Old Business
Treasurer’s report:
The picnic cost $1,243.35 for the catering from Miller’s Meats and additional supplies from Walmart. The current balance in our account is $694.97. We paid for the Elks rental through the end of the year, and we have no outstanding debts currently that I am aware of.
Legislative update (Tom Miller):
- Matt Huffman will no longer be president of the Senate. He has been a friend to landlords and owns rental properties himself.
- The next general assembly starts in January.
- Gerrymandering bill (Issue 1): why is Ohio launching this redistricting?
- Electric grid in Ohio: Microsoft is coming into Columbus, and that will use a lot of power. They talked about purchasing Three Mile Island and refurbishing it, also possibly Davis Besse. All of that power from Three Mile Island would be used by this computing center – the “cloud” worldwide uses as much electricity as the country of Japan. There will be possibly 25%-300% increases in the generation rate (about half of a typical electric bill). An energy policy may be introduced next session.
- HB 645 / SB 271: Refundable income tax credit if rent exceeds 5% of a household’s income. This may not go anywhere. Basically everyone would qualify for this.
- HB 126 was passed – prevented school districts from hiring outside sources to challenge all of the tax assessments of properties.
New business
We may consider raising the dues a bit.
Motion to adjourn: 1st Joe, 2nd Josh
Speakers
Matt Cordonnier (Regional Planning/zoning)
They don’t enforce zoning, just work on code portions.
There have not been many updates this year, as there was a big update at the end of 2023.
Marijuana dispensaries: not deciding whether Findlay should have them (City Council does that), but if so, what zoning structure should that be. There are some ground rules, like 1000-1500 ft from a church, park, school, or daycare.
His office does a lot of grant writing, including applying for a FEMA grant for $27M to help pay for the river widening east and west of Main St and the Eagle Creek retention basin. The original price tag was $60M. Findlay has as many flood-insured properties as bigger cities – 2000 homes in the flood plain. Completion of these projects could reduce that by half or more, hopefully down to 500-750 homes in the flood plain.
Q: Tax abatement (CRA) – what is it?
Findlay has a pre-1994 CRA (Community Reinvestment Area), which is a property tax exemption. CRA can help develop a vacant lot that grants a temporary exemption from paying the increase in property value for that property. You still pay tax for the land but not the building for 10 years. It also helps if you do an addition on your house if the house is 50+ years old, and you spend at least $2500. This applies to the city of Findlay, not the rest of the county. Apply for this after the project is completed within the calendar year in which the project is completed. Contact Regional Planning with any questions about this. It does not apply to things like a new roof, new siding, etc.; it does apply when you expand the square footage.
Q: What is the timeline for the Eagle Creek Retention?
He is not a key person on that, so he doesn’t know, but we’re getting closer. Steve Wilson would be the point person for that.
Randy – Director of Hancock County Child & Family Services
There is a levy on the ballot for children’s services. The first one passed in March 2020, it was 0.8 mil and raised $1.7M, which was used for placement of children in foster care – not salaries, equipment, buildings, etc. In 2020, they had 120 kids in their custody, which is very high. Some of the placements were costing $400+ a day! They have gotten those numbers down, with 74 kids in their care now. Most are in family foster care, some in a group home or treatment, and some in kinship homes. The 2020 levy expires at the end of 2025, so it’s on the ballot for renewal.
There are more children who need foster care than homes are available. He has been in contact with other CFS departments to see what they are doing. They are trying to figure out how to keep costs down while providing quality care for these children, while costs are increasing due to inflation.
This is a replacement levy. It goes from $23 per $100k of valuation to $28 per $100k. The total levy will go from $1.7M to $2.1M. Local costs are about $200k/mo for placements, so the left will carry some more of that. The biggest cost is kids who are in residential treatment facilities.
Unfortunately, he can’t tell stories because of privacy laws, but they have seen horrific things for these kids. Case workers often only last 2-3 years because of seeing these situations. The child welfare budget is $4-4.5M, and salaries are about $900k.
Q: What about resourcing between counties?
They’ve talked about doing that with area counties, but it’s all about costs and resources. Even $400/day is a lot, much less $1200/day as some of these places cost. There’s a great business opportunity here to invest in a facility and bring these costs down.
If foster homes get in danger of eviction, their organization will help get their rent paid.
Randy would be happy to answer further questions or share more with our group in the future about all of their services.
Andy Hatton – Superintendent of Findlay City Schools
Pam Harrington (treasurer & CEO)
Susan Russell (board member)
David Conley (tax policy expert)
They are not here to argue for or against the levy, they are just sticking to the facts.
Make sure you vote on November 5! Early voting has started.
