PEPPER PIKE, Ohio – The Orange Board of Education has taken the first step toward placing a .95-mill, five-year Orange Community Education and Recreation (OCER) levy on the primary election ballot May 6.
On Monday (Nov. 25), the board passed the first of two resolutions needed to place the renewal levy on the ballot for voters in the Orange City School District.
The second required resolution will likely be passed at the board’s next meeting at 6 p.m. Dec. 9.
In September, OCER Director Jill Korsok explained to the board that the OCER levy has been in existence since 1975 and has to be renewed or replaced every five years. The current levy expires Dec. 31, 2025.
The .95-mill levy has been at this level since 1995, Korsok said.
Passage of the renewal, which would not increase millage or taxes, would ensure the continuation of OCER facilities, programs and services for all residents of the district through 2030, she said.
The last renewal levy, in March 2020, passed by a 77 percent margin.
“The bulk of our committee’s work will begin in late January,” Korsok told the board Monday.
This levy is designed to provide about 25 percent of the funds needed to operate OCER through its annual budget, Korsok said.
“Seventy-five percent of our operating budget comes from fees people pay to participate,” she said in September. “So most of the funding is user driven.”
If the levy passes, collection of the tax would begin in 2026.
Operating levy possible in 2027
In other action, the board approved the district’s five-year financial forecast.
In presenting a summary of the forecast, Treasurer Todd Puster said the district may need to place an operating levy on the ballot in 2027 to offset an anticipated trend of declining cash balances.
“Throughout the course of the current five-year forecast time frame, the financial position of the school district is forecast to decline from a modest surplus this fiscal year to a deficit of approximately $5 million in 2029,” Puster said.
“On three-year averages, our expenditures are up about 2.5 percent, and revenues are up less than one-half percent. That’s what creates the structural imbalance that we’re seeing.”
Puster said this situation is not unusual in school finance in Ohio.
“If we do nothing over the next five years, and the forecast is spot on, we’re looking at about a $5 million deficit in 2029,” he said.
“One way to deal with the deficit is to increase revenue. A path out of deficit spending would be a 5-mill levy, perhaps presented to the voters in 2027. That would keep our cash (balance) relatively stable.”
The last time district voters were asked to support an operating levy was in 2011, when a 5-mill levy passed.
Last November, district voters passed a 1.5-mill permanent improvement levy to allow the district to maintain facilities and equipment for years to come.
That levy passed by a margin of 73 percent to 27 percent.
Puster said the district is in “a resilient financial position.”
“Absent major changes to existing revenue and expenditure patterns, expenditures are forecast at close to break even for this fiscal year and next,” he said.
The board maintains a 90-day operating cash reserve at all times, Puster said.
“The district is forecast to have sufficient reserves to maintain a minimum cash reserve of 25 percent of anticipated expenditures through the next several years, but comes closer to breaching that reserve level during fiscal year 2029,” he said.
“The district is expected to remain highly dependent on local property taxpayers for funding day-to-day operations for the five-year period and beyond.”
Rising expenses a concern
Board President Jeffrey Leikin noted that in comparing this five-year forecast with the one the board approved in May, an increase of more than $3 million in expenses is predicted in that six-month period.
“Can you explain that to the board?” he asked Puster.
“The biggest thing that’s going on is health insurance (costs),” Puster said. “The 13 percent increase is outside of the norm.
“The second thing, frankly, is we’ve had to negotiate wages, especially with non-teaching employees, but with all employees in general, that have been above our historic norm. Those are the fastest-growing areas of the budget right now.
“The percentages (of wage increases) might be in the 3- to 4-percent range, but when you flip those to numbers, that’s several million dollars.”
Leikin replied, “If our expenses are going up this quickly, we’ve got to put a plan together to deal with it.
“In a six-month period, that’s a huge increase,” he said. “If you compare the two forecasts, it’s an alarming difference in the numbers.”
Puster said he and Superintendent Lynn Campbell will “have to take a look very seriously at some point at our health benefits plan.”
“Our health benefits continue to be the fastest-growing expenditure that we have,” he said.
“Property tax collection fees are a significant expense for our district. That’s a $1 million item for us.”
Puster said another concern is that the Ohio General Assembly is reviewing several pieces of legislation to amend property tax laws.
“Any of these proposals, if enacted, could undermine essential revenue assumptions and materially alter the forecast financial position of the Orange City School District,” he said.
“It looks unlikely that something will happen in the current legislature, which ends next month.
“But something is very likely to happen when the new legislature is sworn in in Columbus in January. The budget bill is one potential vehicle.”
Puster cautioned the board that the five-year forecast “is not an absolutely certain prediction of the future.
“We try to use best information available, look at the trends around us and try to determine where we are headed financially,” he said.
Update on PPLC renovations
Also on Monday, Korsok said renovations to the Pepper Pike Learning Center (PPLC) are “coming along beautifully.”
“We’re still on schedule for completion in mid-March,” she said, noting asbestos removal was recently completed.
“I give a ton of credit to (the OCER) staff, who has been very flexible.”
Renovation of the main entrance, lobby and additional spaces at the PPCL began Oct. 28.
Security updates are a key component of the renovation, Korsok said.
There will also be updates to the front entrance, lobby and adult restrooms, she said.
In addition, office space will be added near the lobby.
“That will allow us to add additional classrooms and activity spaces in the youth hallway where we currently have staff offices,” she said.
Since Oct. 28, the main entrance and lobby of the PPLC have been closed due to the construction.
Drop off and pick up for all preschool students, morning Lions Club students and after-school activities are through the north doors closest to the blue playground, according to the district website.
In August, the board approved a contract with the Albert M. Higley Co. of Cleveland to provide a larger, more secure entrance to the PPLC, along with other renovations to the building.
The PPLC houses OCER’s administrative offices and its Early Childhood Preschool, Youth, Stagecrafters and Adult Education programs and offices.