KATY ISD TRUSTEES CONSIDER OPTIONS TO CUT EXPENSES:
Katy ISD trustees consider options to cut expenses
HELEN ERIKSEN, CHRONICLE CORRESPONDENT
Updated 5:30 am, Tuesday, June 7, 2011
Katy Independent School District could save $25 million by reducing its contribution to its employees' health plan and by eliminating bus transportation for certain students among other cost-saving measures, according to a district consultant.
These are some of the options the district will consider in addressing a $4 billion statewide budget cut in public school funding.
School officials have said the district budget could be $50 million leaner as a result of state cuts.
The district budget will be discussed during a special meeting of the board of trustees at 5:30 p.m., Wednesday, June 8, in the Education Support Complex, 6301 S. Stadium Lane.
Bill Lenhart, of WCL Enterprises, helped school district officials identify several measures to soften the impact of the expected shortfall in school funding for the 2011-12 school year. He made a May 23 presentation to trustees on the options to reduce operational costs.
"My focus in this was on non-campus functions, processes and staffing," Lenhart said. "I did not look at any of the staffing levels associated with any schools within the district."
In a letter to the Katy ISD community last week, Katy Superintendent Alton Frailey provided details of Lenhart's proposed cuts. He said the district's goal to address the shortfall was to find places to cut that would result in losing the least number of jobs.
The House is expected to vote Thursday on SB 1, the bill that would implement the reduction in state funding to school districts.
According to Lenhart's analysis, the district could save $4.3 million by eliminating bus rides for students who live within a two-mile radius; these rides are not reimbursed by the state.
He said the district could trim another $4.2 million from the budget by decreasing its contribution to the employees' health plan and limiting it to the minimum required by state.
Other reductions proposed include savings of $1.8 million in lowering the number of maintenance and operations staff by 102 positions through attrition; $2.1 million in eliminating about 79 professional, technical and paraprofessional positions; another million can be cut in decreasing overtime; a reduction of $639,000 in electricity costs by restricting access to district facilities throughout the year; $690,000 in savings from nixing the use of certain academic and operational software and $500,000 by providing cell phones to fewer personnel.
Frailey said WCL Enterprises has worked with other local districts such as Cy-Fair, Humble and Spring Branch.
Lenhart said he met with Katy ISD staff for two months to develop the recommendations which include in-depth financial analysis as well as the evaluation of weighted average daily attendance.
"One of the goals of looking at this from the outside was to minimize the impact on staffing within the district as much as possible or where it was necessary to do it through means like attrition or voluntary termination," Lenhart said.
A complete list of the recommendations is on the district's Web site, www.katyisd.org.
[What is interesting about this account of Alton Frailey's attempts to cut the budget are two things. The first is that one must remember that Alton Frailey and his head of human resources did not know that Texas has a biennial legislative process, and that budgets and finances for the state are in terms of two year increments. So Frailey failed to understand that the cuts in state funding were spread over two years, not one, so they weren't nearly as bad as he thought. Can anyone imagine that he could have been so clueless? Lots of his actions were precipitated be the fact that (1) he didn't understand the process one bit, and (2) he had been overspending tax dollars like they were going out of style, and he found himself looking at severe cutbacks because of both of HIS actions!
He had just gone through a public thrashing when he heard that the State had cut his budget by 50 million dollars, and his immediate reaction had been to lay off 350 teachers! As it turned out he was wrong about the amount of the cut, and the teachers didn't need to be fired. He had egg on his face, and he was in panic mode.
In June he hired a consultant to help him out of his own mess. The thing was, he just was spending more money that he didn't have.
He authorized the hiring of WCL Enterprises and its CEO Bill Lenhart, (the first of several such unwise hirings over the years, of consultants that knew no more than long term KISD administrators like Bill Moore, in my opinion).
While KISD isn't transparent, evidently Beaumont ISD is, and so we can look at a contract that was probably similar to Katy ISD's for this service:
Can anyone even imagine what a waste of tax dollars this probably was when KISD had award winning financial people that were very competent already in their employment! What could possibly have been wrong with the School Board that they would go along with such a matter? What did the Board know that the public never did? Was KISD in the same kind of trouble that BeaumontISD was?
As it turns out, Beaumont was in deep trouble when they hired WSL, as is evidenced by this article:
BISD owes state $1.5M for overestimating attendance
By Brooke Crum Updated 9:16 am, Tuesday, May 13, 2014
Trustee Tom Neild asks questions of Bill Lenhard
[sic], with WCL Enterprises, during Monday's meeting. The Beaumont Independent School District board of trustees held their agenda review meeting on Monday night.The Beaumont Independent School District board of trustees held their agenda review meeting on Monday night. ... more
The Beaumont school district --already heading into budget season short $8 million because of an embezzlement scandal and the loss of industrial tax revenue -- now owes the state $1.5 million.
Bill Lenhart, managing principal of WCL Enterprises, the Houston-based consultant firm hired to clean up the district's finance department, told trustees Monday night that BISD overestimated its average attendance rate this past school year.
The Texas Education Agency allocates funds to individual school districts based on the average number of students who attend school each day.
Because BISD reported more students than were actually enrolled, the district will have to return $1.5 million, Lenhart said.
Additionally, BISD will receive less money from the state this year because student enrollment decreased from last year, Lenhart said.
