Friday, May 24, 2013

Lebo math at its finest

A reader submitted this for consideration. It appears that Jan Klein's numbers are not adding up.

Look at the Estimated value of Community Assessment in 2013 chart which was dated 8-May-13.
Assessed Value Per Tax Office (5/3/13): $ 2 ,715,449,015
The next line is interesting.
Less Historical % of Liens at Year End est at 1.6%: 43,447,184
Every year, this shows up in the budget. However, it never shows up as revenue when the liens are satisfied. They get paid eventually. Classic example is the $2.3 million windfall for the Covenant. Liens are deducted in the budget which cause the millage to go up.  We pay for the liens through our taxes and then when the District collects the liens, we never get a refund or see it budgeted.

Back to the chart. See the 22.61 mills in the orange box? That is our new millage for 2013-2014.  But Jan Klein skipped a step. The Anti Windfall Law requires that she first needed to establish the revenue neutral tax rate. That number is 21.17 mills.  How do you get the 21.17 millage? Take $54,914,220 (Budget- Real Estate Taxes at 2012-13 Millage Rate) and divide it by $2,593,675,608 (Adjusted Assessed Value) in the green box. That is the true millage neutral rate.  Jan's number is 6.8% over the revenue neutral tax rate, or a 1.44 mill increase.

Doing the Lebo math:

  22.61 (Jan's millage)
 -21.17 (millage neutral)
1.44 mill increase or 6.8% over the revenue neutral tax rate


Let's look at the "20%" reduction in millage. (Blue Box)

 27.13 mills (2012-2013)
-22.61 mills (2013-2014)
4.52 mills

That is a 16.66052340582381% reduction, not 20% reduction!  Percentage calculator

I think there is some explaining to do, School Board. It ain't adding up.

85 comments:

Anonymous said...

During the last meeting, I asked the District to show its work, the arithmetic to calculate the millage using the assessed value, Act 1 exemption, gaming homestead exclusion, windfall adjustment, and estimated appeal outcomes.
I did not get a straight answer.
David Huston

Anonymous said...

There are a number of additional things that don't add up in the Jan Klein numbers that the school board accepted, as they usually do, without checking or questioning or caring whether taxpayers understand. I'll begin a list that continues where the post left off :

1) the County reassessments for 2013 were posted in February, 2012. The reassessments were supposed to go into effect for the 2012 tax year, but were not completed in time and extended to 2013. The 2013 total reassessed value of Lebo taxable property increased by 27.9% to $2.778 billion from the 2012 certified value of $2.171 billion.

Referring now to the Districts "Calculator" chart Elaine has posted, note that the beginning point is the "Assessed Value Per Tax Office (5/3/13):" of $2.715 billion. This indicates a taxable value reduction of some $63 million from the original $2.778 billion over a 15 month period. This represents for Lebo a lot of real estate value ; and, this reduction is the cumulative net result of hundreds of Lebo reassessment appeals over a 15 month period. Now refer to Jan's line item "Less successful appeals-(commercial and residential)" amounting to $81.5 million. This would have us believe that there will be a further assessed value reduction of $81.5 million over just the next few months. Credible ? She does not provide any specific supporting rationale other than it supposedly represents outstanding appeals. It certainly seems questionable. And probably does not take into account that the Municipality just 6 weeks ago initiated 2013 appeals of 155 of the most significantly under assessed properties in Mt. Lebanon.

Why would the District want to have such a high number ? The school board had already approved a 2013-2014 budget based on a real estate tax dollar figure necessary to balance the budget, but absent a specific 2013 Anti Windfall & Act 1 compliant millage rate certain to achieve it. We tend not to recognize that when assessed value declines, a millage rate must increase in order to achieve a fixed tax revenue requirement. Has there been a conscious attempt here to establish a particular and high millage rate ?

Our attention to detail back then was diverted when we were advised that the millage would likely have to increase by 0.54 mills - from 27.13 mills in 2012-13 to 27.67 mills for 2013-14 before reassessment adjustment. This 0.54 mills was considered painful by many, but represented only a 1.99% increase after all, and we seemed resigned to it. And in our collective ignorance we allowed our selves to be fooled.

How and why did the story unfolding above result in the blog posting factually concluding there is now in fact a 6.8% or 1.44 mill increase over a revenue neutral millage rate that was not determined for and revealed to taxpayers, but certainly should have been ? It's not just a 0.54 mill or 1.99% increase. Or that the final 22.61 millage rate for 2013-14 is not the 20% reduction from 2012-13 millage as reported on the District chart, but rather only 16.7% ?

And how does the projected and now budgeted 2013-14 real estate tax revenue appear to remain within the bounds of ACT 1 ? But in fact may not ?

I'll try to cover and explain this in a follow-on comment #2 tomorrow.

Bill Lewis







Anonymous said...

BUSTED!!!!! ONCE AGAIN !!!!!

Anonymous said...

Somewhere it was mentioned that districts could very easilyexceed the windfall limits for several reasons.

I believe one exemption is to fulfill contract and pension obligations, the second to cover debt- which the high school project probably qualifies for and there's a third that escapes me right now.

Anonymous said...

This interesting--

http://www.lgalyceum.org/lgalyceum/2012/02/reassessments-your-taxes-common-myths-debunked.html

"The rules for school districts – regardless of whether they are in Allegheny or another county – are different.  School districts are subject to the anti-windfall provision of Act 1 (Again for those interested, 53 P.S. section 6926.327).  School districts must also equalize millage for the first year post-reassessment, but they are not allowed to factor in any prior experience of assessment appeals.  They then are permitted to increase the equalized millage up to the limit of their prior year’s Act 1 percentage “index” (which is an inflation-based number that is calculated for each school district each year by the Pennsylvania Department of Education)."

This sentence is very specific... "School districts must also equalize millage for the first year post-reassessment, but they are not allowed to factor in any prior experience of assessment appeals."

Doesn't the district's calculator chart show prior experience of assessment appeals factored in or am I misreading it?

Anonymous said...

