MOUNT CARMEL - Mount Carmel Borough is the last taxing body between Northumberland County and Mount Carmel Area (MCA) School District that must figure out how to pay back its portion of the court-approved reassessment of the Mount Carmel Mid-Rise, worth $165,190 in five years of retroactive tax payments.
"We haven't made a decision on it yet. We will decide that at the next meeting," said borough council President Tony Matulewicz.
Mount Carmel Mid-Rise, at 315 S. Hickory St., is owned by Mount Carmel Housing Inc., which provides low-income tenants with affordable housing. It had been assessed at a fair market value of $4,441,500, but they argued it should be $1.35 million while the county argued it was $3.15 million.
After the hearing in December, Judge Charles H. Saylor determined the 2010 fair market value is $3 million. In previous years, the value is determined at $2.6 million, 2006; $2.7 million, 2007; $2.8 million, 2008, and $2.9 million, 2009.
Representatives of Mount Carmel Housing Inc. reserved comment, citing a corporation policy.
Lump sum or installments
The borough's portion of the payback is $58,950.58, while the district owes $68,508.42 and the county owed $37,731.24.
"We're losing revenue, but we'd be losing a whole lot more if they (MC Housing) got what they wanted," said Matulewicz.
He described the ruling as fair and "favorable to the borough."
A representative from the county assessor's office said the county chose to pay the full amount back in one lump sum rather than in installments. Had the amount been stretched out over three years with a 6 percent interest rate, the county would have paid $42,897.83.
The district chose not to tax the mid-rise for 2011, 2012 and partially for 2013, according to former Mount Carmel Area business administrator Janis Venna.
"We'll honor whatever the judge decided. Unfortunately, it's a loss of income to the school district. It's a critical time for money, especially with schools across Pennsylvania," she said.
The borough council discussed the issue last month in executive session and will likely not pay the amount back in one large sum. Members are debating whether to not tax the mid-rise for three years or take out a loan to make the payment.
A lot of numbers
The final assessed value, which is the number used to determine tax amount, for the mid-rise is $678,000. If the assessment and property taxes remain the same, the mid-rise owes the district $27,438 yearly, the borough $21,865 and the county $12,453.
The mid-rise was the second largest taxed entity in the district, but is now the fourth largest. Even with the reassessment, it is still the largest taxed body in the borough, paying at least three times more than the second largest taxed body.
The payback, however, should have never been so high, said county chief assessor Albert Bressi in March.
The original reassessment request was filed in October 2005, but court documents indicate that, "inexplicably," there was no further activity on the case until July 6, 2010.
Bressi, who came into the assessment bureau three years after the request, said he started working on the case as soon as he saw it.
After the hearing in December, Saylor determined that both the corporation and the representatives of the three taxing bodies "presented expert testimony with respect to the proper valuation of this subject property."
Using the example from a Pennsylvania Supreme Court case, Saylor concluded the fair market value of the property is between the values presented by both parties.