001Heat. Heat. Heat. However, they are not Is there Okay. Just like last week, so we can go through those serial. No. So we see our policy policy 60 days which is about $26 million. So you can see that it doesn't it doesn't mean 29 reaction 28 29. So if you go to the next scenario, it's very similar to what we just looked at. No cuts is cut and we're waiting for both cash policy 28 and 29 but not. If you go to scenario 10, similar to the previous one, but this one is $10 million in cuts and all three levy stop and one one and with school district tax levy and we're above the threshold all all the years of the forecast there. And if you go to scenario 11, this one is has no
002cuts, but the levies are stopped. They're staggered one a year for three years straight. And we're really only positive for this year 26 over the threshold. All the other ones are below the threshold. So any questions or >> Miss Sebastian? >> Yes, >> Mr. Nucio and Dr. Hun, I do have a few questions. I know this was shared, Mr. Nucio at a previous presentation, but can you just uh refresh me on when if this is passed, when does collection begin? So the the the income tax would start on 111 of 27 because all new levies are on start on a calendar year. It doesn't matter if we're a school district, a city, a county, they all start on a calendar year 11 one. But of course there's no collections as of 1 one because nobody
003has worked on that so far. So we'd start getting collections probably in April because it's quarterly. But the first year they only collect about 5% because mainly people don't either know about the levy. Employers don't know about the levy and some people don't know to tell their employer, well I work in a school district that has a I live in a school district that's a school district income tax. I need you to withhold. So a lot of people find out the next year when they do their tax returns that says what school district you live in and you got to put down your school district number and it says oh you owe you owe school district income tax. So they find out the second year. So collections the second year like 70%. And then year
004three they're like 105% because people that owed the previous year are now catching up and paying. and then it's fully collecting like at 100% probably after 18 to 20 months. So that's how it works. >> Thank you. And if we um and please correct me if I'm wrong on any of this from my research, if we forgive uh a property tax levy effective January 1st, 2027, that means that would immediately stop. >> That would be that would immediately stop at January 1st. Yes. >> Okay. Do we foresee this may be a question for Mr. Nucio or Dr. Hunt and I know we we obviously do not we can't tell the future but based on the previous few years or patterns do we foresee any type of change with the state funding formula as it currently
005stands? >> Well does they passed this fair funding plan probably about six years ago when they're going to implement it in phase it in over six years. Well, this last budget, they didn't phase it in because they didn't update any of the numbers. They still have 2022 numbers instead of updating it to like 2024 numbers. They kept it at the old numbers. So, they're not fully funding the the funding formula, which means we really don't even have a formula. Because if they're not updating it, then what do we have? It's just it's old old data with numbers. So, we end up losing losing out on money that we should be receiving because that they didn't update the data. And that's a decision by them. It's not an error. That was a deliberate decision that we're
006not going to update the data. >> Thank you, Mr. Nucio. Dr. Hunt, >> thank you. So, I I think I heard the question. Is that too loud? I I apologize. This setup is is a little different. How how's it going down there? So, your question was about funding moving forward. Is that what I heard? >> Yeah, I was asking um do we foresee or have there's been any conversation surrounding the state changing or modifying their funding formula? [clears throat] >> As Mr. Nusio stated, you know, we we are not being funded through the fair school funding formula. they have basically said that's unsustainable and they've they've basically eliminated using that as the formula to fund schools. So, we still rely on local revenue taxes. Um, you can see just based on our our newly submitted
0075-year forecast that nothing that we've done here internally in terms of our own budgeting or allocations, uh, but because of changes not in funding, but in how property tax is collected, we're down $7 million. That's not nothing nothing that we've done here internally, but that is the impact of all of the state level changes. I and I'm not I couldn't speak to any federal changes, but I think we would we should anticipate [snorts] seeing less in our federal title um allocations is it would be my guess. Uh, I don't know what that looks like, but I think we're everyone, not just us in Parma, but across the state, people are anticipating, school districts are anticipating seeing less. And if you see, read the local news, you can see how some districts are currently being impacted
