Budget Commission Regular Meeting – October 16, 2023
Meeting Details: The Geauga County Budget Commission met in Regular Session on Monday, October 16, 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: Prosecutor Jim Flaiz, Auditor Chuck Walder, and Treasurer Chris Hitchcock.
Staff Attendance: Deputy Auditor Kristen Sinatra and Fiscal Office Manager Pam McMahan.
County/Township Staff: Geauga County Budget and Finance Manager Adrian Gorton (virtual) and Geauga Public Health Board President Carolyn Brakey (virtual).
Others in Attendance: Kathy Johnson of Chardon Township (in person) and this observer (virtual).
The meeting was called to order at 10:09 am.
Minutes: No minutes were ready for approval.
The following Revenue Certifications were approved:
Hambden Township- Amendment #3 - $800,547.80 in the general fund, $3,182,680.67 in special revenue funds, and $437,921.99 in capital project funds for a total of $4,421,150.46.
Hambden’s amendment reflected an increase of $20,000 in their ARPA fund. This money came
from an ARPA grant fund- not the ARPA program itself. Ms. Sinatra stated that the Auditor's Office Staff cautioned Hambden to make sure that these funds should be placed in the ARPA fund, and Hambden replied that this had been approved by the grant issuer. Mr. Walder recommended that his staff reach out to Hambden again to advise them to check with the Auditor of State to make sure this fund is the proper location for these grant dollars.
Geauga County - Amendment #13 - $51,157,857.46 in the general fund, $128,629,274.03 in
special revenue funds, $6,279,092.87 in debt service funds, $1,254,159.50 in special assessment funds, $27,843,104.47 in capital project funds, $18,063,060.25 in enterprise funds, $1,206,807.93 in internal service funds, and $3,757,550.66 in fiduciary funds for a total of $238,190,907.17.
Geauga County’s Amendment certified an increase of $130,000 in the ADAMS (Alcohol, Drug Addiction and Mental Health Services) Board fund.
Other Business:
Middlefield Village - Ms. Sinatra updated the Budget Commissioners that Middlefield Village has discovered that their 2022 Revenue Certifications have incorrect amounts. Due to clerical error, their CARES Act funding was counted twice. Mr. Walder stated the solution is to amend all affected certificates, and all Budget Commissioners voted to approve the motion to do so.
Discussion:
Property Revaluation and Its Effect on Inside Millage - Mr. Walder apologized for not yet sending out a letter to the County Commissioners advising them on how to mitigate the effect of the increase in inside millage due to the increase in property valuations taking effect on January 1, 2024. This situation and the proposed letter were discussed at length at the October 2 Budget Commission meeting. He has been unable to send the letter yet due to illness. He provided the other Budget Commissioners with a draft letter dated 10/16/23 for their approval.
Mr. Walder summarized that the County receives 2.5mills out of the 10mills of total inside millage, making them the largest single recipient of inside millage funds. He stated that the County will receive an additional $2.4 million dollars of unanticipated revenue due to increased property valuations that will result in additional property tax dollars. The letter advises the County Commissioners to split their inside millage windfall between Job and Family Services (JFS) and The Department on Aging and then reduce collection on the levies of these entities by a corresponding amount in order to “neutralize the taxpayer burden for this portion of the Inside Millage increase, due to Revaluation.” It goes on to commend the County Commissioners for their “... desire to assist the taxpayers by mitigating the unprecedented unvoted increase in Inside Millage valuation” and affirmed that the Budget Commission will assist them with this process. Mr. Walder noted that reduction of JFS’ non-qualified levy should be prioritized rather than their qualified levy, as the non-qualified levy is fully funded by Geauga taxpayers whereas the qualified levy is partially funded by the State. This means a reduction in collection of the non-qualified levy would return more money to Geauga taxpayers compared to the qualified levy.
The Budget Commissioners stated that there are eight new/replacement levies on the ballot in November that would be affected by the inside millage increase, and they determined that the County Commissioners would need to take action on this issue within the next 30 days in order to mitigate the effects of the inside millage increase before they take effect on January 1. Mr. Walder opined that if the County Commissioners do indeed implement the mitigation efforts the letter describes, it would set a good precedent for other County entities to follow suit. Mr. Walder stated that Claridon and Chester have both shown early signs of being willing to implement levy collection reductions to offset the inside millage windfall.