After fudging the budget for years, Ms. Klein was named Treasurer of our school district over our prior treasurer Mellon Bank. Who do you trust more, Mellon or Klein?

Lebo Citizens said...

This comes from the Budget page of the District website:

"Act 1 of 2006 limits the amount of additional real estate tax revenue the District may levy in any given year. For 2013-14, Mt Lebanon is permitted to levy a millage rate on the new community assessed values which would raise real estate taxes by an additional 1.7% (Index) over the 2012-13 Budget amount plus exceptions for the additional cost of the retirement rate increase. The additional exceptions beyond the 1.7% Index that were granted by the state provides for almost $900,000 more in collectable real estate tax revenue. The budget presented to the Board does not require all the allowable tax revenue increase to be in balance.

The 2013-14 Budget includes a 4.52 reduction in the millage rate to 22.61 mills. Community-wide, the reduction in millage rate allows for 1.9% more in real estate tax revenue than the prior year. This increase is well below the Act 1 of 2006 index as well as the allowable exceptions to the Index that the District is entitled to use."
http://www.mtlsd.org/district/budget/default.asp
Elaine

Lebo Citizens said...

Also from the same link as above:
"Impact on Homes
As a result of the property reassessment of 2013, the change in assessed value of any individual home within the community could differ significantly with each property within the community. While total District real estate tax revenue in the community will only increase 1.9%, the impact on an individual homeowner is not as easily predicted. The rule of thumb is that if any individual property assessment increased less than 20%, that property’s school tax bill will likely be reduced. And if any individual property assessment increased more than 20%, that property’s school tax bill will likely be increased. The larger the change from the prior year’s assessment, the larger the increase or decrease in the tax bill."
Elaine

Lebo Citizens said...

Jan, to have a 20% reduction in millage, the 2013-14 millage should be 21.70, not 22.61. And I am a Lebo math casualty. Kudos to Ostergaard, another Lebo math victim for voting against the budget. Obviously, Posti, Lebowitz, Cappucci, and Birks are Lebo math grads when they approved this budget.
Elaine

Anonymous said...

How many pizzas is that, Pizza man Cooper.

Lebo Citizens said...

.55 mills increase at the old millage rate was 2 large Cooper Pizzas. So...3 large Cooper Pizzas error?
Elaine

Anonymous said...

No need for PK anymore. Janass Cline is our revenue generator to cover the high school cost overage and the grievance.

Hey Timmy! How do you like having working with a finance officer that gives you the wrong budget numbers? Aren't you glad you recommended giving her a 6.9% pay grab last year?

Lebo Citizens said...

The rule of thumb as explained on County website is here. http://www.alleghenycounty.us/averageinc.aspx If our assessments were below 26% Mt. Lebanon average, then our taxes would decrease. But Jan claims that if they are under a 20% increase, then our taxes will decrease. Her real number is 16.7%. Quite a difference from Allegheny County's calculation for Lebo at 26%!
Elaine

Anonymous said...

Taxes will be mailed June 1. Are they incorrect ? Do we pay them ?

Lebo Citizens said...

Yes! You have to pay them. They are correct, based on the budget approved by the school board directors. Jan, Timmy and six school board directors screwed us royally. I don't know of any options. What happens when a board approves a budget above the Act 1 of 2006 Index? Will the PDE step in? Probably not. Can we put our taxes in escrow? Come on, Readers. Do we have options?
Elaine

Anonymous said...

This will be my second or #2 installment of commentary on the post:

2) thank you 9:14 PM for disclosing the "Rules for school districts", the applicable Purdons Statute and the particular sentence "School districts must also equalize millage for the first year post-reassessment, but they are not allowed to factor in any prior experience of assessment appeals."

According to this, the District violated both provisions - (a) they did not develop and make public a revenue neutral millage rate for 2013-14 as required, apparently in an attempt to hide their intent to actually raise the millage by 1.44 mills or 6.8% above the revenue neutral rate level. The Anti-Windfall law requires a 2-step process - determine the revenue neutral millage first, then separately increase that millage up to the Act 1 limit plus exemptions allowed ; and, (b) they applied prior assessment appeals to adjust the the official assessed value of taxable real estate.

Is how they game the system, knowing nothing will be done about it here or in Harrisburg ?

3) the "Calculator" chart line item of "Less Historical % of Liens at Year End est. at 1.6% :" which amounts to a $43.4 million deduct in real estate valuation for 2013-14. What this suggests is that the $982 thousand in taxes due on this real estate with a value of $43.4 million at 22.61 mills will not be paid by the lien date of July 15, 2014, and may never be paid. The District then deducts this lien presumption valuation from the official evaluation which in turn results in a millage requirement adjustment upwards to force the rest of us to make up for the deadbeats and pay their bills !

Truth be told, almost all liened tax revenue is collected in time, but try to find where it is booked when it is paid. To show that liened taxes are if fact collected , refer to the District CAFR's on the website - in the statistical sections locate the table "Property Tax Levies And Collections" - for 2012 see CAFR page 95 (PDF page 103) for example. If you compare this table for the website CAFR reports available the years 2007 - 2012, you will be able to see that liened taxes for each past year shown are in fact collected bit-by-bit each successive year.

So, bottom line, the District basically collects liened taxes twice - once through adjustment of the millage rate to force the rest of us to pay the bill during a current tax year, and second the eventual payment beyond that by the original property owners over time or at the disposition/sale of their property. The question is, where are liened tax payments booked because they do not show up in the annual budgets and financial statements as an identifiable line item or incorporated/included in real estate revenues ?

In the interests of full disclosure, the District also reports the following in the 2012 CAFR :

~ property tax receivables at 6/30/2012 were only $482,727 (page 32); but,

~ lien'd taxes for 2012 were $596,361 (page 95)- timing ?; but,

~ as I indicated above, the liened tax (nonpayment) estimate for the 2012 budget year was $982,000 !

Seems we may have been hornswoggled again. I know this is tedious for some, so enough for a sunny day. Please recognize that the District has been at this for years, are experts, and as a result the devil can only be found in the details.

Next installment tomorrow.

