Saturday, June 18, 2016

District financial condition

Moving on to another, and very important topic, the district's financial condition.

Somehow, we went from dire predictions of possibly not being able to meet payroll, to having a comfortable surplus.

Last Fall, a foundation leader wrote in the Post-Gazette:

"A few years ago the district’s financial condition was so dire that Ms. Lane admitted that, “with insolvency breathing down my neck,” she couldn’t sleep at night. She made tough, unpopular calls, resulting in closed schools and teacher furloughs during a period of recession, declining enrollment and decreased funding. Twice she turned down raises totaling $35,000. And she reduced per-student spending from $21,711 in 2010-2011 to $20,594 in 2012-2013, dropping the district from the eighth-highest-spending in the state to the 29th."  
http://www.post-gazette.com/opinion/2015/09/08/Gregg-Behr-Pittsburgh-schools-must-continue-the-legacy-of-Linda-Lane/stories/201509080021

In a recent WESA interview, the superintendent made similar claims about bolstering the district's financial situation.  

Are the comments valid?  What is the true financial situation?  Another point of view follows.
In the five years BEFORE Linda Lane the school district's budget surplus/deficit in sum total, across five years, was +/- $1 million in total, with a rock solid all-in fund balance of roughly $80 million, well with guidelines from Moody's, S&P, and Fitch.

Since then, poor financial modeling from 2011 forward has seen Linda Lane twice raising taxes in years that massive surpluses were run. That's not worthy of applause. Middle class families are hurting. 
In the five years BEFORE Linda Lane the school district's budget surplus/deficit in sum total, across five years, was +/- $1 million in total, with a rock solid all-in fund balance of roughly $80 million, well with guidelines from Moody's, S&P, and Fitch. 

Since then, poor financial modeling from 2011 forward has seen Linda Lane twice raising taxes in years that massive surpluses were run. That's not worthy of applause. Middle class families are hurting. 

It's unfortunate that one of the requirements of the Gates Foundation grant was a sharp reduction in the number of teachers - all at the same time teacher academies were illogically required to open - but Dr. Lane was a good soldier and nonetheless cut deep and still hit taxpayers twice. 

Even after the auditor generals's report was issued great efforts were taken to book transfer in March 2016 - after the fiscal year was closed - to hide another $20+ million surplus. 

Dr. Lane inherited a budget that at year end was essentially balanced five years running and in her tenure missed the mark five years running, all while essentially ignoring the long term health of our school buildings by choking off capital improvements. The next superintendent will be tasked to take this neglect on. It's not rocket science - if investment does not approximate depreciation, the assets are not being cared for. 

In the meantime, while all local foundations have celebrated 10 years of philanthropic reign, enrollment continues to decline. Parents are voting with their feet and there's no amount of ink at the post gazette to make that go away.
It's unfortunate that one of the requirements of the Gates Foundation grant was a sharp reduction in the number of teachers - all at the same time teacher academies were illogically required to open - but Dr. Lane was a good soldier and nonetheless cut deep and still hit taxpayers twice. 

Even after the auditor generals's report was issued great efforts were taken to book transfer in March 2016 - after the fiscal year was closed - to hide another $20+ million surplus. 

Dr. Lane inherited a budget that at year end was essentially balanced five years running and in her tenure missed the mark five years running, all while essentially ignoring the long term health of our school buildings by choking off capital improvements. The next superintendent will be tasked to take this neglect on. It's not rocket science - if investment does not approximate depreciation, the assets are not being cared for
In the meantime, while all local foundations have celebrated 10 years of philanthropic reign, enrollment continues to decline. Parents are voting with their feet and there's no amount of ink at the post gazette to make that go aw


Since then, poor financial modeling from 2011 forward has seen Linda Lane twice raising taxes in years that massive surpluses were run. That's not worthy of applause. Middle class families are hurting
It's unfortunate that one of the requirements of the Gates Foundation grant was a sharp reduction in the number of teachers - all at the same time teacher academies were illogically required to open - but Dr. Lane was a good soldier and nonetheless cut deep and still hit taxpayers twice. 

Even after the auditor generals's report was issued great efforts were taken to book transfer in March 2016 - after the fiscal year was closed - to hide another $20+ million s
Dr. Lane inherited a budget that at year end was essentially balanced five years running and in her tenure missed the mark five years running, all while essentially ignoring the long term health of our school buildings by choking off capital improvements. The next superintendent will be tasked to take this neglect on. It's not rocket science - if investment does not approximate depreciation, the assets are not being cared for
In the meantime, while all local foundations have celebrated 10 years of philanthropic reign, enrollment continues to decline. Parents are voting with their feet and there's no amount of ink at the post gazette to make that go away.

10 comments:

Questioner said...

Earlier this week a response was posted in the comment section of the article by a person writing under the pen name "Kermit Weiss," who has clearly studied the situation in some detail.

"In the five years BEFORE Linda Lane the school district's budget surplus/deficit in sum total, across five years, was +/- $1 million in total, with a rock solid all-in fund balance of roughly $80 million, well with guidelines from Moody's, S&P, and Fitch.

Since then, poor financial modeling from 2011 forward has seen Linda Lane twice raising taxes in years that massive surpluses were run. That's not worthy of applause. Middle class families are hurting.

It's unfortunate that one of the requirements of the Gates Foundation grant was a sharp reduction in the number of teachers - all at the same time teacher academies were illogically required to open - but Dr. Lane was a good soldier and nonetheless cut deep and still hit taxpayers twice.

