PEPPER PIKE — Officials projected in 2015 that the Orange City School District would receive $3 million in annual revenue from Pinecrest, the new mixed-use district at Interstate 271 and Harvard Road. Since Pinecrest opened in May of 2018, Orange schools received $233,132, Orange schools Treasurer Todd Puster said.
“People think we’re already getting this $3 million figure or close to it because they see the commercial development with the stores, restaurants and second-story apartments,” he said at a recent Audit and Finance Committee meeting. “The check so far is $233,000. The 2019 figure is based on what happened in 2018 and that was the opening year.”
Mr. Puster broke down the $3 million figure at the Orange Board of Education meeting on Oct. 7 to explain why the district is not receiving the full amount. The calculation is based on figures from when Pinecrest will be at full build-out in 2022.
According to Mr. Puster, the district was expected to receive $828,343 for payment in lieu of taxes, known as PILOT. That’s when money is paid to a government entity for some of the property tax revenue that may be lost to tax exemptions.
The commercial district at Pinecrest is using tax increment financing, also known as a TIF, to redirect tax dollars for public infrastructure improvements. The school district receives PILOT money to offset the loss of TIF revenue. Orange schools will receive a compensation payment equivalent to 25 percent of the dollars redirected, according to Mr. Puster.
The 2015 estimate also predicted that the district would receive $415,000 from income tax revenue sharing with Orange Village, $1.15 million from residential taxes and $621,664 in future property tax increases. The estimate changed slightly in 2018 with a total projected revenue of $3.1 million, he said. Pinecrest is located in Orange Village.
In reality, Orange has received $233,132 in PILOT payments. The district has received no revenue from income sharing, which is projected to begin in 2020. It has also received no revenue from residential taxes because the Pinecrest development timeline has been delayed. The residential development at Pinecrest is not included in the TIF district. The school district has not increased taxes, so revenue from future tax increases is zero instead of $621,664, according to Mr. Puster.
“Pinecrest helps our financial forecast but it’s not a game changer,” Mr. Puster said.
“And it was never anticipated to be,” Board of Education member Melanie Weltman added. She said that no one in Orange Village ever intended revenue from Pinecrest to replace property taxes for the school district.
School board President Beth Wilson-Fish asked about the source of the misconception about school district revenue from Pinecrest. Mr. Puster said that some people may project what they want to happen rather than the reality of the situation.
“There are a couple people who have their own reasons for wanting a certain narrative that never was the reality,” he said.
In other news, the school board approved a resolution affirming its intention to place a recreation levy renewal on the March ballot in 2020. The Cuyahoga County fiscal office will certify the amount of revenue that the levy generates then it must be filed with the county Board of Elections.
“There are two options, increase revenue or decrease spending,” Mr. Puster said at the audit and finance committee meeting.
The 0.95-mill, five-year levy generates $965,000 annually and has been renewed nine times, Mr. Puster said. The Orange City School District is the fiscal agent for Orange Community Education and Recreation.
Mrs. Wilson-Fish said that Orange has been able to extend the levy in the past and asked why other districts have to pass levies more often. According to Mr. Puster, every district faces different circumstances. Changes in state funding, territory transfers or losing a major taxpayer can affect how often the voters are asked to approve a levy.
“This is the longest we’ve extended the levy in 40 years,” he said. “We haven’t asked for money in 10 years.”
If passed, collections for the recreation levy renewal would begin in 2021.