Bill Lewis

Lebo Citizens said...

Don't forget that penalty for late payment continues to be 10%, plus interest thereafter.
Elaine

Lebo Citizens said...

In spite of a beautiful Saturday, blog traffic has been unusually high. My guess it is because of this blog post. Not only are residents getting a 6.8% tax increase, but how about all those extra fees for sports, parking, and band? The budget doesn't include the second bond or the grievance. Remember how we wanted to change auditing firms, after 25 years with Maher Duessel? But noooooo. Jan Klein said that they were doing a fine job. Scott Goldman wanted to change auditors, and Mary Birks rolled her eyes at him. Cooper was thinking pizzas. Timmy and Jan were dreaming about their next raises. Cappucci owes David Huston an apology for being rude to him when he asked to see some arithmetic concerning the budget.
I can't wait to hear Bill Lewis' next installment.
Elaine

Anonymous said...

Well, the yard work will have to wait a bit. Here's my #3 commentary installment :

4) I made an error in my last installment, item 3) above, towards the end, in the last ~ with the figure $982,000. That $ figure was mistakenly for the 2013-14 (a/k/a year 2014), and should have been $939,700 for the 2012 year. Sorry about that. The conclusion following remains valid, however.

5) someone called me to say he didn't believe the District had to determine and disclose the revenue neutral millage rate prior to establishing the final rate. I referred him to the District's 14 page power point presentation of March 11, 2013 entitled "Preliminary Budget Preparation". I believe this was actually presented by Dr. Steinhauer, and specific reference is made to revenue neutral determination on page 6 - it's on the website. Also, page 12, captioned "Board Options", seems to have some strange, conflicting and incorrect math results. No one seems to have noticed, so perhaps I'm wrong ? Anyone else care to take a close look and comment ?

6) returning to the issue of liened taxes that remain outstanding, the District does find an additional advantage to them financially that should be noted. Since 85% of the annual levied real estate taxes are paid within the 2% "Discount Period", and almost all the rest are paid within the "Face Period", few of us think about the point in time in which the 10% "Penalty Period" occurs (i.e. 4 months after the billing date of June 1st., or September 30th.) followed by the lien date the following year at which time interest at 10% per annum is assessed, plus any costs of eventual collection (legal, collection agency, etc.), on the unpaid balance.

If your school tax bill is say $5,000 , the one-time penalty would amount to an added $500 and the annual interest cost, if a lien occurs, would amount to another $500 every year the $5,000 is unpaid! The 10% rate sure beats the 1% or so annual interest rates Jan obtains where she parks District cash doesn't it ! If you care to actually look up the CAFR pages I referred to in my #2 installment comment above in item 3, second paragraph (i.e. 2012 CAFR page 95, and similar for preceding years) you will find that the District reports liens, including those eventually collected, at apparently only the levied amounts, not the levied amounts plus accumulated penalties and interest. Wonder where all this is booked and available for public review ?

I'm going to pause for now because I may be approaching the 4096 character as well as your tolerance limits. Will continue in a bit.

Bill Lewis

Lebo Citizens said...

Thanks for all your keen observations, Bill. Here is the March 11, 2013 Preliminary Budget Presentation.
The 2012 CAFR (Comprehensive Annual Financial Report) link is
HERE.
Elaine

Anonymous said...

Bill, you don't disclose whom suggested that the district doesn't need to determine and disclose the neutral rate prior to approving the final millage rate.

First, how do you establish The final rate without determining the neutral rate? Then the obvious next question, what does the district achieve by keeping it a secret?

Weren't all the current board directors big proponents of transparency? Why should anything, but the most personal personnel issue be discussed or approve hidden from the stakeholders?

One only hides things when they don't want the truth known!

Anonymous said...

Continuing right along :

7) The "Calculator" chart link to Elaine's post shows in the upper box for the coming school year that all of the math manipulations I reviewed in my prior commentary immediately above lead to a derived "Budget-Real Estate Taxes at 2013-14 Millage Rate" amounting to $55,942,561. If you subtract from this the 2012-13 figure in the box below of $54,914,200 the difference is $1,028,341. This difference in turn is precisely 1.87% above the real estate tax revenue for 2012-13 and within the maximum 1.9% legal limit established for MTLSD.

Question is, was all this a work-back from the 1.9% dollar figure ? There were really only 2 numbers to be determined - property value $'s and millage rate, the product of which could not exceed 1.9% of $54,914,220 or $1,043,370.

The District was advised of the latest County property valuation for MTLSD on May 3,2013 of $2,715,449,015 and knew this had to be *adjusted* (reduced)- this final County figure was 25% higher than that for 2012-13. I believe the District was trying to achieve the highest millage rate possible but still be able to tell taxpayers it would be at least a reduction of 20% below that of 2012-13. This would seem to compensate for the 25% reassessment increase.

To achieve this required that they have to juggle and create some combination of reduced property value X a high target millage rate. Hence, they incorporated the questionable appeals-yet-to-be-determined assumption plus appeals not apparently allowed as deducts. This resulted in a millage rate the District incorrectly claimed was 20% lower, but really only 16.7% lower. Why want as high a millage rate as possible ?

Another pause because of a rather long explanation but approaching keystroke limits.

Bill Lewis

Anonymous said...

3:22 PM The person was a friend of mine who wishes to remain anonymous, as you do.

Act 1 does not specify a requirement for determining a revenue neutral millage prior to a final allowable rate that I am aware of. Only that the tax dollars so arranged and collected do not exceed the 1.9% MTLSD limit allowed for 2013-14.

Although the Anti-Windfall law requires a revenue neutral millage rate determination, and the District did not comply, were you and others reading this also aware that the Municipality did not disclose a revenue neutral millage rate in spite of the fact that they also passed an ordinance (believe it is now numbered 3225) on December 11, 2012 that said they would by Resolution this month, but did not/will not ?

If you check on several surrounding taxing jurisdictions, for instance, I believe you will find the same thing. There are no penalties for non-compliance by governments or government agencies in many , far too many cases. Recourse - complain to your state officials, the PDE, etc., or file a writ of mandamus, or a lawsuit for nonfeasance ? Don't waste your time or money in this Commonwealth.

