Substitute levy could be answer in Niles

NILES — The head of Avon Local Schools in Lorain County, which passed a substitute levy in November, said financially distressed Niles City Schools has the right idea in approaching one here.

The Niles City School District is the first district in Trumbull County to approach a substitute levy — a tactic that allows districts to combine emergency levies up for renewal into continuous levies that generate the same amount of money in the first year and possibly additional revenue in subsequent years if there is new construction in the district, according to the Trumbull County Auditor’s Office.

Voters in Niles will be asked Nov. 6 to consider an 11.7-mill levy that will generate $2.6 million in its initial year if passed. The substitute levy will combine two 10-year levies — a 4.6-mill emergency levy passed in 2009 and a 4.65-mill levy passed in 2012 — that each generate $1.3 million into one continuous levy.

Those two levies, which are up for renewal in 2019 and 2022, now require 5.7 mills each to generate the same amount of money they did when passed at lower millage rates, Christy Sostaric, an accountant with the Trumbull County Auditor’s Office, said. Taxpayers who do not add on to their homes or build new homes wouldn’t see any increases, she said.

“Emergency levies can’t produce more money, but a substitute levy allows for new growth factors,” Sostaric said. “The first year it’s just a normal levy producing the dollar amount it always has and then the second year is when growth is factored in.”

Voters in Avon approved a substitute levy in November that combined five existing emergency levies into one 14.26-mill continuous emergency levy. Mike Laub, superintendent of Avon Local Schools, said his district, which has a history of support from voters, chose to approach a substitute levy as a way to permanently stabilize finances while not having to always approach voters with renewals.

“The substitute levy for us took a handful of emergency levies and bundled them, for a lack of a better term, and made them continuous,” Laub said. “We had heard there was voter fatigue because we were on the ballot what seemed like nearly every year renewing something. Now we don’t ever have to go back to the taxpayers again for those particular issues.”

Laub said Avon Local Schools should be able to realize approximately $200,000 in additional revenue when construction growth is factored into the equation. Those homeowners who don’t add on to homes or build new will continue to pay what they were paying, he said.

Prior to passage of the substitute levy, if there was a large amount of new construction in Avon, millage rates would be adjusted downward so that the emergency levies would continue to collect the total dollar amount intended, Laub said. Any additional revenue collected through the substitute levy moving forward will hopefully reduce the amount of millage Avon Local Schools has to ask for should they ever need to approach voters for new money in the future, Laub said.

“Because of the way we’re growing in Avon, there is potential that the substitute levy should yield some additional dollars,” Laub said. “New homeowners who were going to have to pay taxes anyway will pay a millage rate on top of what existing homeowners are paying.”

However, Laub said districts like Niles City Schools, which aren’t in a positive financial situation and might not expect a lot of construction, would still benefit from seeking substitute levies.

“Districts in financial distress need to stabilize money and passing a substitute levy will help with that,” Laub said. “The first time a renewal fails, and if you’re already not able to pass new money issues, you’ve got a real problem. Substitute levies guarantee an ongoing stream of revenue and it’s a very smart thing to do.”

Niles City Schools Superintendent Ann Marie Thigpen didn’t return calls seeking comment about the substitute levy.