State transitional loan for Penn Hills School District’s re…

State transitional loan for Penn Hills School District’s re…


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A $1.24 million loan designed to fund various initiatives in the Penn Hills School District’s financial recovery process has been approved.

The 10-year, no-interest transitional loan comes through the state Department of Education.

School board members voted 7-0 to approve the loan agreement Monday . Board members Cathy Mowry and Kristopher Wiegand were absent.

Funds will be placed into a special account and can only be drawn with approval from state-appointed recovery officer Dan Matsook.

The loan was made available because of the district’s state-designated status.

“They make sure that there’s money available for districts to be able to do some things and get a jump start on things,” Matsook said of the education department. “We would be paying out of our own funds in order to do these things to get out of recovery.”

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

The state put Penn Hills in financial recovery status in January and appointed Matsook in February to help turn things around.

District officials approved a financial recovery plan June 29. State Department of Education officials did the same in mid-July.

It’s available for review on the district’s website, phsd.k12.pa.us.

Recovery initiatives to be paid for through the loan include education, insurance, transportation and operational audits, public relations, professional development as well as request for proposals of solicitor and transportation services.

“These are all big systems that we’re looking at,” Matsook said. “There may be significant findings. Any services that we have identified in the plan, we’re going to do a (request for proposals) process and make sure we’re getting the best prices and services that meet our needs along with those prices.”

He said the transportation audit was recently finished. Its report is expected to be filed within a few weeks.

The technology audit will be done in December with the special education audit expected in January.

Security and insurance audits will be addressed in the spring.

Audits are being done by consultants from the Pennsylvania Association of School Business Officials.

“We need to get them done because we need to see where we’re at and where we need to go,” board President Erin Vecchio said of the audits. Technology’s the biggest thing I’m looking at. Everything in the world right now is technology, so I want to make sure the kids get everything they can.”

Vecchio, who’s noted several times it was the state that recommended the high school and elementary school construction and approved the bonds for it, said the transitional loan should be a grant and not have to be paid back.

“I don’t think the taxpayers of Penn Hills should be paying for anything (for recovery),” said Vecchio. “I think it should be the state paying for this.”

The first of 10 loan payments is due June 22, 2022.

Preliminary budget

The district’s preliminary 2020-21 budget will be revealed at 7 p.m. Jan. 9 at Linton Middle School.

Matsook said it will be a good gauge in determining were Penn Hills is in terms of recovery.

“We’re anticipating that we did make some progress,” Matsook said. “We’re also anticipating a significant bite in that progress by the fact the board didn’t raise taxes. That’s $2.7 million this year that we would have had moving forward, but we’re moving in the right direction.”

District officials nixed a plan to raise taxes by 1.9172 mills, or 6.7%, after the state gave the district $3.3 million in additional funds. This school year’s budget also included more than 20 teacher furloughs.

The current millage rate is 28.6646 mills, already among the highest in the region.

Michael DiVittorio is a Tribune-Review staff writer. You can contact Michael at 412-871-2367, [email protected] or via Twitter .


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