Newport-Mesa Schools Sure Can’t Afford This : Scandal: What’s worse than crowded classes, slashed programs, layoffs and shortages? Alleged embezzlement.

It is considered one of the wealthiest school districts in the state, but a $2.7-million deficit in the Newport-Mesa Unified School District has forced the layoffs of about 200 employees and resulted in overcrowded classrooms that are often short on supplies.

Parents have been hit with a bus fee--$150 a month--for the first time in seven years. Teachers are asking parents to help buy much needed supplies and to volunteer time as aides. Students, too, are grumbling about programs that have been slashed to balance the books in a district where property tax revenue has dropped and enrollment continues to grow.

Then, just as it appeared things couldn’t get any worse, comes news that the district’s chief finance officer, Stephen A. Wagner, is under criminal investigation for allegedly diverting more than $175,000 in school funds to a company he co-owns.

“I felt like I’d been stabbed in the back,” said Martha Fluor, a former bilingual teacher’s aide elected to the seven-member Newport-Mesa Board of Trustees last November.

Many parents in this well-heeled and tightknit school district were already alarmed enough about district finances to lobby for creation of a community budget advisory committee. Now revelations that a trusted employee may have misappropriated money has sent new shock waves, and many parents are wondering whether money allegedly tapped by Wagner has cost dollars for classes.

A group of parents last week collected 350 signatures in two days on petitions calling for the ouster of Supt. John W. Nicoll, who has headed the district for 22 of its 26 years. Organizers say the Wagner case is symptomatic of funding problems over the last few years that have reached crisis proportions this fall.

“Our parents are all very concerned,” acknowledged Fluor, herself a mother of three children in Newport-Mesa schools. “They’re looking to our chief executive officer and saying ‘How could you let this happen?’ I’m telling them that (a school district) is like a large business; sometimes the chief executive officer doesn’t know everything that’s going. Like any CEO, he places trust in individuals of rank to run their department.”

Fluor and Nicoll say emphatically that the school district’s financial woes are unrelated to the Wagner case.

Rather, they blame a drastic drop in property tax revenue due to the recession, cuts in state funding and about $1 million in bookkeeping errors. The result: About 30 teachers and 160 other employees were laid off after the last school year, salaries were frozen and class sizes are routinely running to as many as 35 students per teacher, the largest in 15 years.

District officials also point out that they moved swiftly and aggressively when they learned of the district attorney’s criminal investigation of Wagner last month, suspending him without pay and serving him last week with a notice of dismissal that could become final on Tuesday. They add that auditors also are working feverishly alongside law enforcement investigators to determine how much money may have been diverted.

District lawyers, meanwhile, have filed a claim against the Newport Beach man seeking restitution of $175,356--the sum of four district checks he allegedly wrote to Cobbler Express Corp.

Still, some have nagging doubts.

“One of the thoughts that went through my mind--I think all our minds--is that this might explain some of our recent financial problems,” said trustee Edward H. Decker. “But that’s an unknown until we get the district attorney’s report.”

For employees of the district--the teachers, instructional aides, bus drivers, clerical and cafeteria workers who spend their days caring for the 17,500 children in Newport Beach and Costa Mesa schools--word of possible embezzlement is like adding salt to a wound. They have watched co-workers laid off and seen their paychecks frozen despite contracts calling for automatic increases attached to a rise in the cost of living. And they have tried to stretch their energy and supplies to meet the needs of 400 more students than last year.

Longtime employees say the past few years have been the worst in the district’s 26-year history. In fact, schools throughout Orange County and the state are facing difficult times--layoffs, cutbacks and soaring class sizes--due to the recession and the state’s own budget crisis. But because Newport-Mesa is a “basic aid” district, which depends almost exclusively on property tax revenue in the affluent area, the economic downturn has hit with a vengeance.

The attitude of many may be summarized by a flyer posted in the main office at Pomona Elementary School in Costa Mesa: “We, the unwilling, led by the unqualified, have been doing the unbelievable for so long with so little, we now attempt the impossible with nothing.”

