The financially troubled Youngstown Metropolitan Housing Authority will seek a state legislative bailout from a $1.9 million real-estate tax debt, which includes penalties and interest for nonpayment, and has been accumulating since the authority’s major renovation of Rockford Village.
The debt stems from the authority’s $13.6 million makeover of Rockford Village, formerly known as Kimmel Brook Homes, on the city’s East Side in 1999 and 2000.
That federally funded project turned 300 barracks-style units into 149 townhouses and 10 single-family homes. Rockford remains the authority’s largest development.
When the work was done, YMHA failed to file with the Mahoning County Auditor’s Office the required reapplication for the real-estate tax exemption, said Danielle Mulligan, the authority’s planning and development director.
Saying state legislation is now the only remedy, Mulligan told the authority’s commissioners last week that she is asking state Rep. Michele Lepore-Hagan to introduce a bill granting tax amnesty for YMHA.
“Whenever we have improvements done, even though the parcels are tax exempt, the county assesses taxes on the improvements, and we have to file the exemption request all over again with the auditor, who sends it to the state [Ohio Department of Taxation],” Mulligan explained.
“Apparently, in 1999-2000, the exemptions weren’t filed initially, and, at some point later in time, they were filed, but we had to make payments to the county auditor’s office under a payment plan, and, for some reason, some of those payments didn’t get made, and so the property at Rockford continues to accrue what shows up on the bill as delinquent taxes,” Mulligan said.
“Because that property has accrued taxes for 15 years and we’re not paid up to within the last three years, we can’t file an exemption with the county auditor’s office until we get current,” she said based on her conversations with the county auditor’s office staff.
“We’re advised that we need to contact our state representative and have them sponsor a tax amnesty bill, so we have contacted Rep. Hagan’s office,” Mulligan said.
“This legislation [if passed] takes care of what should have been exempt but wasn’t,” given that state law generally exempts public housing authority properties from real-estate taxes, said Mulligan, who has been with the authority 21/2 years.
“I’m going to research any legislative solution that is possible,” Lepore-Hagan said, adding that she will be meeting Wednesday with Carmelita Douglas, YMHA executive director.
“I want to do what I can to help them because they provide services to people in need,” Lepore-Hagan said of the housing authority and its staff.
Lepore-Hagan, of Youngstown, D-58th, said she did not yet know if a bill she might introduce would apply only to YMHA, or also apply to other similarly situated Ohio public entities that owe real-estate taxes, or whether the bill would wipe out Rockford tax debts incurred in the past, or merely eliminate any future taxes on it.
She said she wasn’t sure of the chances of passage of any such bill, given the short time she has been in the Legislature and given the fact that Republican majorities control both the Ohio House and Senate. “I have to just do what’s right,” she said of any legislation she might introduce.
Lepore-Hagan took office in January.
“I think the ball got dropped somewhere between changes in [YMHA] administration, and then somebody picked it up, but, in order to do that, we had to pay a portion of the taxes that we shouldn’t really owe,” Mulligan said in an interview.
“We do take it seriously and not frivolously, and we are trying to resolve it,” Douglas said of the tax debt.
“We’re going to get it cleaned up. I’m bound and determined to do that,” Douglas added.
The discussion of the tax debt occurred during the same meeting in which the housing authority commissioners approved a one-time, $10,000 retirement bonus for authority employees who leave by year’s end.
The commissioners offered the retirement incentive to balance the authority’s budget after federal funding cuts in recent years, with automatic federal budget cuts via sequester possibly returning this fall.
“I was not aware that we had not filed for the real-estate [tax] exemption,” said Eugenia Atkinson, who was housing authority director from May 2000 to December 2007.
Atkinson said that, as far as she knew, the authority would submit the necessary applications for tax forgiveness whenever it got tax bills.
The total Rockford Village tax debt to date includes some $1.35 million in taxes, $178,000 in penalties and $374,000 in interest.
Interest is now 3 percent per year, and penalties are 10 percent per half year on unpaid taxes, said Cheri Donofrio, director of taxation in the county auditor’s office.
Because of the previous Rockford tax delinquency, the state rejected the housing authority’s 2008 application for an exemption there, Donofrio said.
County Auditor Ralph Meacham and County Treasurer Dan Yemma said they don’t have the authority to forgive YMHA’s debt, and that they believe state legislation would be the only way to eliminate that debt.
Yemma said foreclosure likely would be “the very last resort,” especially because Rockford is a federally subsidized complex housing low-income people.
“We’re trying to get this worked out as best we can and certainly have not considered legal action,” Yemma said.
“The burden of applying for the exemption falls upon them,” Yemma said of public entities’ need to file the tax exemption application at the time of construction on their land.
“It sounds like the Legislature is the only remedy at this point,” Yemma concluded.