“I do applaud you. You are doing a lot of things.” – Jackie Hoynes, chairwoman of fiscal oversight commission
It seems Ledgemont Schools cannot catch a break, no matter how hard district officials try.
Last Friday morning, district officials were eager to distribute new Chromebooks to students in grades 3-12. Funds for the fast, portable computers were donated by Frances Spatz Leighton, a 1937 Thompson High School and New York Times best-selling author. But the latest blast from Mother Nature closed all public schools in Geauga County, delaying Chromebook Day a week.
Then, the fiscal oversight commission appointed to help the district rid itself of budget deficits, tabled approval of a district proposal to move its 4.5 mills of inside millage to a debt-service fund to repay more than $2.37 million in state solvency assistance loans. It also reported the Ohio Department of Education has delayed making another solvency loan needed to help the district meet payroll through the end of the current fiscal year.
Ledgemont Superintendent Julie Ramos told members of the Ledgemont Financial Planning and Supervision Commission Friday morning the district is exploring to many options to generate long-term stability and address incurable debt and declining enrollment.
“We have the inside millage, we are having informal conversations with Cardinal (Schools) about a joint collaborative high school,” Ramos said. “Then, the other option that we’re also looking at is closing the high school building and bringing the students and staff down here (elementary building).”
But the district needs answers from others to make it all happen — and it isn’t getting them, yet.
Movement of Inside Millage
Earlier this month, the Ledgemont school board approved a plan to move inside millage to a special fund to pay off its debt.
Ledgemont — which slipped into fiscal emergency status in 2010 — has received three loans from the state to date: $2.17 million in FY2010-11, $1.677 million in FY2011-12 and $1.114 million in FY2012-13.
The district has repaid about $2.59 million out of its state foundation money, but still owes the state $2.37 million. And that figure does not include a requested solvency loan of $300,000 for FY 2013-2014.
Board members have assured taxpayers — who would have their property taxes increased without a vote — funds would be diverted only as long as needed to repay its debt, which Treasurer Belinda Grassi estimates would take six to seven years.
The catch: Although state law allows a school district to move inside millage for specific purposes such as debt service, the question of whether solvency assistance funds are considered debt has never been answered.
“We have reached out to the county prosecutor’s office for a legal opinion. They said they couldn’t make a ruling because that would be creating policy and they cannot do that. So, they have to go to the Ohio Attorney General’s office,” Grassi told commission members, adding that process could take six to eight months.
She also indicated Ledgemont might need to get an opinion on the issue from the Geauga County Auditor’s Office and the Ohio Department of Taxation.
“We have also reached out to our local representative to see what we can do to get something into legislation, because it technically speaking would be just a one line item, it is considered debt for this purpose,” Grassi explained. “So, we’re working all angles on that. It will just remain to be seen what happens — we have a year to try and figure that out.”
Commission Chairwoman Jackie Hoynes said they have asked for an informal opinion from the attorney general’s office and added Assistant Attorney General Jeff Greeley will attend the Feb. 28 commission meeting to discuss the process with Ledgemont officials.
“The reason they (Ohio Attorney General’s Office) are reluctant to give us an opinion is … the assistant or an attorney in the attorney general’s office can give us an informal opinion, then, when it goes through the whole attorney general’s office, it goes in front of a board,” Hoynes said. “That board, whatever they say, then becomes law. So, their opinion could differ from the informal opinion that we’re given.”
Hoynes acknowledged it is confusing, but assured Ledgemont officials the commission has been working to get answers.
“So, is it fair to say there are three potential outcomes to this process?” asked Ramos. “One being a decision is made in our favor, a decision being made not in our favor or a decision just is not going to be made?”
Hoynes said she felt an official attorney general’s opinion eventually will be made, but it could be eight months away.
“That’s fine. We started this process in January because we know it’s not going to take effect until next January,” Grassi said. “So, we feel confident, we have 12 months to try and do whatever is necessary to make it work out.”
Commission then voted unanimously to table approval of the district’s request to move inside millage.
“There are still some hoops to jump through and legal questions to be answered,” Hoynes said. “And I think we’d like to hear those answers before we vote on it.”
Closing Ledgemont High
Grassi also said her office is gathering data to present to the commission regarding the possible closure of Ledgemont High School.
There currently are 227 students enrolled in the high school building, which houses students in grades 7-12, Ramos said.
Seventy-seven of those students are in seventh and eighth grade. They would be relocated to the elementary school building, leaving 150 high school students to attend a new cooperative high school.
“It’s really complicated because of the funding aspect, like ‘How does all your money flow to this new high school?” Grassi said. “It’s really confusing. Nobody’s really done that either.”
Ramos said there are some previous studies that analyzed closing Ledgemont High School, but there were more students enrolled in the high school when those studies were conducted.
“Where our enrollment was in the past, we couldn’t fit everybody down here,” she added. “Looking at the building specs for down here, with our enrollment now, today, we could fit all the kids in this building. It would be extremely tight, but we could do it.”
A cooperative high school is permitted under Ohio Revised Code section 3311.521.
It is different than a merger or consolidation of school districts, Ramos and Grassi said, explaining boards of education of contiguous school districts could establish a cooperative education school district for purpose of operating a joint high school.
“It is a way were there could be a financial savings for both districts,” Ramos said.
Need for Additional Solvency Funds
Ledgemont is anticipating a $300,000 budget shortfall at the end of the current school year, Grassi said.
“That is way less than it used to be,” she noted. “But that is where we expect to be and that is what we expect to be borrowing.”
The ODE, however, is not satisfied with the district’s financial recovery plan.
“At this point, there is not an answer. They’re not rejecting it nor are they approving it,” Hoynes said of ODE’s inaction. “At this time, they feel that the financial recovery plan does not satisfy what is needed, in statute, as far as accepting it.”
She said the law requires a recovery plan to specify the actions a district will take to eliminate the fiscal emergency conditions; eliminate the deficit and any deficit funds; balance the budget; and avoid any fiscal emergency conditions in the future.
“They feel that the financial recovery plan does not satisfy all parts of that,” Hoynes said. “So, they are requesting additional information before they make a final decision.”
Additional information to be addressed includes:
• Specific steps to correct the continued overexpenditure of funds.
“I think your inside millage (proposal) would be your response,” Hoynes told Ramos, in addition to any other actions the district is considering such a joint high school with Cardinal.
• Cost per pupil at Ledgemont is high compared to neighboring districts.
“They’d like to see an analysis of exactly why is your cost per pupil higher,” said Hoynes. “It’s not a judgment; it’s just factual. There could be really good reasons, but they’d like to see why there’s a difference.”
• Existing contracts with Geauga County Educational Service Center.
‘They would like you to issue requests for proposals … to determine that if you went with another ESC or another outside provider, could savings be realized?” Hoynes said.
Ramos said the district already is exploring a partnership with Cuyahoga County ESC regarding an online program it offers in partnership with Lincoln Interactive.
The hope is community school and online students would re-enroll at Ledgemont, she said.
“There are some dollars that would come back to this district,” she added.
• A feasibility study analyzing the savings to be realized if the high school were closed.
“They’d like that to include the number of classrooms available, staff and students per building, and possible savings relating to operating the building,” Hoynes explained.
The commission needs the additional information no later than Feb. 15, she said, after which ODE will make its decision on funding an additional solvency advance.
“I do applaud you. You are doing a lot of things,” Hoynes told Ramos. “You are being aggressive and really trying. I think we just need to put all that in writing.”
And hope for no more delays.
