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Penn Hills

CPA to help Penn Hills School District straighten out finances

Michael DiVittorio
| Friday, Dec. 1, 2017, 12:24 p.m.
The Penn Hills School District administration building.
Michael DiVittorio | Tribune-Review
The Penn Hills School District administration building.

A certified public accountant from the state Department of Education has been assigned to help the financially struggling Penn Hills School District straighten out its books.

Michael Lamb of the Wessel & Co. accounting firm in Johnstown will review district records throughout December and begin work in school offices at the start of next year. His commitment as a consultant with the district goes through June, according to Superintendent Nancy Hines.

The state placed the district on its financial watch list in July.

“He seems to be a very enthusiastic individual, very well-versed in school finance and has worked with other school districts,” Hines said.

District Business Manager David Russos said the state is paying for Lamb's services.

“He's here to be a consultant. We welcome all the help we can get,” Russos said.

Lamb also has been working with the Plum School District, which is trying to work its way out of $4.5 million of debt.

“They do a fantastic job for us putting in processes and internal controls, providing auditing services,” Plum Business Manager John Zahorchak said. “We're real happy with them.”

Penn Hills raised taxes by 1.5 mills in 2016-17 after receiving approval from the state Department of Education to raise the millage above the Act 1 index, citing additional expenses for special education and retirement costs. The index is a formula that limits tax increases.

Taxes were raised 1.2509 mills in the 2017-18 budget. The district is developing its spending plan for next year.

“We're not ruling out raising taxes, and it certainly at this point seems most likely that we will be raising taxes,” Russos said.

The millage rate is 27.557. The district can raise taxes up to 0.909 mills under the Act 1 index.

That maximum increase would mean a property owner with the average median home value of $88,100 would pay $79 more in real estate taxes next year.

The school district is about $170 million in debt, due largely to construction of elementary and high schools that opened in 2012. The district also did renovations at its middle school and took out an $18 million loan in 2015 for day-to-day expenses. The debt is projected to be paid off by 2042.

Allegheny County District Attorney Stephen A. Zappala Jr. and state Attorney General Josh Shapiro have been investigating the district's finances for more than a year.

Zappala spokesman Mike Manko declined to comment on the investigation, which was started in 2016 after state Auditor General Eugene DePasquale released a scathing audit of the district.

Michael DiVittorio is a Tribune-Review staff writer. Reach him at 412-871-2367 or mdivittorio@tribweb.com, or via Twitter @MikeJdiVittorio.

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