Penn Hills School District financial recovery plan nearly complete, details not released

A plan to bring the financially struggling Penn Hills School District back in the black is nearing completion.

State financial recovery officer Daniel Matsook has been working with a special advisory committee to craft the extensive plan the past few weeks.

It is expected to be submitted to the state Department of Education by April 23 and approved by the district at a meeting April 29.

A draft of the plan was submitted to the school board earlier this month.

It includes roughly 70 initiatives designed to streamline operations, increase revenues and reduce expenses.

Board President Erin Vecchio said officials were instructed not to discuss the details until it’s finalized.

“Nothing’s going to be finalized until we make sure the impact of this recovery is not going to hurt the kids in this district,” Vecchio said. “If it does get to that point, I will make sure we get a meeting with the (state) Secretary of Education. I still believe the state is responsible for this whole mess.”

The district is more than $172 million in debt largely due to the construction of the high school and elementary school.

Matsook gave an overview of the plan at a board meeting last month.

It will feature demographic information, student enrollment, academic data and related statistics as well as student achievements and financial reports.

“A major theme of my plan is to make sure that we do not move the Penn Hills School District out of recovery at the expense of our students,” Matsook said. “The students will be the basis for all our decision making.

“Even though academics is not the focus of my plan, it cannot be ignored. The finances impact what we do in our classrooms and our school buildings each and every day.”

The report will feature some of the initiatives district officials implemented to help right the ship prior to the state putting it in financial recovery status.

Matsook, who once worked as Wilkinsburg’s liaison during a transition of more than 200 middle and high school students to Pittsburgh Public Schools’ Westinghouse Academy, started his recovery work in Penn Hills on Feb. 5.

“They recognized where they were,” Matsook said. “They started to pull themselves up by their bootstraps already. Unfortunately, things didn’t happen fast enough, nor were they far reaching enough.”

He said part of the plan will involve “right-sizing the workforce.”

It could mean teacher furloughs and layoffs district-wide. The number of cuts is yet to be determined.

“Because of declining enrollments, we have to get the district to a point where the workforce is right-sized so that we’re being fiscally responsible with the taxpayers with what we’re offering our students and programs as well.”

The district still needs to meet day-to-day obligations while the plan is being created, and may need to borrow money in the coming months.

“Our cash flow has pretty much slowed down to a trickle,” Matsook said. “We’re anticipating we’re probably going to have to get a tax anticipation note to get us through the summer so that we can meet our obligations with our salaried employees and heavy bills that we have put on hold for a couple months.

”We have the challenge of narrowing the budget deficit as we plan for the 2019-20 school year.”

A link to the district’s proposed preliminary budget is posted on the front page of the district’s website, pbsd.k12.pa.us.

It shows a projected $8.1 million shortfall even with a maximum real estate tax hike allowed by the state without a voter referendum.

The district would raise the millage rate from around 28.7 mills to 30.6 mills, a 1.9-mill 0r 6.7% jump.

The proposed new rate would amount to the owner of a home assessed at $100,000 paying about $192 more in taxes next school year.

Board members have repeatedly said they cannot continue to tax people out of their homes and businesses.