The Celina Board of Education held a work session Monday night to discuss the district's finances and future levy needs as well as the state budget. To view this work session:

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The following is an AI Generated summary of the Celina Board of Education's work session from Monday May 12th, 2025:

Meeting Notes

1. Celina City Board of Education Financial Outlook and State Budget Impacts

• Purpose and Structure of the Meeting
  The meeting is a work session for the Board of Education to gather information, receive updates, and clarify issues before making decisions. No formal actions or votes are taken during work sessions. Attendance was noted, and the meeting was called to order with the Pledge of Allegiance.
• State Budget Update and Fair School Funding Formula
  Michelle provided an update on the Ohio state budget process, including the governor’s, House’s, and upcoming Senate proposals. The Fair School Funding Formula, implemented in 2021 as a six-year plan, is in its fourth year. The governor’s proposal does not update base costs, affecting funding calculations and making districts appear wealthier.
• Impact of State Budget Proposals on Celina
  The governor’s budget would reduce Celina’s state funding by $2.5 million over two years. The House’s bridge formula would instead result in a $115,000 increase over the same period, with a base funding supplement of $20 per student for FY26 and $30 per student for FY27, totaling $50,000 for Celina.
• 30% Cash Balance Carryover Cap
  The House budget includes a provision capping school year-end cash reserves at 30% of prior operating expenses. Exceeding this threshold would require the county commission to reduce local property tax rates, returning excess to taxpayers. For Celina, this would reduce millage by 6.13 in FY26 ($4.1 million) and by 3.9 in FY27 ($2.8 million), with an additional $1.2 million reduction projected for FY28.
• Duration and Impact of the 30% Cap
  There was discussion about whether the 30% cap is temporary or permanent. Some believe it is for two years, others think it could become permanent if enacted into law. The cap could force districts to return to voters for new levies, shifting funding burden from state to local sources.
• Strategies to Mitigate Cash Balance Cap Impact
  Districts are considering moving funds from the general fund to severance or capital projects funds to avoid penalties from the cash balance cap. Such transfers require substantiation and planning.
• Senate Bill 66 and the 20-Mil Floor
  Senate Bill 66 proposes to include emergency levies, substitute levies, inside millage, and school district income taxes in the 20-mil floor calculation. For Salina, this would reduce property tax and rollback at Homestead by $700,000 in FY27 and $1.1 million in both FY28 and FY29.
• Uncertainty Around Legislative Outcomes
  There is uncertainty about whether the 30% cap will remain, be increased, or be made optional for county commissions. Senate Bill 66 is expected to become law, but its final status is not confirmed.
• Combined Financial Impact of Legislative Changes
  The bridge formula could provide a small revenue increase, but the 30% cap and SB66 would result in significant losses: $4 million in FY26, nearly $3 million in FY27, and $700,000 in FY27 from SB66. The district can mitigate some losses by reallocating funds to a capital improvement fund.
• Five-Year Financial Forecast and Deficit Spending
  The district’s five-year forecast indicates that in three years, deficit spending will begin, and cash reserves will be depleted regardless of mitigation efforts. State funding reductions could total $1-2 million annually.
• Capital Improvement Fund Rules and Use
  Funds moved to a capital improvement (070) fund can be returned to the general fund if not used within 10 years. Documentation and substantiation of intended projects are required. The fund is intended for projects like building a new track, field house, or TriStar building.
• State Budget Timeline
  The Senate will release its budget version by the end of May. The House and Senate conference committee will negotiate in June, with the governor expected to sign the bill by June 30, effective July 1.
• Expected Outcomes and Next Steps
  The board expects the bridge formula and 20-mil floor change to be enacted. Even with mitigation, the district anticipates losing about $2 million per year in state funding.

Conclusion

1. Funds can be protected in the capital improvement fund for up to 10 years and returned to the general fund if not used.

