MACEDONIA — Stagnant revenue, increasing expenses and aging facilities were the main focus of a recent forum hosted by the Nordonia Hills City School District at the high school.
"In Nordonia, we’re unique. We’re one of the very few districts in the state of Ohio that do not have a permanent improvement fund to pull from," said Matt Gaugler, the district’s new business director. "That means the general fund, the main budget line, all expenses come from that."
In 2001, the school buidings had several renovations done, such as air conditioning, new gym floors, roofing and more, Gaugler said.
"A lot of that was great in 2001, but now fast-forward to where we’re at now," he said. "That’s not such a great thing because there was a lot of technology and a lot of construction industry standards that exist now, that we know now, but we didn’t know then. Some of the things that were great then are actually costing us a lot of money."
Currently, the district has items like some of its boilers, which the Nordonia schools have been repairing, that have reached a point where it would be more cost effective to replace them, Gaugler said. The district has been doing "band-aid repairs that we’ve tried to get the most life as we can out of the units that we have, but we’re nearing the end for a lot of them," Gaugler said.
Gaugler said another immediate expense facing the district is the condition of the south side exit at the high school, which is sinking.
"We’ve been informed by the city we have to grind that down and build it up new," he said. The estimated cost of the project, which the district will work on over the summer, is $50,000.
Another expense the district is looking at is upgrading its security systems, Gaugler said. He added that he estimates it will cost $40,000 to upgrade the software to maintain compatibility for the ID system the staff uses to access the buildings. Upgrades to the district’s security camera system "to keep those current with today’s software and for our security for our police and fire forces to be able to view our buildings at all times" would be more than $200,000, he added.
While expenditures have gone up for the district, the revenue is "not going up at the same pace," said Treasurer Karen Obratil.
"In 1976, inflation was teetering on double digits," she added. "Property values were increasing at an astronomical rate. More importantly property values are tied to taxes, and taxes were increasing at an alarming rate. As you can see here, where the inflation rates were at at time set the stage of what the legislators ended up doing, which was in response to the tax burden that the homeowners were having. They decided to enact House Bill 920."
This bill only allows the school district to receive the same revenue that was approved when that levy was first put on the ballot, Obratil said.
"So we have a home valued at $100,000 ... we see 5 percent in taxes which creates $5,000 from that property," she said. "Summit County goes to reappraisal three years later. Now the value of your property increases to $120,000, and local government has 5 percent. Now that percent is going to bring those taxes to that entity $6,000 dollars, which is $1,000 dollars more than what they received three years prior."
However, Obratil, school districts, even with the increased valuation, will still only get $5,000, and the percentage of what the district collects will decrease. In the hypothetical example Obatril gave, in 40 years, when that home is valued at $400,000, the local government will collect 5 percent in taxes, or $20,000. Meanwhile, the school district will still collect $5,000, with its percentage lowered to 1.25 percent.
Another financial hit from the schools came when public utilities were deregulated in 1998, Obratil said.
"That meant that property values were at 88 percent, and it got reduced to 35 percent," Obratil said. "We had $5.6 million that we received in 1998, and $1.5 million was received in 2010. You can see there was $4 million lost."
Ohio’s school districts also lost money when the state phased out taxes on a businesses’ equipment and inventory.
"Ohio wanted to be more competitive and they wanted to reduce that business tax 25 percent down to zero," Obratil said, adding that this tax has been eliminated.
Ohio’s system for funding schools has been declared unconstitutional four times due to the state’s overreliance on local property taxes, Obratil said.
Public schools also have lost money to community schools, Obratil said.
"Legislative action wanted to give people in Ohio an educational choice, to either go to a community school or a charter school," Obratil said. "What happens with that and how it works is, it’s on the backs of the public schools so the Ohio Department of Education takes the money right out of our foundation money and sweeps it out of our funds and sends it to the Community Schools. We do not receive the $6,000 per pupil. That is in the formula from the state funding, we receive about $1,300 per pupil. Yet for every community student, they sweep out of our town $6,000 or whatever the per pupil amount is for that period of time, and then it goes to that Community School."
One way the district has saved money is through various consortiums, Gaugler said.
"When we have major work that has to be done, we do belong to these groups that pull together several contractors," Gaugler said. "We take competitive bids so we constantly try to get the most cost-effective work done by professionals so we are constantly trying to stretch the dollars."
Dr. Joe Clark, the district’s superintendent, said that the community needed to come together to decide how the district can best address the school facilities issue.
"If there’s any future construction that needs to happen, that’s not me or this board that will be making those decisions," Clark said. "The community needs to say ‘You know what, we’re not going to spend $5 million on new boilers over the next five years. Why don’t we build new buildings?’ But that’s the community that needs to come forward with that, because if a board or a superintendent tried to do that, it fails."
Obratil said the Nordonia City School District was second lowest in Summit County when it comes to residential tax rates. The district has the third highest GPA in the county, she added.
"When a levy is approved, typically what it does is it lasts maybe three to five years," she said. "I think we did a great job of being good financial stewards of the district’s taxpayers’ money because our levy was passed in 2011. It's now 2018."
Reporter April Helms can be reached at 330-541-9423, firstname.lastname@example.org, or ??@AprilKHelms_RPC??