008uh having the same discussions that we are uh around reductions, around um being on the ballot, uh and and what does that look like? And so, it's not just us. This is impacting everyone across the state. >> Thank you. Um Dr. Hunt, going into I was looking and thinking through the reductions for staffing and operations going into next school year like 15 million seems I mean that's a lot. It's a big number. Even 7.5 or 5 million which was referenced in several of the proposals seems very high. What realistically can we cut going into next school year? And so that the board knows and I know we've had this discussion. So we're currently working on staffing and we also also are working on what reductions look like. I know that I've shared publicly that um
009you know as we look at this we are trying we're going to try our very best not to impact students and classrooms. Um, so I think in terms of making reductions realistically as we head into next year, I think we could hit $3 million. I think 4 million would hurt a little. I think 5 million would hurt a lot. And I don't know how we get to 10 or 15 million without impacting teachers, students, families, and programs. So let's say we do as a board um the directive is to make three three million in cuts for next school year. I don't know if this is for Mr. Nucio or Dr. Hunt. What does the compound impact look like that for year two and year three beyond that? >> Mr. or you want to >> well
010I can't give you an exact number but if you cut the if you cut positions then you're cutting it's affecting 2000 it's affecting the next year year two and year three it's not going to be exactly 3 million each but um there is an impact in compounding for the following year. So as the more you cut up front the easier it is to make the number. If you cut them on the back end, you're not going to get as much savings. And of course, that all assumes that you don't add any additional people. If you cut people and you add them somewhere else, then there's no savings at all. >> Does that answer your question? >> I I have one more and then I'll wrap up. Um, so my thought on this and I I
011have spent a lot of time over the last two weeks looking into this and thinking through some things and I appreciate Dr. Hunt and Mr. Nucio whenever I've called to think through and ask questions you've answered called me back very quickly. My recommendation then would be I would love the board to consider through our conversations 3 million in cuts for the 2728 school year. I recommend we phase forgiveness of the property taxes for giving one in January 2027, one in January 2028, one in January 2029. that way um we do give some immediate relief through this process. Um and the last thing I would like to note I know through the different scenarios we see recommendations for fiscal year 27 28 29 with what the cut the cut amounts could potentially be. Um I don't
012foresee us needing to have conversations about 28 and 29 at this time. I think we start with 3 million going into 2027 2028. We plan to do the property tax relief and then this time next year we revisit the reductions in staffing and operations for the following school year. So that is my thoughts and I will yield the floor. Thank you Dr. Early. Uh Miss Kirpic or Mr. Reyes. >> Thank you. Thank you Miss Sebastian. Um so Mr. Nucio which which of these scenarios provides the best long-term stab long-term stability in your opinion? >> I believe that is number >> well if you're just >> it was four on the last one. I think >> there's different amounts you're cutting. So if you if you're just asking about the property taxes the best scenario to
013have them all stop on one one of 28. that you board can decide whe you want 5 million, 10 million, 15 million or nothing or something else on anywhere in between. But if you're looking at the best long-term scenario regarding property taxes on of the 11 scenarios, it' be all of them stopping on 128. >> Okay. Um I guess more what I'm trying to figure out is the best long-term scenario for the district to where once we implement this plan, we don't have to go back asking for for money again. out of these scenarios, which one do you think accomplishes that? >> I'm sorry, can you repeat the question? >> Which of these scenarios do you believe gives gives the district the best long-term stability to where we don't have to go back to the
014community asking uh for for for more funds? Obviously, that would be the one where you make $15 million in cuts and have um all the levies stop on 111 and 28, but that may not be the best thing for the district or the community. But if you're asking which one's the best financially, that would be that what I would say. >> Okay. Thank you, >> M. Sebastian. May I also weigh in on that? >> Yes. thing. So, if you recall at the last um work session, um I [clears throat] I always tend to pivot off of that unreserved fund balance as something to look to. And as you look at um I'm just looking at scenario 10. So if you look at scenario 10 and you look at the uh unreserved fund balance at 36,
01539, and 32 leading up from 28 through 30. When I look at those numbers, those are well above our 60-day cash policy. So that's what that represents to the board. And so when I look at that, I I believe the number, and Mr. Nucio can correct me is approximately $25 million on that unreserve unreserved fund balance keeps us allows the board to meet policy. [snorts] And so when I look at numbers like 36 and I look at that as a lever as we look at reductions and as we look at the potential give back on the renewals. Uh [snorts] that's where I see us being able to talk about less of a reduction because that money is sitting on those lines. And as I look at the forecast, you know, this is kind of a
