enterprise and stewardship
You might not know Janice R. Klein, but Mt. Lebanon School District Superintendent Timothy Steinhauer says she’s a friend of yours.
Klein, the district’s director of business since 1981, has saved taxpayers millions of dollars with her forward thinking, fiscally conservative management style. Her creativity helped shave millions from healthcare costs not just for Mt. Lebanon but for the region. And when she foresaw a change in state legislation that could jeopardize funding for the high school renovation project, she started planning the financing that allowed the $109.6 million project to proceed even before designs were on the table.
After 37 years of preparing budgets, negotiating contracts and planning, Klein is retiring to spend more time with her family on the West Coast and make more trips to her beloved Disney World. But don’t expect her legacy to be forgotten anytime soon.
“We’ll find somebody to do that job, but we will never replace her,” Steinhauer says. “She’s been a good friend to this community.”
“I can’t even put it into words,” school board president Michael Riemer says of Klein’s breadth of expertise. “Her fiscal leadership has put us ahead. [We are in] one of the strongest positions in the state. … All of the board presidents over the years have relied on her heavily. She is truly committed to this district.”
You might expect a top caliber finance manager to be staid, clad in a tailored blue suit, parked in front of a computer. But Klein’s number columns are the only plain thing about her. “I have the color sense of a 12-year-old girl,” Klein says. A black belt in Shoto-kan karate who also loves ballroom dancing, Klein wears Jolly Rancher-colored glasses, bright jewelry and nail polish and has an office festooned with classic animation prints. The most prominent one is of Jiminy Cricket, the cartoon conscience of Pinocchio. Former Superintendent Glenn Smartschan, who served from 1990 to 2002, used to call Klein “Jiminy Cricket” because it was her nature to remind district leaders of the proper procedures.
Steinhauer, superintendent since 2009, says Klein never shies away from speaking her mind, but her directness is helpful, noting he has never encountered a situation Klein hasn’t seen before.
Looking back at Klein’s career is, in effect, studying the financial evolution of the district for the past three-plus decades.
When Klein moved to Mt. Lebanon in 1981 at age 27, she was the only administrator with an accounting degree. The district’s $25 million, hand-typed budget was one inch thick. Want to change something? You gotta retype the whole page.
Schools were on a cash basis of accounting, which means expenses and revenue are booked when paid, not when incurred.
As she leaves, the schools have a $98.9 million, 200-page spreadsheet budget full of formulas that tie everything together. Change one number somewhere and the document adapts. Instead of the cash basis, the district now follows generally accepted accounting principles (GAAP), which require booking expenses and revenues when incurred.
For example, with a cash basis system, real estate transfer tax that is owed in June but paid in July would be booked in July. But under GAAP, it is booked in June. For the school district, that makes a difference, since its fiscal year starts July 1.
Klein, a Squirrel Hill native, earned her undergraduate degree from George Washington University in 1976 and an MBA from the University of Pittsburgh in 1981. She became a CPA in 1982 and was an adjunct faculty member at Carnegie Mellon University from 2002 to 2008.
Klein’s resume is a waterfall of awards to the point that she can’t list them all. It includes an alphabet soup of professional organizations she has served, including the Pennsylvania Association of School Business Officials (PASBO), where she has been president and this year won the PASBO Award of Achievement. She also was active in the PASBO’s West Central region leadership and in the Association of School Business Officials International (ASBO).
The accolade that means the most to her is the Gary E. Reeser Memorial Award, PASBO’s annual nod to the state’s business official who best exemplifies professionalism, leadership and innovation. As the presenter at the 2015 PASBO conference ticked off the qualities of the winner, she recalls thinking “That sounds like me.” It was. “It was one of the few times I was speechless,” Klein says.
“[Jan] is passionate about her work, but is known to bring quick wit and good humor to the topic at hand,” says Bob Saul, PASBO president. “During her career, Jan has regularly contributed to her profession by sharing her lifetime of accumulated knowledge in school finance and operations with other PASBO members.”
Steinhauer notes that Klein consistently wins the Government Finance Officers Award (GFOA) for her comprehensive annual financial report, which helps the district create benchmarks for measurement and provides transparency for taxpayers to see how their money is spent. The ASBO and GFOA awards mean the finances are reported accurately.
