Pittsburgh Public Schools, facing a multimillion-dollar deficit that will force it to draw down precious emergency money from its reserve fund, could find partial relief by overhauling its contracting processes, concludes an analysis by the Allegheny Institute for Public Policy.<\/p>\n
\u201cGiven the district\u2019s ongoing financial woes, compounded by the board failing to pass a much-needed school consolidation plan in November, any and all avenues to find cost savings must be seriously explored,\u201d says Alex Sodini, a research associate, at the Pittsburgh think tank.<\/p>\n
It was on Jan. 12 that PPS Controller Rachael Heisler (who also serves as city controller) detailed for the school board an October special report <\/a>on deficiencies in the district\u2019s request-for-proposals (RFP) competitive bidding procedures in awarding contracts, potentially costing PPS millions of dollars.<\/p>\n While PPS\u2019 procurement policies are largely guided by state <\/a>law<\/a>, RFP rules for personal service contracts \u201care relatively vague,\u201d the controller found.<\/p>\n The Heisler report recommended several moves that could help to improve financial discipline, participation and transparency in the district\u2019s procurement <\/a>process<\/a>. Two ideas are borrowed from the School District of Philadelphia (SDP).<\/p>\n \u201cThe first is to set a monetary threshold for which construction and professional services contracts require an RFP (and to solicit competitive bids),\u201d Sodini says. \u201cFor SDP, professional services and capital contracts over $100,000 require an RFP and one is recommended for contracts over $20,000.<\/p>\n \u201cAdopting similar rules would help clarify and bring consistency to PPS\u2019 vague and discretionary policies,\u201d the think tank researcher says, citing the controller\u2019s report.<\/p>\n The other recommendation is to increase the length that an RFP is open. Since the start of 2024, the district completed 25 total RFPs which were open, on average, for 27 days. RFPs for SDP were open for an average of 43 days while the controller recommended a length of 50 days.<\/p>\n \u201cAdopting both measures would allow for more potential bids, ideally increasing competition and quality, while diversifying the vendor pool,\u201d Sodini says, again referring to Heisler\u2019s conclusion.<\/p>\n Sodini notes that the report also highlights the shortcomings of data and resources available on the district\u2019s website. A centralized data source which provides detailed information regarding contracts, RFPs and vendor participation would allow for greater public scrutiny and accountability compared to the scattered and\/or scant information currently available, the Heisler analysis notes. PPS could use the City of Pittsburgh\u2019s dedicated procurement website as a model to make such a change, she says. <\/p>\n Lastly, the controller\u2019s office recommends PPS build relationships with local service providers in an effort to both reduce costs and increase the quality of services provided to students.<\/p>\n Sodini says Heisler estimates that implementation of these policies could generate $10 million to $15 million in savings annually. \u201cHowever, the actual cost savings will be difficult to predict ex ante. That is, based on estimates versus actual costs,\u201d he reminds.<\/p>\n But, regardless, he says finding cost savings is imperative as PPS remains in a precarious financial situation.<\/p>\n \u201cAssessment appeals have chipped away at the property tax base, while federal pandemic relief funds are almost fully spent,\u201d he notes.<\/p>\n Indeed, PPS\u2019 2026 approved budget received a boost of $12.1 million thanks to cyber charter reforms in the state budget. And district taxpayers were spared roughly $3.4 million as a 4% property tax increase was reduced to 2% owing to a state provision regarding an excess property tax relief allocation. <\/p>\n \u201cDespite these savings, PPS still expects a $5.7 million deficit, which will further draw down the district\u2019s dwindling reserves,\u201d Sodini cautions. <\/p>\n The Allegheny Institute has repeatedly highlighted the district\u2019s extraordinarily high spending per student \u2014 $33,524, 10th highest in the state as per the most recent data (2023-24) from the Pennsylvania Department of Education. <\/p>\n Yet, Sodini reminds that PPS ranked just 466 out of 610 school districts and charter schools for the 2023-24 academic achievement exams. <\/p>\n \u201cTaxpayers, parents and students deserve better,\u201d he says. <\/p>\n