Budget Commission Regular Meeting – May 1, 2023
Meeting Details: The Geauga County Budget Commission met in Regular Session on Monday, May 1, 2023 at 10:00 am in the Auditor’s Conference Room at 215 Main Street, Chardon, Ohio. This meeting was in person with a virtual option via MS Teams.
Meeting Attendance: Auditor Chuck Walder, Treasurer Chris Hitchcock and Prosecutor Jim Flaiz.
Staff Attendance: Deputy Auditors Tammy Most and Kristen Sinatra and Fiscal Office Manager Pam McMahan.
County/School/Township/Village Representatives: Geauga County Commissioners Budget and Finance Manager Adrian Gorton, ADP Chief Deputy Administrator Frank Antenucci, and Geauga County Assistant Prosecutor Kristen Rine (via MS Teams)
Minutes: Minutes from the Special Meeting on 4/17/23 were approved.
Revenue Certification Requests:
The following Revenue Certifications were approved:
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Chardon Local Schools - Amendment #4. $62,230,201.53 in the general fund, $8,675,378.29 in special revenue funds, $422,512.47 in debt service funds, $2,731,823.21 in capital project funds, $28,851.38 in enterprise funds, $8,776,289.55 in internal service funds, and $217,505.70 in fiduciary funds for a total of $83,082,562.13.
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Geauga County - Amendment #5. $46,242,857.46 in the general fund, $124,955,857.53 in special revenue funds, $6,279,092.87 in debt service funds, $1,254,159.50 in special assessment funds, $27,344,356.76 in capital project funds, $17,543,060.25 in enterprise funds, $1,206,807.93 in internal service funds, and $3,757,550.66 in fiduciary funds for a total of $228,583,742.96.
Regular Business:
Discussion Items:
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South Russell Manorbrook Fund: Deputy Auditor Kristen Sinatra pointed out that South Russell Village had a fund with a negative carryover beginning cash balance when they submitted their first amendment, which was approved by the Budget Commission on February 6th. They submitted a resolution for an appropriation of $9,000 in the Manorbrook fund, which already had a negative balance. It was noted that, while the Manorbrook fund appears to have a negative cash balance, there has been an advance from the income tax fund that resolves the issue. Mr. Walder stated that Auditor’s Office Budget Coordinator Paul Pestello has a good understanding of the nuances of non-township finances, and therefore he should weigh in on whether or not it is appropriate to show funds as having a negative cash balance on certificates in situations such as this one.
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Russell Ohio Public Works Commission (OPWC) Loan: Deputy Auditor Tammy Most noted that Russell Township is doing a 10 year OPWC loan commencing in 2025. Mr. Walder stated that the Budget Commission will need to allocate money for repaying the loan into Russell’s debt fund from the appropriate road levy fund. He commented that Russell will need to decide which road levy fund they want to use for this. Since loan repayment doesn’t commence until 2025, the debt will not affect Russell’s 2024 budget.
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Job and Family Services (JFS) Levy Software Issue: As noted at the last Budget Commission meeting, a software issue caused JFS to receive levy money to which it is no longer entitled. Mr. Walder provided followup on this problem. The software company MVP has admitted it made a mistake and is working to fix it. Of import, the MVP software did collect the right amount of taxpayer money (that is, $0) for JFS; however, the software credited JFS with getting levy dollars that were not collected. Essentially, MVP software made a mistake on the calculation side, but no tax dollars were actually improperly collected from Geauga taxpayers. Due to this error, JFS appears to have more money in its 2024 budget than it actually does. This will be corrected once Mr. Walder is able to explain the situation to JFS. MVP has stated it will do the math to figure out what the correction will be. Mr. Walder stated that the county is working to replace the MVP software by January 1, 2024.
Mr. Walder informed the other Budget Commissioners that the GPH budget presented to the Budget Commission for approval at the last Budget Commission meeting had not been approved by the GPH board beforehand but rather was only approved by the GPH board after the fact on April 26. OBSERVER NOTE: Under ORC 3709.28 the GPH Board was required to adopt an itemized appropriations measure for the 2024 budget on or before April 1, 2023. More details on the GPH board’s approval of their budget can be found in the LWV Observer Report on GPH's April 26 meeting.
Mr. Walder expressed his displeasure at being led to believe the Budget Commission was presented with a GPH board approved budget at the Budget Hearing on April 17 when this was not the case. He stated that he has addressed the issue with the GPH Administrator.
Mr. Walder opined that a letter to the GPH board was also warranted. He explained that the letter informs the GPH Board that going forward it will be required to provide the Budget Commission with formal proof that its budget has been passed at a public meeting of the GPH Board as the law requires. Mr. Flaiz and Mr. Hitchcock both reviewed Mr. Walder’s draft letter and Mr. Hitchcock commented, “this is a very gentle rap on the knuckles.” All Budget Commission members agreed that the letter will be sent to the GPH Board and then each signed the letter.
