USC re-assessment appeals to make setting tax rate difficult

Published Feb 26, 2013 at 9:28 am (Updated Feb 26, 2013 at 9:28 am)

Due to outstanding assessment appeals that won’t be completed by the time they must pass a 2013-14 budget, Upper St. Clair School Board can expect to be faced with tough decisions about where to set the millage rate due to the state law that prevents the district from receiving any extra funds from the recent county-wide reassesment.

The board on Feb. 25 received a report from John Vogel of the law firm of Tucker Arensberg, which represents the district in assessment appeal.

Vogel told the board that there were still 334 appeals pending at the Board of Property Assessment, and 196 pending at the County Board of Viewers as of December.

He said the appeals that have not been settled represent about $53 million in additional value after assessment, according to Allegheny County.

Since the school board is required to lower the 2012-13 millage rate of 25.718 so that the district does not collect more than $43,522,383 in 2013-14, the board will have to determine what will likely happen with those final $53 million worth of appealed assessments.

Vogel said if the district keeps the millage rate too high, they may face having to refund money to the taxpayers. If they decrease the millage too far, though, that is money that the district will never get back. Thus, the board will have to walk a fine line in setting a millage rate for the 2013-14 budget.

Vogel showed a chart that indicated what the millage rate would have to be lowered to under three different scenarios. If the district lost all $53 million worth of the appeals, it would have to lower the millage rate from 27.718 to 22.070. If the district lost 75 percent of the assessed value increase, they would have to lower the rate to 21.920. And if they lost half of the assessed value increase of $53 million, they would have to lower the millage rate to 21.773.

Board Member Harry Kunselman asked what it would cost the district to refund tax dollars if they set a millage rate that was too high.

Frosina Cordisco, director of business and finance for the district, said she would recommend giving residents a credit on the next year’s taxes, rather than issuing refunds.

She said the county is expected to give the district updated calculations for the assessed value of property, including all settled appeals up to that point, on May 1. She said she will meet with Vogel to determine what the recommendation will be regarding a millage rate.

Cordisco said Feb. 11 that the district is hoping the board will approve a proposed final budget for 2013-14 at its April 22 meeting, and a final budget at the May 28 meeting.

This is a month ahead of deadlines set by the state for adoption of the proposed and final budgets. The state requires the proposed final budget to be adopted by May 31 and the final budget be adopted by June 30.

In other business Feb. 25, the board authorized the refinancing of up to $12 million in bonds from 2007, if the sale will save the district at least $900,000.

Michael Bova, of Boenning & Scattergood, told the school district Feb. 11 that he expected to be able to refinance the bonds at interest rates between 0.6 and 3.25 percent. The district is currently paying between 3.625 and 4.25 percent interest on the bonds that were issued in 2007.

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