Bill Lewis

Lebo Citizens said...

Bill Lewis, your 2:44 PM comment talks about the irregularities on page 12 of the March 11 presentation given by Timmy. I had a post about this back in March called, Wait a minute!!
They're all over the place!
Elaine

Anonymous said...

Bill, I wasn't asking for the name of the person as I find nothing wrong with anonymous post for the most part. I was curious that they might be a director, administrator or employee of the district, but even that isn't really important.

The important issue is why the SD should be allowed to operate clandestinely? I agree, as long as our representative kowtow to the NEA and PSEA their will be no control.

Anonymous said...

The Budget Resolution is a very long detailed document that nobody wants to read because it is so long. However, there are significant details disclosed in that motion. It is possible that the revenue neutral millage figure might be contained therein. File a RTK request for the Budget Resolution passed by the board if you dare.

Anonymous said...

Elaine @ 5:06 PM Wait a minute !!

You're right, but real problem is that the math on page 12 is all wrong and no one, none of the others that commented, even began to notice or seemed to recognize it. Is everyone math challenged and/or indifferent ? Do we accept anything a taxing body feeds us without checking it out or question ? Is everyone "just too busy" ?

For instance, if the page 12 item 1. value applies to each following item, each of the separate calculations in items 2., 3., and 4. are incorrect - each would lead to a different and incorrect dollar value of a single, solitary (i.e. 1.00) mill. Here are the 1.00 mill values derived from the math exhibited in each of the items :

Item 2 = $1,826,087

Item 3 = $1,690,909

Item 4 = $2,022,472

The value of a single 2012-13 mill is actually $2,122,795 according to the District.

Who was the District employee that prepared page 12 and performed the math calculations ? Who proof read it, verified the calculations ? Let's put the name(s) out here.

Bill Lewis

Lebo Citizens said...

"File a RTK request for the Budget Resolution passed by the board if you dare."
Wow! Thanks,Jo.
Elaine

Anonymous said...

6:18 PM The apparent fact that a RTK would be required to determine if what should obviously be openly available and public information is available only in a closely held document should prove to everyone that this District is about as nontransparent as a public organization could possibly be. Absolutely shameful !

Anonymous said...

That's where your wrong 6:18. School Board Members may not want to read it because it is so long. But we do. Put it on the web.

Anonymous said...

I would love to see the District have to apply their TERC Investigation math procedures in public to attempt to verify the Super's flawed and very misleading power point presentation in March. The board sure bought it without question, probably convinced Jan Klein prepared it.

Maybe the Super should return to his expertise on wind instruments - he's sure full of enough hot air !

Anonymous said...

All of this money out of residents' pockets, for what? To keep paying the teachers' union and satisfy the egos of the board who are building their own legacy.

The renovation project is a real mess, already there are defects coming to light (shades of the public safety building) and the cheapening of materials has made it an eyesore even to those who work there.

The collective school board has sold this community down the river. They should hang their heads in shame!

Richard Gideon said...

As a follow up to Mr. Lewis' excellent analysis of the District's financial situation (and especially his post of May 25, 2013 at 3:05 PM), back on 28 March 2013 I wrote to Mrs. Klein and asked her the following question: "It is my understanding that the $2.3 million in back taxes owed by the former 'The Covenant' senior living facility was paid to the District upon sale of that facility to Concordia. Has that amount been used to offset the millage rate?" I received the following reply: "All taxes due from Covenant were paid and recorded in the District's accounting records as they were received.

If you would like specific records as to revenues, you may access our financial reports on our website at www.mtlsd.org
"

That is not an answer to my question, as I already acknowledged that it was my understanding that the back taxes had been paid. I have a suspicion that Mrs. Klein knew where this was going and decided to avoid answering the question.

Anonymous said...

Jan Klien does a perfect imitation of Lois Lerner... "if you want the information you're going to have to find it yourself, I'm taking the Fifth."

Lebo Citizens said...

RG, that seems to be the standard response. "It is on the District website." And it is not.

Word on the street was that Jan Klein was going to retire this year. That didn't happen!
Elaine

Anonymous said...

RG @ 12:37 PM

The Covenant $2.3 million in liened taxes...taxes that through millage "adjustments" the rest of us who pay our taxes ended up paying the District...were received and booked by the District. Because such a recovery had not been budgeted, the $2.3 million dropped down to the bottom line and became classified as unassigned surplus funds at year-end. The school board subsequently allocated the entire amount to, as I recall, both a PSERS (teachers retirement)future funding account and the Capital Projects Fund. There was absolutely no school board consideration given whatsoever to providing a 1-year, 1.1-mill tax reduction offset to taxpayers.

Jan, of course, could have provided you the rest of the story as I just did with only a few keystrokes....

Bill Lewis

Anonymous said...

Bill, with Act 1, it actually discourages doing just as you suggest.

I would have been ok with them using the money to pay down capital projects to lower borrowing amounts.

But they spread it across a couple of line items if I recall correctly. One being OPEB, the other a PSERS stabilization fund, and I can't remember the third...maybe the HS project.

OPEB and PSERS are regular expenses. This is the reason Dan Miller proposed not floating bonds for road repairs. It doesn't make sense....just as it doesn't make sense to fund annual expenses like OPEB and PSERS out of "found" money.

It makes the future tax increase even worse.

Anonymous said...

4:28 PM Yes, it's just that I don't trust any of them with *found* money...they'll spend it at the first opportunity.

I well remember a MTLSD school board president in the 90's...Henry "Skip" Kasky...at a point when the District had amassed millions in excess fund balance dollars, and in response to a taxpayers request that the millage rate be reduced, stating, "That's not gonna happen, we're better managers of money than you are".

I believe that same attitude continues to prevail even today.

Anonymous said...

Whoops, forgot to identify myself as the submitter of the 6:08 PM comment.

I also have 2 witnesses to that Kasky statement who remain Mt. Lebanon residents. We may be old, but we're not forgetful of shenanigans.

