Wilkinsburg school board discusses borrowing $3 million to maintain cash-flow
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Tensions ran high Tuesday evening in Wilkinsburg as the school board, the district's superintendent and about 15 community members discussed a plan to borrow $3 million to get the ailing school district through the rest of the year.
Superintendent Archie Perrin and the district's business manager, Bruce Dakan, said borrowing money is necessary to maintain cash-flow, although they both acknowledged it does not address the root of the district's financial woes.
"This $3 million does not solve any of the problems that caused this situation to occur," Mr. Dakan said. "This buys time."
Board member LaTonya Washington expressed skepticism that there is a plan to get the budget back in order.
"What's the game plan?" she asked. "You want us to vote on $3 million, but how are we going to pay that back?"
Mr. Perrin said the loan would likely be paid for at least in part by making cuts.
"We have not yet settled teacher contracts or contracts with service personnel," he said. "Everything's up for grabs."
The school board will vote on whether to take out the loan next week.
Charter schools, delinquent taxes, safety concerns and poor school performance were all offered as reasons the district is struggling --but there was no consensus on which of the problems is more critical or how to appropriately address them.
"It all comes down to charter schools," Mr. Dakan said, citing a 36 student increase in charter school payments totaling $630,000. "That student increase in charter schools and the fiscal ramifications is what put us in this situation."
The district spends between $3.5 and $4.5 million on charter school payments, a number that has increased in the past five years.
Over the same period, the district spent $13,399,388 on charter school tuition payments, including payments to cyber charter schools.
The district's annual budget is about $26 million, Mr. Perrin said.
But district officials say they don't face a financial problem only when it comes to giving tuition payments to charter schools.
Mr. Perrin argued that there has not been an aggressive enough effort to collect delinquent taxes, an amount he said ads up to about $20 million.
"The reality is we have not been aggressive enough to collect [property taxes] but somehow we accept the fact that we are unable to collect this 20 million dollars," he said. "And then we say to the people now we have to burden the taxpayers and everyone else to raise millage or borrow money or whatever else ... because we never talk about that. Because it's unpleasant to talk about that."
Three school board members and two community members -- each of whom previously served on the school board -- raised questions about how the loan would be paid back and whether more a more aggressive tax collection system would make much difference.
"That $20 million is mostly on paper," said Jean Dexheimer, a former Wilkinsburg school board member. "Even if the state authorized a SWAT team, you wouldn't be able to collect the money."
Ms. Dexheimer said "This is not Wilkinsburg's problem or Duquesne's problem. As a commonwealth, we have not sustained the commitment we had to public education a century ago."
State Sen. Jim Ferlo, D-Highland Park said the district should merge with its much-larger neighbor to the west -- an idea not discussed at Tuesday's meeting.
Mr. Ferlo wrote in an email that "the District should merge with the City of Pittsburgh School District and benefit from budget resources, possible foundation grants, the aspiration and benefits of the Pittsburgh Promise, and an immediate reduction in their property tax which is now the first or second highest millage rate within Allegheny County."
First Published February 19, 2013 10:34 pm