Wednesday, July 10, 2024

Oconee School Board Sets Millage Rate After Receiving Little Pushback From Citizens About 2.27 Percent Tax Hike The Rate Produces

***Millage Rate Is Down From Original Proposal***

The Oconee County Board of Education on Monday voted to set the millage rate for the collection of property taxes for Oconee County Schools at 14.25, representing a 2.27 percent property tax increase.

The Board took the unanimous vote after completing the last of three required public hearings on the tax increase.

Two people spoke at that hearing, bringing only to six the number of persons who have spoken at the hearings required to give citizens a chance to comment on the new millage rate. None of those six spoke in favor of the tax increase.

The adopted rate of 14.25 is a drop from the 15.0 mills proposed by the Board at the beginning of the discussion of the Fiscal Year 2025 Budget.

Oconee County School Superintendent Jason Branch recommended to the Board that the lower rate be used after Chief Financial Officer Peter Adams told the Board that the lost revenue could be absorbed by a reduction in the system’s Fund Balance, or savings account.

Branch sent County Administrator Justin Kirouac a letter dated July 9 indicating that the Board of Education on July 8 had approved the 14.25 millage rate.

The Board of Commissioners on Tuesday night confirmed that millage rate and officially adopted the millage rate for county services of 4.435 for the unincorporated parts of the county and 5.375 for the parts of the county falling within the boundaries of the county’s four cities.

The county millage rate represents a tax cut of 1.07 percent for the unincorporated parts of the county and a freeze of taxes for the incorporated parts of the county.

Watkinsville has lowered its millage rate to 2.756, down from 2.921, resulting in a tax freeze. Bishop, Bogart, and North High Shoals have not yet adopted their millage rates.

Millage Rate Recommendation

Adams explained the reason for the public hearing and gave an overview of the Fiscal Year 2025 Budget at the 6 p.m. tax hearing and repeated those same points at the 7 p.m. called meeting of the Board.

Board Vote To Approve Millage Rate And Tax Increase

The millage rate of 14.25 is a drop from the millage rate for last year of 15.0, Adams said.

Adams told the Board that “The law required that the (14.25) millage rate be advertised as a property tax increase as a result of the assessed value of the property in our county being greater than it was a year ago.”

The determination that 14.25 is a tax increase is more complex than that explanation suggests.

Oconee County Tax Commissioner Jennifer Riddle provided Branch and Adams an analysis of the growth in the Tax Digest, or value of property in the county, that divided that growth into two categories.

The Net Tax Digest increased from $3,264,446,842 in 2023 to $3,594,010,773 in 2024 mostly as a result a $255,508,753 increase in the Reassessment of Existing Real Property, or inflationary growth.

The Net Tax Digest also grew by $74,035,178 as the result of Other Changes To Taxable Digest. The Other Changes result from zoning changes or other modifications in the use of property resulting from property additions or renovations.

Riddle told the Board that a rollback millage rate of 13.934 was necessary to offset the growth in the tax digest due solely to the Reassessment of Existing Real Property, or inflation, and to avoid a tax increase.

Adams On Millage Rate

Adams, in his comments, never presented the rollback rate as under consideration, but instead focused on the decision to recommend the reduction in the millage rate from the originally proposed 15.0 to 14.25.

Adams Before Board At Tax Hearing 7/8/2024

“Please note, at 14.25 mills, our estimated unassigned Fund Balance will be $17.8 million, which equates to 15.55 percent” of the $14.9 million in expected expenditures in the Fiscal Year 2025 Budget, he said at the 6 p.m. hearing.

“The Georgia Department of Education recommended best practices is to maintain about two months of operating expenses on hand,” he said, “which would equate for Fiscal Year 25 to $19.2 million, or 16.8 percent estimated Unassigned Fund Balance.”

“With that information,” Adams continued, “we still recommend the 14.25 mills.”

In the revised budget that Adams presented, the 14.25 mills are expected to produce $50.2 million, assuming a 98 percent collection rate.

