LFC Comments by Brian Massie, Lake County resident:
We are pulling back the curtain on the Lakeland Community College finances and enrollment. It will be left up to the taxpayer to determine if the College officials have been good stewards of the taxpayers’ money.
We thank Mr. Michael T. Fisher, General Counsel for LCC, for his complete and timely response to our records request.
Issue #1 on the November 2, 2021 ballot will be the Lakeland Community College 1.5 mills renewal levy. The college administration states that it is needed for operating costs, purchasing furnishings, equipment and construction and improvement of property. The levy will be collected for 10 years, commencing in the tax year 2021, and is first due in 2022.
A 1.5 mill levy costs the taxpayer $52.50 per year per $100,000 of home valuation. [1.5 x $35.00]
Let’s take a look at the current property tax levies that are being collected by Lakeland. On the following worksheet we received from the Auditor’s office, you will see that there are three property tax levies current being collected for Lakeland:
2010 – 1.70 mills total estimated annual revenue of $9,632,243
2002 – 1.50 mills total estimated annual revenue of $8,033,663
2015 – .38 mills total estimated annual revenue of . $2,323,514
Grand Total of estimated annual revenue ………. . $19,989,420
[Note: Actual Property Tax Revenue for fiscal year ended June 30, 2020 was $20,809,271…see interim statements shown below.]
Let’s take a look at their enrollment: [Source: https://www.ohiohighered.org/]
In the last ten years, Lakeland’s enrollment has experienced a steady decline from 9,996 to 5,755. That is a decrease of 4,241 students or 42.4%. As a means of comparison, the total enrollment for all Ohio Community Colleges in 2010 was 211,260 and 188,534 in 2020. This reflects an overall decline in Community College enrollment of 22,726 students or 10.7%.
Four year universities also experienced a decline in enrollment for the same period – 338,300 for 2010 and 309,689 for 2020, a decrease of 28,711 or 8.5%.
There were no reasons given for the overall decline in the number of students attending Community Colleges. However, the continuing drop in Lakeland’s enrollment should be a huge wakeup call for the administration and their Board members. They kept spending money, perhaps to stem the tide of declining enrollment, but as you can see it has not worked. As of June 30, 2021, they are reporting total long-term debt of $89,254,914!!!!
Let’s take a look at their Condensed Statement of Revenues, Expenses and Changes in Net Position:
One very disturbing number to LFC is the “Net Position” at June 30, 2020 – ($27,370,62). This means that the college’s liabilities exceed their assets.
A negative “Net Position” means that future revenues will, at least in part, be needed to make up past revenue shortfalls, or there will be a need for drastic cost cutting measures.
Take a look at the “Current” and “Non-Current” liabilities as of June 30, 2020 on the following statement:
Other post employment benefits $11,252,767
Compensated absences $1,369,844 (Current liability – payable within one year)
Compensated absences $879,689 (Long-Term liability – longer than one year)
It would be appropriate to review the current annual salaries for Lakeland’s administration.
The total of all 19 salary positions listed above is $2,562,541, and that does not include fringe benefits or pensions. As a comparison, the average annual income for a Lake County resident is $33,539 (2019), and for a household it is $64,466.
We can see that Morris Beverage is paid handsomely. How does he stack up against other community college Presidents?
An internet search found these interesting statistics: “At associate-degree colleges with ranks, presidents earned, on average, $273,814. The median was $241,727 (the high was $489,357, and low $124,030). For associate colleges without ranks, the average is $241,452, with a median of $224,371 (high was $437,019, and low $130,000).”
An interesting omission to us is the name Amy Sabath. Ms. Sabath is a well-known and well-connected Republican in Lake County. According to Lakeland’s website she is the Director for Government Relation & Executive Assistant to the President and Director for the Nonprofit & Public Service Center. She is also a political consultant and has done consulting work for current State Senator, Jerry Cirino, when he was Lake County Commissioner. Cirino appointed Ms. Sabath to the Lake County Visitors Bureau a few years ago, and she is still the President of the Visitors Bureau Board, but they had to increase the number of Board members to 9 to make room for her after she was not re-appointed by the current Lake County Commissioners.
Moving on to the fringe benefits and pension paid to the Lakeland’s employees:
How important are the Lake County property taxes for the on-going operation of Lakeland Community College? Please remember that the 1.7 mill levy was approved by the voters in 2010 and is continuous, which means that Lakeland will receive the revenue forever, and therefore, do not have to be accountable to the taxpayers for THAT LEVY.
The .4 Bond Levy approved in 2015 pays down the debt for their Health Center and is not subject to the impact of HB 920. Therefore, as property values increase the property tax collected will increase without a vote of the taxpayers.
LFC Comments: We know that we have generated and reported a lot of numbers. In our opinion, we see an entity that is struggling to be relevant. Their drastic declining enrollment tells us that they are not meeting the needs of the students, employers, or the community.
A lot of Lakeland employees are being paid generous salaries, pensions, and benefits. If enrollment does not increase significantly they will need to do some drastic cutting of operating expenses, and the highly paid administrative staff.
If the 1.5 mill renewal levy does not pass, it will mean an $8 million reduction in their annual revenue, and should make Mr. Morris Beverage, President, and the entire board sit up and take notice. The Lake County taxpayers will be saying that they have lost faith in their leadership, and will no longer fund an entity that appears to have been run into the ground.
If we continue our our path of ever-increasing property taxes, we will price seniors and those living on fixed incomes out of their homes that they have worked all their lives to achieve. It is obvious to LFC that the increasing size and cost of Lake County’s public sector is quickly outstripping the private sectors’ ability to pay for it.
The next property tax levy on our agenda is the Willoughby – Eastlake School District. Note, to Dr. Steve Thompson – gird up you loins because we are going to pull back the curtain again on your deceptive “emergency levies”. Ah, what a tangled web we weave, when we first set out to deceive.