Budget Commission Approves Berkshire’s Budget &
Rescinds West Geauga’s Inside Millage Shifted to Permanent Improvement
Budget Commission Meeting – February 20, 2025
Meeting Details: The Geauga County Budget Commission met in Special Session on Thursday, February 20, 2025 at 9:00 am in the Auditor's Appraisal Conference Room, 231 Main Street, Chardon, Ohio. The meeting was in person with a virtual attendance option via MS Teams.
Meeting Attendance: Prosecutor Jim Flaiz, Auditor Chuck Walder, and Treasurer Chris Hitchcock
Staff Attendance: Assistant Prosecuting Attorney Kristen Rine (virtual), Deputy Auditors Tammy Most and Kristen Sinatra, and Chief Operations Officer Pam McMahan.
County Staff: Joshua Holtz, ADP Information Technology Technician
School District Representatives:
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Dr. John Stoddard, Berkshire Local School District (LSD) Superintendent
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Beth McCaffrey, Berkshire LSD Treasurer
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John Manfredi, Berkshire School Board President
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Bryan Wadsworth, Berkshire School Board Member
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Dr. Rich Markwardt, West Geauga LSD Superintendent
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Karen Pavlat, West Geauga LSD Treasurer
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Christina Sherwood, West Geauga School Board President
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Dr. William Beers, West Geauga School Board Vice President
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Pam Claypool, West Geauga School Board Member
Members of the Public: Kenston LSD Treasurer Seth Cales, Chardon LSD Treasurer Deb Armbruster, Berkshire resident Nathan Ricket, Legal Counsel for Berkshire and West Geauga Rebecca Princehorn, and this LWV Geauga Observer attended in person. Numerous members of the public attended virtually.
The meeting was called to order at 9:00 am.
Geauga County 2025-2026 School Budget Hearings - Day 2
Observer Note: The Budget Commission conducted the School Budget Hearings on separate days. This report summarizes the hearings conducted on February 20, 2025, which were for Berkshire and West Geauga Schools. Kenston, Cardinal, and Chardon had their hearings on February 19, 2025, and they are detailed in a separate Observer Report, which is available here.
1. Cardinal Local School District Revenue Certificate
The Cardinal’s official revenue certificate reflecting the changes made at Cardinal’s Budget Hearing the day before was approved and signed by the Budget Commissioners. Observer Note: Please see the February 19, 2025 Budget Commission Observer Report for details on Cardinal’s Budget Hearing. The correct revenue certification numbers are provided in that report.
2. Berkshire School District Budget Hearing
Auditor Walder provided a presentation on Berkshire and its budget. Highlights include:
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Property values in the Berkshire School District increased by 30.8% on average as a result of the 2023 property revaluation.
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17.1% of all property valuation complaints heard by the Geauga County Board of Revision (BoR) in 2024 came from Berkshire residents. Mr. Walder said this percentage is an indicator of the temperament of taxpayers regarding the amount of property taxes they have to pay. He indicated that, with five school districts in Geauga County, he would expect about 20% of BoR complaints to come from each district, and Berkshire’s 17% aligns with that. Observer Note: More information about the BoR is available here.
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Berkshire ranks fourth out of five in the County in effective school taxation rate at 22.5 mills. This places them close to (but not below) the 20 mill floor. Observer Note: Last year Berkshire was below the 20 mill floor. Effective taxation rate, or effective millage, refers to converting the total tax millage to today’s dollars. The value of a mill generally increases over time, but, for any given tax levy, Ohio House Bill 920 requires the value of a mill to be fixed at whatever it was when the levy was originally approved by voters. 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, 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.
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At 100% collection, the value of 1 mill in Berkshire is $505,000.
General Discussion
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Mr. Walder clarified that 20 mill floor adjustments and income taxes are not a part of the effective millage rate. Berkshire did receive a 20 mill floor adjustment last year totaling $1.54 million and also receives income tax from its residents, but neither of these are factored into the effective millage rate.
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Mr. Walder expressed concern about Berkshire’s low cash as a percentage of expenses and said it indicates that “your cash is dwindling.”