Background: GPD was created under Ohio Revised Code Chapter 1545 | Park Districts. It had recently asserted a right, on advice of its attorney, to create a reserve fund under Ohio Revised Code Chapter 5705 | Tax Levy Law . GPD also had previously renewed two levies under this section of the code. The Geauga Prosecutor’s Office sought clarity on these matters by requesting a legal opinion from the Ohio Attorney General (OAG).
In Opinion No. 2022-017, OAG Dave Yost opined that Ohio park districts which are organized under ORC 1545 are “a creature of statute, and accordingly may exercise only those powers that the General Assembly confers on it.” He concluded that GPD was not permitted to take actions under Chapter 5705, specifically finding:
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GPD lacks authority to create reserve funds
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GPD is only permitted to use additional (new) or replacement levies - not renewal levies
Reviewer Comment: OAG Opinions provide useful guidance to public officials but are not binding and may be challenged in court.
Mr. Walder opened the discussion by stating that he and Geauga County Assistant Prosecutor Kristen Rine drafted a letter to alert GPD about the potential impact of OAG Opinion No. 2022-017. The OAG opinion applies to all Ohio Section 1545 Parks, not just GPD. Mr. Flaiz expressed surprise that the OAG decision hasn't generated more response, given the potentially broad impact.
GPD has two renewal levies, one from 2008 and the other from 2018. Mr. Walder explained that both of GPD’s renewal levies are qualified, meaning the State of Ohio provides 12.5% of funding. Since the OAG has ruled that 1545 park districts like GPD cannot have renewal levies, it is possible that GPD may be forced to return that 12.5% of funding to the state.
The Budget Commissioners hypothesized that GPD could present the argument that they should not have to pay the 12.5% back to the state because Ohio willingly “paid it without protest” and never questioned the legality of GPD’s renewal levies prior to the issuance of OAG Opinion 2022-017. The Budget Commissioners wondered if going forward Geauga taxpayers will have to make up the 12.5% previously paid by the state; for now, this is unknown.
There was discussion about whether the Budget Commission should continue to collect tax dollars for GPD’s renewal levies since the OAG has now deemed them to be illegal. It was decided that for now, renewal tax levy dollars would continue to be collected until the remediation process is determined. However, Mr. Walder remarked that the Budget Commission would be entering “uncharted water” at the August Budget Hearings if they must decide whether or not to continue to collect tax dollars for levies known to be illegal.
The Budget Commissioners agreed to send the letter drafted by Mr. Walder and Ms. Rine to GPD via GPD’s legal counsel. The letter states “... please ensure that GPD is prepared to address and justify the legality of the collection of these tax levies to the Budget Commission.” It urges GPD to communicate in advance with the Budget Commission regarding plans to remediate for past, current and future collections. All Budget Commissioners signed the letter, which included a copy of OAG Opinion No. 2022-017.
GPD must submit its 2024 budget to the Auditor’s Office for vetting by July 20th. The Budget Commissioners all agreed that it is up to GPD - not the Budget Commission - to remediate the situation GPD is in as a result of OAG Opinion 2022-017.
Reviewer Comment: Historically, GPD has always acted as its own taxing authority. As a Section 1545 Park District, the provisions of OAG Opinion No. 2022-017 apply to GPD whether they are under Geauga County authority or operating independently. Notably, GPD will bear all accounting and legal expenses to remedy this situation, as they no longer are supported by the Geauga County Auditor, Treasurer or Prosecutor.
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House Bill 140 (HB140) & Levy Forms: With input from Ms. Rine, the Budget Commission discussed how Ohio House Bill 140 would affect forms relating to levy resolutions going forward. OBSERVER NOTE: HB140 is also known as the Ballot Uniformity and Transparency Act and was passed last year. It requires certain specific ballot language regarding total revenue and cost to taxpayers for some types of levies and bond issues.
New forms in compliance with the language required by HB140 are expected to be rolled out by Geauga County soon. There was some discussion about using PDFs with drop down menus and/or Word templates. It was noted that entities should be cautioned that, if they choose to modify template language, they must be careful to remain in compliance with HB140 language guidelines and should only make modifications with the advice of counsel.
Public Comment:
This observer clarified the name of the software that erred in calculating JFS levy funds, confirmed that the Geauga Park District budget is due July 20 (along with most other county entities), and requested copies of the letters the Budget Commission is sending to Geauga Public Health and Geauga Park District.
More Information and Posted Minutes: Available on Auditor website
Next Meeting: May 15, 2023 at 10:00 am in the Auditor’s Conference Room at 215 Main Street, Chardon, Ohio.
Name of Observer: Sarah McGlone
Name of Editor: Anne Ondrey
Name of Reviewer: Shelly Lewis
Submitted 5/2/2023
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