What Brethren Village pays in taxes
Brethren Village has challenged its taxable status, arguing that it shouldn't have to pay property taxes because it's a charitable organization.
The change in status for the retirement community, if granted, could mean the loss of nearly $900,000 in annual tax revenue for Manheim Township, Manheim Township School District and Lancaster County.
But officials for the taxing bodies said they're negotiating a potential agreement that would recoup some of the losses by having Brethren Village make annual payments in lieu of taxes.
How much they end up getting — if anything — remains to be seen.
The nonprofit retirement community is the latest in a string of continuing-care retirement homes in the county to challenge their tax status in the wake of a 2007 court decision that made it easier for charities to seek exemptions.
In two of the three other local cases, the retirement communities won tax exemptions but also agreed to make payments to the county, school district and township in lieu of taxes.
Brethren Village, located off Lititz Pike just south of Lancaster Airport, pays property taxes on its offices, independent-living apartments and cottages, but not on its nursing facility.
In July, it filed an appeal with the Lancaster County Property Assessment Office asking that its taxable properties at 505 Airport Road and 218 Fieldcrest Drive also be declared tax-exempt.
In its application, Brethren Village cited the 2007 Supreme Court decision involving Chapel Pointe retirement community in Carlisle.
Like Brethren Village, Chapel Pointe is a nonprofit that operates a nursing home that was tax-exempt and independent-living apartments that were not.
It sought a tax exemption for the apartments but was turned down by the assessment board and county court, which ruled the apartments did not meet the definition of a charitable entity.
The retirement community appealed to the state Supreme Court, which overturned the lower court ruling.
Because Chapel Pointe was a tax-exempt charitable organization and the apartments were used for the purposes of the institution, the court ruled, they, too, should be tax-exempt.
Following that decision, three local retirement communities — Masonic Village in Elizabethtown, Pleasant View in Manheim and Moravian Manor in Lititz — appealed the taxable status of their properties.
Moravian withdrew its appeal, but the two others were successful. They reached payment-in-lieu-of-taxes, or PILOT, agreements with their taxing authorities.
Brethren Village now hopes to follow suit.
Officials of the retirement community argued their case Sept. 2 at a hearing before the county assessment appeals board, which has yet to render a decision.
Earlier this year, attorneys from both sides began negotiations on a possible PILOT.
Anthony Thompson, an attorney representing Brethren Village, said he's "hopeful" both sides can reach an agreement.
He declined to discuss any details of a possible settlement.
Rory Connaughton, an attorney representing the township and school district, also declined to comment on the possible terms.
Brethren Village is one of Manheim Township School District's biggest taxpayers, said Joe Kurjiaka, the district's chief operating officer.
Its taxable properties are assessed at nearly $40 million and generate $660,345 in tax revenue for the district, $136,298 for the county and $92,967 for the township.
If the district were to fill the $660,345 revenue gap by increasing taxes, it would have to boost millage by about 1.5 percent, Kurjiaka said.
But that isn't an option, he said, because the school board has already agreed to keep any tax increase for next year at or below the district's Act 1 index of 2.9 percent. The school district last year boosted its tax rate 4.1 percent.
Instead, the district would likely have to cut expenditures in next year's budget, Kurjiaka said.
"It certainly seems like it's a fait accompli," he said of Brethren Village's request for tax-exempt status.
"I'd love to challenge them, but the courts have already spoken, and I don't want to waste taxpayer money on a fight we probably won't win."