Budget Commission Sends Letter Admonishing the County Commissioners’
“Gross Misrepresentation of the Budget Commission's Message to Taxing Districts”
Budget Commission Regular Meeting – July 15, 2024
Meeting Details: The Geauga County Budget Commission met in Regular Session on Monday, July 15, 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, Auditor Chuck Walder, and Prosecutor Jim Flaiz.
Staff Attendance: Chief Deputy Treasurer Caroline Mansfield and Deputy Auditors Tammy Most and Kristen Sinatra.
County Staff: Automatic Data Processing (ADP) Chief Deputy Administrator Frank Antenucci (in person) and Geauga County Budget and Finance Manager Adrian Gorton (virtual).
Members of the Public: This LWV Geauga Observer (virtual).
The meeting was called to order at 10:01 am.
Minutes: Minutes from the Special Meetings on June 27, 2024 and July 1, 2024 were both approved and are available here.
The following Revenue Certifications was approved:
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West Geauga Local School District - Amendment #2. $58,437,192.10 in the general fund, $5,285,093.48 in special revenue funds, $8,948,507.80 in capital project funds, $1,606,982.42 in enterprise funds, $282,286.33 in internal service funds, and $125,038.49 in fiduciary funds for a total of $74,685,100.62. Appropriations do not exceed revenue.
West Geauga’s amendment updated the district’s fund balances for a total increase of $3,362,130.62.
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Berkshire Local Schools - Amendment #1. $25,219,527.21 in the general fund, $3,332,123.37 in special revenue funds, $1,613,391.28 in debt service funds, $1,833,171.91 in capital project funds, $882,819.29 in enterprise funds, $428,653.33 in internal service funds, and $191,173.66 in fiduciary funds for a total of $33,500,860.05.
Berkshire’s amendment updated the district’s fund balances (amount of change not stated).
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Cardinal Local Schools - Amendment #1. $20,541,759.52 in the general fund, $2,102,700.16 in special revenue funds, $1,794,725.90 in debt service funds, $644,799.28 in capital project funds, $656,637.65 in enterprise funds, $49,793.04 in internal service funds, and $137,323.18 in fiduciary funds for a total of $25,927,738.73. Appropriations do not exceed revenue.
Cardinal’s amendment updated the district’s fund balances for an overall change of $1,636,536.67.
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Russell Township - Amendment #4. $2,468,716.93 in the general fund, $9,621,523.58 in special revenue funds, and $2,729,783.65 in capital project funds for a total of $14,820,024.16. Appropriations do not exceed revenue.
Russell’s amendment certified increases in the general fund and in special revenue funds.
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Thompson Township - Amendment #4. $420,400.34 in the general fund, $1,759,292.14 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 $2,331,664.73. Appropriations do not exceed revenue.
Thompson’s amendment certified a $40,000 increase in special revenue funds and a $140.56 increase in debt service funds.
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South Russell Village - Amendment #7. $1,898,321.81 in the general fund, $7,950,074.11 in special revenue funds, $1,607,330.46 in capital project funds, and $210,299.54 in fiduciary funds for a total of $11,666,025.92.
South Russell Village’s amendment reflected a $13,500 increase in the general fund.
The Budget Commission voted to acknowledge the following Geauga Trumbull Solid Waste Supplemental Appropriation:
Other Business:
The Budget Commissioners discussed a draft letter from themselves to the Board of County Commissioners (BOCC) regarding recent comments at a BOCC meeting. Observer Note: In brief, County Commissioner Tim Lennon stated that the Budget Commission advises County entities to “spend, spend, spend,” and the Budget Commissioners took exception to this characterization. More details are available in the June 27, 2024 Budget Commission Observer Report.
Mr. Flaiz said he thought that the draft letter was good, but he cautioned that: “If we have to respond to every incorrect statement one of the Commissioners makes at a meeting, I mean, they meet every week. We meet twice a month, usually. So it's going to be challenging….” He went on to say that the statement they were responding to in the current letter was “such a gross falsehood” that a letter was warranted.
Mr. Hitchcock noted that the draft letter mentions high cash balances without specifying what is meant by that term. Mr. Walder explained that exactly what constitutes a high cash balance varies greatly among the different entities, so the term was purposely left open-ended.
The Budget Commissioners voted to send the letter to the BOCC. Observer Note: A copy of the letter that the Budget Commission sent to the BOCC was emailed to this observer on 7/15/2024. It was signed by all three Budget Commissioners, and its text reads as follows:
Dear Commissioners:
The Budget Commission has become aware of Commissioner comments made during a recent session of the Board of County Commissioners which were a gross misrepresentation of the Budget Commission's message to taxing districts within Geauga County.
The Budget Commission is not and has never been in favor of any taxing district spending recklessly nor has that ever been a recommendation of the Budget Commission. Rather, the Budget Commission advises spending money that has been budgeted and if not spent, returning those funds to taxpayers. Alternately, if those funds are not spent an explanation should accompany the following year's budget submission. Additionally, if there are high cash balances, the advice has been to clearly articulate a plan for the accumulated funds, then execute that plan.
