Oregon voters to consider a 4.95-mill school levy on Tuesday

Kelly J. Kaczala

        The Oregon City Schools District has a 4.95-mill operating levy on the primary ballot on Tuesday.
        The levy, which will be permanent if passed, is needed because the district’s expenses will exceed revenue this year.
        The district’s five-year forecast, which is occasionally updated by Treasurer Jane Fruth, predicted the district would have financial issues this year.
        On Nov. 3, 2015, voters approved a 3.95-mill operating levy after voters rejected several levy attempts in previous years. The district continues to collect $1.8 million annually on that levy. It does not expire. It is permanent.
        In 2015, Fruth’s five year forecast predicted expenses would exceed revenue in 2020 and that another levy would be needed this year.
        Even if the levy passes on Tuesday, Board Member Jeff Ziviski said another operating levy would likely be on the ballot in three years.
Teacher salaries
        Most of the revenue of the proposed 4.95-mill levy would go toward teacher salaries. Eighty percent of the district’s budget is used to pay personnel.
        Last year, the school board approved a contract with teachers and non-teachers in the district that increased salaries over a three year period from 2020 to 2022.
        “The levy would go to pay people,” said Superintendent Hal Gregory, “but those people translate to services and programs for kids. The idea that the money is just there to pay salaries in and of itself is true, but it’s there to pay salaries to provide the quality services that our students deserve and expect.”
         Ziviski, who last year cast the sole vote against putting the levy on the March 17 ballot, now supports it.
        “I may have a difference of opinion with others on how and where the district should focus its resources. I also understand that our personnel have been tasked with being relied on more and more to help tackle some of society’s issues, such as providing meals to our students. For some, the only meal they get all day are those they receive at school. The district takes on additional tasks that used to be provided by the family structure in the child’s home. They are a strain on our district’s resources. They were not part of our responsibility and expense base as early as five to eight years ago,” said Ziviski, who is also chairman of the district’s finance committee.
        “I have a very in-depth knowledge and history of the finances of the district,” he added. “From a high level view, the district needs the levy to maintain its current expense base. The district had kept a pretty flat expense base of $38-$40 million annually. But with some of the decisions that have been made recently, this base has increased, thus putting the levy request on the ballot. There is a board meeting the week after the election where the board will meet to discuss its next steps. If the levy is voted down, I believe that it will be back on the ballot in November, but nothing is certain yet. If the levy passes, the district will most likely need to put another levy on the ballot in as early as three years unless some reductions are implemented. Then we could push it out maybe four to five years.”
        Early last year, the school board approved a contract with the Oregon Federation of Teachers (OFT) and the Ohio Association of Public School Employees (OAPSE). The OFT, which represents the district’s teachers, negotiated a 3 percent increase in 2020, a 2.85 percent increase in 21, and a 2.75 percent increase for 22. No raises were considered for 23 and 24, though they will receive automatic step increases at 2 percent per year as part of their pay. Traditionally, as part of their contract, certified staff, which includes teachers, receive automatic salary “steps” or increases the longer they serve in the district. Those who serve 30 years will have received a total of 18 step increases. As part of the contract, certified staff regained a lost step.
        OAPSE, which represents non-certified positions, such as secretaries, maintenance, bus drivers, and school monitors, negotiated a 3 percent increase for this year, a 2.85 percent increase in 21, and a 2.75 percent increase for 22 for its members. No raises were expected for 23 and 24 for non-certified staff other than step increases of about 2 percent per year.
        The board last year also approved a salary increase for Gregory. His annual salary was increased from $130,895 to $137,032, according to the treasurer’s office.
        Some in the community have questioned why the board passed the salary increases last year when the five year forecast predicted the financial shortfall in 2020.
        Gregory said the district’s personnel deserved the raises.
        “The district has the lowest voted millage in Lucas County and it would remain one of the lowest with the passage of the levy.”
        He also said employee salaries are at the bottom of a list of all Lucas County school districts.