Smartschan says Klein kept the district’s finances safe by projecting revenue conservatively but projecting potential deficits aggressively. That way, the district was always prepared for the worst. “If you have a major issue with the budget, it can take you down,” he says.
He also noted Klein’s “integrity was beyond reproach,” a characteristic Klein says she got from her parents. “It’s always been my belief that you do the right thing for the right reasons, and everything else falls into place,” she says.
One of her best-regarded accomplishments is her role in kickstarting the Allegheny County Schools Health Insurance Consortium, of which she has been a trustee and a three-time chair. In the mid-’90s, health insurance costs had begun escalating unreasonably, with many districts struggling to pay the bills—in some cases the cost began to exceed 10 percent of district budgets. So in 1997, Klein and some fellow school human resource professionals and business managers conceived of a consortium that would pool resources with each individual district maintaining its own plans.
As the group of covered school districts (and a few other educational institutions) grew, the consortium leadership transitioned to include labor leaders as well as managers. Conversation also shifted to include pooling coverage into a common plan and considering quality as well as cost. Klein and her colleagues learned everything they could about healthcare and used consultants to evaluate the quality of providers. After all, the unions certainly would support their districts’ health care plans, if the care was top notch.
Districts then dropped their individual plans, and the consortium formed a narrower network using top-rated providers. Trustees now include superintendents, business managers, school board members and labor and union representatives. School staff members continue to have zero or low copays and deductibles. Lower out-of-pocket costs for in-network services naturally encouraged them to choose network providers.
“When you give good people data, you may not get the answer you thought but it will be the answer that benefits both sides,” Klein says.
What happened with that business model? The costs for health care for the consortium dropped from $241 million in the 2013-14 school year to $232 million in 2014-15. The group has averaged a 3 percent increase in its health care costs over the last dozen years with recent increases even lower. The effort earned a write-up in Forbes. The health insurance consortium now covers 61 school districts and related entities, and as Klein says, “almost 55,000 belly buttons.”
One of Klein’s talents is creative, well-timed bond financing, says Steinhauer. Refinancing bonds made it possible for the school district to use the proceeds to add air conditioning to all its buildings and to put artificial turf on the “Rockpile,” a practice field on the high school campus. The result? Upgrades without any new taxes. “She is always very thoughtful, very strategic,” Steinhauer says.
That strategic planning led to the structuring of bonds for the renovation of the high school years before the funds were needed. That was fortuitous in several ways: state legislators in the meantime passed Act 1 of 2006, which would have limited the district’s ability to borrow all the money needed. The head start made the financing doable. Additionally, rates were lower earlier on and structuring them sooner allowed the district to save money, Klein says. A second bond was floated later, under the Act 1 limit. Issuing two bonds also enabled the district to borrow only the money needed to complete the project, further limiting the cost to the community.
She also advised the administration throughout the planning to make sure money was carefully spent. “We did it as cost effectively as we could,” she says. The project plans were solidified in 2008, construction began in 2012 and was completed, in phases, by 2015.
All that sounds fairly far from the classroom, but Klein assures us it isn’t. “Everything we do is for the kids, even keeping our finances pristine and having a high bond rating means we pay less for debt service,” she says. “We don’t ever forget that we’re here to provide an excellent education for the kids. Everything else is secondary.”
Klein also points out the administration remembers its money comes from taxes. “The entire administrative team is very conservative. We’re not out there spending money to spend money,” she says. “We do not want to go to the board to raise taxes.”
Historically, Mt. Lebanon School District has been in a great financial position regardless of the state of the economy, a fact continued through Klein’s tenure, Steinhauer says.
In addition to the business director, the finance department includes five full-time employees who will work with the new director.
Klein will miss her colleagues and the mission. “If it weren’t for the dedication of the people in the school district to do what’s best for the kids, this job wouldn’t be worth it. It wouldn’t be worth the hours and the time,” Klein says. “I am leaving my successor a $100 million business that is well financed. That is well documented. And I am leaving a team I won’t have to worry about day to day.” Then she pauses. “I really won’t miss the politics.”
She will be done in December but plans to stick around for a while to ensure a smooth transition. She is looking forward to spending time with her son, Dan, a 1994 Mt. Lebanon graduate, daughter-in-law and two grandchildren in San Francisco; she wants her grandchildren to know her. “What do you want to be remembered for?” she asks. “Do you want to be remembered for your work? Or do you want to be remembered for what you do for your family?”