Bill Lewis

Anonymous said...

Bill,
You might also remember Kasky never managed the District's money but he did do investments for Charlie Steele.
John Ewing

Anonymous said...

Yes John,

I don't think many current bloggers would recall Charlie Steele. He was the District's labor lawyer for the teachers contract back then who lived in and worked out of a motor home to also be able to handle multiple concurrent school district clients scattered about the Commonwealth, maybe even Ohio.

Wasn't it the case that he got caught overbilling clients and was disbarred, or something like that ?

Bill Lewis

Anonymous said...

Bill:
Same Charlie Steele????

http://articles.mcall.com/1997-03-26/news/3126902_1_school-lawyer-school-districts-sentence

Attorney Gets Jail For Overbilling * Charles Steele, `The Best School Lawyer In Pa.,' Gets 33 Months For Abusing His Position Of Trust.
March 26, 1997|By MIKE FRASSINELLI, The Morning Call
Completing his fall from grace, prominent Pennsylvania school lawyer Charles Ellis Steele on Tuesday was sentenced to 33 months in prison for overbilling dozens of school clients, four in the Lehigh Valley area.

"You are about to sentence the man who is the best school lawyer in Pennsylvania. Period," Steele's lawyer, Bruce A. Antkowiak, said before U.S. Senior Judge Maurice B. Cohill Jr. handed down the sentence.

Lebo Citizens said...

Besides hoping for some disgruntled MTLSD employees, what can be done about this budget not adding up?
Elaine

Anonymous said...

Elaine - I'm sure it would add up applying TERC Investigation math. That must be what Steinhauer used in coming up with his March powerpoint !

Anonymous said...

Not much I'd imagine as long as we have people like Cappucci, Cooper, Birks, Posti and Lebowitz drinking the PSEA kool-aide.

Here's is an interesting report on whether teachers are underpaid, which is the biggest budget item in the district.

"Assessing the Compensation of Public-School Teachers"
http://thf_media.s3.amazonaws.com/2011/pdf/CDA11-03.pdf

It contains heady research and studies which I have neither the time or inclination to spend countless hours checking. I'm open to opposing evidence. An intelligent rebuttal would be welcome, but if all people can offer is mindless name calling (like "dimwit") don't-- we'll understand where you're coming from.

Here is the conclusion from the study and interesting points.

"CONCLUSION
After overcoming several methodological challenges to evaluating teacher compensation, it is evident that existing public-school teachers receive wages that are at least as high as comparably skilled workers, while their benefits and job security exceed what they could earn in the private sector. Overall, public-school teacher compensation exceeds private levels by approximately 52 percent, for a total of more than $120 billion annually in excessive labor costs.68 State and local governments seeking to balance their budgets in difficult times should take a close look at teacher compensation, which is considerably higher than necessary to retain the existing teacher workforce. More fundamental reform of teacher compensation would scrap the existing rewards for education and experience—and instead pay market rates to teachers who are measurably effective."

Some culled facts gleaned from the study--

• The wage gap between teachers and non-teachers disappears when both groups are matched on an objective measure of cognitive ability rather than onyears of education.

• Public-school teachers earn higher wages than private-school teachers, even when the comparison is limited to secular schools with standard curriculums.

• Workers who switch from non-teaching jobs to teaching jobs receive a wage increase of roughly 9 percent. Teachers who change to non-teaching jobs, on the other hand, see their wages decrease by roughly 3 percent. This is the opposite of what one would expect if teachers were underpaid. Second, several of the most generous fringe benefits for public-school teachers often go unrecognized:

• Pension programs for public-school teachers are significantly more generous than the typical private sector retirement plan, but this generosity is hidden by public-sector accounting practices that allow lower employer contributions than a private-sector plan promising the same retirement benefits.

• Most teachers accrue generous retiree health benefits as they work, but retiree health care is excluded from Bureau of Labor Statistics benefits data and thus frequently overlooked. While rarely offered in the private sector, retiree health coverage for teachers is worth roughly an additional 10 percent of wages.

• Job security for teachers is considerably greater than in comparable professions. Using a model to calculate the welfare value of job security, we find that job security for typical teachers is worth about an extra 1 percent of wages, rising to 8.6 percent when considering that extra job security protects a premium paid in terms of salaries and benefits.

We conclude that public-school teacher salaries are comparable to those paid to similarly skilled private sector workers, but that more generous fringe benefits for public-school teachers, including greater job security, make total compensation 52 percent greater than fair market levels, equivalent to more than $120 billion overcharged to taxpayers each year.

As I said, I don't know if the info in the study is biased or not. I'm open to reading an intelligent and well-presented rebuttal.

As long as taxpayers are swayed by "its for the kids" tax increases nothing will change.

Anonymous said...

Hey 9:59 AM & 10:32 AM - thank you ! I hadn't really followed ol' Charlie much since he left our scene back in the day. I think Charlie's former partner, Mr. Hoffman, may still be on the scene from time to time ?

Sort of recall it was also sometime back when that the then school board approved what is termed an "early bird" teachers contract one early Saturday morning with little advance public notice giving teachers a 25% salary increase over just 3 years. Of course it was for the children back then as well.

Bill Lewis

Anonymous said...

Don't forget the state raising the pension multiplier from 2.0 to 2.5 (that could be applied retroactively) back in 2002. That increase in how pensions are calculated plays a big role in the pension crisis districts are facing today.

Anonymous said...

Bill,

Opponents say the contract's Sept. 2, 2004 passage was rushed to avoid a taxpayer referendum.

Raises averaged 5.14 percent over the life of the contract, with the greatest jumps in salary for teachers with eight to 18 years of experience, a range where Hoffman said Mt. Lebanon lagged behind most other districts.

Hoffman said he still believed the contract is fair, even if it does appear to give much to the teachers. "It's not a concessionary contract," he said.

http://www.post-gazette.com/stories/local/neighborhoods-south/mt-lebanon-hopes-to-avoid-teacher-contract-tension-till-2010-550240/

Any raises teachers get today are compounded on top of the raises they got in the past.

