Budget Commission Discusses Aquilla Village Dissolution
and Considers Issues with School Funding
Budget Commission Meeting – November 18, 2024
Meeting Details: The Geauga County Budget Commission met in Regular Session on Monday, November 18, 2024 at 10:00 am in the Auditor's Conference Room, 215 Main Street, Chardon, Ohio. The meeting was in person with a virtual option via MS Teams.
Meeting Attendance: Prosecutor Jim Flaiz, Treasurer Chris Hitchcock, and Auditor Chuck Walder.
Staff Attendance: Assistant Prosecuting Attorney Kristen Rine (virtual), Chief Deputy Auditor Ron Leyde, Deputy Auditors Tammy Most and Kristen Sinatra, and Chief Operations Officer Pam McMahan.
County Staff: Budget and Finance Manager Adrian Gorton (virtual).
Members of the Public: This LWV Geauga Observer (virtual).
The meeting was called to order at 10:02 am.
Minutes: Minutes from the Regular Meeting on November 4, 2024 were approved and will be available here when published
The following Revenue Certifications were approved:
Reviewer Note: An explanation of the different types of funds in revenue certifications can be found here.
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Auburn Township - Amendment #3. $1,017,414.90 in the general fund, $4,703,996.37 in special revenue funds, $214,688.00 in debt service funds, and $203,954.45 in capital project funds for a total of $6,140,053.72. Appropriations do not exceed revenue.
Auburn’s amendment certified a $60,000 increase in the capital projects reserve fund.
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Thompson Township - Amendment #6. $420,415.34 in the general fund, $1,799,292.14 in special revenue funds, $140.56 in debt service funds, $150,000.00 in capital project funds, and $1,831.69 in special assessment funds for a total of $2,371,679.73. Appropriations do not exceed revenue.
Thompson’s amendment reflected a $40,000 increase in the special revenue safer grant fund.
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South Russell Village - Amendment #8. $1,898,321.81 in the general fund, $7,950,074.11 in special revenue funds, $1,614,830.46 in capital project funds, and $210,299.54 in fiduciary funds for a total of $11,673,525.92.
South Russell’s amendment reflected a $7,500 increase in the OPWC (Ohio Public Works
Commission) capital projects fund.
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Geauga County - Amendment #10. $54,612,226.17 in the general fund, $129,324,826.00 in special revenue funds, $5,572,596.38 in debt service funds, $1,256,502.32 in special assessment funds, $30,201,581.61 in capital project funds, $16,711,930.52 in enterprise funds, $1,449,886.67 in internal service funds, and $4,138,083.61 in fiduciary funds for a total of$243,267,633.28.
Geauga County’s amendment certified the following increases in three special revenue funds:
$2,882,740.76 in the Public Assistance - Job and Family Services (JFS) fund, $55,872 in the Common Pleas Court fund, and $2,917,012 in the Community Development- Brownfield Remediation grant fund.
A Geauga Trumbull Solid Waste Appropriation Transfer of $1,800 was acknowledged by the Budget Commission.
Discussion
The Budget Commissioners discussed how property values would be determined in light of the recently passed ballot measure to dissolve Aquilla Village. Mr. Walder indicated that this would be discussed at the Transition Supervisory Board meeting on November 26, and he said his best guess was that new construction property valuation would be used. He explained that there will be a transition period during which Aquilla Village will cease to exist but will not be fully integrated into Claridon Township during which a Receiver will handle revenue matters. He said the transition period lasts from the official certification of the election results by the Board of Elections on November 19 until the State Auditor certifies that the transition is complete. Observer Note: The Transition Supervisory Board consists of three voting members: one County Commissioner and one representative each from the Auditor’s Office and the Recorder’s Office. This Board will select a Receiver to shepherd the resolution of Aquilla’s obligations and responsibilities. More information is available in this Geauga Maple Leaf article, which is behind a paywall.
