Borough takes hit in assessment challenge
LANSDALE » It’s a relatively small item for the North Penn School District, but has caused consternation in Lansdale Borough.
A package of property assessment appeals approved last month now looks likely to have a big impact on the borough’s budget.
“We have five or six different properties that have been approved for reassessment, and they range generally from $150 to, I think there’s one for $1,000 or so,” said borough Manager John Ernst.
“But the big one I want to call your attention to is 701 Lansdale Avenue, which is the former St. Mary’s Manor — that assessment appeal has been for about $42,000,” he said.
Every year the school district’s finance department identifies properties whose market values have increased significantly since their last assessed value recorded with Montgomery County, and property owners can and do file reverse challenges to seek a reduction in their value, and corresponding drop in taxes due.
On Jan. 21 the school board approved a package of those assessment settlements, and said at the time
the net result was repayments of roughly $111,000 to the property owners in question, and that several of the challenges and settlements involved had dated back several years.
Ernst and borough Interim Finance Director John Crawford brought one of those agreements to the attention of the borough administration and finance committee on Feb. 3, noting the county and school board had both approved those settlements and the borough must do so next, particularly for the property’s value subsequent to a sale from the Archdiocese of Philadelphia, which removed its tax-exempt status.
“The new owner, ‘701 Lansdale Realty LLC,’ bought the property, and realized they were taxable. So they went through an appeal process, which took a while,” Crawford said.
“They’re going back to 2015 and getting an assessment from $10,388,000 down to $9 million, for the prior six years. So the prior six years of refunds for their taxes is considerable, it is over $41,000,” he said.
For the school district, the roughly $111,000 impact is absorbed in a line item in a 2020-21 budget that totals over $270 million, but the impact to the borough may feel much larger, Ernst and Crawford told the committee. Borough council passed a $35.4 million 2021 budget in December 2020 without raising taxes, but staff warned the precarious post-pandemic budget would show only a small surplus, if any, and that was before the impact of the new assessments.
“The unfortunate part of that is that it’s coming out of your current year’s budget. It’s not like you have returned earnings, like a corporation, and can go grab money from prior years,” said Crawford.
“It hits the current year, so it really does hurt,” he said.
During full council’s subsequent discussions, council President Denton Burnell added detail: “They immediately filed this assessment appeal in 2015. They were actually denied, and they appealed it, and eventually they were given this $9 million assessment,” he said.
“Quite frankly, the worst part about it is that, even though it was assessed in 2015, it hits the budget now, because this is when the payback has to happen. It’s not like we can go back to 2015 and take $7,000 here, go to 2016 and take $7,000, it’s right now, boom, just about a $42,000 hit,” Angelichio added.
Borough council next meets at 7 p.m. on Feb. 17; for more information visit www.Lansdale.org.