An appeal of the tax status of a number of county organizations for the year 2014 was passed in a two-to-one vote during Wednesday morning's meeting of the Warren County Commissioners.
Following the handling of new business, Commissioner John Eggleston asked to add the item, which was not on the agenda.
"I'd like to make a motion to authorize the board of commissioners to execute and file an appeal of the tax exempt status of the following properties Warren General Hospital, The Rouse Estate, The YMCA, The Crary Home, Calvary Chapel and Warren Anthems Inc. with the Warren County Board of Appeals for the tax year 2014," Eggleston announced.
Commissioner John Bortz questioned what Eggleston was trying to accomplish with the motion.
"There was a lot of discussion that we didn't follow procedure and I thought, when we agreed to forego the 2013 (tax) year, that that was going to be the end of the arguments about procedure," Eggleston responded. "Apparently, at least one of these entities wants to continue to argue... We asked the board of appeals to look at tax exempt properties... two years ago. We didn't pass that in a meeting. We didn't send them a letter. We informally... asked them to look at this."
Eggleston went on to explain the genesis of the tax exemption examinations.
"This came out of... in part, the forensic accountant we hired when we were... arguing about one of the outlier properties of the hospital as to whether that was tax exempt," Eggleston said. "That forensic accountant said, 'Well, you need to look at all your tax exempt properties'... because we haven't looked at these things in a long time. That is appropriately the role of the tax appeals board and we asked them verbally to do that. It isn't that nobody, that no taxing body, is behind this. We stand firmly behind it."
Bortz concurred with Eggleston's account of events, noting that he, Eggleston and then-commissioner Terry Hawk did direct the Warren County Tax Appeals Board to look at area tax-exempt properties.
"We're doing this in public," Eggleston added. "It gives me a chance to say where I stand on this... The purpose of this motion is to put this out in public and move forward... I wish they would just put aside all the procedural stuff and get to the meat and potatoes... If they're worried about legal fees, then let's get down to it and let the courts rule and move on from there."
Commissioner Chairman Stephen Vanco, after hearing Eggleston explain the action, then seconded the motion.
"We did have a recommendation made to us that we should take a look at our tax-exempt bodies out there to see where they're at," Bortz said. "However, the context of where we are at this point is somewhat evolved from that genesis of about two or three years ago. What was then has now moved on to something a little bit more elaborate. Specifically, I question whether this motion that is up before us today is going to save us any type of legal fees... Procedurally, moving forward, later on, maybe this takes care of a degree of housekeeping. However, the initial tax year that is under question, that is still outstanding procedurally because we had not taken this action two years ago which should have been... the starting point from any subsequent action. The other thing too is, we're in litigation and I have made public comment recently regarding the cost of that litigation."
Bortz pointed to some specific entities he had concerns over pursuing for tax liability.
"With regard to Warren General Hospital, we (the county) have a number of contracts with regards to them," Bortz said. "I have to wonder what the ramifications overall are going to be in regard to that. Pertaining to the Y, again, a valuable asset and I'm just questioning whether, at this time, with everything going on in our country and our economy, whether this is the right thing to do when we could be doing this outside of litigation."
"I think that there is a set system where we've already gotten to the point that we've had hearings because they have been found to be taxable," Vanco argued. "They have appealed it. They've gone past that point into the court system. Let them go through the system. That's why the system's in place."
Bortz noted levying full property tax burdens on non-profits was not the object of the initial examinations.
"Our original goal for our conversations in this process was to move toward PILOT (payment in lieu of taxes) agreements," Bortz said. "Now we're at the place we are right now. Let's be mindful of our situation, the cost of litigation that this is going to have on the county. Let's also be mindful of the impact that this litigation is going to have county- and community-wide. This is going to go on for years and years and I have to ask ourselves, is now the right time? Are we in the right financial situation to exacerbate such a fight?"
Vanco weighed in on associated costs.
"As time goes on, nothing gets cheaper," he argued. "So I would think that the present is the most inexpensive time to do this."
Eggleston gave his view on where the situation stands.
"In our neighboring county, Erie County, there are three major hospitals... that all have been paying PILOTs for years," he said. "If they thought they were going to win in a court, they'd fight it through the courts, but they all pay it. They say, 'We recognize that we have a responsibility to the community and we're gonna pay.'
"We've never really looked at the hospital or the YMCA."
"The YMCA, how is that anything but a very nice athletic club? Where's the need for government services they're meeting? We're under no obligation to provide people with stairsteppers and treadmills and swimming pools. Is it an asset? Absolutely, but where's the non-profit part of that... Why are the county taxpayers forced to subsidize one athletic club in the county?
"When has anyone ever shined any light on the hospital? The hospital is basically becoming a monopoly on medical care in Warren County. Does anybody besides me think that might be dangerous in terms of what we're going to paying when you have no other option?
"We need to take a look at this stuff. Our job as commissioners is to be concerned with all of Warren County. Not just with some certain segment within it that's upset because there's a change in the air."
"I think where our differences lie is, 'Is the juice worth the squeeze?'," Bortz replied. "Also I will say, let's keep a careful eye on how we're managing our checkbook as we go through this process."
Eggleston and Vanco voted in favor of the motion while Bortz voted nay.