Nexus pipeline settlement appealed to state Supreme Court

MILAN — Area school districts continue to be caught in the middle of a yearslong financial fight. On Monday, Lorain County auditor Craig Snodgrass announced that he filed an appeal with the Ohio Supreme Court regarding the valuation and assessment of the Nexus pipeline for tax years 2019, 2020 and 2021. "I have made this important decision because I believe that an appeal would be in the best interests of Lorain County and the political subdivisions in Lorain County, and would be in the best interests of county auditors throughout the state of Ohio," Snodgrass said in a prepared written statement. A few Erie County school districts — including Perkins, Margaretta and Edison schools — have waited, for several years, for the final pipeline valuation in order to get funding promised to them years ago by Nexus, since the pipeline runs through those school districts. Edison Schools, for instance, had to remove a bond issue for two new schools last fall from the November ballot since Snodgrass — who questioned the settlement and wanted more clarification — appealed Nexus pipeline's most recent tax settlement of $950 million. The school district sought to use money from the settlement to pay for its construction project. The other 12 Ohio county auditors whose counties have the Nexus pipeline traveling through them agreed with the $950 million settlement. "By appealing the settlement, the Lorain County auditor negated the deal for every Ohio county that has a part of the Nexus pipeline," superintendent Corey Ream wrote in a letter to stakeholders in September. "At this point, we anticipate the owners of the Nexus pipeline will pay taxes based on their proposed value of $615 million until the final value is re-established. The process may take years to complete. "The decrease in taxable value during the appeal means Edison Schools will likely lose between $600,000 and $800,000 of pipeline income per year," Ream continued. "We won't know the actual amount until our (Erie County) auditor, Rick Jeffrey, receives updated information. This money is going to help pay for the new building proposal." With Monday's news, Ream told the Register that the school district still plans to put a 6.7-mill, 37-year bond issue on the May ballot for an $87 million construction project to build two new schools and renovate Edison High School. "The finances for the ballot issue in May were planned around the possibility of a continued appeals process and a reduction of pipeline income," Ream said. "The district will initially allocate about $2.2 million a year from the pipeline to the building project. That amount will be reduced each year as the valuation of the pipeline depreciates." If approved, the bond issue would raise almost $47 million in local money toward the project's overall cost. "The remaining amount of the project would be paid for by the Ohio Facilities Construction Commission and revenue the district receives from the Nexus pipeline," according to an informational flyer provided to taxpayers by Edison Schools. Additionally, if the bond issue is approved, property taxes for the owner of a $100,000 home will increase by about $235 a year, according to the Huron County auditor's office. In April 2022, district board members unanimously decided to construct: • A new school, for students in preschool through fifth grade, at the current Edison Middle School site in Berlin Heights • Another new building for grades 6-8 onto the existing Edison High School building in Milan When explaining why the school district is now going forward with the bond issue, the informational flyer said Edison Schools wants to make sure it can receive funding support from the Ohio Facilities Construction Commission, a state agency. "Financial support from the Ohio Facilities Construction Commission is determined by a three-year adjusted per pupil valuation of the district. This relates largely to the property wealth of the district," the flyer states. "Because of the new pipeline, the district's valuation continues to increase. This means the amount of state support the district would receive for a construction project continues to decline. Beginning the project now would 'lock in' a 27% state share." It remains unclear when the final settlement will come and how much money Edison, Margaretta and Perkins schools will get. Planning for the future In February 2020, Edison Schools and architectural firm GPD Group of Akron hosted the first meeting for taxpayers. At that meeting, GPD officials went over a facilities presentation with the problems facing current buildings and possible designs. Then they allowed residents to give feedback and ask questions. District officials continued facilities discussions because student enrollment has been steady in recent years, and the way students are being taught in classrooms is changing. Two of Edison's buildings — the elementary school in Milan and middle school in Berlin Heights — are also becoming too old to renovate by state standards. For instance, portions of Edison elementary and middle schools were built in the 1800s, and each have had numerous additions. Since the first meeting three years ago, school officials and the public toured elementary and middle schools in Amherst and Strongsville designed by GPD Group to get ideas of what kinds of features they'd like to possibly have at Edison Schools. Edison Schools also asked stakeholders to give feedback on their preferences through an online survey. At a March 2022 public meeting, many who attended expressed concerns about possibly moving Edison Middle School, now located in Berlin Heights, to Milan. Others believed having all students on one campus, like at the current Edison High School site as proposed, could provide additional benefits, like older students being able to mentor younger students more easily. _ Reach reporter Caitlin Nearhood at nearhood@sanduskyregister.com and follow her on Twitter @CaitlinNearhood