Anonymous said...

We're even screwed by the lawyers hired to seemingly protect the taxpayers interests in employment contract negotiations aren't we !

Anonymous said...

In what other line of work can you go to jail for overcharging government agencies, then go back to work in the same field after doing Federal time?
http://old.post-gazette.com/regionstate/20000926charley8.asp

Anonymous said...

Steele just got a new gig with the Reynolds School District in Greenville:
http://www.reynolds.k12.pa.us/Downloads/BdNews%2005152013.pdf

Richard Gideon said...

Examples such as Charlie Steele, Henry Kasky and the current Mt. Lebanon School Board demonstrate that real reform in public education will not - repeat, will not - occur at the local level. Real reform must begin in Harrisburg, because Harrisburg sets the rules of the game when it comes to education in Pennsylvania. Even if you elected nine reform-minded people to our school board it would not solve the problem of pensions and extravagant building projects.

Reform can happen. It is happening in such places as Colorado, Michigan, Rhode Island, Hawaii and Indiana. It is even happening in California!! The REASON FOUNDATION recently released a study entitled Weighted Student Formula in the States (click the link to read it). The study, by Lisa Snell, Director of Education Policy at Reason, states, "Public funding systems at the state and local level are also adapting to a 'school funding portability' framework, where state and local school funding is attached to the students and given directly to the institution in which the child enrolls. School funding portability systems (in cities like New York, Baltimore, Denver, Hartford and Cincinnati, and states including Rhode Island, Hawaii and Indiana) are funding students through student-based budgeting mechanisms. In 2012, Prince George’s County, Newark and Boston moved to full weighted student formula systems whereby the money follows the child, with schools receiving actual dollars( rather than staffing allocations) based on each child’s precise funding determined by various 'weights' based on factors such as grade level, socio-economic status and past educational performance."

While most people favor local as opposed to state control over education, it is nonetheless important to realize that local governments are probably better at tyrannizing their residents because they are closer to them; thus any local school district that cannot be brought to account will eventually become dictatorial. Also, sincere people may disagree over what constitutes "local control." I favor the definition that says the family is the final arbiter of what is best for its children.

The whole concept of the "school district" needs to go, along with the residential property tax that feeds its enormous ego.

Anonymous said...

I'm not sure I agree with you all the way on disolving local school districts.
People do move to areas like MTL, USC and NA because of excellent schools. We had a gentleman speak at board meeting afew years back, that claimed he moved out of the city to get his kids into a good district and away from drugs.
I believe he was disapppointed on the second item.
Without the school district anchor it will be hard to evaluate just what a communities priorities are, in my opinion.
I will agree that their need to be changes at the state level, especially. We need acts that actually have some teeth. Districts should be forced to change auditors every 3 years or so.
If there is a hint of foul play, hidden bookings etc., there must be a way to get to the bottom of it.
Things like school construction projects should be automatically put to a referendum. If the well-educated, highly paid administration can't create a persuasive campaign to motivate 51% to vote for their projects, may be they aren't the intelligent leaders we think they are!

Anonymous said...

Mr. Steele is now practicing law with an attorney who is filing court cases on behalf of a Wisconsin client who wants to remove the Ten Commandants from public properties in Pennsylvania. Mr. Hoffman is employed by the Mount Lebanon School District's solicitor's law firm He attends Mount Lebanon school board meetings after executive sessions on personnel.

Anonymous said...

Its like Mr. Lebowitz discussing an upcoming self-evaluation being conducted by the district staff, with a possible retreat to evaluate the findings.

Yeah like, how unbiased and transparent is that little exercise going to be. Oh of course, the results will be... "we're doing one helluva a job for how little we make! If the state would only send us more money... oh the things we could think and the things we could do!" (apologies to Theodore Geisel.)

OK class, now here's your chance to grade yourself!

Is this the thinking that is going on in public education today?

Lebo Citizens said...

Mr. Hoffman was also the solicitor at the Act 34 Hearing. See page 2. Act 34 Hearing transcript
Elaine

Anonymous said...

Good post, Elaine. You highlighted Mr. Hoffman has been involved in personnel matters and the high school project. Where was Mr. Peterson?

Anonymous said...

Hi Tom,

I would like to add to your thoughts about who is underpaid. I think the younger teachers suffer underpayment more than the senior teachers. When the district and the union negotiate a contract the focus is on the percentage salary increase as a total lump sum. The two sides then decide where the money is to be placed on the Steps and Lanes of the salary scale. The Steps are payment for time in the job and the Lanes are payment for higher education degrees.

Most of the negotiators for the union are the longer serving teachers who have been underpaid for many years too. Being senior teachers, they appear to say to the younger teachers, “We get ours now, and you get yours later.” This mindset runs up the higher end of the salary scale and the pension payments beyond where they should be, so I would suggest that the more skillful teachers are eventually compensated for their efforts while the less skilled teachers are overpaid for their efforts over their working lives.

This is all done for the children, of course, just like your argument that skillful teachers are underpaid. Deep down we all know the teachers pay scale is for the teachers but parents don’t dare expose the teacher myth for fear or retribution against their children.

Anonymous said...

Apparently 7:50 you didn't read the PDF offered by 11:12.

You suggest that younger teachers are underpaid, would you care to tell us how you arrived at that conclusion? Especially when a high percentage of current college grads are underemployed and in many instances not in jobs unrelated to their degrees or totally unemployed.

I don't disagree that younger teachers may make less than older teaches, but in what occupation doesn't seniority bring it's own rewards. Except maybe athletics where the star college athlete's compensation rockets past the senior journeyman.

Anonymous said...

7:50, what do you propose?
Should we solve the unfairness problem by paying the younger teachers more?
Then, when there is no more hockey stick, the senior teachers will say it's not fair, and they will demand more pay. There is always unfairness somewhere in the pay scale so they can keep crying for more with every contract.
How about lowering pay to make it fair instead?
Of course the teacher pay scale is for the teachers. It's no myth! Who else do you think the teacher pay scale is for?
I have seen parents speak at meetings lately. They are not afraid of retribution against their children. Instead, they see complaints fall on deaf ears.

