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PILOT committee moves forward with plans to get Allentown money from its non-profits

By Randy Kraft, WFMZ.com Reporter, RKraft@wfmz.com
Published On: Mar 07 2013 03:26:03 PM CST
Allentown PILOT committee

Randy Kraft

ALLENTOWN, Pa. -

An ad hoc city committee is moving ahead with plans to encourage non-profit organizations that don’t pay taxes to voluntarily contribute money to Allentown.

“I fully appreciate that our non-profits make contributions to the city in many, many ways,” said committee chairwoman Jeannette Eichenwald. “I’m grateful for that. But it’s just not enough.”

Twenty-nine percent of all the property in Allentown is in the hands of non-profit entities, reported committee member Debi Bowman, Allentown’s deputy finance director.

“It’s a very substantial amount of property,” said Eichenwald.

Bowman said about 10 percent of tax-exempt properties belong to churches, 12 percent to colleges, 16 percent to hospitals, 49 percent to government, authorities, the Allentown School District and utilities, and all others total 12 percent.

“You’re not getting blood out of a stone,” warned committee member Jeff Glazier, who said some organizations may not be allowed to contribute. He suggested the committee move forward with no pre-conceived notions, “with our intent only to learn.”

Committee member Ray O’Connell said it first should find out what non-profits already contribute to Allentown: “What are they doing for us now?”

Eichenwald and Bowman said none voluntarily contribute money to the city.

The committee, which consists of three City Council members and two members of the city administration, set several goals during its second meeting Wednesday night:

·      It intends to determine what kind of contributions non-profits now make to Allentown.

·      It may primarily focus on seeking financial contributions from non-profits that have the highest property values and utilize the most city services.

·      It will find out from city department heads which non-profits are the biggest users of those city services, including police, fire and EMS.

·      It wants to get a better handle on non-profits that may rent tax-exempt properties to profit-making businesses.

·      It will expand its membership to include three non-profit representatives, as well as one business representative.

·      And it will seek the formal blessing of the full City Council via a resolution of support.

The committee was created last month by City Council president Julio Guridy. Its first meeting was Feb. 13

No date was set for when council will be presented with a draft resolution, but the committee plans to meet again April 17, the same night council meets.

The committee is investigating whether Allentown should initiate a program called PILOT, an acronym for “payment in lieu of taxes.”

Eichenwald has said most cities that already have initiated such programs request 25 to 33 percent of what non-profits would pay in property taxes -- in money and/or additional services. 

O’Connell and Eichenwald want to know what property taxes large non-profits would be paying to Allentown if they were not tax exempt.  “I like that,” said O’Connell.  “I would look at the biggest non-profits, go after them. Go after the money.”

Eichenwald, Glazier and O’Connell serve on City Council. In addition to Bowman, Vicky Kistler, the city’s health bureau director, also serves on the committee.

“At some point in the near future our fact finding will be completed,” said Eichenwald. “I always like to have a road map about what direction we will continue in.” But she added she will not go forward in any direction unless there is “compromise, but consensus” among the committee members.

In the discussion about getting a resolution from City Council, Kistler suggested the committee’s work might be easier if it knows upfront that it has the support of everyone on council.

The committee hopes to get non-profit members from an Allentown medical institution, from an educational institution and from one other area.

Eichenwald said much of what Muhlenberg College now does for the city “is in the best interest of the school itself” adding: “I don’t mean that to be pejorative. I’m sure if you looked at Cedar Crest, you would find the same thing. They help, their value is greatly appreciated, but it is part of what they do -- providing their students with experiences in the community.”

She said colleges use far more city services than churches. She said 20 to 30 times each week, police, fire and EMS units go to Muhlenberg College, adding some weeks there are as many as 40 incidents. She added police also are called to city hospitals “to maintain safety and order.”

Bowman said Muhlenberg College does give Allentown money to buy one police car every year. O’Connell estimated that value at $25,000-$30,000

Eichenwald suggested PILOT might be a successful tool to solve Allentown’s multi-million-dollar pension crisis.

Wednesday’s meeting began with a discussion about Brown University in Providence, R.I. “Providence, like all cities, was faced with an enormous pension problem,” said Eichenwald.

She said Providence Mayor Angel Taveras did three things, the first two of which “obviously are not in the purview of this committee”:

He re-evaluated city managerial salaries.

He renegotiated “iron-clad” police and fire pension agreements and got concessions valued at $16 million a year. Eichenwald said City Council repeatedly has been told it is impossible for Allentown to do that.

From Brown University alone, Taveras managed to get a commitment of $30.8 million over 10 years to benefit his city, as well as financial concessions from the University of Providence.

Eichenwald said Brown’s support for Providence shored up the real estate value of the university and increased applications to the university because Providence became a healthier and safer community where more parents would want to send their children.