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1435 Navahoe Drive

Pittsburgh, PA 15228

May 16, 2010

Mr. Ed Kubit
Mt. Lebanon Board of School Directors
Mt. Lebanon School District
7 Horsman Drive
Pittsburgh, PA 15228

Dear Ed:
Excluding the substantial one time $2.3MM lien tax recovery, the District could be as much as
$2.1MM improved to budget this year (09-10). Another way of saying this is that the Community
may have been over taxed by as much as 1.0 mill. At a minimum, the 0.3 mill tax increase you
supported last May was totally unnecessary and only contributed to the budget surplus.
Earlier this month, you responded to a budget question, in part: “The operating budget for the
district has essentially no increase from last year.” This is only true when one compares the 09-10
budget to the proposed 10-11 budget and handily ignores the recent 09-10 year-end estimates
indicating significant improvements in Revenues and Expenditures. You should be looking at
these fiscal realities, not continuing the shoddy past practice of fiscal planning based on budget-to-
budget comparisons.
In a word you have “pre-taxed” the Community. It is the cumulative effect of unnecessary tax
increases over the last few years that is enabling the District to forgo an operating expense related
tax increase. It is not your frugality.
For next year, salaries alone are proposed to be up more than $1.6MM or 4.0% compared to the
current year estimated actual expense, less anticipated retirement savings. Supplies, Repair &
Maintenance expenditures, without any meaningful explanation, are proposed to be up more than
$450,000 or about 20% from this year’s estimated actual expenditures.
A few months ago, in a mailing to the Community, you indicated: “The new High School design
takes into account enrollment projections over the next 20 years.” With the intervention of Dr.
Steinhauer, it was determined that your statement was not true. You told me that there was no
intention to mislead anyone. This time around, I am not sure.
My counsel is to reign in line items that may have extraordinary increases and use some of the
District’s mounding reserves to: a) reduce the proposed tax increase, or b) rebate monies directly
to the Community. When you think about it, the Community paid the recently recovered $2.3MM
liened taxes during the period the balance was outstanding. Go ahead and give it back – now.
Take care,

William R. Matthews III

cc: MTLSD School Board
Dr. Steinhauer
Mr. Ed Kubit
Mt. Lebanon Board of School Directors

May 16, 2010

2009-2010 Year End Estimate vs. 2010-2011 Proposed Budget

MTLSD - Year End Financial Analysis (end of March)
MTLSD - Proposed Final Budget 04-29-10