Budget Commission Adjusts Bond & Emergency Levy Millage Rates for 2025
Budget Commission Meeting – December 4, 2024
Meeting Details: The Geauga County Budget Commission met in Special Session on Wednesday, December 4, 2024 at 1:30 pm 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: Deputy Auditors Tammy Most and Kristen Sinatra.
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 1:34 pm.
Minutes: Minutes from the Regular Meeting on November 18, 2024 were approved and are available here.
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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Chardon Local School District - Amendment #3. $62,665,685.61 in the general fund, $6,178,116.43 in special revenue funds, $446,668.68 in debt service funds, $2,832,397.76 in capital project funds, $8,815,413.30 in internal service funds, and $174,703.73 in fiduciary funds for a total of $81,112,985.51. Appropriations do not exceed revenue.
Chardon Schools’ amendment certified a special revenue funds increase of $12,331.97.
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Berkshire Local Schools - Amendment #3. $25,219,527.21 in the general fund, $4,304,299.19 in special revenue funds, $1,613,391.28 in debt service funds, $1,801,804.33 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 $34,441,668.29. Appropriations do not exceed revenue.
Berkshire’s amendment reflected an increase of $7,934.02 in special revenue funds as well as a decrease of $51,367.58 in the capital project construction fund.
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Geauga County - Amendment #11. $54,612,226.17 in the general fund, $129,750,235.32 in special revenue funds, $5,572,596.38 in debt service funds, $1,256,502.32 in special assessment funds, $29,333,168.77 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 $242,824,629.76.
Geauga County’s amendment certified an increase of $425,409.32 in special revenue funds and a decrease of $868,412.84 in capital projects funds.
Calendar Year (CY) 2025 (Tax Year (TY) 2024) Millages for Bonds and Emergency Levies:
Before considering the bonds and levies below, Mr. Walder explained that each year the Budget Commission must adjust the millage of certain bonds and levies to prevent excess taxpayer money accrual in these funds. He stated that “... this was not done very diligently…” in the past, and so this annual review will now be a “more formal process,” including calculations to determine entity needs done by Auditor’s Office staff members. Mr. Flaiz added that in that past there were (unspecified) instances when there was “big money left over” once a bond was paid off, and the courts would typically order this money to go into the general funds of these entities. He expressed the preference that “the goal is for it (leftover money after bonds are paid off) to be like $30,000 or less.”
Mr. Walder said that his staff had been in communication with each entity listed below, so all are aware of this process. Ms. Sinatra stated that treasurers for all the entities below were asked for “... updated information regarding their debt for their bond, as well as a cash summary report, which gives us their carryover and/or any encumbrances.”
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Berkshire Local Schools Bond Levy Observer Note: The total amount of the Berkshire Bond Levy was not stated at this Budget Commission meeting, but according to this Geauga Maple Leaf article, it is approximately $18.7 million.
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Original Bond Terms: 38 years, 3.65 mills
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Previous year (CY 2024) millage: 2.6 mills Observer Note: One (1) mill is equivalent to 1/1,000 of assessed property value. This is equal to $1 for each $1,000 of assessed property value. Over time, property values tend to increase. Under Ohio House Bill 920, the millage associated with a given tax bond/levy is often adjusted down over time as an anti-inflationary measure.
The calculations of the Auditor’s Office staff determined that Berkshire’s CY 2025 bond payment requirement amount was $1,205,006.28. Ms. Sinatra and Ms. Most presented calculations showing how much money would be left in the bond fund after making the required payment based on 98% tax collection if millage was set at three different levels. At 2.38 mills, there would be about $21,000 in carryover in the bond fund. At 2.5 mills, there would be about $45,000 in carryover, and at 2.6 mills carryover would be approximately $95,000. Mr. Walder said that generally speaking there should be “... adequate carryover in case of a reduction of collection for some reason, or for an anomaly.” Ms. Sinatra noted that Auditor and Treasurer fees were not a part of their calculations, and it is possible that some entities may pay those fees from their bond/levy fund, which would reduce the stated carryover amounts.
Mr. Flaiz suggested coming up with a carryover formula to be used for all entities along the lines of “...if your debt service is $1.2 million per year, then we should be aiming for a carryover that is, oh, 5% of that, or 10%.” Mr. Walder said this approach would not work because when debt payments occur is an important consideration, as payments due early in the year cannot rely on the next year’s tax collection. He also said that some bonds have large balloon payments due at the end of the term that would change the calculation.
Mr. Hitchcock stated “I think, this being the first time it's really come down into such detail for our review, we should be a bit more conservative for the first time out.” Mr. Walder clarified that this meant “... giv(ing) them more leeway,” which in this case means higher carryover balances. Ultimately, the Budget Commissioners unanimously agreed to set the Berkshire Bond Levy collection at 2.5 mills for CY 2025. Mr. Flaiz said that setting collection at 2.5 mills means “the taxpayers are getting a break.” Mr. Walder added that “I'm happy to see that at 2.5 mills the taxpayers are seeing over a one mill reduction of their tax from what the levy passed at on the ballot.”