016rolling 5-year forecast. Every year we submit something new. And so when I see in our current what you're looking at now, we get out to 2030 and I'm I'm gonna guesstimate that maybe into 2031, we'd still be meeting the policy. Um I don't think there's ever a guarantee, especially in the state of Hello in the state of Ohio. um especially with all of the changes that are happening at the state level that we could say we're never going back to the community because I just I don't know that we could predict out that far. But I can tell you when I look at this, this this puts us out uh into 2030, 2031, maybe beyond in which we're not doing this levy cycle every November and every May. Um which maybe the communities here would
017appreciate us not asking every year in November and May. So that's what I look at and I I think as you consider this knowing that I've shared I believe we can reduce out about 3 million without um deeply impacting specific people and programs and families in the district. I think that is something to weigh in on. Thank you. >> Thank you. Um, so how realistic is is 10 million in cuts over these 27, 28, 29 fiscal years? >> I think I shared this last month just as an example to save and and please don't take this the wrong way. I always use teachers because th those are our highest cost employees. So 75 teachers is about $4 million. We can't afford to cut to 75 teachers and pretend like we'll have a positive impact in
018the classroom. We just we can't do that. [snorts] So when we started the discussion initially a few months back and shared with you like 15 million is the number then we got some additional information we modified that somewhat uh to about 12.5 million and then as we are talking more realistically and sharing with you that I think we can get to 3 million heading into next year. I think that's a realistic number that we could do to reduce and then I think it was suggested potentially next year at this time we again go through the process take a deeper look at what we have operationally what we have in terms of of potential reductions in human resources what does that look like and and land on a number at that point if that makes sense.
019Yeah, it does. It does. Um, so I feel like if we find some kind of medium between scenario 9 and 10, that kind of puts us a line with with what you're saying, 3 years, the first or 3 million the first year, second [snorts] year, we'll take a look at and see what we can cut. But, um, you know, cuz nine says 2 million, 2 million, 1 million as opposed to four, three, and three. Um, but yeah, I I think if we could find some some middle ground between these these two scenarios, I think that would put us in a good position. So, that's all I have right now. Thank you. >> Mr. Sebastian, can I have speak? >> Yes. >> So, the resolution that I have for the next the 6:00 meeting has it
020as a total. So, it doesn't [clears throat and music] break it out between year one, year two, and year three for the tax or for the prop. Let me start over the first the three years. It doesn't take into effect the cuts by like four million this year, 3 million the second, three the third year. It's just a total. So, so it be like 0, 10, 5, 15, 20, 30, whatever you want. Could be three and a half. It could be 7 and a half, whatever you want. It just has a total. So, you don't actually have to figure out at this meeting the exact breakdown of the next three years. You just have to give me, excuse me, a total over the three-year periods. Mr. >> Nio. Okay. Just point of clarity with what
021you just said. I just want to make sure. Um, so we're looking at So if if we're talking about um what Mr. Reyes just said, so you're saying it's the the sum of either we're looking at 5 million in cuts or 10 million in cuts. Is that >> my scenarios have the five mill go up in in increments of five million, but that you don't have to. You can you can say we want to make $7.5 million of cuts over three years and that's fine. Or you could say 6.942, whatever you want to put in there. I just need a total over three years and then we can figure out how to cut it for the three years with the total number you that you wish to cut. >> That makes sense. Thank you. Miss
022Kerpek, >> thank you. Um, a lot of my questions got answered by everyone else, so I appreciate that. Um, I like the thought of, um, stopping the three levies, one in 27, one in 28, and the other in 29. Um, I think it would be a really good idea to do the gradual um to do the gradual stopping of them. Um I mean my um my suggestion would be scenario number seven where we make uh 10 million in cuts and then we stop the three levies. One in 27, one in 28 and one in 29. >> Thank you Miss Kerbic. >> Could I speak on that? >> Yes. >> So I appreciate your um input on that. um as Dr. Huntton would say and we're trying to stay above the threshold for um 20 it's
02326.2 million dollars I think what it is for cash policy and that would pretty much put us under the policy every year because if you look at 22.5 then 22.2 then it goes up a little it's positive there and then it goes down. So most of the years were below our cash policy. >> Miss Sebastian. >> Yes, Dr. Early. >> Um Mr. Reyes, can I ask a a clarifying question with your statement? Um you were asking about long-term stability. Are you referring to financial or operational? Financial. Okay. Um so I feel like Miss Kerpik I ideally would like to do the phase of 27 28 29 um but based on this conversation it doesn't I don't see an option if we are at 10 million or less in cuts with 3 million likely being next
