W-H can’t cover payroll next week; District hopes to pay workers by the end of the month, is working on a loan

By Joshua Benton
Staff Writer

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The leaders at the top are changing, but the news is familiar: Wilmer-Hutchins will not be meeting payroll this month.

Interim Superintendent James Damm said Wednesday that the district will not have enough funds to pay its employees their monthly paychecks Wednesday. The district is seeking a loan, and it hopes employees will be paid before the end of the month.

“We’re working on a couple of things,” Mr. Damm said.

The district’s principals were told about the problem Wednesday morning and asked to inform their staffs.

Mr. Damm took over last week after Superintendent Charles Matthews was indicted on a felony evidence-tampering charge. On Tuesday, the Texas Education Agency announced it would take charge of the troubled district’s financial affairs by imposing a state management team.

The state intervention is based on the results of a TEA audit, which found significant financial mismanagement.

That audit, in turn, was launched in part because Wilmer-Hutchins ran out of money and couldn’t meet payroll on Aug. 25. Employees spent the next two weeks juggling bills and trying to scrape together money. They were finally paid Sept. 9, after state officials made a previously scheduled payment to the district.

November may not be the last time paychecks are delayed in Wilmer-Hutchins. The district relies on state funds for about 55 percent of its budget, and it has been able to meet payroll this fall in part because the state has made monthly deposits of more than $1 million into district coffers.

But after a final payment Nov. 25, Wilmer-Hutchins is not scheduled to receive any more state foundation school fund money until April. Without an infusion of cash, the district won’t be able to pay employees in December, either.

Making payroll in the first months of 2005 should be less problematic, as local residents begin to pay their annual property taxes.

Meanwhile, one of the figures most closely associated with the district’s financial collapse will soon be returning to office. Mr. Damm said he has brought back the district’s chief financial officer, Phillip Roberson.

Dr. Matthews suspended Dr. Roberson with pay Sept. 17 as the district’s financial operations came under scrutiny from state officials and multiple law enforcement agencies. Over the last several months, as Wilmer-Hutchins’ finances unraveled, Dr. Roberson said several times that he did not know the size of the district’s deficit or where its $1.6 million fund balance went.

Mr. Damm said that if Dr. Roberson was going to be paid his $78,000 salary, he might as well be performing work for the district. “He can pay his way,” Mr. Damm said. “He has a degree of expertise, and I want him to use that.”

Dr. Roberson will no longer be the district’s chief financial officer, however. That title will go to Bill Goodman, a financial consultant for the district since September. Dr. Roberson will retain the title of business director.

The change in Dr. Roberson’s status reduces by one the number of people the district is paying not to work. Dr. Matthews, who is paid $175,000 a year, and indicted maintenance director Wallace Faggett, who is paid $63,500, are both still being paid while suspended because of their legal troubles.

Mr. Damm and Mr. Goodman are both paid substantial daily rates. And the two-person management team announced Tuesday also will be paid by the district at a rate of $480 per day each. That works out to nearly $250,000 per year, although Mr. Damm said he expected the state managers would actually work less than full time.

The district will soon have one other change in its financial arrangements. Wells Fargo, the district’s depository bank, has formally asked the district to sever their relationship. Mr. Damm said the district received the bank’s request earlier this month, and it will take effect after the first of the year.

The district is talking to other banks, seeking a replacement.

Mr. Damm said Wells Fargo provided no reason for its decision, but it comes on the heels of Wilmer-Hutchins’ financial near-collapse over the last few months. “They said, ‘We want out,'” he said. “I can’t say I can blame them.”