Anonymous said...

Eureka, I've got the answer!

At the start of every school year we let every teacher establish their own individual salary and benefits. That way no ones under or over paid. A perfect world, everyones happy except no one will tell us how to pay for it all.

Anonymous said...

We need to do several things:

Hire college graduates to avoid multi-million-dollar grievances.

Eliminate post-employment healthcare entirely.

Let teachers work until Medicare age.

Reduce pensions at least 25%.

Hire a consulting firm to tell us what a teacher should be paid in salary and benefits based upon the Allegheny County job market.

Anonymous said...

Not a bad idea, might want to employ the wide-spread rule in private industry about relatives working in the company.

Several big name employers in the aRea are requiring staff to re-apply for their positions. Teachers might want to try that on for size.

Lebo Citizens said...

Another example of Lebo math at its finest is under revenues in the final budget. Jan Klein is showing a 9.8% increase in state revenues. Yet our more vocal Lebo grads on the board are saying that there have been state budget cuts. This is why I only voted for Durwood Hill for school board. Look at his answer to question number 6. http://www.mtlsd.org/district/districtpta/durwoodhill.asp
We're getting more money from the state, yet Lebo alumni Lebowitz, Birks, Cappucci, and Posti are saying otherwise.

Who filed a RTK for this double dog dare:
"File a RTK request for the Budget Resolution passed by the board if you dare."
Elaine

Anonymous said...

This has always been a problem. Board members state something like "Gov. Corbett has cut state funding to our district" and immediately everyone believes it's true.

No one says, whoa their Mary, back up a minute. Klein's budget shows an increase so on what information do you make your claim?

But, what is even more infuriating is that our "CFO" and our Superintendent, the very people that have the accurate numbers right in front of them, sit like bumps on a log. Why?

Because, contradicting the claim doesn't serve them. They're not working for the students, representing the taxpayer. They're working to feed the system.

Anonymous said...

Elaine,
You bring up a good point. Anti-Corbett people are suggesting that the State has not stepped up education funding the last few years.

What they are talking about specifically is the Basic Education Subsidy. This is an amount the state gives to school districts based on "need" as determined by a nice funding ratio.

But what these same people completely ignore is how much the state has been required to increase funding due to the PSERS crisis. The increase you see in the state funding is only slightly related to the BES and greatly related to PSERS. The state is on the hook for half of every school district's increase each and every year! That's a boat load of money.

Just think, if Corbett decided to freeze the PSERS increases, how would the school districts then fund even basic education on their own?

The whining from the anti-Corbett board members is a complete and utter joke.

The first thing he will freeze is construction reimbursements (and I think he has already started this). The second thing he might look at is how the state funds retirement.

Anonymous said...

At least we know Birks is too dumb to read a State budget - and too lazy to read a Lebo budget.

Anonymous said...

COULD BE THE MOUNT LEBANON SCHOOL BOARD BUDGET TRICKS !!!!

By Tribune-Review

Published: Tuesday, May 28, 2013, 9:00 p.m.
Updated 15 hours ago

As most Americans began their three-day Memorial Day weekend, the increasingly familiar sequester “misery” index once again “rose” to the public's attention. The word from Washington was that about 115,000 federal workers were being furloughed to meet those dastardly budget cuts.
And while the mainstream media sympathetically reported on the plight of those workers, they somehow missed the federal job postings since March: In all, jobs for more than 10,000 people have been posted. Median salary? About $76,000. And a quarter of the advertised positions pay $113,000 or more, according to a Washington Times analysis.
While high-profile jobs directly affecting public services went on the sequester's chopping block, the Defense Department was busy recruiting 71 bartenders and 123 waiters; half of those positions were listed post-sequestration, The Times reports.
And while the Transportation Security Administration warned of widespread flight delays — that is, before Congress stepped in — it, too, was listing job openings — in all, 439 positions since March 4.
“An email from one federal agency indicated that it was intentionally placing the brunt of the cuts on critical and high-profile positions instead of low-priority jobs to lend credence to the dire warnings it had proffered to Congress in a plea for more funding,” The Times reports.
Government's dirty little secret is that the 2011 Budget Control Act, which triggered the sequester, is partially responsible “for today's temporary improvement in spending and the deficit,” The Heritage Foundation reports. It's time Congress stops the incessant whining and prioritizes the cutting.

Anonymous said...

It appears Mary is just a marionette for the administration and teachers.

How else do you explain that an experienced CPA that never sat on the school board can figure out that state revenue isn't down, but Mary can't?

She could read the budget report and ask Jan why the discrepency, but she won't because that wasn't why she was put in office.

Anonymous said...

I'm a new(ish?) resident of Mt Lebanon (moved here last year almost to the day) and had the need to be more involved in the community. I knew I had a lot of work to get caught up on the local goings-on, but just reading the past few posts I found out that I have a long road ahead of me. I'm relatively young (31) and plan on living here the rest of my life so hopefully I can figure it all out.

Lebo Citizens said...

Hi 3:17 PM. Welcome to Mt. Lebanon! Looks like you are getting a good start at a young age. Even though I lived here most of my life, I didn't follow any of the school district or commission aspects of Mt. Lebo. It wasn't until the high school renovation boondoggle started that I even attended a school board meeting. I totally missed the elementary school renovations. I remember going to my old school (Jefferson Elementary) a couple of years ago to take a picture for my website and was surprised to see how it changed. That is pretty pathetic, but I was working two jobs and taking care of loved ones. Who had time???
If you have any questions, email me at EGillen476@aol.com, and I would be happy to answer them if I can, or get you to someone who will be able to help you.
Elaine

Anonymous said...

3:17 welcome to the neighborhood... its a great place to live and if we manage it right, it can be the best right place at just the right time if the following is true.

http://www.bizjournals.com/pittsburgh/blog/the-next-move/2013/05/the-growing-desire-for-compact.html

May 22, 2013, 2:12pm EDT
ULI survey reveals a growing preference for more walkable communities
Tim Schooley
Reporter- Pittsburgh Business Times

"In a survey about American views on housing, transportation and community, Ross emphasized a substantial preference by a host of different respondents for compact development, a term suggesting a market opportunity not just for cities.

