Fort Worth school district declares financial emergency for 2nd year

FORT WORTH -- The school district declared a financial state of emergency for the second year in a row as officials try to get a handle on their budget woes.

Trustees voted 5-3 Tuesday night to continue what is called its state of "financial exigency," a step required by the state if the district eliminates jobs. Last year, the district cut about 75 positions, mostly campus monitors, to help reduce a budget shortfall.

Trustees Christene Moss, Juan Rangel and Carlos Vasquez voted against the motion. Trustee T.A. Sims was absent.

Vasquez said he opposed the motion because the district will have about $100 million in reserves, more than originally projected.

"I don't think this is the right thing to do at this time," Vasquez said.

Administrators said the district needs to protect its reserves because it is unlikely to receive additional funding in the next three years while fixed costs are still rising.

Chief Financial Officer Hank Johnson said that laying off employees would be a last resort and that administrators are looking at various options to save money, including furloughs and pay freezes.

"I don't want to lose any jobs here in Fort Worth ISD," he said.

Larry Shaw, executive director of the United Educators Association, which represents area school employees, said declaring financial exigency tells faculty that the district can't be trusted to honor a contract.

"What that says to the instructional staff of the district is that you need to start looking for another job," he said.

State funding concerns

A Houston attorney involved in the last two school finance lawsuits against the state gave trustees a brief presentation on the current situation with the funding system.

David Thompson said the system has eroded the state's share of funding to what school finance was like before 2005, when Texas courts ruled that funding system unconstitutional.

The courts found then that the system essentially created a state property tax, which is against the Texas Constitution.

He said most districts, including Fort Worth, are at the $1.04 maximum tax rate allowed by law without calling a rollback election. Additionally, the Legislature created a per-pupil funding limit used to determine how much revenue a district can raise.

For example, Fort Worth's limit is $4,764, which is below the state average. For Austin, which has about the same student makeup and enrollment, it is $5,756, which allows that district to raise $93 million more than Fort Worth.

"In Fort Worth, we remain concerned about both adequacy and equity," Superintendent Melody Johnson said.

Thompson said the goal is to first work with legislators to get relief, but he did note that a growing unrest has spurred discussions across Texas to find "alternative ways to bring these the attention that they need."

Payroll redux

In other business, trustees voted to seek requests for proposals for two external audits of the payroll.

One audit would look at previous payrolls, and the other would look into payroll procedures.

The district switched payroll systems last year, a move that resulted in about $1.5 million in overpayments to employees and former employees.

An internal audit found no evidence of fraud, but some trustees had concerns that the sample size was too small and that the audit was not thorough enough.

EVA-MARIE AYALA, 817-390-7700