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Mr. Flaiz said he didn’t have any big issues with Berkshire’s budget.
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Mr. Hitchcock said he was pleased to report that Berkshire’s tax delinquency collection rate increased to 110% and noted that it probably wouldn’t be that high again. Ms. McCaffrey said she looked into that and it was likely caused by the electric company paying their taxes three days late, which delayed that distribution to this budget cycle. Mr. Hitchcock noted that in the 2023-24 budget, the predicted ending balances were significantly lower than the actual ending balances ended up being, which he said was a pet peeve of his. He did say that otherwise the predicted and actual ending balances have been close over the last 10 years. Ms. McCaffrey pointed out that she had in fact increased the predicted balances in 2023-24 to the Berkshire School Board as revenue estimates increased; however, the schools only appear before the Budget Commission annually so there was no opportunity to do the same before the Budget Commission. Mr. Walder noted that: “Schools have historically been difficult to align your numbers with our numbers because we're reporting on different time frames (school year versus calendar year). We eventually catch up. We eventually are true, but it's never going to be at a moment in time.”
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Ms. McCaffrey said that the way the State handles school funding has had a large, negative effect on the amount of money the district receives. She explained: “The loss of open enrollment revenue is devastating. This year, we've turned down 31 children (who wanted) to open enroll (in Berkshire Schools). If we got the voucher for those 31 kids like private schools get, that would be a big help to us. So it's confusing why the legislature doesn't let that voucher follow the child to a public school, only to private.”
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Ms. McCaffrey expressed frustration about how 20 mill floor adjustments are perceived: “... that's not something the schools made up…. The General Assembly put that in place, so it's frustrating when schools get vilified for that.” Mr. Walder said he thought changes to school funding weren’t over but rather were just beginning. He said that the 20 mill floor adjustment was created 35 years ago and noted that school funding is flawed. He thought that the recent property revaluations across the State have drawn attention to the problems with school funding and may spur legislative action. Mr. Walder and Ms. McCaffrey then disagreed on the purpose of the 20 mill floor, which Mr. Walder said was to set a minimum funding level for schools and Ms. McCaffrey said was to provide free and appropriate education for students. After some discussion they agreed to disagree on the matter.
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Mr. Walder pointed out that, when voters consider ballot initiatives that provide funding for schools, there is no information on the ballot telling voters that certain types of funding, like emergency levies and bonds, are not a part of the 20 mill floor calculation.
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Berkshire School Board President John Manfredi said that the district’s 30 year old Permanent Improvement levy failed as a renewal. He felt this was because voters were angry because they thought the district got a lot of money from the revaluation. He added, “... in several years, we're going to be out of cash, so we have to have something on the ballot which they don't want to pass because they don't think they should have to because of the revaluations. Well, the revaluations don't cover our budget.” He asked the Budget Commissioners for advice on what to do. Mr. Walder said that many school districts have minimized the effect the revaluation had on taxpayers and noted that Berkshire got an additional $2 million between the revaluation and the 20 mill floor adjustment, which he said was significant from a small district. Ms. McCaffrey asked Mr. Walder if he agreed that the district shouldn’t have been vilified for not giving back that $2 million because they needed it. Mr. Walder said that was the district’s decision to make. Ms. McCaffrey then stated “the facts are Berkshire's following the law. We have properly authorized levies that are clearly required, and so to give money back when you can't afford it would just dig the hole deeper.” Mr. Walder responded that there were townships in desperate need of cash that still mitigated their inside millage increase.
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Ms. McCaffrey wanted to know why they were not able to access certain property value information on the Auditor’s website. Mr. Walder said it was still available and his staff would show her how to do it.