Even after the auditor generals's report was issued great efforts were taken to book transfer in March 2016 - after the fiscal year was closed - to hide another $20+ million surplus.

Dr. Lane inherited a budget that at year end was essentially balanced five years running and in her tenure missed the mark five years running, all while essentially ignoring the long term health of our school buildings by choking off capital improvements. The next superintendent will be tasked to take this neglect on. It's not rocket science - if investment does not approximate depreciation, the assets are not being cared for.

In the meantime, while all local foundations have celebrated 10 years of philanthropic reign, enrollment continues to decline. Parents are voting with their feet and there's no amount of ink at the post gazette to make that go away."

Questioner said...

Budget issues make most laypeople throw up their hands in confusion but the message is, essentially, that the goal for a government budget is NOT to build up a large surplus (a reserve of 5-10% should be enough).

A large surplus would suggest that more taxes are being collected than are needed.

Another way to build up a large surplus is to neglect maintenance of capital assets. A look at the condition of our schools, and the lack of the regular maintenance we used to see before the Broad era, suggests that assets are being neglected in favor of building up a surplus.

Meanwhile, for a long time, poor financial condition was given as a reason not to spend on the normal expenses of a school district (nurses, libraries, band uniforms, etc.).

When will we see one of our newspapers go beyond "large surplus!" and conduct a true investigation into the state of our district's finances and assets?

Anonymous said...

I'm glad that you opened this discussion. When we were hit with the 2 big tax increases a few years ago I was financial devastated. I still have a very hard time paying my city taxes. When I complained to my councilman Dan Gilman he said that I had previously been under taxed. When I spoke with councilwoman Kale she said I should go to government agencies for assistance. To me it sounded like we'll take your money then give it back to with programs, crazy talk! I felt at the time that I was being priced out of the city and that the attitude was "oh well just move out". I watched school board meetings for years when Mr Isler questioned the budget every meeting. No surplus was ever disclosed at all!
Imagine my shock when A.G. Depasquale released his audit and slammed the board for holding a $100 million surplus. I felt betrayed that they would raise taxes, whine and cry about money and always act like they were on the brink of bankruptcy.
All of this has resulted in a distrust of PPS and state government. They are in Harrisburg all the time asking for more, more, more! Never referring back to the $100 million.
It may be too soon to ask about the costs of Mr. Hamlets policies. I for one would like some hint at how much it will differ from our present day spending.
The city could price a lot of working class people out. We will become really rich and really poor. No middle. Taxes are an issue and I get frustrated that the taxpayer is hardly given a voice here, the media, the teachers union, local government and the groups that are in this recent heated exchange.
Has anyone asked what Mr. Hamlet,s ideas will cost the taxpayer or has the PG looked at all? I haven't seen it. Every time I even mention taxes on this board it is totally ignored.
Thank you and Happy Father's Day.

Anonymous said...

PPS one thing always like to make Consultants Social Support Services improve their financial💰💰💰💰💰situation meaning when they see something appealing like it end up buying it not a financial condition problem a spending habit 💲💲💲💲💲just like to spend tax payers dollars on anything & everything call it like it is nobody being held ACCOUNTABLE when comes to SPENDING act if have a
Money Tree PPS spend what you need not want you want ok

Anonymous said...

PPS money tree for consultants. Every dollar spent should have a benefit that can be proved. That shows a measurable result.

Anonymous said...

10:15, in terms of taxes, I feel your frustration. I doubt that taxes will ever be decreased, but there is always talk about school funding reform. Our school taxes are high in all districts and I once made a joke that I would gladly pay my county property tax twice if my school tax was not so high. I don't want you to think the school taxes are low for our suburban neighbors because they really are not.

Questioner said...

Word is that Mark Roosevelt and Linda Lane were granted health care for life. This was by the prior board. Why? What went wrong here, and how is it that the public doesn't learn about things like this until it is too late? Maybe the foundations would like to pick up that expense?

Anonymous said...

8:37 PM I'm granted to pay school taxes for life 💲💲💲💲to pay for Mark and Linda health insurance does anybody know how that came about is that normal for Superintendents after leaving PPS ? To get that kind of benefits
Also will the next Superintendent get same benefits when they leave ?
Oh I think all PPS graduate students should get same deal as well

Anonymous said...

personnel issues are never public but salaries for teachers are online on some state site and we do get to know the super's salary, so why not the terms of departure or retirement?

i know many on here were fans of thompson but he often decried his salary as low when compared to the CEOs of corporations since he likened his position to those ececutives. Wonder what his terms were when he left. and then there was lynn spampinato, some terms of her separation became public if I recall, but not the cause of her leaving. I bet most of the terms are negotiated before the candidate signs a contract. i am sure there are others too to add to the list of well compensated in retirement plans.

Anonymous said...

Thank you 8:29, I'm poster 10:15 I never thought taxes would decrease but the insecurity is always there for the next increase. Now with Mr. Hamlet's new ideas I wish a price tag would be more transparent along with all of the other bells and whistles. I don't think I'm asking too much. I really didn't think I would get a response to my post. No one here likes to talk about money.
As far as education goes, money is an after though and taxpayers MUST understand that! Nothing is too good or too expensive! So now we have someone new to sprinkle it all around again.
Anyone wish to comment on the $100 million surplus we have?
I recall reading that when Mr. John Thompson left he went to Clayton County GA (south Atlanta) and made well over $300,000. He was fired in less than a year. No reason was given.