Stage Set For Legal Battle
Several of the recipients of the letter have made it clear they’re readying for court.
The county is too, and it’s looking for allies.
If Warren General Hospital, the Rouse Home, the Warren YMCA, the Crary Home, Warren County Memorial Park, and Calvary Chapel want to appeal the loss of their status as exempt from property taxes, they have 30 days.
The Warren County board of assessment appeals ruled the hospital, YMCA, and Crary Home subject to property taxes. The board members ruled the Rouse Home and 10 acres exempt, but the rest of the extensive holdings taxable. A small portion of Warren County Memorial Park was also ruled taxable while the majority will remain tax exempt.
Unless those entities file appeals, they are responsible for taxes on the taxable portions of their properties starting Jan. 1, 2013.
If they do file appeals, they may face the combined efforts of Warren County and the Warren County School District.
County officials are expecting challenges. They are also hoping the school district’s board of directors will join in the defense of the changes.
“The board of assessment appeals and the county commissioners are waiting for clarification from the school board as to their level of participation,” county solicitor Barry Klenowski said Monday. “It is the board of assessment appeals’ as well as the county’s hope that the school board would vote to stay consistent with their policies and former practice of getting involved when certain cases meet that threshold value.”
Klenowski said he believes the school board has in the past gotten involved in assessment appeals when the value of the property is over $500,000.
The policy pertains explicitly to assessment appeals. No mention is made of tax-exempt status.
“The board authorizes the administration to maintain contact with the Warren County Assessment Office regarding real estate assessment appeals that have direct impact on the district’s tax collection base,” according to school district policy 4007. “The board authorizes the administration to take such steps and expend such funds as are necessary to intervene or otherwise participate in said appeal.”
The commissioners have met with a committee of the school board, according to Klenowski, and that committee agreed to move forward a recommendation to the full board that it join the county’s efforts in cases that go over the $500,000 threshold.
The school board is scheduled to meet Monday evening. The agenda for Monday’s meeting was not available Tuesday afternoon.
Whether the board joins or not, the county is prepared to move forward.
“We’re in it knee-deep,” Klenowski said. “We’ve gone forward and told the appellants they’ve been denied.”
Klenowski anticipates one particular angle of attack from entities that appeal and the school district will not be involved.
Some have claimed that the county and the board of assessment appeals do not have the authority to change tax-exempt status. “Warren General Hospital raised that in their administrative appeal,” Klenowski said. “It’s in their brief.”
The county officials believe they have the authority to examine and, as necessary, change, tax-exempt status. “This is an issue we wanted to research before we decided to go forward,” Klenowski said.
According to the consolidated county assessment law, the board of appeals prepares the “assessment roll of property subject to local taxation or exempted from local taxation.”
“It’s an issue of first impression,” Klenowski said. That is, there are no court rulings on the issue.
Because the county took the initial steps of going through the roll and examining all tax-exempt properties without checking with the school district or other taxing bodies, defending that work will be the county’s responsibility.
“The litigation of that particular issue is going to be one carried by the county,” Klenowski said. “The school board has made it clear that this is the type of argument they will not get involved with.”
The school district would have to be involved if representatives of one or more of the agencies propose a “payment in lieu of taxes” or PILOT.
A PILOT is a settlement in which the subject of tax agrees to pay an amount to the taxing body instead of the amount of tax. There is no required minimum nor percentage that is acceptable. Each case is determined by the agreement of the taxing bodies. Klenowski said a PILOT agreement can allow two parties to “save litigation fees and move forward.”
Pittsburgh-based UPMC recently entered into PILOT agreements for two facilities it operates, UPMC Hamot in Erie and land it is purchasing in Allegheny County.