Budget Commission Regular Meeting – May 6, 2024
Meeting Details: The Geauga County Budget Commission met in Regular Session on Monday, May 6, 2024 at 10:00 am in the Auditor's Conference Room, 215 Main Street, Chardon, Ohio. This meeting was in person with a virtual option via MS Teams.
Meeting Attendance: Treasurer Chris Hitchcock, Prosecutor Jim Flaiz, and Chief Deputy Auditor Ron Leyde (substituting for Auditor Chuck Walder, who attended virtually).
Staff Attendance: Deputy Auditors Tammy Most and Kristen Sinatra. Fiscal Office Manager Pam McMahan and Chief Compliance Officer Kate Jacob both attended virtually.
County Staff: Geauga County Budget and Finance Manager Adrian Gorton, Assistant County Administrator Linda Burhenne, Automatic Data Processing (ADP) Chief Deputy Administrator Frank Antenucci, Board of Developmental Disabilities (DD) Superintendent Don Rice, DD Assistant Superintendent Dave Carlson, and DD Business Director Rean Davis.
Members of the Public: This LWV Geauga Observer (in person).
The meeting was called to order at 10:03 am.
Minutes: Minutes from the Regular Meeting on April 15, 2024 were approved and are available here.
Prior Business: Board of Developmental Disabilities (DD) Budget Items Update
Observer Note: The Budget Commissioners did not approve DD’s 2025 budget during the Levied Departments Budget Reviews due to concerns about DD having bank accounts outside of the County Treasury and the possibility that DD may have subsidized private entities that lease DD property. Please see the March 18, 2024 Budget Commission Observer Report for details. DD Staff appeared at this Budget Commission meeting to provide an update on how they are addressing the concerns raised by the Budget Commissioners.
Mr. Gorton stated that they are in the process of figuring out how to account for DD’s lease revenue separately from its other revenue. He said that Ms. Davis is working on the necessary paperwork to establish a lease revenue account for this purpose.
Mr. Rice said that DD provided the Budget Commissioners with information about revenue and expenses associated with each rental agreement. Observer Note: This information was emailed to the Budget Commissioners and also sent to numerous journalists as well as some LWV members, including this observer. These numbers were not actually presented or discussed in any detail during the meeting. Mr. Rice and Ms. Davis also said that DD has closed the separate accounts it held at Huntington Bank. Ms. Davis noted that they are working to make all their deposits into the County Treasury (also held at Huntington Bank), but the fact that the checks they are depositing are made out to the Board of DD itself and not the County has been problematic. She explained that they are getting around this issue by doing pay-ins at the Treasurer’s Office for now until DD gets their scanner set up.
Mr. Flaiz summarized that the Budget Commission’s main issue with DD’s budget submission was their bank accounts outside of the County Treasury. He also noted there was concern about the lack of detailed information about revenue and expenses associated with DD’s leases. Mr. Leyde asked how much granularity the Budget Commissioners want as far as the lease revenue amounts as well as the associated expenses. Mr. Flaiz said they need to be able to compare revenue and expenses associated with DD’s leases to determine whether or not entities renting DD properties are being subsidized by DD’s levy funding. He opined that “If you are losing money on any of those leases and you’re using levy funds to do that (make up the difference), that’d be a problem for the Budget Commission, because we have to make a determination whether you’re using your levy funds properly.” Mr. Rice said that DD was under the impression that they were not allowed to make a profit. Mr. Flaiz responded that “Well, if you’re losing money, I mean if you’re subsidizing a private entity and you’re using your levy funds, that would not be legal.”
Mr. Hitchcock said that “Taxpayers’ money is sacrosanct…. It’s very important to be as transparent as possible with hiring these agencies that are serving your clients.” Mr. Rice noted that DD will have to rework some of its contracts and grants and said “we can also go to the point where we charge them rent and they simply increase what their costs are to us. It’ll be a wash, but it’s ok, we can do that.” Mr. Flaiz responded “At least there’s a number” and noted that currently quantifiable information like this isn’t available.