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Ms. McCaffrey also asked what was going on with the Orwell pipeline tax delinquency. Observer Note: Another company acquired Orwell-Trumbull Pipeline’s assets but not its tax liabilities, meaning its tax delinquency is still on the books. Mr. Flaiz said that a tax foreclosure was filed by his office and the case is being litigated in Cuyahoga County. The receivership that acquired the Orwell pipeline has taken the position that the tax delinquencies should be extinguished and Mr. Flaiz said his office’s argument is the opposite. He said that his office has spent hundreds of hours pursuing this delinquency over the years, and they are currently awaiting a decision from the Cuyahoga County judge on the case. He said that he would appeal the case if the judge rules against Lake, Portage and Geauga Counties (all three counties have joined together on the case), and he added that he would pursue it to the Supreme Court if necessary. He noted that he thinks it would be “a huge win” to get 10% of the delinquency. Ms. McCaffrey expressed outrage about “the $10 million to this county that these people walked away from paying. That's a million dollars for just us, for little Berkshire, that would do huge things for our bottom line.”
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Ms. McCaffrey asked if the Budget Commission wanted budgets submitted electronically in the future. She was told that digital or hard copy was fine.
Budget Approval
The Budget Commissioners unanimously voted to approve Berkshire’s 2025-2026 budget. Estimated 2025-2026 resources were certified as: $25,666,905.89 in the general fund, $2,139,524.00 in special revenue funds, $1,632,734.28 in debt service funds, $553,071.02 in capital project funds, $835,000.00 in enterprise funds, $433,500.00 in internal service funds, and $115,000.00 in fiduciary funds for a total of $31,375,735.19.
3. West Geauga Local School District Budget Hearing (Part 1)
Auditor Walder provided a presentation on West Geauga and its budget. Highlights include:
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Property values in the West Geauga School District increased by 33.3% on average as a result of the 2023 property revaluation.
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45.9% of all property valuation complaints heard by the Geauga County Board of Revision (BoR) in 2024 came from West Geauga residents. Mr. Walder said that within West Geauga there were more property valuation complaints from Chester and Russell compared to Newbury, perhaps because Newbury property values went up less on average than in Chester and Russell. He indicated that 45.9% of all BoR complaints coming from one school district was unanticipated and reflects “...pent up public sentiment that we need to drop their values in order to drop their tax.”
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West Geauga ranks third out of five in the County in effective school taxation rate at 23.98 mills. This places them close to (but not below) the 20 mill floor. Observer Note: Last year West Geauga was below the 20 mill floor.
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At 100% collection, the value of 1 mill in West Geauga is $1.256 million.
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West Geauga has shifted 1 mill of its inside millage to its Permanent Improvement (PI) fund. Mr. Walder recommended fully rescinding this shift because 1) the district is close to the 20 mill floor (PI money isn’t counted in the 20 mill floor calculation) and 2) the submitted budget shows a lack of need for the 1 mill to be shifted to PI. This action would reduce PI fund revenue by $1,230,665; this amount would be added back into the general fund. According to the submitted budget numbers, West Geauga would have a PI fund ending balance of $855,575 without the inside millage shift. Observer Note: More information about how inside millage works is available here.
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There were 2,014 West Geauga students in 2023-24; enrollment is up 10.3% over the last five years. The County average is an enrollment decline of 3.2% over the same time period. Following the increase in West Geauga’s enrollment after the merger with Newbury in the 2020-2021 school year, district enrollment has declined 3.2%.
General Discussion
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Ms. Pavlat stated that West Geauga’s PI expenses have gone up since the district’s budget submission. She explained that the water filtration and maintenance PI expenses were listed at $2 million in the submission, but the latest architectural estimate came in after the budget was submitted, and it was higher at about $3.4 million. Mr. Walder asked when the project will happen, and Ms. Pavlat estimated 2026 and said they were waiting on EPA permits associated with changing the well site. She also mentioned future improvements needed for the track and tennis courts and talked about PI projects often being longer-term than one year. Mr. Walder mentioned that general fund millage being shifted to PI has a consequence to taxpayers since that revenue isn’t counted in the 20 mill floor calculation. Mr. Flaiz said that they were stuck with what was submitted and noted that the budget submission was presented to taxpayers, the School Board and now the Budget Commission.
