GEAUGA BUDGET COMMISSION FINDS EXTRA DOLLARS IN WEST GEAUGA LSD RENEWED “EMERGENCY” LEVIES; MORE GIVEBACK TO TAXPAYERS

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Thursday, February 29, 2024

As a result of the 2023 Inside Millage Revaluation, termed by many taxpayers as an unvoted windfall for all five local school districts, the Geauga Budget Commission, composed of Auditor Chuck Walder, Prosecutor Jim Flaiz, and Treasurer Chris Hitchcock, has uncovered its responsibilities regarding tax levy review. The authority for this review is granted by Revised Code 5705.31 under Tax Levy Law in Ohio’s Constitution. Had the debacle of the sexennial revaluation not become apparent in the privation to Geauga County real estate payments, the Geauga Commission would not have had the opportunity to research the disservice to homeowners and taxpayers.

The specific authority granted to the county budget commission is as follows: to “examine such budget [including school tax levy] and ascertain the total amount proposed to be raised in the county for the purpose of each subdivision and other taxing units in the county.” In addition, the budget commission has authority for approving “(A) [a]ll levies in excess of the ten-mill limitation,

(B) [a]ll levies for debt charges not provided for by levies in excess of the ten-mill limitation, including levies necessary to pay notes issued for emergency purposes . . .”

In a graph comparing the 2024/2025 school year budgets for Kenston, Cardinal, Chardon, Berkshire, and West Geauga LSDs, the Geauga County Budget Commission was able to demonstrate that there excess carryover cash per each enrolled student. Although the revenue slightly trails the expense per student in Kenston, Cardinal, and Chardon, LSD’s, with both Berkshire and West Geauga LSD’s demonstrating more revenue than expenses for enrolled students. Nevertheless, each system is still receiving sizable cash carryover in the bank.

The anomaly is West Geauga LSD, as the only school district in Geauga County that helped out its taxpayers by suspended collection of $1 million and made its taxpayers feel better while dealing with 33.3% additional revenue in the amount of $1,307,637 and a total inside (unvoted) millage for 2023 of $5,585,072 and an increased unvoted millage for 2024 of $1,307,637. Further, the revenue (income) to West Geauga exceeds student expense by a whopping $2.6 million, according to oral testimony at the hearing.

In the end, the West Geauga Budget Summary on February 28, 2024, demonstrated that West Geauga’s Beginning Balance of $27,114,659 gained $2,081,637 because its certified revenues exceeded its expenses by $2,081,631. Depending on methodology, the carryover (cash in the bank) per enrolled West Geauga student worked out to $14,000+ 80% of per-student expenses. In spite of its generous offer to mitigate $1,000,000,West Geauga LSD is awash in excess carryover cash.

Prosecutor Flaiz pointed out two landmark legal judgments that were resolved in the Ohio Supreme Court to resolve excessive tax burdens created for taxpayers without their authorization. The first is Village of South Russell v. Budget Commission of Geauga, 1984 12 Ohio St.3d 126, 465 N.E and

Sanborn v. Hamilton County Budget Commission, 2014-Ohio-5218, 27N,E, 3d498. Both of these judgments deal with the question of excessive cash carryovers in favor of taxpayers, who funded the appeals, and received the favorable judgment, In explaining that West Geauga has reached the 20 mill floor, Prosecutor Flaiz explained that West Geauga could accept the Budget Commission’s decision that the school district must return a portion of their hoarded funds back to the taxpayers or file a legal court appeal at their own additional expense.

Treasurer Chris Hitchcock heard that West G. has a long-term dream to develop a totally new campus with a consolidation of two buildings: Grades 1-5 and Grades 6-12. Nevertheless, when Hitchcock asked about the school system’s hiring of an architect, the spokesperson acknowledged that no architect has been hired to do any research or plans. Hitchcock said that the school district has $26 million in the bank, a result of its unvoted windfall without the voice of its taxpayers, Hitchcock insists that those unvoted funds, by virtue of no immediate plans by West Geauga LSD, must go back to the taxpayers.

That explanation brought on the West Geauga explanation about need to replace stadium turf with Hitchcock’s quick response that West Geauga “has 90% of everything it could possibly need already. In fact, Hitchcock stressed that West G. “already has an embarrassing amount of cash; at least $12 million needs to be returned to West G. taxpayers.” Anything less is “just idle talk to excuse hoarding cash.”

Flaiz resumed his logical argument, noting that excessive cash carryover held by West Geauga is the single biggest issue. He reviewed the history of old LSD levies from 1989, and two so-called emergency levies that were initiated in 1992 as part West G’s jumping on “the Emergency Levy trip. In fact, according to Flaiz, two Emergency levies bring in $4 million dollars. Flaiz explained that Emergency levies “must provide for emergency needs or operating deficits only.” The “Emergency” monies raised in February 2003 were initially for only four years, but the “Emergency” renewal passed by voters in 2007 was for a five year period. The next “Emergency” renewal was for five years. The following “Emergency” renewal passed in 2016 was for a ten year period. Therefore, the unspecified/unexplained “Emergency” usage of moneys served West Geauga Local School District well because of the generosity of its taxpayers. According to Flaiz, in 2016 the West Geauga General Fund balance was already $13 million in cash. Due to voter generosity, that General Fund balance has continued to grow—perhaps in non-linear fashion, and still the taxpayers were not yet critical.

Flaiz emphasized that because West Geauga was not forthright with its taxpayers, the General Fund nearly doubled. Flaiz concluded that the West Geauga LSD has given him heartburn with the absolute need for the Budget Commission to analyze and approve budgets every single year according to the authority granted by the Ohio Constitution, especially when subdivisions like West Geauga are collecting “Emergency” funds for “Non-Emergency” needs.

From an analytical point of view, has West Geauga LSD defrauded its taxpayers when it has borne no “Emergency” since 1989?

Perhaps the most significant response was the comment from the West Geauga Budget Administrator/Fiscal Officer: “We work very hard to spend what we bring in.” That remark brought a laugh from many conducting the budget review and the response from Flaiz that West G “Emergency” funds could be eliminated altogether. “I don’t want to debate the potential for fraud.”

Hitchcock expressed his admiration for West G as a “phenomenal school system. Nevertheless, until you approve a levy, excessive funds must be suspended. Give the extra funds to taxpayers. Taxpayers have been hornswoggled.”

Auditor Walder followed up with suppression of $2.3 million in “Emergency funds” and Prosecutor Flaiz urged West Geauga LSD to observe “the law. Accept the judgment or take us to court.”

When this writer left the audio version of the Geauga Budget Commission at approximately 11:15 am, Chris Hitchcock’s words still rang out: “Stop hoarding $29 million.”