GALVESTON — Eleventh-hour funding promises from unnamed sources have prevented a massive reduction in force by Galveston County’s largest employer, University of Texas Medical Branch, officials announced Tuesday.

However, the institution incurred $710 million in Hurricane Ike-related expenses at its main campus, of which only $100 million would be covered by insurance. It was also unclear how long it could sustain a $50 million monthly payroll with most of its major revenue generators offline.

The news left thousands of employees fearing for their futures and officials unable to offer solid assurances.

Going into Tuesday’s town hall meeting at UTMB, sources told 11 News that university officials were prepared to announce massive layoffs – up to 4,000 people.

When Galveston Mayor Lyda Ann Thomas was briefed on the plan Sunday night, she got on the phone with state legislators.

“It was incredible and incomprehensible that anyone in Austin would use this time to put 4,000 into the streets of Galveston and Galveston County when we have citizens that don’t have shoes on their feet or a roof over their head,” said Thomas.

“It’s a complex problem that defies immediate solutions,” said medical branch President David L. Callender, who spoke to hundreds of employees at a noon meeting attended by Galveston Mayor Lyda Ann Thomas, state Rep. Craig Eiland and Congressman Nick Lampson, among other elected officials.

“Let’s be clear, until approximately noon (on Monday) it was my understanding, based upon University of Texas officials, that they were ready to announce today the firing or the laying off of approximately 4,000 people,” said Galveston State Rep. Craig Eiland.

While UTMB president David Callender and UT System Chancellor Kenneth Chine said there would be no layoffs for now, they painted a very bleak financial picture for UTMB and acknowledged that jobs would be cut in the future.

The medical branch, which operates a hospital, research laboratories and a medical school, would return, but not as it was, Callender said.

Callender said that John Sealy Hospital, which supplies the bulk of the jobs at UTMB, would be reduced from a 600-bed facility to 200 beds. He also floated the idea that the hospital could be moved to a location in League City.

Shine delivered some levity to an angst-filled meeting with a one-word answer to the perennial question: “Would the medical school move to Austin?”

“No,” he said.

The room erupted in applause.