Lakewood OH
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District to restructure debt

By Kevin Kelley

Westlake

When the Cuyahoga County Budget Commission informed Westlake City Schools that it was collecting less property tax than planned, the school district faced two options.

The district could increase its tax rate half a mill this year and 0.4 mill next year. This would be possible because although voters approved a total capital tax rate of 7.12 mills, the district is only collecting 5.7 mills, as this has been enough to service the district’s debt. (Those figures refer only to taxes to fund capital expenses, such as bond levies, not taxes to fund general operating expenses.) An increase in the tax rate would mean homeowners would have to pay more in property taxes.

Or the district could restructure its debt.

By consensus, the board of education chose the latter option at its April 14 meeting and voted to leave the tax rates as they are. Public school districts, like municipalities, are required to annually certify the county budget commission’s tax rates.

District Treasurer Mark Pepera said tax collection is falling off largely because the growth in property values has been stagnant or declining in Westlake during the past three years.

The restructuring will be accomplished, Pepera said, by taking some of the debt due to be paid off over the next two years and spreading the payments over a longer period.

The cost of restructuring could range from $75,000 to $200,000, Pepera said, depending on interest rates. However, the restructuring is made possible by the fact that the district’s debt service will decrease by 1.2 mills in 2017. The cost of restructuring will be only a fraction of that, Pepera said.

 

 

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