spent the 2001-02 school year at Como Elementary in Fort Worth, the district said.

But some board members in Wilmer-Hutchins had long wanted to bring back Dr. Matthews. As far back as 1996 – when TEA took over the district for a host of financial and academic problems – there had been attempts to rehire him.

In October 2002, the Wilmer-Hutchins school board voted unexpectedly to fire Superintendent Harvey Rayson. (Mr. Rayson had been Karnack’s superintendent from 1988 to 1990.) Four days later, they hired Dr. Matthews to take his place.

As in Karnack, the enrollment in Wilmer-Hutchins has declined steadily, from 4,017 when Dr. Matthews left in 1994 to 2,902 last year.

Since Dr. Matthews’ return, Wilmer-Hutchins’ cash reserves have evaporated from $1.6 million to a deficit.

Meanwhile, his salary has jumped. Mr. Rayson was paid $95,100 a year. Dr. Matthews was hired at $125,000; a few months later, trustees gave him a raise to $178,600.

Dr. Matthews has the second-highest salary of 892 Texas superintendents who work in districts with fewer than 5,000 students, according to state data.

Last week, even before the Wilmer-Hutchins missed payroll, TEA officials announced an investigative audit of the district’s finances. Auditors arrive today.

Some of those who worked with Dr. Matthews in Karnack say Wilmer-Hutchins might have seen it coming.

“I was never so surprised in my life as when I saw on the TV that he had been reinstated as superintendent in Wilmer-Hutchins,” Mr. Gibson said. “It just seems like trouble follows him around.”