School Board Balks
The Warren County School District is going to wait a while before throwing its hat into the ring of the ongoing non-profit tax status process.
At its meeting Monday evening, the school district’s board of directors was on the receiving end of empassioned pleas from officials from Warren General Hospital, the Rouse and the Warren YMCA in advance of a vote on a motion that would have brought the district into the appeal process once it reached the Court of Common Pleas. The motion was ultimately tabled.
“The board was approached and encouraged to participate in the ongoing tax appeals,” Solicitor Chris Byham said in a presentation on the issue. “The law is clear that taxing bodies have standing to challenge tax exempt status. The law is less clear the assessment board of appeals can initiate the process.”
The district has policy that guides its response to tax appeals.
“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.”
Byham said policy 4007 affords the district the opportunity to participate when the free market value of the property in question exceeds $500,000. While he acknowledged that there is some question whether the policy applies to tax-exempt status appeals, he said, “As the largest of the three taxing bodies, the school district will be the body that is most affected by the outcome of this litigation financially.”
“A reasonable reading of the policy is that it allows the district to participate,” he said, noting that the policy “doesn’t mandate participation, it authorizes participation.”
Byham also informed the board that the issue could be settled with an agreement for payment in lieu of taxes, also known as a PILOT agreement. Noting that it would be the “middle ground,” he explained that in such an arrangement “the business entities would agree to pay something (but) not the full amount of the taxing amount owed.”
When the meeting was opened for public comment, Tim Bevevino, president of the WGH board of directors, said, “The process utilized here was so grossly irregular…that it is fundamentally unfair and wrong.”
Urging the district not to participate in the process, he added, “We have no intention to sign a PILOT of any kind or of any amount. We will fight it to the Supreme Court if we have to.”
WGH CEO John Papalia told the school board, “The decision tonight has a devastating effect on our communities…for decades to come.” He added that the burden the hospital shoulders regarding providing community services “will fall to the government.”
Jason Diley, CEO of the Rouse, echoed a similar tone. Noting that the tax bill the Rouse could face on the Rouse Suites alone is ten percent of the organization’s operating budget, Diley said an “essential service that we provide to this community will be lost. What will Warren County look like in three to five years if these are allowed to pass? Litigating this process will serve to erode our community.”
“We haven’t made any decision to take anyone’s tax exempt status,” school board President Arthur Stewart clarified. “We’re the moon circulating the earth and the decision is made on the earth.”
“There is a completely separate board of assessment appeals (that) acts outside of the direction of the county commissioners. We don’t have the ability to send a message to that board,” he added.
Stewart said the school board needs more detailed information from the entities involved before making a decision. “This isn’t the time to dig into that,” he added.
The motion facing the school board Monday night would have withheld the district from involvement on the procedural question – whether the board of assessment appeals can revoke a non-profit corporation’s tax exempt status – yet would have allowed the district to participate in the appeal process only after the appeal was before the Court of Common Pleas.
“It is abundantly evident there’s going to be apparently a well-fought battle on the procedural question whether this is properly before the Court of Common Pleas,” Stewart said. “Until that battle is fought out, isn’t this a moot question?”
Board Vice President Donna Zariczny said, “The procedural issue was one that kept bothering me when we were talking with the (Warren County) commissioners. The fight seemed like it was more about (the process.) That’s not a fight we should be fighting. (There’s) no rush to do anything.”
“I would have voted for this motion if I was satisfied the process happened appropriately,” Stewart added. “I am bothered by the process.”
Dr. Paul Yourchisin said, “I think it’s way too premature for us to make a decision at this time. There is no reason I see. Let things run their course until they are in our own bailiwick.”
The board voted to table the motion 5-2 with Tom Knapp and Mary Anne Paris dissenting after arguing that the motion would have upheld current policy and would not have required district participation on the procedural question.