How school funding works
All funds go into 3 “buckets”: operating, bond, and permanent improvement. This levy is for the operating bucket. Money can’t be moved between buckets. Operating money is for salaries, benefits, utilities, current expenses, and capital improvements that will last less than 5 years (> 5 years = permanent improvement bucket).
This is a service, and it takes people to operate that.
It has been 19.5 years since Findlay voters approved new operating money for FCS. A renewal occurred in 2017, but that stayed the same mills. Three times on the ballot in 2020 were unsuccessful.
HB 920: When voters approve property taxes, as property values go up, public schools’ collection rates go down. They are held to dollars, not a percentage.
Ohio has more school tax levies on the ballot this fall than any other state.
The school district needed money in 2020 when the levies failed. But the district got $14M to be spent over 4 years from the government; that ran out on September 30. With that, they were able to hire people and get curriculum resources that have helped FCS exceed state standards for the last 2 years.
Why now? The Covid dollars ran out. Two public work sessions were held in March and April. They’re $12.7M short, and we have the local capacity to provide that through the Fair School Funding Formula. They look at the value of all the properties in FCS, how much people make, and the enrollment and determine that number for local capacity. The state gives a certain amount of funding, whether we get that local capacity or not.
Do we go with a property tax or an income tax? We’re the only school district in Hancock County that does not have an income tax. All others have both an income tax and a property tax, even in Wood County and Perrysburg. Nearly 30% of the citizens living within FCS are on fixed incomes. Rather than a traditional income tax, they look at an earned income tax that does not affect social securities, pensions, IRA distributions, disability, etc. Surrounding districts pull a traditional income tax and property tax.
FCS did not want to ask for more than what was needed. A 1% earned income tax will provide $12-13M. This is only for those who are actually in Findlay City School district. This does not affect people who only work in Findlay but do not live here.
What happens if this doesn’t pass? They recommend cuts of $5M for the 2025-26 school year – 20-25 teachers, 4-5 administrators, 20-25 supplemental positions (athletics, extracurriculars, etc.), half-day kindergarten, state minimums on bussing (2 miles), etc. We are already deficit spending, so cuts will need to be made. Multiple rounds of cuts would need to be made.
Q: Is rental income counted as earned income?
Rental income is not specifically outlined as exempt from earned income. You’d need to talk to your tax advisor about that based on how you file your taxes.
David Conley: he’s a taxation expert for governments and school districts. First, he made sure they were not spending wastefully. Second, he looked at how much money the district actually needs to operate where they won’t have to come back to the community repeatedly. An earned income tax only taxes people who are residents of the community, not businesses; certain business income if you’re self-employed might be subject to it, but if you have a creative tax company that may not be the case. If you don’t live in the district, you don’t pay the earned income tax.
This is still unclear, but earned income is income you earn from actual work, not asset income (typically). This is different than a traditional municipal tax.
We rise and fall together; if a recession hits, the school needs to tighten its budget as well.
Q: What is the cost per student for FCS?
$14,765
How does that compare to other districts? It’s comparable, though others are higher.
Q: If you live in the city but work elsewhere, you’ll be paying an income tax there plus earned income tax in Findlay, correct?
Findlay does not offer a credit for if your income is earned somewhere else.
When you retire and your income stays flat, but you see an increase in your property value, you end up with a declining amount of cash to pay your bills. This earned income tax helps 1/3 of our community on a fixed income. The school district also gets half of its money from the state and other sources. The other half from the property taxes gets divided to 75% from individuals and 25% from businesses.
The attempt is to diversify this tax among different individuals. Young families who have children will be paying more. It shifts the taxes to people who are more likely to be using the school system. Those who homeschool are also paying the tax and not using the schools.
Taxes are not perfect. They’re not individualized. This is their attempt at the fairest way to do it. Another property tax is detrimental if property values go up.
Q: What about cutting administration costs and other things that could be cut?
Our administrative ratios are in line with similar districts. If cuts need to be made, administrative positions will be cut.
Q: Has anyone generated a study of what would happen if we make these cuts?
Yes, lots of studies have been done, plus from personal experiences. Schools are a huge part of making a community attractive. Good performance tends to increase property values. FCS has the lowest administrative cost per pupil in the county – $1,372 per student. FCS is the 4th lowest tax cost out of the 20 geographic districts around us. Adding this tax would still keep us in the lowest 10, but other districts have school taxes on the ballot too.
Q: We need to nail down whether rental income is taxable income. 42% of dwellings in Findlay are rentals. This is still unclear, and we need an answer.
The answer is to call your tax consultant. As a business owner, there are a multitude of ways to navigate how you record your revenue.
It’s earned income if you take an active role in running that business. If it’s an inactive role just as an investor, then it’s not earned income.