Mr. Walder noted that, across all the entities receiving inside millage windfalls, there will be a total tax increase of $9.2 million, which is an approximate increase of 30% in inside millage and 9-10% overall. Observer Note: A full list of these entities and the amounts they will receive is available on page two of this document. He further remarked that Kenston School District will receive a windfall of $1.1 million and West Geauga School District will receive a windfall of $1.2 million, and went on to state that each of these districts either has a levy on the ballot in November (Kenston) or is considering placing a levy on the ballot soon (West Geauga). Mr. Walder also pointed out that Chardon Schools will receive an additional $800,000 despite already having about $22 million in cash already. Reviewer Note: Ohio HB 187, passed by the House and introduced in the Senate, would limit the impact of the revaluation on property owners. See a short explanation here. It is not clear that this will pass before January 1, 2024 when the new valuations will go into effect.
Mr. Hitchcock stated that the Budget Commission needs to consider the effect of the revaluation on the inside millage of school districts that are largely outside of Geauga County that nonetheless have Geauga County students, such as Chagrin Falls Schools; Mr. Walder responded that he would have Chief Deputy Auditor Ron Leyde work on this. Treasurer Hitchcock advised that the letter to the County Commissioners should emphasize that the inside millage windfalls were not voted upon by Geauga citizens. He also advocated for spelling out in the letter that JFS and Aging are the entities that the County Commissioners can give the inside millage windfall to and then reduce their levy collections by corresponding amounts. The letter to the County Commissioners with the changes posited by Mr. Hitchcock was approved by the Budget Commission. Observer Note: The letter to the County Commissioners was forwarded to this observer via email later in the day on 10/16/23 and is quoted from above. All Budget Commission Members signed the letter.
Mr. Hitchcock suggested that the Budget Commissioners present their letter at a Board of County Commissioners (BOCC) meeting in person. He noted that they have never taken this action before, but he feels it is warranted in order to make a strong presentation and underscore the importance of the matter. The Budget Commissioners approved scheduling a Special Meeting to occur on Tuesday, October 24, 2023 at 9:30am during the Board of County Commissioners meeting. They also plan to submit a Request for Action form on this matter to the BOCC today (10/16/23). Reviewer Note: Here is a link to the meeting notice.
Treasurer Hitchcock stated that the Budget Commission could consider communicating with each entity benefitting from the inside millage windfall with information on how the entity can ameliorate the windfall’s effects on taxpayers using an approach similar to the one they are advising the County Commissioners to utilize. Mr. Walder stated that County entity reactions to the document published on the Auditor’s website (see the first link provided above) regarding increased property valuations and the need to act responsibly with the additional tax dollars that will be collected as a result have included his office getting more “negative pushback” from school districts than from Townships, Villages, and Cities. Mr. Flaiz noted that the Budget Commission itself can do nothing about these entities’ windfalls until 2025, and he observed that some of these entities have already been warned by the Budget Commission that they have too much money even before the inside millage windfall is taken into account. Observer Note: The Budget Commission has already certified all entity tax budgets for 2024, which is why they cannot take any action until 2025. Mr. Walder said that he has heard that these entities are “saving it for a rainy day. What if the sky falls? That is not what government is supposed to be doing. Government is not supposed to hoard money… they're supposed to hold money to perform a function. And if something happens, they should go back to the taxpayers and say we need more money and these are the reasons and justify it.” The Budget Commission approved sending out letters to each County Taxing Authority- schools, townships, villages, and cities- with a message similar to the one contained in the letter to the County Commissioners. Observer Note: The letters to each category of County Taxing Authority were forwarded to this observer via email on 10/17/23 and were signed by each Budget Commissioner. Each letter stated that: “The Geauga County Budget Commission is strongly 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.”
