Penn Hills School District exits financial recovery status

After five years of financial recovery, Penn Hills School District has been officially released from the designation.

Members of the Pennsylvania Department of Education, Penn Hills administration and the public gathered Thursday, May 23, in the library of Linton Middle School to announce the district’s exit from financial recovery status.

The district was placed under the status in 2019 after spending more than it budgeted for five consecutive years while ballooning its debt burden from $11 million in 2011 to more than $170 million by 2016.

TribLive previously reported that the majority of the debt could be credited to bond-funded construction projects that included claims of over-the-top expenditures, unanticipated overruns, alleged mismanagement and deficient plans to pay off one of the highest school debt loads in Western Pennsylvania.

Since then, the district has been required to meet monthly with Pennsylvania Department of Education officials to work on financial stability.

“Today’s announcement is a testament to the great things that we can do when we come together,” said Khalid Mumin, secretary of the Pennsylvania Department of Education. “The Pennsylvania Department of Education has long stood in support of Penn Hills School District as we provided the technical assistance, funding and resources they needed to reach their goals.”

In the past five years, the district increased its capital reserve fund by $7.4 million — increasing it from $600,000 to $8 million. School board members and administrators also were able to raise the previously negative fund balance to $19 million.

Going forward, the district will be under a monitoring period by the state for the next five years.

During this time, the district will be required to continue to meet with members of the state Department of Education for technical support and curriculum support. School board members have put in place a fund balance policy that ensures they look ahead when determining expenses.

Board member Rock Marra warned a tax increase might be in the district’s future to maintain the newfound title of financially stable.

Chief Recovery Officer Dan Matsook said the school board is going to continue to look internally at opportunities for savings before opting for a tax increase.

“When we look into our five-year projections, we talk about doing the best we can to base our assumptions on increase in costs and increase in revenues,” Matsook said. “Right now, we’re looking to save nearly three-quarters of a million dollars because we’re being more efficient with our safety and security moving into next year.”

Penn Hills is one of three school districts that have left financial recovery status. Mumin said it follows the City of York and Scranton school districts. The Sto-Rox and Duquesne City school districts are still in the financial recovery status.

Superintendent Dr. John Mozzocio, who began his term in January, thanked staff and community members for standing with the district.

“Our school board, past and present administration, teachers, staff, parents and students have all played crucial roles in this turnaround,” Mozzocio said. “Your sacrifices, innovative ideas and steadfast support have been the bedrock of our recovery efforts.”