Board member questions tax amounts paid by housing authority
The miniscule amounts of county and municipal taxes paid by the Fayette County Housing Authority were questioned Thursday by board member James V. Bitonti, who asked if some type of increase could occur. Bitonti, the mayor of Belle Vernon Borough, used the authority’s recent tax payment of $28,816 for the 150-unit Belle Vernon Apartments as an example. Of that amount, Bitonti said $20,289 went to the school district, while only $4,751 went to the county and $3,774 went to the borough.
“I think they (the county and borough) should receive a little more money than they’re getting,” said Bitonti, who asked if it’s possible to adjust the cooperative agreements the housing authority has with each municipality where it operates public housing.
Executive Director Thomas L. Harkless said the housing authority, through those cooperative agreements, doesn’t pay property taxes on its holdings in the traditional sense. Instead, the authority makes what is known as a “payment in lieu of taxes,” or PILOT, which is calculated by housing project site.
The formula calls for the authority to total the amount of rent it collected in a given year, then subtract the amount it paid for utilities. Ten percent of the remaining figure is then proportionally divided between the county, school district and municipality, based on their millage rates.
Using Bitoni’s reference to Belle Vernon Apartments as an example, in 2002 the senior citizen high-rise’s rent-minus-utility cost figure stood at $288,164.
The authority’s PILOT, calculated at 10 percent of that amount, came to $28,816.
Had the Belle Vernon Apartments complex been privately owned, it would have generated $69,968 in combined property taxes in 2002, based on its $822,850 assessed value and the county, school district and borough millage rates in effect that year.
In some cases the PILOT formula for 2002 resulted in the authority’s making no payments. That was the case for its public housing holdings in North Union Township, 150-unit Lemon Wood Acres and 24-unit Lemont Heights.
Although Lemon Wood Acres had a $724,290 assessed value and in private hands would have generated $47,896 in property taxes – $8,930 to the county, $37,445 to the Laurel Highlands School District and $1,521 to North Union Township – those entities got nothing in 2002.
Harkless said that’s because the utility reimbursement factor outstripped the rents collected, resulting in the authority essentially paying tenants $29,421 to live in Lemon Wood Acres and Lemont Heights.
“We have residents that we literally send a (utility reimbursement) check to,” said Harkless.
The same thing occurred in 2002 in Dunlap Creek Village in Redstone Township and the authority’s Outcrop housing project in Springhill Township, neither of which generated any revenue for the county or their respective municipalities and school districts.
Even in Bierer Wood Acres, the authority’s largest public housing complex with nearly 200 units, the PILOT formula resulted in a payment of only $781 in 2002 – $158 to the county, $32 to South Union Township and $592 to the Laurel Highlands School District.
In addition, the authority’s administrative offices, with buildings assessed at $205,260 and $52,510 in 2002, are tax-exempt. And Harkless said that the authority’s smaller Oliver Heights housing complex, located in North Union Township, isn’t even covered by a PILOT agreement. It thus generates no tax payments at all, even though it had a $144,480 assessed value in 2002 and isn’t classified as low-income housing.
In response to Bitonti’s questions, Harkless said he would research the cooperative agreements to see if the PILOT percentage can be changed.
“We can pull the contracts out and we’ll share it with the solicitor,” said Harkless.