District 6 trustee Tom Neild said the overestimation was a "total shock" to him because the attendance reports he receives from the district each week did not indicate a significant decline in enrollment or attendance.
Lenhart suggested the district consider eliminating some positions during budget workshops, which begin May 29.
Adding to the district's financial troubles, BISD is spending more money at a faster rate than last year, Lenhart said. The district is currently operating on a $158 million budget, he said. Last year's budget was about $171 million.
If the district continues to spend at this pace, it will have used $172 million at the end of the fiscal year, Lenhart said.
Lenhart's company projected a net cash balance of $15 million at the end of the year based on the $73 million BISD had left at the end of March.
He said one area where the district is spending more than last year is litigation. BISD spent about $1 million more in legal fees this year than last.
In the past year, it also came to light that Beaumont ISD lost about $4 million to two employees who recently plead guilty to embezzlement charges. Additionally, the district will get $4 million less in taxes because ExxonMobil successfully challenged the formula used to determine its valuation.
Lenhart said the district has instituted spending cuts to help save money, such as canceling all blanket purchase orders. It is also cutting back overtime in the custodial and maintenance departments.
BISD spent more than $1.6 million in overtime from Sept. 1 through May 12, according to Lenhart.
Here is an article about the Katy ISD teacher firings where one can see the lack of a coherent policy is quite evident.
Katy ISD students walk out in protest over teacher layoffs
Students walk out in protest over teacher layoffs
Hundreds rally in Katy ISD
By Robert Stanton and JENNIFER RADCLIFFE
Published 5:30 am, Thursday, April 14, 2011
Hundreds of students in the Katy school district walked out of class Thursday to protest teacher layoffs caused by a feared $50 million budget shortfall.
The two largest gatherings were outside Morton Ranch and Cinco Ranch high schools, but students from other campuses also rallied around the roughly 350 Katy Independent School District employees notified this week that their positions were being eliminated.
At the corner of Cinco Ranch and Commercial Center boulevards, about 100 students carried posters that read "Save our Teachers" and "Honk for Teachers."
"They're firing a lot of the good teachers when they don't need to," said Casey Burson, a 15-year-old sophomore at Seven Lakes High. "The district has an $80 million balance in the account and they just waste so much money."
Schools across Texas are grappling with the $7.8 billion reduction in education funding included in the budget passed earlier this month by the House. Gov. Rick Perry said Thursday, however, that walking out of class isn't the right response from students.
"There are better ways to send your message than walking out of the classroom," he said. "The fact of the matter is, I feel quite confident that the Texas Legislature will fund our schools appropriately. At the end of the day, being in the classroom is a lot more important to them than protesting, particularly during school hours. If they want to come here on Saturdays and Sundays or after school, have at it."
Other options considered
Politicians are considering an array of options, including increasing taxes or drawing down savings to cover the gap.
Still, local school systems must prepare for the worst. Over the last few weeks, the Houston ISD has issued about 950 pink slips to teachers.
Other districts have managed to weather the storm without layoffs. Alief ISD, for instance, is coping with a $10 million to $25 million shortfall mainly by eliminating positions through attrition.
"There's no involuntary reductions, no salary reductions, no program cuts," district spokeswoman Susan Castro said.
Katy ISD spokesman Steve Stanford blamed the layoffs squarely on state budget cuts.
"There are some very real reasons for why this is happening," Stanford said. "It is a direct impact of what is happening in Austin."
But a spokeswoman for Advocates with Americans for Prosperity, a nonprofit taxpayer advocacy group, said the state isn't to blame. Texas school districts should be reducing costs at the administrative level, said Cindy Mallette, grass-roots manager for the group's Texas chapter.
"This is an act of dramatics on the part of the administration," she said. "Kind of a shock and awe."
Some students participating in Thursday's protest pointed out alternative ways to save money.
"We have 'smart boards' and we don't need them," said James Breaux, a sophomore at Cinco Ranch High, referring to interactive whiteboards that are operated with touch detection.
Katy Superintendent Alton Frailey met Thursday morning with a small group of students at Morton Ranch High School to address their concerns, Stanford said.
The 350 Katy educators who are losing their jobs at the end of the school year were notified in person this week.
"We felt it was better to meet with them rather than give them a letter," Stanford said. "Some were very emotional, and they had the option to go home if they wanted to and let the substitutes take over."
Students' reaction to the news, he added, "is a testament to how much our kids care. They love their teachers and they've got great relationships."
Stanford said none of the students will face discipline.
Gio Smith, a Cinco Ranch freshman, wasn't worried.
"If there is punishment," the 15-year-old said, "it was worth it."
Ed Castillo, a 2007 Cinco Ranch High graduate who caught wind of the protest via Twitter and Facebook, watched from across the street.
"I'm definitely proud of them," said Castillo, 21.
Uptick in similar protests
Angus Johnston, an adjunct professor of history at the City University of New York and a historian of student activism, applauded the Katy students. Funding shortages across the county have created a groundswell of student activism this spring, he said. On March 11, Johnston tracked student protests in at least 20 states, including one in Austin.
"I really think it's kind of extraordinary," said Johnston, who runs studentactivism.net.
While local school systems may have other options and students may not have all the information, the activity helps draw attention to an important topic, Johnston said.
"It's a very big deal," he said. "It sort of sends up a flare."
Staff writer Joe Holley and correspondent Helen Eriksen contributed to this report.
robert.stanton@chron.com