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Mr. Flaiz asked if by shifting the inside mill from PI to the general fund, would that cause West G to lose out on 20 mill floor adjustment revenue of $1,230,665. After some discussion, it was determined that this was accurate, but it wouldn’t take effect until the next budget cycle because rates are calculated once a year in January for the entire calendar year. School systems use a fiscal calendar, so half of the $1.2 million reduction in revenue would occur in the school’s 2025-26 year ending June 30, 2026, and the other half of the $1.2 million reduction would occur in the school’s 2026-27 year beginning July 1, 2026. All agreed that this was difficult to understand.
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Ms. Pavlat said the district had to look at PI projects on a multiyear basis for various reasons, including the limited amount of time per year that construction can be done. Mr. Walder said that PI funds that get money from a ballot initiative can hold balances longer. However, he noted that that West Geauga’s PI fund is funded by “... operational monies shifting into a PI account that has a tax consequence to taxpayers, and so that money has to be tested annually, because it's being placed in there annually and that makes your PI a little different than a non-floor PI or a ballot PI.”
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School Board Vice President Dr. Beers asked how they should pay for needed PI projects if the inside millage shift to PI is no longer allowed. Mr. Hitchcock suggested the general fund could be used if the PI fund’s balance is depleted. Dr. Beers said in that case general fund expenses should be increased. Mr. Walder said he was going off of the information that West Geauga provided in their budget submission and couldn’t run numbers that he didn’t have.
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Mr. Hitchcock said delinquent tax collection was great at 113%. He also said that he wanted to treat West Geauga the same as they would treat any other entity, and “you have, simply put, too much cash.” He noted that the state average cash as a percentage of expenses was 46.1% and West Geauga would be at the state average with many million dollars less than they have now. Mr. Hitchcock stated: “if there is one message I can deliver to you is, do not hoard money. And you have been for years.” He opined that “the taxpayers (are) being taken advantage of.”
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In regards to West Geauga’s two emergency levies, Mr. Hitchcock asked if the district was still in an emergency. Ms. Pavlat said that emergencies are not statutorily defined and that their constituents have passed each of their two emergency levies three times. Observer Note: See more details about the emergency levies below. She noted that the district is starting to operate at a deficit. She stressed the emergency levies are fixed fee levies and they are “what our constituents will pass.” Mr. Hitchcock asked “Would it not be a bit disingenuous when you use the emergency levy for a regular operating fund?” Ms. Pavlat said “What would you use them for? They're for our regular operating fund.” Mr. Hitchcock countered “Why don’t you call it a regular operating levy then, not an emergency levy?” She responded that designation was made when the Board originally put the emergency levies on the ballot in 2003 and 2005. Mr. Hitchcock expressed the opinion that the district should switch to an operating levy and not an emergency levy, particularly since emergency levies are not counted in the 20 mill floor calculation.
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Dr. Markwardt said back in 2015 the district was 133rd in the State performance index, and now the district has been in the top 10 for the last 3 years. He said “As your school's performance increases, the schools act as a magnet, and also your property values will go up.” He hypothesized that part of West Geauga’s large increase in property values in the revaluation was due to the good performance of the school system, and the resulting increase in property taxes is part of why the district has a high cash balance. Mr. Flaiz said the cash balance was high before the revaluation. Ms. Pavlat said that the Newbury transfer was part of the reason for that. Mr. Flaiz and Mr. Walder agreed that school performance can influence property values, but it is not the only factor. Mr. Walder said “I'm not critical of the performance of West G as a school. What I'm concerned with is the public's temperament and ability to absorb the taxes that are being put upon them, if it's not directly going into fundamental education.”
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Mr. Flaiz did a presentation on West Geauga’s levy history and relevant law. Key points were:
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The district hasn’t passed a current expense levy since 1989, and since 1992 the district has only put emergency and permanent improvement levies on the ballot. Observer Note: Neither emergency levies nor PI levies are a part of the 20 mill floor calculation.
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The district’s two current emergency levies were originally passed in 2003 (fixed at $3.7 million a year) and 2005 (fixed at $2.35 million a year). Mr. Flaiz expressed concern about West G’s “... reliance on emergency levies to fund your general operations, and the fact that it's been a very long time since you could be considered to be in anything that's called an emergency.”