The calculations of the Auditor’s Office staff determined that Kenston’s first CY 2025 bond payment requirement amount was $431,065.63. Ms. Sinatra and Ms. Most presented calculations showing how much money would be left in the bond fund after making the required payment based on 98% tax collection if millage was set at two different levels. At 0.36 mills, there would be about $177,000 in carryover in the bond fund. At 0.35 mills, there would be approximately $160,000 in carryover in the bond fund.
Mr. Flaiz questioned why Kenston would have so much more carryover compared to Berkshire. Ms. Sinatra explained that more money was needed for Kenston’s carryover to be sure they have enough money left for their first bond payment of the year in March 2026, which may be drawn before all funds from the first property tax collection of the year are distributed. Mr. Walder stated that Berkshire’s first bond payment doesn’t occur until April at which point property tax funds will have been distributed, so less carryover is needed in Berkshire’s case.
Mr. Hitchcock stated “We're going to review this annually, and this is the first time reviewing this information. The school district would be appreciative of our continuing to provide this carryover balance, and then next year, we'll be able to better determine if that is too much.”
The Budget Commissioners unanimously agreed to set the first Kenston Bond Levy collection at 0.36 mills for CY 2025.
The calculations of the Auditor’s Office staff determined that Kenston’s second CY 2025 bond payment requirement amount was $2,735,204.75. Mr. Walder explained that this bond payment was “a bit of an anomaly” because there is a balloon payment at the end of the term that they must plan for. There was much discussion to figure out what the balloon payment amount was, and it was determined that it was an additional $200,000. Calculations showing how much money would be left in the bond fund after making the required payment based on 98% tax collection if millage was set at two different levels were considered. At 2.28 mills, there would be about $169,000 in carryover in the bond fund. At 2.26 mills, there would be approximately $120,000 in carryover in the bond fund.
The Budget Commissioners unanimously agreed to set the second Kenston Bond Levy collection at 2.28 mills for CY 2025.
Mr. Walder explained that West Geauga’s Emergency Levy is a fixed sum levy, meaning that “... no matter what happens, you can't collect more than the dollar amount ($3,700,000) that you put on the ballot.” The calculations of the Auditor’s Office staff demonstrated that setting collection at 2.95 mills would result in the necessary $3,700,000 required by West Geauga’s Emergency Levy. Ms. Most noted that the millage was lower in CY 2024 because West Geauga voluntarily returned $1 million to taxpayers that year. Mr. Walder observed that, although the collection on this emergency levy will increase in 2025, the Budget Commission suspended collection on West Geauga’s other emergency levy, “... so the net effect is still going to be a (property tax) reduction.” Observer Note: More information on the Budget Commission’s suspension of West Geauga’s 3.5 mill Emergency Levy is available in the February 28, 2024 Budget Commission Observer Report.
The Budget Commissioners unanimously agreed to set the West Geauga Emergency Levy collection at 2.95 mills for CY 2025.
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Geauga County Public Library (GCPL) Bond Levy Observer Note: Observer Note: The total amount of the GCPL Bond Levy was not stated at this Budget Commission meeting, but according to this Geauga Maple Leaf article, it is $24 million.
The calculations of the Auditor’s Office staff determined that GCPL’s CY 2025 bond payment requirement amount was $1,157,995.28. Mr. Walder explained that his staff have been monitoring the balances and think that a slight increase in millage from the previous year was warranted. He noted that a slight increase millage would still be significantly less than the 0.5 mills originally approved by the voters. There was discussion regarding when these payments are due (December and June) and the amount of carryover needed. At 0.27 mills, the carryover balance would be about $177,000, and this was deemed sufficient. The Budget Commissioners unanimously agreed to set the GCPL Bond Levy collection at 0.27 mills for CY 2025.
Aquilla Village Dissolution Discussion
Mr. Hitchcock asked how much cash Aquilla Village has left on hand in order to complete its transfer to Claridon Township. Mr. Walder didn’t have a precise amount but said it was “six figures.” He said that the Transition Supervisory Board has selected a Receiver, Pierce Leary, who will handle financial matters during the transition period, including “... reconcil(ing) the financial obligations that the village continues to have until they're dismissed, and then he will also dispose of any assets in the form of real property.” Mr. Walder noted that Mr. Leary’s services and any “wrap up costs” will be paid from Aquilla’s remaining cash balance. He also said that arrangements have been made to ensure that Aquilla residents have snow plowing and fire protection services until the transfer to Claridon Township is complete. Observer Note: Please see the November 18, 2024 Budget Commission Observer Report for more information on the Transition Supervisory Board and the dissolution of Aquilla Village.
Public Comment
This observer requested a copy of all documents from this meeting, which were provided via email on December 4, 2024.
The meeting was adjourned at 2:51 pm.
Next Meeting: The next Regular Meeting will be Monday, December 16, 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: 12/12/24
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