Grand jury report faults school officials for Penn Hills debt
Nearly a decade after the Penn Hills School District moved forward with two costly construction projects, an Allegheny County grand jury released a report Tuesday blaming the school board and district officials for poor leadership, mismanagement, inept decision-making and favoritism that has left the district in a “catastrophic financial condition.”
The district is now $172 million in debt, with the third-highest property tax rate in Allegheny County. The district’s financial situation makes it unclear
how it will recover or even continue to operate, the report said.
The 75-page report released Tuesday describes how board members, district leaders and vendors made decisions that showed a lack of understanding of future costs and obligations related to the projects. Meanwhile, the state Department of Education failed to provide proper oversight, the report said.
In an email Tuesday, district superintendent Nancy Hines said the report provided her with a “sense of relief that we have some type of closure,” but she noted that questions about the decisions and accounting missteps remained unanswered.
“However, I choose to live in the moment and to look forward,” she said. “There are so many good people who are associated with the Penn Hills School District, and among this group are our students, our residents, and our staff. Penn Hills is a proud and resilient community.”
The grand jury report was released about three weeks after the state Department of Education placed the district into financial recovery status, which means a chief recovery officer will be appointed to carry out a financial plan. The report said the district likely faces continued tax hikes, dwindling property values and the loss of more students to charter schools.
Board members hired a politically connected architect who lacked experience designing schools and allowed her to drive up costs — expanding the scope of the project and opting for highend materials, such as chandeliers and floor tiles imported from Italy — even as cost overruns imperiled the district, the report said.
Jurors did not recommend criminal charges but instead proposed a series of legislative changes. Among them:
• Require a referendum for any school district borrowing that reaches or exceeds 50 percent of its borrowing base limit.
• Extend statutes of limitation for Ethics Act violations.
• Allow the state Department of Education to require a referendum or stop a construction project if a district fails to comply with state rules on new school construction.
• Hold public officials liable if students are deprived of their right to a public education.
• Bar school board members from serving unless they complete mandatory training under the Public School Code.
In a phone interview Tuesday, state Rep. Anthony DeLuca, D-Penn Hills, described the findings as “mind-boggling” and said he would draft legislation based on the recommendations so other districts might avoid similar problems.
“There’s got to be a way to hold these people accountable,” he said. “Taxpayers shouldn’t have to pay for their malfeasance in office.”
The report makes limited reference to the actions of former business manager Richard Liberto, who was featured prominently in state Auditor General Eugene DePasquale’s scathing 2016 audit that prompted the grand jury investigation. The board fired Mr. Liberto in 2015 amid accusations that a bus contractor stole more than $260,000 in district fuel; tuition payments to alternative schools were under-budgeted; and that he failed to properly oversee district credit cards. He denied any wrongdoing.
After the audit, Allegheny County District Attorney Stephen Zappala’s office decided to take a closer look at the finances through a grand jury, the report said.
“The acts which caused this financial catastrophe, while most likely the result of a total lack of an understanding or sophistication regarding the intricacies of multimillion dollar financial transactions, had an impact upon the Penn Hills community which has been disastrous,” the report says.
In a statement, Mr. DePasquale said the report confirmed his findings that decisions by former district leaders had ravaged the district and community. He said he plans to hold a community meeting this month to discuss ideas for fixing the troubled district.
“I want to give members of the community a chance to be heard and share ideas that could move Penn Hills forward and keep the focus on educating students,” he said. “Major decisions are being made that impact the entire community and I want to hear directly from the people who are most affected.”
How it began
Penn Hills operated at multimillion-dollar losses, aggravated by steady enrollment declines and bad budgeting, as early as fiscal year 2005, according to the report.
By September 2007, the district was about $400,000 in the hole and unable to pay its bills. A state-appointed consultant found that the district had failed to cut staff in proportion to continuously falling enrollments.
Among other things, the consultant recommended that the district scale down the 218,000-square-foot high school by nearly 5 percent to manage enrollment drops.
But despite consultants’ recommendations to renovate and consolidate buildings to save money, Penn Hills instead opted to build two new buildings.
“The decision to build rather than renovate, the hiring of an inexperienced architect, and the continuous approval of unnecessary expenditures all contributed to the financial disaster the district is now facing,” the report says.
Political ties
Chosen to design the two school projects was Architectural Innovations of Ross, which was paid about $11 million for its work. Architectural Innovations, or AI, is owned by Jan Brimmeier, whose firm was described in the grand jury report as having little experience in school construction.
The report noted, however, that Ms. Brimmeier had strong political connections. Her sister, Bonnie Brimmeier, formerly served as solicitor for the municipality of Penn Hills and her brother, Joe Brimmeier, is the former chairman of the Pennsylvania Turnpike Commission. Later, in 2014, Mr. Brimmeier pleaded guilty to a felony conflict of interest in a pay-to-play scandal. He was sentenced to 60 months of probation, fined $2,500 and ordered to complete 250 hours of community service.
The grand jury said that the current school board president, Erin Vecchio, who was a board member at the time, formerly worked for the Turnpike Commission. According to the report, Ms. Vecchio was injured while working for the Turnpike and received workers’ compensation. When those benefits expired, she applied for a job with the state Department of Revenue and listed Mr. Brimmeier as a reference, according to the report.
He helped Ms. Vecchio land a job at four pay steps above the minimum salary for the job, the grand jury said. But in an attachment to the grand jury report, she said she was the lowest paid office manager in the entire department.
Later, after the board voted to build the new schools, Mr. Brimmeier called Ms. Vecchio to ask about the open architect position. He said jobs would be available for people in the Penn Hills area if his sister were to get the contracts, Ms. Vecchio testified to the grand jury.
Ms. Vecchio denied that her vote to hire AI was influenced by Mr. Brimmeier, testifying that she only provided him with information on the interview process, the report says.
Contacted Tuesday, Ms. Brimmeier said: “The Penn Hills School Board approved all construction decisions after Architectural Innovations made full disclosure through the school board’s liaison.”
Board member Donald Kuhn Jr. started working for the state Lottery Commission within weeks of voting to build the new high school, according to the grand jury report. He also denied that the job influenced his vote.
But according to board member Carolyn Faggioli, Ms. Vecchio and Mr. Kuhn called their board colleagues and urged them to vote for Ms. Brimmeier’s firm. All board members, however, denied that they hired AI for political reasons, according to the report.
Asked for comment Tuesday, Ms. Vecchio said, “I think this was the biggest waste of taxpayer money I’ve ever seen, with no results.” And she wondered why, after two years of work, the grand jury recommended no criminal charges against anyone.