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It is the job of the Budget Commission to determine 1) whether levy revenue is clearly required by the school’s budget submission and 2) whether levies are properly authorized and being collected within accordance with the law. He said concerns were raised about West G’s levies being properly authorized at last year’s budget hearing, and he asked the district to reach out to his office to work through those concerns at that time. He noted that the district failed to do so. Observer Note: The LWV Geauga Observer Report covering West Geauga’s 2024-2025 Budget Hearing is available here.
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Ohio Revised Code (ORC) states that emergency levies must either: 1) provide for emergency requirements of a school district or 2) avoid an operating deficit. Both of West Geauga’s emergency levies stated that they are providing for emergency requirements in their ballot language.
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The emergency levies were most recently renewed in 2016 and 2019, both for 10 years. Mr. Flaiz said that the district had a cash balance of over $11.5 million before the 2016 renewal, and questioned if the district was really in a state of emergency at that point. He noted that the district had a cash balance of over $15 million before the 2019 renewal, and again questioned if there was an emergency then. Referencing the current situation in 2025-26, he asked: “What emergency is there when you have over $25 million of cash, and the voters only authorized you to collect this money for the emergency requirements of the district, which is not straight operating? The board, in order to use emergency levy money for operating expenses, the board has to determine that there's an emergency, and I haven't seen a record of that.”
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The Ohio Supreme Court decision in Village of South Russell v. Budget Com'n of Geauga County (1984) states that Budget Commissions must determine whether levy funds approved by the voters for a specific purpose are indeed budgeted for that purpose.
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An Ohio Attorney General Opinion from 2012 (Opinion No. 2012-007) states that proceeds from a tax levy for the emergency requirements of a school district cannot be used for any purpose the school board wishes, but instead may be used for emergency requirements only. Mr. Flaiz said this means “you can't use this (emergency levies) as a pass through and just pay general expenses. It has to be for an emergency.” He also said “you can't use it for whatever the board wants, which is what they're currently doing. You can't just blindly use it for current expenses.” Mr. Walder added “But they have been for years.”
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Mr. Walder asked if the emergency levies could have been renewed as substitute levies. Ms. Pavlat said they could have been, but it wouldn’t fully solve the problem because substitute levies are outside of the 20 mill floor calculation. Mr. Walder noted that it would have gotten rid of the emergency requirement though. He said that converting emergency levies to substitute levies would keep them qualified, which means eligible for 12.5% assistance from the State; new levies are not eligible for this benefit. Mr. Walder said he thought that emergency levies could be converted to substitute levies even before they expire. Mr. Flaiz said he thought the long-term way forward was to convert the emergency levies, and in the meantime he was concerned about taxpayer lawsuits similar to the Sanborn case. In this case, taxpayers sued the local Budget Commission for approving a shift of some of their school district’s inside millage to permanent improvement. The Ohio Supreme Court’s decision stated that shifting inside millage that only results in increasing cash reserves is not permissible.
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Dr. Markwardt asked if substitute levies are continuing or time-limited. Mr. Walder said they can be done either way. Dr. Markwardt said his perception is that West Geauga residents prefer time-limited levies. Mr. Walder said he thought that this used to be the case, particularly in Chester, but he thinks continuing levies are becoming more preferred and said all Russell Township levies are now continuing.
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Mr. Hitchcock praised the quality of West Geauga Schools, but he said that the Budget Commission’s “... duty is to make sure that there is need with the actual ending cash balance continuing to grow.” He referred to his notes from last year’s hearings and said at that time he motioned to refund $6 million of West Geauga’s emergency levy funding back to the taxpayers. This motion lacked a second. He said West Geauga’s numbers this year indicate that the district could give $10 million back to the taxpayers in order to bring themselves back to the state average cash as a percent of expenses. Mr. Hitchcock said he wasn’t suggesting that amount because the district has the large water filtration project coming up, “... but I am strongly suggesting my colleagues give back $6 million as we should have done last year, because you didn't need it then, and you sure don't need it now, regardless of the classification the emergency levy. I think the $6 million refund to the taxpayers out of your excess cash funds to get you to the state average is appropriate.”