2. Celina School District Financial Planning and Levy Options Amid State Funding Uncertainty

• State and Local Revenue Sources
  Discussion of Celina’s two major revenue sources: state (42.4%, $15 million) and local (57.6%, $20.5 million) as of 2024, excluding one-time advances and recovered funds. Property tax, emergency levy, and earned income tax figures are detailed.
• One-Time Funds and Exclusions
  Explanation of why $1.5 million (advance to grants, mainly $900,000 to ESSER) and $222,000 (Chromebook grant reimbursement) were excluded from revenue calculations, as they are one-time events.
• Emergency Levy Details
  Emergency levy provides $4.9 million, expiring in tax year 2025, representing 32-33% of property tax collected and 14% of total income. Its renewal, replacement, or expiration is under consideration.
• Levy Options and Pros/Cons
  Three options discussed: renewal of emergency levy (no growth, confusing term), substitute/replacement levy (captures new construction growth, up to 10 years), or letting emergency levy expire and running a new operating levy (risk of not passing).
• New Construction Revenue
  In tax year 2024, $3.7 million in new construction (Class I and II) would yield an additional $10,000 in revenue under a substitute levy, which is not possible with an emergency levy.
• Levy Duration and Voter Fatigue
  Discussion on optimal levy duration (5-10 years), balancing frequency of community asks and alignment with income tax levy cycles. Concerns about voter fatigue and costs of repeated levy campaigns.
• State Funding Uncertainty and Budget Risks
  State budget may reduce both state funding and property tax revenue. Emergency levy funds are 14.5% of forecasted expenditures and 13% of revenue for this year. SB 66 could reduce funding by $691,000 in FY27. A 30% cash balance cap could result in a $4 million hit in FY26.
• Mitigation Strategies for Funding Reductions
  Potential to mitigate cash cap impact by transferring millions from general fund to a capital improvement fund, which is legal and responsible. Planning for continual erosion of state funding is necessary.
• Timeline and Next Steps
  Resolution to be passed in June or July, with submission to Board of Elections by July 25th for a November vote. If levy fails, must return to ballot in spring, risking loss of funds starting January.
• Income Tax Levy
  Current income tax levy is five years, expiring in 2033 (tax year 28 for fiscal, 33 for tax). Discussion on aligning levy cycles and possibility of making income tax levy continuous in the future.
• Communication and Public Education
  Need for clear communication to the public about the purpose of the levy (operating funds, not construction), the impact of new construction, and the difference between emergency and substitute levies.
• Budget Composition and Cost-Saving Limitations
  82% of the budget is personnel, mainly teachers. Only 15% is supplies, limiting cost-saving options. Reductions would impact services to students.
• Levy Campaign Costs
  Running a levy campaign costs $12,000 each time. Failed renewals increase costs and frequency of campaigns.
• Long-Term Financial Planning
  Emphasis on the need for fiscal responsibility, planning for reduced state funding, and educating the public about the necessity of local funding.

Conclusion

1. Recommendation to pursue a replacement/substitute levy to remove ‘emergency’ terminology and capture new construction growth.

3. School district financial planning, state funding changes, and levy decisions

• Approval of 070 Capital Projects Fund
  Discussion about an upcoming motion at the next Monday meeting for the board to approve the 070 capital projects fund, including the process and requirements for approval.
• Five-Year Forecast and Reserve Requirements
  Review of the five-year financial forecast, its impact on decision-making for fund allocation, and the importance of maintaining a 30% reserve. Discussion of fiscal responsibility and projected negative cash spending in years three, four, and five, even if state funding and the $4 million emergency levy remain unchanged.
• State Funding, Levies, and Legislative Changes
  Concerns about state legislators’ approach to school funding, property tax relief, and the impact of fluctuating property valuations. Discussion of Senate Bill 66 (SB 66), the 20-mil floor, and the effect of changes in millage rates and fixed sum levies, including the emergency levy cap at $5 million and the risk of losing 1.4 mils if SB 66 passes.
• Public Perception and Communication
  Clarification that fixed sum levies, such as the $5 million emergency levy, do not increase revenue for the district even if property taxes rise, and the importance of communicating this to the public.
• State Budget Proposal and Decision on Levy
  Overview of the state budget proposal, its complexity, and the need for the board to use this information to decide which levy to run.
• Adjournment
  Formal motion and approval to adjourn the meeting.

Conclusion

1. A motion for the board to approve the 070 fund will likely be presented at the next Monday meeting.
2. The 30% reserve must be maintained, and the five-year forecast shows negative cash spending is expected, which would be exacerbated by additional spending.
3. If SB 66 passes, the district will lose another 1.4 mils and may end up back on the guarantee instead of the formula.
4. The district will not receive more than the set amount from fixed sum levies, regardless of property tax increases.
5. The information provided should help inform the decision on which levy to run.
6. Meeting adjourned.

 Next Arrangements

•  Discuss the creation and use of a capital projects fund at the next board meeting.
•  Monitor the progress and final content of the state budget and Senate Bill 66.
•  Continue planning for future building projects and capital improvements with proper documentation.
•  Pass a resolution in June or July regarding the levy option.
•  Submit the resolution to the Board of Elections by July 25th for a November ballot.
•  Revive the levy committee to run the campaign.
•  Determine the duration (5-10 years) and type (replacement/substitute) of the levy at the next board meeting.
•  Research the maximum allowable duration for income tax levies and whether they can be made continuous.
•  Plan for mitigation strategies such as transferring funds to a capital improvement fund if the 30% cash cap is enacted.
•  Prepare communication and education materials for the public regarding the levy changes and their impact.
•  Motion for the board to approve the 070 capital projects fund at the next Monday meeting.