Mr. Gorton asked if the Budget Commission would be willing to see the revenue and expense numbers listed on DD’s internal reports or if they need to be included in the New World Financial Management System, which is the County’s fiscal management software program. After some discussion regarding the difficulties associated with splitting expenses among multiple entities on New World, it was decided that DD’s internal reports would be adequate.
Mr. Flaiz asked what other County entities have done in similar situations to that of DD. Mr. Leyde said that Mental Health (MH) has a sub-department within its main fund to keep track of revenues and expenses associated with its apartment complex and Job and Family Services is considering doing something similar for its new building. Mr. Gorton said that if DD is able to create a sub-department and treat it as an allocation, all of the lease-related expenses and revenue can be tracked with DD’s internal reports, and, since a separate fund would not be created, it “doesn’t need to go to the State” for permission. Ms. Davis asked if all lease revenue can be lumped together in one sub-account, or if separate sub-accounts are needed for each leasing entity. It was decided that one sub-account would be adequate, but the Budget Commission would like to see the revenue and expenses associated with each lease on DD’s internal forms. Ms. Davis said that she had the paperwork to create the sub-department ready, but after some discussion, it was decided it may need to be revised before going forward.
At this point, the DD prior business portion of the meeting was concluded, and the Budget Commissioners thanked the DD staff for their work on this matter.
The following Revenue Certifications were approved:
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Kenston Local School District - Amendment #3. $49,001,187.14 in the general fund, $2,136,054.60 in special revenue funds, $6,762,090.20 in debt service funds, $1,608,226.40 in capital project funds, $2,174,805.72 in enterprise funds, $9,712,158.56 in internal service funds, and $70,874.22 in fiduciary funds for a total of $71,465,396.84. Appropriations do not exceed revenue.
Kenston’s amendment reflected an increase in the capital projects permanent improvement fund of $300,000 and an increase in the internal service rotary fund of $162,933.08
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Auburn Township - Amendment #2. $1,017,414.90 in the general fund, $4,703,996.37 in special revenue funds, $214,688.00 in debt service funds, and $143,954.45 in capital project funds for a total of $6,080,053.72. Appropriations do not exceed revenue.
This amendment certified increases in Auburn’s museum donation fund and cemetery donation fund for a total special revenue fund increase of $123,000.
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Chester Township- Amendment #3. $3,123,738.19 in the general fund, $11,346,901.64 in special revenue funds, $5,032.00 in capital project funds, and $13,011.99 in special assessment funds for a total of $14,488,683.82.
Chester’s amendment reflected a special revenue fund increase of $129,700.
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Bainbridge Township - Amendment #4. $4,230,348.65 in the general fund, $18,772,899.89 in special revenue funds, $2,015,383.34 in debt service funds, $1,703,940.76 in capital project funds, and $539.02 in fiduciary funds for a total of $26,723,111.66. Appropriations do not exceed revenue.
Bainbridge’s amendment certified a $459.95 increase in the EMA (Emergency Management
Agency) ARPA (American Rescue Plan Act) First Responder Grant special revenue fund.
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South Russell Village - Amendment #4. $1,873,997.81 in the general fund, $7,268,820.03 in special revenue funds, $1,350,330.46 in capital project funds, and $210,299.54 in fiduciary funds for a total of $10,703,447.84.
South Russell Village’s amendment reflected a $200,000 increase in the street maintenance special revenue fund.
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Thompson Township - Amendment #3. $420,400.34 in the general fund, $1,719,292.14 in special revenue funds, $150,000.00 in capital project funds, and $1,831.69 in special assessment funds for a total of $2,291,524.17. Appropriations do not exceed revenue.
Thompson’s amendment certified a $5,000 increase in the police reserve fund.
The Budget Commission voted to acknowledge the following Geauga Public Health Supplemental
Appropriation:
General Discussion
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Letter from West Geauga Schools - Observer Note: This matter originally came up at the April 15 Budget Commission Meeting, where it was stated that West Geauga Schools sent out a letter in early April to all district residents regarding what happened at their February 28, 2024 Budget Hearing. Discussion on whether or not the Budget Commission would have any response to this letter was tabled at that time because Mr. Flaiz was absent. A copy of the letter is available here. Mr. Flaiz stated that he received West G’s letter at his home despite not being a district resident, and Mr. Walder received a copy as well. Mr. Hitchcock said that he did not receive a copy at home. Copies of the letter were provided to all by the Auditor's Office staff.
