AP: Texas

01/23/2005

By LIZ AUSTIN  / Associated Press

Dilapidated buildings, a $3 million debt and allegations that students cheated on state standardized tests have pushed the Wilmer-Hutchins school district to the brink.

And there's more: an indicted school superintendent, local and state investigations into possible misuse of tax money and a desperate plea to taxpayers to save the school system.

"This thing's like an onion," said attorney Phillip Layer, who filed a lawsuit against the school district on behalf of several residents. But as you peel back the layers, "it keeps growing though instead of getting smaller."

Wilmer-Hutchins' survival likely hinges on voters approving a referendum, likely in May, to allow the school district to tax property owners at a rate higher than a nearly 50-year-old local law allows. The district also must restructure a $3 million loan due in March.

Taxpayers have already paid a higher rate for at least 20 years, even though school officials can't prove they ever got voter permission to exceed the 1956 local cap of 90 cents per $100 of assessed property value. Over time, the rate has gradually been increased to about $1.50 per $100, right at the maximum allowed by the state.

If the referendum fails, Wilmer-Hutchins will lose about 30 percent of its revenue, or about $6.1 million per year, interim superintendent James Damm said.

"It comes to a vote of survival of the district," he said.

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Wilmer-Hutchins is located about five miles south of downtown Dallas, where gritty urban decay meets cotton fields. The district draws from the tiny cities of Wilmer and Hutchins, along with part of Dallas and the south suburb of Lancaster.

Its 3,070 students are overwhelmingly black or Hispanic, and poor — 78 percent of them received free or reduced-price lunches during the 2003-04 school year.

Eliminating about 80 jobs and closing three small schools should result in a balanced budget for this year, Damm said. But there's nothing left to chip away at the roughly $3 million fund balance deficit the district built up over the past two years.

Damm said he doesn't know how the district accumulated so much debt.

"Much of it was in personnel, but I don't know exactly where," he said.

The state has shuffled financial and academic monitors in and out of Wilmer-Hutchins since the early 1980s and took over its operations between 1996 and 1998.

The most recent problems became apparent in August, when storm damage exacerbated years of accumulated maintenance problems and delayed the start of classes at the high school.

As authorities began looking at the district's finances, corruption allegations surfaced — document shredding, double payments for expenses and the illegal use of property tax revenue to pay off a loan. The FBI and the Texas Rangers joined the district attorney's investigation in September.

A Dallas County grand jury then indicted Superintendent Charles Matthews and the district's maintenance director in October on felony evidence tampering charges. Both later were fired, and each faces an April trial.

About a week later, the state appointed a two-person management team to oversee all the district's financial decisions.

Then the cheating allegations surfaced.

An analysis by The Dallas Morning News in November found third-graders at one elementary school had the best reading scores on the Texas Assessment of Knowledge and Skills last year despite a mediocre history of academic achievement. The school twice has been labeled "low performing" by the state, most recently in 2000, ranking it in the bottom 3 percent of all Texas schools.

The TEA is investigating and will send monitors when students take the high-stakes test this year, Damm said.

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It's been a challenging — sometimes frustrating — two months for Damm, the former chief financial officer for the Plano school district north of Dallas.

"Every time we look at a new area we find something else that has to be studied and reviewed," he said. "One of these days we're going to run out of doors to open and have that skeleton behind it."

Management team member Michelle Willhelm said it isn't unusual to uncover problems at districts under intense scrutiny. But she admitted she was stunned by the condition of Wilmer-Hutchins' schools.

"The facilities are just the worst I've ever seen," said Willhelm, the former superintendent of the Alief school district in Houston.

School officials were told two years ago in a report from the Texas Association of School Administrators that almost all the district's schools should be razed because of poor maintenance. Only 6 percent of classrooms met minimum standards and some had major safety issues, the study found.

But in a September election that turned largely into a referendum on the district's leadership, voters rejected a $68 million bond proposal that would have funded school construction and renovation.

That has Damm and other district supporters concerned about the tax rate referendum. Damm said Wilmer-Hutchins would probably have to fold and divide its students among neighboring districts if the referendum doesn't pass or if the $3 million loan isn't restructured.

"It's not an issue of voting for one faction or another or voting for the board or the superintendent or anything else," Damm said. "If it doesn't pass, the district can't really succeed."

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Some residents say Wilmer-Hutchins is beyond hope and should just be dissolved.

Longtime resident and former school board member Lionel Churchill said he's cautiously pleased with the district's progress under Damm and the TEA team.

But, he said, "when the monitors leave, will there be behavioral modification in this district or do we go back to business as usual?

"We will, unless we see some really significant changes in the culture of this school district," Churchill said.

Churchill said his group, Wilmer-Hutchins ISD Concerned Citizens, has collected 2,000 signatures on a petition calling for the district's abolishment.

But Damm urges residents not to give up on the district as it works to boost achievement by restructuring the curriculum, renovating school facilities and raising teacher salaries.

"We can make those kind of changes here and make this a quality instructional program that everyone can be proud of," he said.

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On the Net:

Wilmer-Hutchins School District, http://wilmerhutchins.ednet10.net/