That figure would drop to $49.1 million had the 13.934 millage rate been used.

The budget Adams presented includes $60.9 million in state funding and total revenue of $113.5 million. That is against the $114.9 in spending.

To balance the budget, $1.4 million is taken from the Fund Balance, leaving a total Fund Balance of $38.6 million and an estimated Unassigned Fund Balance of $17.9 million at the end of the fiscal year on June 30, 2025. That is the 15.55 percent of expected expenditures.

If the rollback rate of 13.934 had been used, the $2.5 million gap between revenue and spending would have to be covered by money in the Fund Balance, leaving an estimated Unassigned Fund Balance of $16.8 million, or 14.6 percent of expected expenditures.

First Speaker

Ian Taylor, the first of the two speakers at the Tax Hearing on Monday, urged the Board to roll back the millage rate to 13.934.

Taylor Address Board 7/8/2024

“Today I find myself uncharacteristically at a loss for words,” Taylor said. “I just don’t get it.”

Taylor noted that state law sets a limit on the Fund Balance of 15 percent of expected expenditures and said the schools could easily handle the additional cut in revenue resulting from the rollback to 13.934.

Georgia Code Title 20. Education § 20-2-167 reads that a school district may create a reserve provided it “shall not allocate to such reserve fund or reserve account any amounts which, when combined with the existing balance in such fund or account, exceed 15 percent of that year's total budget.”

Oconee County Schools has its own policy (Regulation DM-R(1): Reserve Funds - Fund Balance) that states that “The end-of-year Unassigned Fund Balance is recommended to be a minimum of 10 percent, but not more than 15 percent, of next year’s budgetary general fund expenditures.”

“I have no doubt that this is going to be promoted as the lowest millage rate since Reconstruction or some such nonsense,” Taylor said. “But I would remind you that a millage rate is just a political sleight of hand.”

“What matters most is the total tax,” he said. “And this year, this Board will impose the highest ever local tax burden on the citizens of Oconee County, as an overall total and a per capita basis.”

The property tax last year produced just less than $49 million, and the year before it produced $43.7 million.

“You have plenty of money,” Taylor said. “Take what you need, not what you want. Put the millage rate at 13.9 or less.”

Second Speaker

Pam Hendrix, the second speaker on Monday, also spoke at both of the tax hearings held on July 1.

Hendrix Addresses Board 7/8/2024

On Monday, Hendrix focused most of her comments on the size of the compensation provided to Superintendent Branch.

“This School Board Budget seems to me to be growing from the top down,” Hendrix said.

Hendrix noted that the three-year contract the Board approved for Branch on Aug. 14 of last year called for an annual base salary of $253,071, but it also provided numerous other benefits.

“Our superintendent gets a three-year contract,” she said. “Our teachers get a one-year contract. Why is that? We pay membership in all of his associations. Teachers pay their own. We pay a travel allowance of $1,000 per month...We pay for his cell phone.”

“What is going on?” she asked. “Why are we doing this from the top down?”

In the line item budget for Fiscal Year 2024, which ended on June 30, Branch was budgeted at $284,810. In Fiscal Year 2023, he was budgeted at $272,490. Oconee County Schools has not provided a line item budget for Fiscal Year 2025, though citizens have requested it repeatedly.

“This is very frustrating,” Hendrix said as she left the podium.

Burgess Comments

No Board member responded to the comments of Taylor or Hendrix, and Board Chair Kim Argo adjourned the budget hearing less 12 minutes after it began.

The Board members then left the room, returning just before the 7 p.m. called meeting was to begin.

Adams again addressed the Board and repeated much of what he had said at the tax hearing.

“All of the requirements have been satisfied for the adoption of the final millage rate,” he said in concluding. “I ask the superintendent recommended approval of the Fiscal Year 25 millage rate of 14.25 mills.”

After Branch said “we recommend that the Board vote to adopt the FY 2025 millage rate of 14.25,” Board Member Tim Burgess said he wanted to “take a minute” for “a couple of comments.”