Mr. Hitchcock said it was “... very disconcerting that they would choose to take this route.” Mr. Walder stated “it was disappointing” and went on to say he was “not intimidated by the veiled threat that I saw there, that, you know, services would somehow be sacrificed because the Budget Commission put them to a near-neutral revenue versus expenditure position. I don’t understand how anyone with any common sense could interpret having $27 million in the general fund and being revenue neutral justifying cutting… services to students. I think that’s an irresponsible statement on the part of the school, and one that they will have to explain to the people that fund their initiatives. I don’t know that we need to say anything. Most people get it. ‘You’ve got $27 million in the bank, what are you cutting? Why are you cutting something? Why are you threatening to cut something?’”
Mr. Flaiz said that some of the statements in the letter “bothered” him. He noted that the five-year forecasts of all the Geauga school districts “... are laughable to me. Every single five-year forecast is gloom and doom, yet every single one of our school districts added to their pile of cash during the last five years.” He added that “I’m kind of tired of the five-year forecast being used to justify overtaxing people, which is what I feel like they’re doing. And, I’m not saying just West G, that’s pretty much all of them doing that.” Mr. Flaiz disagreed with West G’s contention in the letter that the Budget Commission’s action to suspend collection of one of their levies was “... unprecedented. I guess they weren’t paying attention to the park district and the library and DD (Board of Developmental Disabilities) and all these other, you know, entities that had too much money, and we addressed that. So, I guess they missed those articles in the paper.” Mr. Flaiz also took issue with West G’s statement that it didn’t appeal the Budget Commission’s Decision because it could weather the storm for a year. He contended that “I think they decided not to appeal because they didn’t have a legal basis to argue with us.” However, he stated that he thought it was “silly” to send letters back and forth and expressed the opinion that the Budget Commissioners should just address matters with the district at their budget hearings.
Mr. Hitchcock cautioned that “It’s important we not allow misleading statements to exist. There may come a time in the near future where the Budget Commission needs to set the record straight.” He predicted that West G may be thinking of putting a levy on the ballot in the near future. Mr. Walder said that there is talk that West G might be considering a “... capital initiative, probably a bond of some sort,” but nothing is definite. He reiterated his disappointment about West G’s letter.
Mr. Flaiz said he talked with West G’s Treasurer after their budget hearing and offered to meet with the district to find solutions going forward, but he stated that the district has not reached out to him since the budget hearing. Mr. Walder said that it was “noteworthy” that the West G Treasurer did not sign the West G letter, and he also observed that the board member who signed the letter did not attend the budget hearing. Observer Note: The letter was signed by Superintendent Richard Markwardt and School Board President Christina Sherwood. Mr. Hitchcock voiced the opinion that the Budget Commission should continue to monitor the situation. Ultimately, the Budget Commissioners opted to take no action.
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Special Meeting June 27 - Ms. Sinatra explained that the Budget Commission usually holds a special meeting each year in late June so the school districts can turn in any revised revenue figures and/or appropriations adjustments before the end of their fiscal year. The Budget Commissioners scheduled a special meeting for Thursday, June 27 at 2:00 pm to handle fiscal year end matters for the school districts as well as regular business. The regular meeting scheduled for July 1 was canceled.
Public Comment
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This observer asked if it had been determined whether or not Geauga Public Health (GPH) is required to advertise its budget. Mr. Walder said that they have not heard a final determination on this matter from the State Auditor’s Office yet. Observer Note: This issue originally came up during the April 1, 2024 GPH Budget Hearing.
The meeting was adjourned at 10:51 am.
Next Meeting: Regular Meeting on Monday, May 20, 2024 at 10:00 am in the Auditor’s Conference Room at 215 Main Street, Chardon, Ohio.
Observer: Sarah McGlone
Editor: Gail Roussey
Reviewer: Shelly Lewis
Submitted: 5/11/24
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