        The district has abatement agreements with new natural gas-fired power plants in the city. The first plant, Oregon Clean Energy Center, and the second power plant, Clean Energy Future – Oregon LLC, will provide the district with $1 million annually over a 15 year period. Oregon Clean Energy Center has been up and running since June 2017. Clean Energy Future – Oregon LLC, is expected to begin commercial operations sometime this year.
        “We have an agreement in place with the second power plant. But until the second plant becomes operational, there’s no money generated from it,” said Gregory.
        The funds from the power plants help offset the need for higher levy millage in the district, he said.
        The district is also still reeling over House Bill 66, which phased out tangible personal property taxes on general business, telephone and telecommunications, and railroad properties starting in tax year 2006. By tax year 2013, there have been no general tangible values left in the property base of school districts.
        “We are continually losing money from the change in the tangible personal property taxes,” said Gregory. “We’re basically losing about $350,000 annually.  Through the five year forecast, we’re going to lose $1.5 million. So there are still monies rolling off our books that will continue to be replaced. That’s typical in a lot of districts with this tax change.
        Former school board president P. J. Kapfhammer slammed the school board for approving salary hikes for district personnel when the five year forecast in 2015 predicted a levy would be needed this year.
        “The board knew before they passed the raises they were going to need a levy,” said Kapfhammer. “The five year forecast states the district will spend more than what they get in revenues starting in 2020.”
        The estimated cost of raises, which included growth in salaries and fringe benefits related directly to salary, were over $2 million from 2016 to 2018. The three year contract passed by the school board last year for raises and fringe benefits from 2020 to 2022 will cost the district over $5 million.             
        “Why not pass the levy first, then approve the raises when they would have money to cover them,” said Kapfhammer.
        “If they hadn’t given the raises, there would be no levy,” he added. “So knowing that, they’re forcing the community to pass a levy, or they’re going to cut programming. That’s not how you do things in the real world. Be transparent. Tell the community you are putting a levy on the ballot that is for raises. And let the community vote on it.”
        Kapfhammer was in attendance at a political forum where Gregory spoke of the need for the levy last Thursday. Kapfhammer told Gregory that the whole levy was based on raises.
        “You’re not being transparent,” Kapfhammer told Gregory. “The last levy that was passed in 2015 went to raises. Tell everyone that’s what this levy is for, too.” He also said that the district will need to put a 10 mill levy on the ballot soon “because the board increased payroll another $5 million.”
Sustain the system
        On Wednesday, Gregory told The Press that a levy would still have been on the ballot this year even if the raises had not been approved.
        “We were going to need a levy this year if the raises were not given,” said Gregory. “It’s needed to sustain the educational system because 45 percent of our entire revenue is generated from our local tax levies. So there’s a connection to the raises, but with our without the raises, we would still need a levy.”
        The remaining funds come from the state of Ohio or federal grants, he added.
        If the levy is defeated on Tuesday, the board will “look at the entire cross section of services to kids, and they will have to make a decision.”
        “If this levy doesn’t pass, the board will have to put a levy on the ballot in November. At that time, we will have a reduction plan put in place,” said Gregory.
        He disputed Kapfhammer’s claim that he was not transparent about the need for the levy.
        “We ran a very positive campaign, showing our community what we’ve done with their money and how they should entrust us with their funds to continue to do what we believe is right for kids.  We’re really focusing on growth right now, not reductions.”
        Gregory also countered Ziviski’s belief that another levy would be needed in three years even if the 4.95-mill levy is passed on Tuesday.
        “I don’t believe that,” he said. “We’re going to look at ways we can continue to be efficient, going forward. Obviously, over the course of the next five years, we have other rounds of negotiations. We have insurance rates that could be in our favor, so that would help. So my goal is to stretch this levy at least five years. That’s not a promise, but a goal. So I don’t believe we’re going to need a levy in three years.”
        Gregory said he’s received positive feedback from the public regarding the levy.
        “There’s a lot of support in the community. I feel very confident it’s going to pass,” he said.
        If the levy passes, it would cost the owner of a $100,000 home $173 annually.
        The district would begin collecting the revenue in 2021, which would total $2.81 million annually.


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