Mr. Walder shared that District 32 State Senator Sandra O'Brien has reached out to him. She is on a State Senate committee to try to address this problem long-term, though trying to get this done before January 1, 2024 may not be feasible for the Legislature. He said that he is proposing to her that there be a relief valve “where if property values increase by more than a certain percentage, it flatlines inside millage benefits, so maybe it caps at 5% and then inside millage can't grow any higher.” Mr. Walder noted the Senator will likely want to speak to Mr. Flaiz and Mr. Hitchcock about the issue as well, which could perhaps occur at a future Budget Commission meeting. Observer Note: State Senator Sandra O’Brien represents most of Geauga County in the State Senate. State Senator Vernon Sykes represents District 28, which includes some of southern and eastern Geauga County. You can look up which State Senator represents your part of the County on the Ohio Senate website.
Auditor Walder stated that his office is planning to hold educational sessions for Geauga citizens on the effects of the revaluation on their taxes, but the scheduling of these meetings is still being worked out. Observer Note: On October 17, the Auditor’s Office announced that an open meeting “to provide more information and answer questions about the tentative value and reappraisal process and how it will affect your property taxes'' will be held at 6:00 pm on Thursday, October 19, 2023, at the Geauga County Office Building at 12611 Ravenwood Drive Suite A333-A334 in Chardon.
Public Comment:
This observer had several points of clarification/questions. First, a copy of the letter the Budget Commissioners voted to send to the County Commissioners was requested to be sent to the LWV once it is finalized (and was received by this observer later in the day on 10/16/23). Second, it was asked whether or not virtual attendance of the Budget Commission’s Special Meeting with the County Commissioners on 10/24/23 would be possible, and it was stated that it would not since the County Commissioners do not allow attendance of their meetings via an online platform. Third, clarification was sought on why drawing down collection on non-qualified levies is more advantageous for taxpayers than qualified levies, and this information is provided above. Fourth, this observer asked when information sessions on the effects of the property revaluation increases on taxes/levies would be hosted by the Auditor’s Office. Mr. Walder said this was still being ironed out but would hopefully occur before the November 7 election. As mentioned in the final Observer Note above, the first such meeting was later scheduled for October 19 at 6:00pm in the County Office Building.
Ms. Kathy Johnson of Chardon Township stated she felt that getting the information about the consequences of the property revaluation to Geauga citizens is “a fabulous idea.” She noted her concern that there could be “people who may be forced out of their homes eventually because of all these taxes.” She is concerned in particular about the 3.0 mill Chardon Road Levy on the November ballot, as she thinks some people won’t be able to pay for this tax increase as a result of increased property valuations. Mr. Walder noted that this road levy was stated to bring in $555,000, but will actually bring in more than the $555,000 that Chardon said it needed due to increased inside millage. Ms. Johnson thanked the Budget Commissioners for their efforts, and each Budget Commissioner in turn thanked her for attending the meeting.
Mr. Gorton asked if the letter the Budget Commissioners plan to send to the County Commissioners will have the particulars on how much the levy collection reductions need to be to offset the increases in inside millage, and how much the County Commissioners will need to send to these entities for the offset to occur after levy collection is reduced. Mr. Walder replied that the exact numbers will not be in the letter, but he will make sure Chief Deputy Auditor Ron Leyde attends the meeting on October 24 and he will have those figures then.
Mr. Gorton also asked about mitigating taxpayer burden by reducing the amount of inside millage collected by the County. The Budget Commissioners cautioned against this, as other entities can claim inside millage given up by the County. Mr. Gorton asked if the Budget Commissioners have to approve any inside millage grabs, and the Budget Commissioners said that they do, but these decisions can be appealed, resulting in unknown outcomes.
The meeting was adjourned at 11:07am.
More Information and Posted Minutes: Available on Auditor website
Next Meeting: Special Meeting on October 24, 2023 at 9:30 am to occur during the Board of County Commissioners Meeting at the County Administration Building, 12611 Ravenwood Drive, Room 8303, Chardon, Ohio. The next Regular Budget Commission Meeting will be November 6, 2023 at 10:00 am in the Auditor’s Conference Room at 215 Main Street, Chardon, Ohio.
Observer: Sarah McGlone
Reviewer: Gail Roussey
Submitted 10/17/23
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