Burgess talked for more than 12 minutes, commenting on many of the points the speakers had made at the tax hearings.

One question he did not address was raised by several of those who spoke at the two earlier tax hearings. They questioned the listing in the revenue section of the Fiscal Year 2025 Budget of $50,000 for interest income.

The same figure had been used last year, but the Board on July 1 approved amendments to the Fiscal Year 2024 Budget showing $2.4 million in interest income.

That level of income for the coming year will offset the $1.4 million in budget deficit and drop in the Fund Balance in the budget Adams presented on Monday.

That level of interest income also would nearly cover the $2.5 million in deficit had the Board actually adopted the rollback millage rate of 13.934.

Burgess Explanations Of Spending

“I've sat here for three hearings now and listened to a lot of comments, a lot of questions, a lot of concerns, a lot of issues raised by a number of people,” Burgess said as he began, “and I felt like now was maybe an appropriate time to try to respond to some of those.”

Burgess said he wanted “to put a few things on the record in case some of this is not reported by our friends in the media.”

“One of the statements that have been made several times by a number of people is a criticism about the rampant spending of our school,” he said.

Burgess said the Georgia Department of Education publishes data that ranks all of the school systems in the state every year on expenditures per student.

Burgess correctly reported that only seven school districts in the state spent less per student in local funding in 2022 and only 11 spent less per student in 2023, the most recent years for which data are available from the state. (I downloaded and analyzed the data myself.)

“So in the last two years we've been at the very bottom of expenditures per student in the entire state all the while maintaining what, by any measure, is one of the best, if not the best, school system in the entire state.”

“So what that says to me,” Burgess said, “is we've been very prudent and practical and effective with the expenses that we've made in our school district.”

Burgess On Budget Documents

“There's also a statement made in one of the hearings about the fact that this budget, the revenues exceed expenditures, and I don't understand where that came from,” Burgess said, “because Mr. Adams has given to us, he's put in the back of the room for everybody to get, a budget, set of expenditures and revenues based on what we're talking about in terms of a millage rate.”

The budget approved by the Board in June listed a $1.7 million gap with excess revenue over expenditures, but only through an analysis of the components of the Fund Balance is it clear that the excess was being put into the Fund Balance.

It was not stated in any discussion of that budget that the plan was to increase the Fund Balance rather than cut the the millage rate. In fact, the original budget retained the same millage rate, 15.0, as last year.

The revised budget presented by Adams based on the 14.25 mills has a greater level of expenditures than the revenues that are expected to result “from the millage rate that we're considering now,” Burgess said in his presentation.

The budget, however, does not clearly label the relationship between the Fund Balance, the revenues, and the expenditures.

“We've been criticized about having a Fund Balance, period,” Burgess said, “but we're talking about taking a million four ($1.4 million) in this Fiscal Year 25 Budget and taking that out of our Fund Balance to balance our expenditure levels.”

“I think that's another example of us hearing what people have said and being willing to lower our Fund Balance to a point below maybe a point where it's prudent but one that we think we can manage through while still meeting our expenditure levels.”

Burgess On New Spending

Burgess said that “continuation expenditures” actually decreased this year over last, negating the change that the Board was spending even with little or no growth in enrollments.

Burgess Making His Comments 7/8/2024

The drop, according to the information Oconee County Schools released, was from $106.0 million to $105.2 million, or a difference of $731,582.

The question then, Burgess said, was “what level of improvements do we think are needed or necessary in our school system for next year?”

As a result of that evaluation, the budget includes $9.6 million in new spending, Burgess said.

Included are 4 percent pay raises “for our school teachers and all of our employees,” Burgess said, and “I've heard almost no one suggest that that's not appropriate and desired and earned by our employees.”

Also included are step increases for employees with 22 to 30 years of experience, increased spending on health insurance, and increased contributions to the State Teacher Retirement System.

The budget also includes 19 new positions, six of which are special education teachers are paraprofessionals. (Burgess said it was "half" of the 19.)

