PEPPER PIKE — School officials for the Orange City School District are questioning if they can push back the levy that was planned for 2021 due to unknown future revenues and a recent decrease in the district’s expenditures.
According to Treasurer Todd Puster, real estate and tangible personal property taxes are higher than estimated so far, giving the schools $755,000 that was not predicted. He said that new construction within the district increased those figures and several delinquent taxpayers paid their bills. With an increase in the district’s investment earnings and decreased expenditures on purchased services, for example, Orange has $2.4 million more than predicted, Mr. Puster said.
“Going into the pandemic, we’re in a good, in fact a little better than expected, financial shape,” he said at the Audit and Finance Committee meeting last Friday.
The administration and the Board of Education began discussing the need for a levy in 2021 because the five-year forecast showed a pattern of deficit spending. Superintendent Lynn Campbell asked how these recent changes to the district’s financial state affect deficit spending.
“It basically wipes out the deficit that we were forecasting,” Mr. Puster said. He said additional cash only eliminates the deficit for fiscal 2020.
Dr. Campbell said that in the long run, a levy should not be the only way to resolve deficit spending. He said that the district needs to look at where it can cut costs and consider bringing in more revenue to support a quality education for the students.
“There’s only two ways when you’re deficit spending, either reduce costs or increase revenue,” he said. “I think it would be unwise to only look at generating more revenue via a levy and not looking at decreasing costs.”
Board and committee member Jeff Leikin said that it is always good to review expenses, but he wants to keep up the quality education that Orange offers.
“It’s always healthy to trim the fat, but at the same time we’ve made a lot of strides in academics,” Mr. Leikin said. “I’d hate to take a step back because we’re telling our people to cut money.”
The members of the committee discussed the district’s expected revenues and expenditures, some of which are significantly impacted by the current worldwide coronavirus pandemic.
Mr. Puster said that real estate taxes bring $41 million to the district. The pandemic has shuttered businesses and affected many families as parents have lost their jobs. The treasurer explained that if tax delinquencies rise to 5 percent, which he said is “not unrealistic,” that amounts to $2 million in revenue that is deferred.
He said that eventually people either pay their taxes or the district receives the money through foreclosure proceedings. In addition, Mr. Puster said that 2021 is the year for Cuyahoga County’s triennial reappraisal update. He said that a general reduction in property values would affect the district with its inside millage.
“We have a small but steady increase over time through inside millage,” he said. “That could work in reverse, so that’s another area of vulnerability.”
The committee also discussed the pandemic’s effect on district expenditures. Mr. Puster said that the district’s costs are going down right now because the buildings are closed and students are engaged in distance learning. Orange is spending less money on paper, utilities and substitute teachers, he said.
Board and committee member Melanie Weltman said that there could be cost efficiencies by reassigning tasks. For example, there may be other custodial work for the cleaning staff to do instead of cleaning floors when the campus is closed.
Even though distance learning reduced some costs, it increased others, Mr. Puster said, such as technology. Dr. Campbell said that the district has purchased internet hotspots for students and there is an increased need for Chromebooks.
Mr. Puster said that he is drafting his five-year forecast, which is presented to the board every May and October. There still are many unknowns because of how the pandemic health emergency has temporarily closed buildings and altered the traditional classroom setting. He included that the district could see additional property tax revenue and a $1 million decrease in spending for this fiscal year in the five-year forecast.