Perhaps the Commissioners would benefit from attending a Budget Commission hearing prior to publicly commenting on the Commissions work. We hope this clears up any misunderstanding you may have.
Mr. Hitchcock noted that the results of the 2024 Cuyahoga County Property Revaluation are getting a great deal of attention. In light of this, he stated that: “I think it is important that we maintain the desire for all the (Geauga County) entities to refund to the taxpayers the additional monies that they're going to be getting with this next tax collection (due to property value increases). But we need to do that across the board.”
Mr. Walder noted that the Budget Commission sent out a letter to this effect to all County taxing entities on June 3, 2024. Observer Note: A copy of this letter was emailed to this observer on 7/15/2024. It was signed by all three Budget Commissioners, and its text reads as follows:
As you are aware, in 2023 the County performed its R.C. 5713.01(B) mandated sexennial reappraisal of all real property. The results of that reappraisal reflected an unprecedented average increase to residential property of 29.5% and 26.1% for agricultural property. Therefore, the Inside Millage increased for taxing authorities proportionately to valuation, resulting in an unvoted windfall to political subdivisions on the backs of our residents.
Last year, the prompt and considerate actions of the participating taxing districts made a positive and noticeable impact by offering financial relief.
Once again, the Geauga County Budget Commission is encouraging political subdivision beneficiaries of this unvoted inside millage windfall to consider the effect that this has on your property owners and constituents. We ask that you responsibly investigate reducing other voted levies to counter the effect this increase will have on your residents.
As a reminder, inside millage in Geauga is capped at 10mills and is shared in the following manner:
25% or 2.5mills to Geauga County
45% or 4.5mills to the Local School District
30% or 3.0mills to the Local Government (Township, Village, or City)
We are making ourselves available to work with you to consider options available to you to help your residents. Please feel free to reach out to us to discuss.
Mr. Walder explained that any property tax mitigation by County entities will not be reflected in this year’s budget submissions initially: “We won't see it, though, until after their budgets, because we kind of told them, don't embed it in your budget. We'll do it post-budget like we did last year. So that will have to be a topic of conversation at their budget hearings.”
Mr. Hitchcock opined that: “I think Cuyahoga County so misstated their reval that it’s going to end up being a problem for us.” Observer Note: The reason Mr. Hitchcock thought that this might be a problem is that areas in the two counties that are seemingly similar have notably different average property value increases, with the increases in Geauga being greater than those in Cuyahoga. This matter is explained in more detail below. Mr. Walder observed that: “They seem to have adjusted their most blighted areas by the highest percentages, while leaving some of the most expensive property minimally touched.” Mr. Flaiz said it was “shocking” to him, and he went on to say that: “The map was the opposite of what I thought it would be. I thought that they would hammer the suburbs, because that's probably where the values rose the most, and they wouldn't have as big of increases in the inner ring areas or Cleveland.”
Mr. Walder said Cuyahoga’s press release explained that “some of the more wealthy areas had a more regular rollover of real estate, (so) its (property) values were already adjusted (that is, increased)… versus some of the less affluent areas with a slow returns ratio of real estate, they needed more adjustment.” He also added that “First of all, those are the people (in less affluent areas) that can afford it the least. But secondarily, those are also the school districts that are probably going to be at the (20 mill) floor.” Observer Note: The 20 mill floor means that all Ohio School Districts are guaranteed at least 20 mills of funding by law. If a school district’s funding level drops below the 20 mill floor (the “at the floor” mentioned above), a property tax increase (i.e., increased collection of existing levies) is instituted by the State for residents of those districts to get funding back up to the required level. More information on the 20 mill floor is available in a video by Auditor Walder here.
Mr. Hitchcock observed that Cuyaghoga’s “Eastern suburbs are our Western suburbs,” and he noted that Cuyahoga’s Eastern suburbs had the least property value increase in that county, whereas the Western part of Geauga county had the largest property value increases in Geauga. Flaiz pointed out the the property value increase for Hunting Valley in Cuyahoga is low (15% on average according to the numbers posted at the Cuyahoga County reval link above), but the average property value increase for the portion of Hunting Valley that is in Geauga was significantly higher than this. Observer Note: The exact value of the property value increase for Hunting Valley in Geauga was not available in previously published documents from the Auditor’s Office. The Auditor’s website states that the average residential property value increase for Russell Township was 33.6%, and the Hunting Valley properties in Geauga County are a part of this Russell Township figure. The Budget Commissioners indicated during their discussion that the Hunting Valley number is likely somewhere in the ballpark of the 33.6% Russell figure.
Public Comment:
The meeting was adjourned at 10:33 am.
Next Meeting: Monday, August 5 at 10:00 am in the Auditor’s Conference Room at 215 Main Street, Chardon, Ohio.
Observer: Sarah McGlone
Editor and Reviewer: Gail Roussey
Submitted: 7/24/24
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