024year we would have to then do option 10. We'd have to do all the levies stopping in 2028. From what I'm understanding of our questions and what's being presented, there's no option to stop a levy in 2027 and be above that 25 million unreserved funds. Is that correct? >> Yes, that is correct. I mean there there will be there might be one year or two years that are above that but if you're looking for the whole period where you're going to be above the threshold it would have to be all of them stopping on 111 to 28. >> And what are and you've probably shared this before and I apologize if I'm asking repetitive questions. What are the ramifications if we went with um scenario 7 in fiscal year 27 and 28? we were under
025the unreserved fund balance of the 25 million. What are the ramifications for that? >> There are no ramifications if you're under the 60-day cal cash policy. It's just I would have to inform the board. We're now under our policy, but there isn't that there isn't any like payback or automatic things to go into effect. It does say in our policy that if we get under the 60 days cash policy that the board shall consider new revenue sources or new property tax levy or something to that effect. But there's there isn't like any other anything other than that. But it's just a good practice to be above 60 days cash. So 60 days cash is $26.2 million. And so that means we spend about $13 million a month. And that's a lot of money, but that's
026what we do. Each payroll is about $4 million. Just to give you an idea of what we spend. And if you have two payrolls a month, that's $8 million right there. Some months you have three payrolls, which I don't like those months because then it's three time it's like over $12 million in payroll. That happens twice a year. Um, so we spend a lot of money because we employ a lot of people because we're a large district. >> Thank you. So I would like to modify my earlier thought then based on all of this to and based on what Mr. Reyes said as well 9 million in cuts over the three years. So assuming 3 million 3 million 3 million with all levies stopping in 2028. >> So something similar to scenario 10, but not
027as much of a cut. >> Correct. And I but I still do feel it's important that we revisit this conversation this time next year. I don't think we need to be married to the breakdown of 3 million 3 million 3 million over those three years. I think we need to revisit what that looks like this time next year for the 2728 school year. >> Yeah, I agree with you. There's there's always a possibility that the levy collects more as property value as as tax I shouldn't say tax income than the school district income tax collections increase. So we could there's a there's a estimate that comes out every year from the state. So you could say, well, this is what we expect this year and the next year it's going to be this. So there's
028a possibility it's going to be above. And of course, if it's above, then you can know scale back the cuts if needed. >> Thank you. Thank you, Miss Sebastian. Thank you, Dr. Early. >> Miss Sebastian, may I just >> weigh in on this real quick? So just to um repeat what I think I heard was your suggestion is 33 and three and earlier we earlier [clears throat] there we talked about in year two and year three what the compounding effect looks like and so this is maybe better suited for Mr. Nucio to weigh in. So if if in fact this is where we go, pick whatever number you want. If it's three heading into next year, uh and there are true cuts in year two, although we're talking about three, three, and three, the the
029reduction might be less because of the compounding of what we've done in year one. And so that whatever that discussion is in the future might look a little different about what the number is in year two. Okay. Thank you. >> Thank you. Is there any more discussion? Any more questions? >> Mrs. Sebastian, if I may. Um I just want to uh revisit what I said earlier after listening to the discussion um prompted by Dr. early. I agree with the uh 9 million in cuts and stopping in 28. Thank you. I would agree also. I don't Mr. Reyes, do you want to weigh in? >> Yeah, I think that's a great place to start. Thank you. >> Well, that's I can change I can modify the resolution because we're going to have to make an amendment
030at for the six o'clock meeting because the resolution's there, but I lots of blanks because I don't know what you guys wanted. So, I have it mostly done and it'll be ready for to vote on the 6:00 meeting. >> So, just for clarity, uh Mr. Nusio, um we anticipated this was the only way to be able to do this. So, we were going to have to do an amendment to the resolution to be able to put that on there. Just so it's clear for the board. Does everybody Okay. I just wanted to make sure. >> Okay. So, just to clarify for everyone, we're going to have $9 million in cuts and the school district tax starting on 111 and stop collection on emergency levies effective 11 128. Am I correct? >> Okay. I see a
031lot of nodding heads, so that's good. >> Yes. >> Okay. Just for clarity, so the public knows. Okay. >> Okay. All right. So I move to adopt resolution 2026-03-119 to adjourn this meeting. Second. We have a motion and a second to adopt resolution 2026-03-119 to adjourn the meeting. Roll call, please. Mr. Nucio. >> Mrs. Sebastian. >> Yes. >> Miss Kirick. >> Yes. >> Dr. Early. >> Yes. >> Mr. Reyes. >> Yes. Meeting adjourned.