Mr. Flaiz stated that Aquilla’s dissolution is the first one to occur under the new law. Observer Note: The new law is Ohio House Bill 101, and it lays out the transition process for village dissolution, including the creation of Transition Supervisory Boards. He said that he has spoken to the State Auditor’s Office and requested a list of potential receivers. He indicated that the individual at the State Auditor’s Office that he talked to said “ ‘...we’re assuming, you know, the County’s paying for this, or the entity or Township’s paying for it.’ ” Mr. Flaiz pointed out that the statute doesn’t clearly say who is responsible for paying for the transition process, but he said that his understanding is that paying for the transition would be handled by the yet-to-be-appointed Receiver. He specified that the Transition Supervisory Board is tasked with supervising everything the Receiver does: “... (the Transition Supervisory) Board is calling the shots, not the Receiver.”
There was a general discussion about numerous potential issues that might arise during the transition period, such as who would be responsible for plowing the roads or providing fire protection services during this time. These types of matters will be ultimately handled by the Transition Supervisory Board and the Receiver they appoint. Mr. Walder also theorized property taxes may need to be recalculated for Claridon Township due to the addition of the former Aquilla Village.
Mr. Walder said that he had met with State Deputy Chief of Staff and Chief of Budget and School Funding Aaron Rausch at the County Auditors Association of Ohio conference the previous week. He stated that Mr. Rausch went through the State’s formula for school funding in great detail for the audience of Ohio’s County Auditors, and Mr. Walder went on to say that “... we mutually determined that there’s an incredible flaw in their funding formula.” Mr. Walder explained that the funding formula does not include certain types of levies, such as emergency and substitute levies, which result in the State formula determining that the residents of school districts with these types of levies are under-taxed and therefore a 20 mill floor adjustment is imposed. Observer Note: Please see the May 20, 2024 Budget Commission Observer Report for more information on the 20 mill floor and school funding calculations. Mr. Walder indicated that Mr. Rausch agreed that certain levies are not included in the formula, and Mr. Rausch said that he would look into potentially adjusting the formula to correct this. Mr. Walder stated “I proposed (to Mr. Rausch) to do a last iteration loading in the levies that are outside of the calculation to account for them and income tax. And he said that he would consider it.”
Mr. Flaiz expressed the opinion that “...there shouldn’t be a formula,” but rather all districts should receive a set amount of funding per pupil.
Mr. Hitchcock said he asked the “...two very smart tax advisors (names unspecified) going through the whole process on school funding” at the County Treasurers Association of Ohio conference he recently attended whether or not emergency levies are tested by anyone on an annual basis, and he was told they are not. Observer Note: Testing an emergency levy refers to checking to see whether or not the conditions that necessitated the emergency levy are still in effect. Mr. Walder clarified that there are two reasons for an emergency levy: deficit spending or an unexpected event/anomaly.
Mr. Walder said that “it seems to me the disconnect between the school system in general and Budget Commissions is that they're required by this school funding formula program to provide five year budgets, and, if they show deficit in those in any of those five years, there are certain actions they have to take, including putting levies on. The Budget Commission is statutorily driven to only look at one year.” He went on to say “I would be okay considering the five year outlook, if we had historical trend basis for, how are you performing against your five year forecast? Have you always shown that five years out you're showing deficits that never happened?” Mr. Flaiz said he plans to take this approach during the next School Budget Hearings by “... overlay(ing) their five year forecast from five years ago versus what they did each year compared to that.” Mr. Flaiz wondered why predicted five year forecasts aren’t more accurate. Mr. Walder responded that he used five year budgeting when he was the Fiscal Officer of Russell Township and showed a deficit “... almost every time… because you always take worst-case, and you're taking worst-case times five.”
Mr. Hitchcock told the other Budget Commissioners that he will be meeting with County Township fiscal officials in the spring to give them the perspective he brings to evaluating entity budgets. He said that he plans to give each entity a historic trend analysis on their budgets.
Public Comment was solicited, but none was offered.
The meeting was adjourned at 10:39 am.
Next Meeting: The next Regular Meeting will be Monday, December 2, 2024 at 10:00 am in the Auditor's Conference Room, 215 Main Street, Chardon, Ohio.
Observer: Sarah McGlone
Editor: Anne Ondrey
Reviewer: Carol Benton
Submitted: 11/20/24
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