Q: Is the student count up or down compared to 5 years ago?
It is declining, both in FCS and across the entire state. Population is down, costs of everything are up, etc. Taxes and insurance have gone up.
It’s hard to determine which tax forms to fill out because everyone’s situations are unique – rental properties, jobs, other deductions, etc. FCS attorneys said that they can’t give advice on particular situations and how landlords will be affected.
If you live in FCS district, you will be taxed income tax. But is rental income “earned” income or not? They won’t say because it depends on your individual situation.
Money from the state follows the student if they open enroll in another district, but property taxes (and future income tax dollars) will stay in FCS.
There are 69 school districts of similar size to FCS, and we’re #29 on that list in terms of number of administrators.
Q: There were a lot of cuts in 2020. What did that result in?
Lincoln Elementary School closed after the failed levy in 2020. The entire district was reorganized. We made three K-2 schools and three grades 3-5 schools (north, central, and south). Students were reallocated. Jacobs was repurposed from elementary to a full preschool. The preschool is a cost to FCS because they don’t get reimbursed for that, but it helps students be successful. Later, Trojan Academy closed. They got out of a lease for administration and put them in the Washington building. This made everything more efficient.
The state has endorsed the science of reading across the state, and FCS is converting from phonics to the science of reading. The state looked at language arts curriculums, and they now have an approved list, which FCS has now incorporated. It’s an incredibly successful and traditional program. We are moving our district to the betterment of our students, getting them back on track after Covid. This is already showing up in the report card, but there is still a lot of work to do.
If they have to cut, they’ll cut things that will impact the kids, and they don’t want to do that. They’ve already cut buildings and other things to save money.
Q: What’s happening in the DEI department and the library facilities? What curriculums are you suggesting get cut?
They would be cutting teachers, administrators, supplementals (people – coaches etc.), bussing, etc.
Q: A school in Toledo is teaching a classical, academic education, and they are growing exponentially. Parents don’t want the DEI curriculum; they want a solid academic education. If you’re getting funds from the federal government, there are always strings attached. The public school system needs to be revamped.
90% of kids in the district go to public school. FCS does as much as it can to support homeschooling families, and there’s a great partnership there. They’re doing their best with their kids.
Q: With the cost trend of students in English as a Second Language, is that increasing or decreasing?
Over the last several years, ESL has increased. They have curriculum and software designed to help students who are English learners. They check for legal documentation.
Q: Is that number of students increasing?
The children received in the last 18 months or so are coming from bad situations. We can break those numbers down, but the cost is extreme to educate students with special needs. They have been getting more and more of those. Special needs students are integrated into regular schools. ESL students have increased but are being accommodated using various resources. Students with disabilities are a financial burden they have taken on, but it’s a process. FCS recently got a grant from the state for additional resources for ESL students.
Q: What is the local tax burden?
If you live in Hancock County, you’re already paying a school income tax for where you live, outside of Findlay.
Q: When you talk about 1% earned income being sufficient for the foreseeable future, that’s not very likely. Other districts keep coming back and asking for more. What will you do when that happens in the future?
None of us know what will happen in the future. The accountant ran a sensitivity analysis, and that’s how we came up with the 12.6M number. That should get us through anything we have seen and into the foreseeable future. We did a lot of analysis of that.
Q: Looking at the card to compare with other districts, are those earned income tax or traditional? (Traditional) So why are you comparing those with Findlay if they’re different?
It’s just pointing out that we don’t have one. Theirs is traditional, so that means that almost everyone pays.
Q: Other districts have implemented this traditional tax, and they’re at a lower percentage, why is our earned income tax higher at 1%?
Then we’d be coming back for more money sooner. And they’re being sensitive to the 30% of people on fixed incomes. We looked at the aging population of our district and did not want to burden them with an additional tax.
Q: I heard that there was some embezzlement going on. Is that true?
No. They are audited three times per year, and the audits are available through the state. They were also federally audited on some of the funds. They had to provide lots of records for this.
Q: When you made the cuts, were classroom sizes affected?
Enrollment has decreased over the past 20 years. If they have to cut 20-25 positions, the approach they would like to take is to keep K-2 class sizes lower, then look at 3-5, then 6-8. High school students have the capacity for larger class sizes to some degree. They haven’t run the numbers for what to do if they have to make cuts. It’s not helpful to kids to make cuts to teachers, buildings, etc. That levy in March 2020 failed, which prevented keeping the district as it was, which is why they needed to reorganize. Class sizes did go up then.
We’ve done a lot of things with the preschool, even offering some full-day classes. Those are things we don’t want to lose.
Q: Who will be most affected by this tax, property owners or people who live in rentals in the district?
The tenant will pay their earned income tax if they reside within the city limits.