The survey doesn’t present great news for distant McMansions, with 61 percent of the respondents indicating they would prefer a smaller home with a shorter commute than the inverse.

Ross noted that 53 percent of the respondents wanted to live close to shops, restaurants and offices.

While the survey revealed the desire for home ownership is as strong as ever, Ross described a survey that pointed out the opportunities to be had by communities the prepare themselves for new residents."

We all know the desirability of our walkable community.
Now if we can just figure out how to work together to attract new residents and businesses.

Anonymous said...

3:17, you don't look newish! Sorry an old joke I just couldn't let go unused.

Perhaps we all can learn a thing or two from you-- neighbor.

What convinced you to settle here?
What's your favorite thing?
What's lacking that you wish were here?
Now that you discovered Elaine's blog... what do think?
Anything you'd like to comment on?

Here's hoping for a long healthy and prosperous life in Leboland!

Lebo Citizens said...

I love this kid! Student suspended for Twitter Budget "Riot"
Elaine

Anonymous said...

Elaine,
It sounds like the executive principal's job was up for a budget cut. The senior must have heard the PTA gossip about the principal and put the information on social media.

Damion Deringer said...

Thank you Elaine and everyone else for the welcoming, I appreciate it.

To answer some of the questions:

What convinced you to settle here?

It was the perfect forever home in a great school system and a neighborhood that has sidewalks! Previously, we lived in Moon and there were no sidewalks in the township so it felt like we were isolated from everything. I grew up in Oakmont and there were sidewalks everywhere so you felt like a community.

What's your favorite thing?

The people are all so friendly and we can walk almost everywhere. Being pretty far from Uptown makes us have to drive up there and then walk, but it is still a great place.

What's lacking that you wish were here?

Honestly, I don't think I've been here long enough to answer that properly as I'm still discovering what is actually here. My last job was being a project engineer on a few heavy civil construction sites (turnpike and Pitt airport) so I was working 100 hr weeks. As you could imagine, I didn't have time to go exploring.

Now that you discovered Elaine's blog... what do think?

There is a great deal of information here and, being a nerd, I love it. I have been reading through a lot of the posts and comments trying to take it all in. I'll admit sometimes it can be a little much, but I'll eventually be able to understand it all.


Anonymous said...

Damion, when we were looking at returning to the area many years ago Oakmont was in the running so I get where you're coming from.

As the ULI study offered above at 4:25 shows, people are rediscovering the joys of a "neighborhood business district" with convenient access to the city.

Hopefully, our commissioners and directors won't chase away all the businesses thru higher taxes/fees and destroy the small town charm. If storeowners, businesses and restaurants can't make a profit because of high taxes and because residents lack of cash for discretionary spending they'll destroy the very community they claim to be protecting.

Damion said...

I may be a Democrat, but I do appreciate the value behind low taxes and streamlining government spending/processes. Hopefully in the next couple of weeks I will get up to speed and will try my best to make a difference any way I can.

Anonymous said...

Welcome aboard, Damion! If nothing else... Vote! Something 80% of your neighbors elect not to do. Such a shame, especially in light of Memorial Day, where we remember those who sacrificed to preserve that right.

Damion said...

Well, I haven't missed an election since I turned 18 so I vote and vote often. Though this last election was a little rough for me as I knew very little about the candidates. I did vote Libertarian for the 42nd as I usually do when I know nothing about the main 2 parties' candidates or refuse to give in to the two party system. I know it is weird hearing that from a Democrat but I believe in freedom for all people and the ability for other parties to freely join any election race just as easily as the R's and D's. Come June, I will try my best to attend all board and commission meetings to get a handle on who is who.

Anonymous said...

Damion--
An engineer with civil construction experience, a democrat that has no problem voting libertarian... be careful, you may create a group of fans that would like to see you run as a write-in candidate should you be so inclined.

Damion said...

Well, I would like to think there are people out there that are more qualified than I on the subject of Mt. Lebanon as I am a very new resident. On the other hand, if I get up to speed and am comfortable with my knowledge of the goings-on then maybe next year.

The one thing that confused me when reading over some things: The commissioners get paid $3500 a year, why? Shouldn't that be a voluntary position? I know its not much but $17500 a year is way too much to pay people that took the position to help their community, not make money off of it.

Anonymous said...

12:08 interesting.
I actually a conversation with Remely after the Bethel candidates forum on this subject, so I'm probably not really anonymous.

Dan mentioned how costly it was to run for office. I'd imagine most candidates win or lose, put a lot of their own money into their campaigns. Plus, should they win, $3,500 is hardly what I'd call an income windfall.
I even believe that school directors should get paid a small stipend for their service. The hours, travel, headaches they endure are worth something.
If they choose they could always give the money to the PK fundraiser.

Perhaps we might actually find more good people volunteer if some of the cost of serving were covered.

We pay federal, state and county representatives often times very lucrative salaries and benefits... why not a little something for the local people.

I could be persuaded to revise my view though.

Damion said...

I don't feel like a politican should be reimbursed for winning an election. The reimbursement is winning. The losers of the elections know the risks associated of getting involved in a campaign.

As for the expenses they have as representatives of Mt. Lebanon, they should be reimbursed with proper documentation given. Travel to and from commission meetings is not included in that reimbursement and "headaches" are part of the job. The good acts that you do for your community should be reimbursement enough. But, as always, that is one man's opinion.

As for fed, county, and state representatives, those positions are full time and should be paid as such. Though, I can be persuaded to say that state government should be part time.

Richard Gideon said...

Mr. Deringer:

Welcome! As one of the few registered Libertarians in Mt. Lebanon, I am delighted to read that you are open to alternative political philosophies. If you please, may I recommend The Reason Foundation (www.reason.org) and Reason.TV (www.reason.com/reasontv) as excellent libertarian resources. I am biased, of course, as I am a sponsor.