By JACOB PERRYMAN
With new challenges pending, the hospital has asked for a new board.
At the Wednesday morning meeting of the Warren County Commissioners, Warren General Hospital's (WGH) attorney requested an auxiliary board be appointed to review the tax exempt status of the hospital.
John Mehler, of MacDonald, Illig, Jones and Britton presented WGH's case during the public comment period of the meeting. Commissioner Chairman Stephen Vanco was absent.
On Aug. 27, the legal battle over whether WGH qualified for tax exempt status in 2013 ended. Warren County Court of Common Pleas Judge Gregory Hammond granted WGH's request for summary judgment and restored its tax exempt status. Hammond's decision was made on the basis that the Warren County Board of Assessment Appeals acted outside of its statutory powers by revoking the hospital's status without authorization from a taxing body.
Later that month, the commissioners gave authorization on behalf of the county, a taxing body, for the Board of Assessment Appeals to review the tax exempt status of WGH and four other entities the Rouse Estate, Warren County YMCA, Crary Home and Calvary Chapel.
Now, WGH is requesting the commissioners appoint an auxiliary board made up of individuals not on the Appeals Board to review the hospital's status moving forward.
Mehler read a letter sent to the commissioners outlining WGH's position that the appeals board cannot be impartial and requesting appointment of an auxiliary board be put on a commissioners meeting agenda.
According to the letter, the hospital and its attorneys, "formally request the commissioners appoint an auxiliary board to handle the matter of the Warren County Commissioners challenge to the local tax exempt status of Warren General Hospital... Given the history of this case, we believe that the assessment board as it is currently comprised lacks the impartiality, objectivity and independence necessary to act as a truly independent, adjudicative body in connection with the real estate tax exemption of Warren General Hospital... We believe the court shares our view that the assessment board improperly blended prosecutorial and adjudicative roles... If the commissioners refuse to appoint an auxiliary board, we will ask the Warren County Court of Common Pleas to order such relief... We believe that the separation of prosecutorial and adjudicative functions is essential... we request that these matters be put on the agenda at the next commissioners meeting."
While the letter asserted WGH had asked the appeals board members to recuse themselves from further action, Mehler admitted they had received no official communication to that effect.
"We believe the next step is to ask you gentlemen to appoint an auxiliary board for the limited purpose of hearing the Warren General case," Mehler noted.
The commissioners pointed out finding members for the proposed auxiliary board could present a challenge.
"You do appreciate the difficulty of finding three people who are willing to step into the middle of this and get up to speed," Commissioner John Eggleston said. "How would they show their impartiality? How would you find those three people? Have you got any suggestions on how that needs to happen?"
Commissioner John Bortz echoed the sentiment, "One of the things that is extremely difficult is finding capable people to go into voluntary capacities... Our board is compensated at a ridiculously small level for the work they have to put into it."
"I'm not sure I have an answer other than, this is what the statute says," Mehler responded. "I don't know that those folks need any particular acumen. I don't believe they have to be lawyers, or accountants, or politicians or anything like that. I think they need to be people. This is the language of the statute 'Members of the auxiliary board shall be competent and qualified residents of the county... We believe that the law requires, for the process to have any integrity whatsoever, that the folks making the decisions need to be objective... In my view, the determination of whether an entity is or is not tax exempt doesn't require a law degree. It doesn't require a C.P.A. It is a sense of, 'What does the entity really do?'"
Mehler cited three cases as legal precedent to support members of an appeals board being replaced or recusing themselves. Bortz questioned their similarity to the ongoing case between the county and Warren General, pointing out the accusations of bias leveled at the appeals board are dependent on its ruling again on an agency it already determined not to be tax exempt.
"The clear line of distinction that I'm seeing," Bortz said, "is that there were individual members that add circumstances outside of the scope of activity which called into question those particular people's integrity that were serving on the board. What we have here is quite different... No one is calling into question, I believe, the integrity of the individual members relative to any kind of outside interest. If anyone is being called into question, they are called into question in their current capacity as tax appeal members."
Mehler noted WGH first received notice its tax exempt status was being evaluated in December 2011, when it received a letter announcing it had been revoked.
"Before any evidence was presented one way or the other, before any appeal was filed, the assessment board says, 'You are no longer exempt,'" Mehler said. "There's only one hearing that takes place before the assessment board with regard to Warren General Hospital's tax exempt status. At that hearing, no evidence was presented... As a result of a half-hour hearing, the assessment board, as presently constituted, decided that Warren General Hospital was no longer exempt."
The commissioners defended the process used.
"They saw this as the way the process works," Eggleston said, referring to the Appeals Board. "We send you a letter telling you we revoked your tax exempt status. Then you come in and defend it. You're characterizing it as, 'They made a decision and weren't going to listen to any evidence.' What they were doing was giving them (WGH) an opportunity to come in and show us why you deserve tax exempt status. And they've had the opportunity to come in and show evidence that they qualified under the HUP test (standards used to determine charitable status in Pennsylvania) to be tax exempt."
"Notice was given," Bortz said. "What was the purpose of the discussion (otherwise)? Once Warren General Hospital was notified, was there a hearing after that?"
Mehler said a hearing was held, but noted it was nearly a year later on Oct. 22, 2012.
"So there was a letter sent and in October of 2012 there was this hearing," Bortz noted. "My question, I think that is begged out of all of this is, isn't a year adequate time to prepare for a hearing to defend your case?"
Mehler agreed that it was but argued a lack of evidence from the Board of Appeals' side during the hearing.
"At the hearing, there's no evidence presented as to why the property is no longer tax exempt," Mehler said.
Under Pennsylvania law, a non-profit must meet the criteria of the HUP test to prove tax exempt status; property is not assumed to be tax exempt unless proven not to be.
"So your contention is, nothing has changed by all appearances, and you are dealt the hand of a change in position without any evidence being presented as far as how the county then arrived at that decision?" Bortz asked.
Eggleston noted he would prefer to have the discussion when all three commissioners were present, but did comment on the situation.
"You've characterized some things. You've said some things," Eggleston said. "You're an attorney representing your client. I understand that. My clients are the 40,000 residents of Warren County and I'm trying to do the best thing that I can for all of them.
"I think some serious questions have been raised about what constitutes a non-profit, how they operate, who gets paid what, how they get paid.
"I think that the judge was totally inappropriate in his remark about the integrity of our board," Eggleston continued. "If anybody should be recused, it's probably him. He went into that courtroom with his decision already written and never listened to any arguments... I think the judge was totally out of line in questioning their integrity in the way that he did. They did what they thought they needed to do to examine this question.
"The fact that you and your clients aren't happy with the way that that came down or the final decision they made. You're entitled to be unhappy about that. I understand your unhappiness."
Bortz noted there is an upside to assembling an auxiliary board.
"If an auxiliary board made up of three different individuals is put forth and they arrive at the same place that the previous board did, now you've got two different boards coming to the same decision," he said. "I think it stands on its own. That is it presents a pretty solid case for the county... It removes any doubt at all and it is the highest test that I can see for this case."