“It’s never been this bad,” says Maya Decker, a 24-year district employee who is now president of the teachers’ union, which still is battling the district over the wage freeze.

Decker talks of kindergarten classes stuffed with 35 children, a language teacher who sees 215 students a day, and one school where 30 math books are spread among 105 first- and second-graders by photocopying lessons with an oft-broken copy machine.

“It’s very, very difficult to be effective,” Decker said.

At Pomona Elementary, where 85% of the 540 students are Latino, the district cut instructional aides and replaced them with lower-paid, part-time bilingual teacher aides.

Last year, there was one aide per grade level, so every classroom had Spanish-language help for at least an hour a day. Now, teachers are lucky if they see the school’s one bilingual aide once every three days, according to main office manager Janet Steward.

“Without an aide, the teachers can’t give the individualized attention that they’d like,” said Steward, a 12-year employee of the school.

Getting textbooks is also a problem at some schools, say teachers.

At Corona del Mar High, the advanced placement biology books arrived six weeks late. English teacher Diane Dickerson said she got her eighth-grade reader just last week--more than two months into the school year--because the district did not process the order she filed in April until the state budget was settled this summer.

“How are you supposed to teach literature if you don’t have a book to send home with the kid?” complained Dickerson, a 20-year veteran of the Newport-Mesa district. “It’s very frustrating because you don’t feel you can give the kids what you’re capable of giving them and what you know they deserve.”

In the faculty lounge at Corona del Mar High last week, teacher after teacher offered vivid examples of how the financial problems have impacted their work.

The school’s largest class is one of its most advanced--a calculus course for 43 juniors and seniors.

Teacher John Weyhrauch shrugs at the task, formerly split into two class periods, but now spread over two classrooms, a sliding door opened for his 8 a.m. lecture.

“You’ve got to get the kids to work more on their own and with each other,” Weyhrauch offers as a strategy for handling the herd. “With two classes, you had two hours to present the material and answer their questions. Now you’ve only got one. The kids aren’t going to get as much individual attention.”

Newport Elementary on the Balboa Peninsula is surviving in part because of support from parents, who have raised $40,000 to pay for physical education, arts and science programs at the school. Dozens volunteer daily as classroom aides, and many donated items on a teachers’ “wish list” of supplies.

Still, the school suffers.

“The teachers are having to do a lot more, are having to pay out of their own pockets,” said Gary March, an aide in the computer lab who has spent the past 23 years working as a bus driver, noon supervisor, and instructional aide in Newport-Mesa. “Everything has just been cut out and cut back.”

Robin Sinclair, president of Newport Elementary’s parent-teacher association, is concerned about the funding crisis and the Wagner case, but remains optimistic. “I have faith in the district that they’ll right the wrongs,” said Sinclair, mother of four sons attending the school. “I have to have faith that the district will fix this situation and we’ll get the money back in the district where it belongs. We really need it.”

Other parents aren’t so confident that district officials are capable of untangling the problems and providing the education they feel their children deserve.

“We were promised by Nicoll and (Deputy Supt.) Carol Berg that children wouldn’t be affected in the classroom by these cuts, but that’s exactly what has happened,” said one parent who is circulating petitions urging Nicoll’s resignation.

“When this came out about the Wagner deal, it just put more icing on the cake,” said the mother who asked not to be identified for fear of retaliation against her children.

Nicoll, who at 70 is the oldest school superintendent in California, says he has no plans to retire. Nor is Nicoll’s heart-bypass surgery scheduled for this week related to the strain of the job, say Fluor and district administrators.

Nicoll could not be reached for comment late last week on the drive to collect petition signatures for Tuesday’s trustees’ meeting. But in an earlier interview, he was bullish on the district’s future.

“This is not the end of the world,” he said. “We’ve still got a great staff and a great bunch of kids. I refuse to let the problems we’re having with the way that one person handled himself cast a pall on the whole operation. This is no time to be Chicken Little. Things are not gloom and doom. Our program isn’t going to fail.”