W-H to lay off 20% of staff; Process will start next week; 30 teachers could be lost in district

By Joshua Benton
Staff Writer

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Nearly 20 percent of Wilmer-Hutchins employees will have to be laid off in the coming months, many of them as soon as next week, school district officials said. That total could include more than 30 teachers.

“You’ll have to choose between several unpleasant alternatives,” James Damm, a financial consultant, told the school board Monday night. “They’re not going to be easy decisions.”

The district’s financial consultants say the school district could run out of money again by March if swift measures aren’t taken. The school board voted 7-0 Monday night to declare a financial emergency, which sets the layoff process in motion.

Meanwhile, a preliminary audit of the district’s finances by the Texas Education Agency says Wilmer-Hutchins broke state law by taking out an illegal $500,000 loan this spring.

According to Mr. Damm, the district currently has 406 employees, 206 of them teachers. He said he recommended at least two – possibly three – separate layoffs.

“I don’t think you can reduce enough of your budget this year” alone, he said. “That would be draconian. This will be unpopular enough.”

The first layoff will begin next week, after the school board meets to decide who will be let go. The second will occur after the school year ends. That summer layoff will involve eliminating 25 positions, some of which could be shed through attrition, Mr. Damm said.

He said it had not been determined how many people will have to be laid off next week. But Mr. Damm said “it could be twice that number,” or 50 positions.

Mr. Damm said the total number of jobs lost could be reduced if administrators or other high-paid employees are laid off. If lower-paid workers are the primary targets, it will take more jobs lost to make up the amount Wilmer-Hutchins needs to cut. Mr. Damm put that amount at “several million dollars.”

“It didn’t happen overnight,” Mr. Damm said about the district’s problems. “The district’s resources have been overtaxed and overspent.”

In addition, Mr. Damm said that the district, “in future years,” should adjust to a lower overall staffing level – about 10 students per staff member and about 17 students per teacher.

Further cuts

At current enrollment levels, that would mean further cuts of an additional 47 positions. In total, the district’s workforce would be 30 percent smaller than it is today.

Even with all these cuts, the consultants said, the district would still have to seek a new loan, backed by tax revenues, in order to pay back a $3.8 million loan due in March. He said the district should seek a loan that would be paid back over five to eight years.

Mr. Damm said that by his analysis, the district has too many employees. That same pattern occurred in Superintendent Charles Matthews’ previous school district, Karnack ISD. Karnack’s enrollment dropped steadily after Dr. Matthews’ arrival there in 1998, but the district did not cut spending accordingly.

As a result, Karnack’s spending per pupil increased from $6,245 to $8,052. That plunged the district from a healthy fund balance to a serious deficit.

Dr. Matthews did not comment on the layoff recommendations during Monday’s meeting.

But by at least one measure, Wilmer-Hutchins’ staffing levels are not particularly unusual. According to data from the 2002-03 school year – the last for which statewide information is available – Wilmer-Hutchins’ staffing levels were only slightly above average for a school district its size.

That year, Wilmer-Hutchins had 6.8 students per employee. The state average for districts its size was 6.9 students per employee. The gap was similar for student-teacher ratio: 13.9 students per teacher in Wilmer-Hutchins, 14.3 statewide.

Possible answers for where the money went could come in the multiple criminal investigations under way in the district. Two grand juries, the Texas Rangers, the FBI and others are investigating allegations of criminal wrongdoing, including misappropriation of funds.

In August, the district ran out of money and couldn’t pay all of its teachers. A fund balance of $1.6 million disappeared in the span of three months, and it has not yet been explained where the money went.

Trimming costs

Meanwhile, the district is trying a number of other ways to trim back on cost, including turning off the lights inside the district’s soda machines. The district was only paying invoices once they are 45 days old because it can’t afford to pay new ones.

Luther Edwards, the board’s president, said he wanted to make sure the layoffs were done according to the letter of the law. “Every time we do a reduction in force, people want to sue,” he said, referring to layoffs the district had to make in the mid-1990s, the last time Wilmer-Hutchins was in dire financial straits.

Information about the allegedly illegal $500,000 loan was included in the TEA’s preliminary financial audit, which was given to board members Monday. The loan was allegedly illegal because it was paid back with money from the district’s bond fund. The district did not have enough regular tax revenue to pay it back.

The audit report says Wilmer-Hutchins had to pay $20,000 in issuance costs to a Utah bank in order to obtain the loan. “The fees paid for this loan raise questions about the district’s efforts to obtain competitive notes,” the report states.

The report also says that some district employees received raises this year – despite a district policy banning raises. That ban was put in place as part of a cost-reduction plan mandated by TEA after Wilmer-Hutchins overspent its annual budget by $1.9 million in 2001-02.