The budget also includes $340,587 in spending for a new curriculum.

The change is “not only to modernize our curriculum but to meet the new standards that the state has put in place,” Burgess said.

“So, yeah, we're adding $9 million to this budget,” Burgess said, “but those are what we're adding them for, and I've not heard anyone criticize any of those items and suggest that any of those particular items should not be included in this budget.”

Burgess On Fund Balance

Burgess said one of the persons who spoke on July 1, was “right on when she talked about our bonded indebtedness for our ELOST (Education Local Option Sales Tax) program."

Burgess did not name her, but the speaker was Laura King.

“That was a valid criticism, that was a valid point for her to make,” he said, “but what she didn't also recognize was it's the very reason we've committed almost $15 million ($14.8) in a reserve that escrows the amount of money necessary to make sure that when that ELOST is over, the revenues will be there to pay that bonded indebtedness that will be due for several more years after that ELOST is over.”

According to the most recent report by Adams to the Board, the Board will be paying against the borrowed $43.0 million in bonds sold after approval of the ELOST until 2033. The current ELOST expires in 2027.

Though this was not publicly discussed when ELOST was approved by voters in 2021, the Board planned from the beginning to spend more money on the proposed projects than ELOST would produce, with additional revenue to be drawn from the property taxes.

Burgess On Tax Freeze

“Then one last comment I want to make because I've not heard this, I've not heard this mentioned by anybody,” Burgess said.

“If you are one of those individuals in our community who has availed yourself of the senior citizen exemption that you get at 65,” he said, “this budget will actually produce for you a reduction in your property tax bill.”

“I, for one, am one of those and I'm going to benefit from that because I'm over 65, but I and I hope there are a lot of other individuals in this community who have availed themselves of that opportunity as well.”

Burgess was referring to the existing exemption for persons 65 and older that results from a freeze in property tax assessments if the home owner applies for the benefit.

The exemption will become automatic in January of 2025 because voters approved an overhaul and expansion of the homestead exemption program in the county in May.

Neither the existing program nor the new one has any connection with Oconee County Schools or with the Board of Education other than the Board agreed to put the issues on the ballot.

Board of Commissioners Chair John Daniell championed the changes.

Executive Session

The Board voted to go into executive session following the vote on the millage rate and emerged 25 minutes later to approve a lists of 13 personnel changes recommended by Branch.

Though the Board did vote on the list “as presented” by Branch, it was not actually released to the public until the afternoon of July 10.

Tuesday morning, however, Oconee County Schools posted on its web site the announcement that Tony McCullers has been chosen as the Chief Technology Officer. That appointment was on the list of personnel changes approved by the Board.

McCullers has been the Director of Assessment and School Improvement since 2022, according to the release. McCullers replaces Ryan White, who was named last month as the Chief Operations Officer for Oconee County Schools.

Already on Monday, Oconee County Schools had announced approval of the 14.25 millage rate on its web site.

“The Board of Education has reduced the millage rate six times since Fiscal Year 2013, moving from 18.5 to the current figure of 14.25,” the news release states.

In the last six years, the Board has reduced the rate three times, while the Net Tax Digest has grown from $35.9 million to $51.2 million.

The tax increase last year was 9.53 percent, and the year before that it was 4.7 percent.


I attended the tax hearing and the called meeting and produced the video below. I merged the two videos from the meetings into one.

Adams addressed the Board at 0.34 in the video.

Taylor began his comments at 5:26.

Hendrix came to the microphone at 8:06 in the video.

The 6 p.m. tax hearing ends at 12:48 in the video, and the 7 p.m. called meeting of the Board begins at that point.

Adams reappeared before the Board at 13:04 in the video.

Burgess began his comments at 16:08 in the video.

The Board went into executive session at 29:26 in the video and returned at that point.

Oconee County Schools also recorded the two sessions, and they are available on the Oconee County Schools YouTube Channel.

The video of the called meeting on the Oconee County YouTube Channel does not include the short session following the executive session that is included in the video below.

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