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Mr. Flaiz said that there were three ways of looking at this:
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Focusing on cash balances (“Chris’s way,” i.e., Mr. Hitchcock’s suggestion)
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Focusing on the inside millage shift (“Chuck’s approach,” i.e., Mr. Walder’s suggestion). He noted that based on the Sanborn case (see link above), the Budget Commission should be examining inside millage assignment every time the schools submit a budget. He added that, if West Geauga didn’t already have an inside mill shifted to PI, “if your board came to us next month and said, ‘Hey, we're going to shift one mill inside millage (to PI),’ I’m pretty confident that we would never approve that. So if that's the case, should we approve a budget that has that inside mill shifted to Chuck's point? And I think the answer to that would be, no.”
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Focusing on whether or not the emergency levies are properly authorized. Mr. Flaiz said “I really do want the (West Geauga) board to address this, because I think we would be legally justified in suspending both the emergency levies…. I do not want to do that.”
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Mr. Walder stated that West Geauga’s mill being shifted to PI “... caused a million dollars of tax to happen (via 20 mill floor adjustment).” He went on to say “I can't look a taxpayer in the eye and say, I did you right…. even after we reduce it, you're going to have $800,000 sitting in that fund.”
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Ms. Pavlat asked when a PI shift would ever be allowed if a school is close to the 20 mill floor. Mr. Walder said there were a number of factors, including cash balance as a percentage of expenditures, which “tells us how resilient you are to losing revenue.” He said another factor is whether or not the district is operating under truly emergency conditions: “I think that puts a whole different light to this, because is that an emergency to move it (the inside mill) to a fund (PI) that causes a tax and isn't consumed? Is that a form of emergency? I think it's the opposite of an emergency. That’s luxury.”
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Ms. Sherwood asked how to reconcile the Budget Commission’s one year focus with schools districts’ required five year forecasts. Mr. Walder suggested having budget estimates that are “... one plus years out. If you think it's going to occur close to but maybe not within that time period, you estimate it, and it would be considered need.” He noted that townships have five year budgets and they have used this approach in their annual budget hearings. He said the Budget Commission has allowed money to accrue for future projects in these cases as long as the projects are done in a reasonable amount of time.
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Ms. Pavlat asked if the inside millage shift to PI would be disallowed for one year and then go back in place. Mr. Flaiz said the West Geauga School Board would have to take action to shift it back to PI.
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Mr. Flaiz encouraged West Geauga to follow Chardon Schools’ example and start spending their excess cash on needed projects. Dr. Beers said they are beginning to do this at the middle school.
Votes on West Geauga’s Budget Submission
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Mr. Hitchcock moved to reduce West Geauga’s revenue by $6 million. There was no second.
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Mr. Walder moved to rescind the shift of 1 inside mill from the general fund to the PI fund. Mr. Flaiz seconded the motion. The motion passed 2-1, with Mr. Hitchcock dissenting.
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The Budget Commissioners voted to table the approval of the West Geauga budget so that the numbers could be recalculated to account for the inside millage change. The Budget Commissioners decided to hold a Special Meeting on Monday, February 24, 2025 at 10:00 am for Part 2 of the West Geauga School Budget Hearing to approve the budget with the updated numbers and to conduct regular business.
Regular Business: There was no regular business.
Public Comment: Public comment was solicited, but none was offered.
The meeting was adjourned at 11:38 am.
Next Meeting: The next meeting is the Special Meeting for Part 2 of West Geauga’s School Budget Hearing and Regular Business on February 24, 2025 at 10:00 am Auditor’s Conference Room, 215 Main Street, Chardon, Ohio. Virtual attendance is available via Microsoft Teams by emailing an invitation request to Ms. McMahan at pmcmahan@gcauditor.com.
Observer: Sarah McGlone
Editor: Anne Ondrey
Reviewer: Gail Roussey
Submitted: 02/25/2025
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