BY SANDRA K. REABUCK
EBENSBURG — The battle to tax some previously tax-exempt properties of Memorial Medical Center has moved to county court after an attempt to reach a settlement reportedly failed.
On Friday, both Memorial and the financially distressed City of Johnstown filed appeals in county court.
And the stakes are huge: Hundreds of thousands of dollars more to be paid in taxes annually – or not – by the hospital giant.
Memorial is challenging the Nov. 2 decision of the county board of assessment appeals to strip the properties of their long-time tax exempt status. Some of the 21 properties are taxed entirely, some only partially.
Memorial also contends the county’s assessment system is outdated and unconstitutional because it’s based on a countywide assessment done in 1972.
Were Cambria County ordered by the court to perform a reassessment, the cost to taxpayers could be millions of dollars.
Johnstown attorney Bryan Barbin, who represents the city, said Johnstown’s appeal is twofold:
• All of the properties considered by the board should be 100 percent taxable.
• And, more broadly, all properties owned by Memorial and its parent Conemaugh Health System in the city should be taxed
“We contend that every hospital property should be taxed. The reason is based on facts showing that the hospital is no longer a purely public charity,” Barbin said.
“It is a monopoly health-care network.”
Memorial spokeswoman Amy Bradley said the appeal “is an effort to follow the legal process and protect the interests of the health-care system. But we are always interested in working with the city to find an acceptable solution.”
But, according to Barbin, Memorial rejected the city’s proposed settlement. Under that proposal:
• The city would accept the taxes under the county board of assessment appeals decision placing some or all of 21 properties into taxation.
• Johnstown would not seek to add more properties onto the tax rolls or ask for any increase in the assessed valuation of any properties in 2009 or 2010.
• The hospital, in addition to paying the taxes, would appoint a city resident to serve on both the hospital’s board and the Conemaugh Health System Board.
“They refused,” Barbin said.
James Walsh of Johnstown, the hospital’s attorney, contended in the appeal filed Friday that the hospital properties are used for charitable purposes and must be tax exempt.
“The facilities at issue are used in the providing of services (to patients) as well as, in some cases, education of medical students and others enrolled in the various healing arts programs,” Walsh said.
Among the 21 properties are parking lots and garages and several buildings: The John P. Murtha Cancer Center and the Conemaugh Home Medical Equipment Center, both on Somerset Street and a cancer center in the former Good Samaritan Hospital.
Also, the five-story Walnut Place Building and the seven-story Locust Building in downtown Johnstown, and the Wessel Building and Family Medical Center, both on Franklin Street.
The assessment appeals board found that Memorial’s tax bills to Johnstown, Cambria County and the Greater Johnstown School District would total $651,401.
That’s $251,000 more than the $400,000 Memorial now pays yearly in contributions in lieu of taxes to the three taxing bodies.
The city alone – which has been receiving $160,000 a year in contributions in lieu of taxes – would gain nearly $88,000 more above that.
Generally, the board decided to strip the exemption – in whole or in part – on properties seen as in competition with private business.
Barbin said the hospital wants to pay no more than the $160,000 it currently pays to the three taxing bodies.
The financially distressed city had wanted Memorial to start paying the $90,000 it had received from the former UPMC Lee Regional in contributions in lieu of taxes. Memorial declined to pick up what UPMC Lee had been paying after Memorial bought its crosstown rival.
