PASSHE Seeks to Flush Stormwater Fees; Claims It’s a Tax & Not a Fee

CLARION, Pa. (EYT) – The Pennsylvania State System of Higher Education is not allowing at least two of its universities, Clarion and West Chester (WCU), to pay stormwater invoices sent to the universities.

While Clarion University, PASSHE, and the Clarion Borough Stormwater Authority would not comment on the situation because the issue is currently under litigation, right-to-know requests from to the stormwater authority provided information.

The crux of the State System argument is that it’s not allowed to pay taxes as a state institution and the stormwater authority fees are taxes.

One of the primary reasons a separate Clarion Borough Stormwater Authority was instituted was its ability to charge fees instead of taxes.

“Much of the land in Clarion Borough is owned by tax-exempt organizations, and this places a heavy burden on tax-paying property owners,” the authority explained on its official Facebook page.

“Faced with expensive stormwater renovations, Borough Council established the Clarion Borough Stormwater Authority (CBSA). Authorities cannot charge taxes but can charge fees for the services they provide. Governments and non-profits are exempt from taxes, but not from fees. The CBSA charges all property owners, including non-profits, for managing the stormwater that flows from the impervious area (IA) on those properties.”

The solution was described as fair and equitable on the Facebook page, but the objections raised by PASSHE could challenge that belief.

While the balance owed by Clarion University is $82,171.44 after four invoices, other entities are also questioning if they should pay the bill. Joe Carrico, Superintendent of the Clarion School District, will not be paying its invoice until the case is settled.

“We have not begun paying yet,” Carrico said. “Our stance is we feel we are the same type of an organization as the university. So, we’re waiting to see what happens with the university.”

Clarion Area owes $17,500.00, but it is not part of PASSHE.

Clarion County is another entity with a number of buildings and parking lots that contribute to stormwater. Clarion County even paid early, taking advantage of a two percent discount, according to Budget Director Rose Logue. The yearly amount is $5,623.20. The county paid at a discount of two percent = $5,510.74, a savings of $112.46.

Ben Aaron, chair of the stormwater authority, said about 85 percent of property owners have paid, including churches in Clarion Borough.

First notice from PASSHE

In a December 18, 2020 letter to Todd Colosimo, of the Clarion Borough Stormwater Authority, chief legal counsel Andrew C. Lehman stated: “I am writing to you to formally advise the borough that the university will not be paying the invoiced fees. As a Commonwealth agency, the university is immune from the requirement to pay stormwater fees. It is the legal position of the university that stormwater fees, unlike water and sewer service fees, are a tax to which the Commonwealth is immune.”

Lehman also wrote that the State System of Higher Education was currently litigating the issue in Commonwealth court. (Borough of West Chester v Pennsylvania State System of Higher Education).

“This matter, when decided, will resolve this legal issue of statewide importance, and provide clarification regarding the imposition of stormwater fees on Commonwealth entities. At this time, however, the university is not authorized to pay any such fee.”

Requests for comments from Jim Geiger, Clarion University Vice President of Advancement, brought a response of “no comment” because of litigation.

“If you have questions, I refer you to Cody Jones at the State System,” Geiger added.

Cody Jones, Chief Strategic Relations Officer, said: “Because it’s part of pending litigation, we don’t normally make a statement on that kind of stuff, just because of the sensitive nature of the courts.”

Fee explained by Clarion Stormwater Authority

This stormwater fee is based on the square footage of impervious areas on all properties. This way, all those who contribute to the burden of managing stormwater help pay the cost. If property taxes were used to pay for stormwater improvements, it could mean an estimated 10 to 13 mill property tax increase. The stormwater fee will cost the average homeowner perhaps only half as much as if it were charged as property tax. Clarion Borough Council and the CBSA feel the stormwater fee is a fair and economical solution to a serious financial challenge.

The authority devised a tiered structure with fees based on the amount of IA on a property, with each tier covering a range of 1,000 square feet of IA. Billing is quarterly, with most landowners paying $9 multiplied by the tier number each quarter. Large properties with more than 6,500 square feet of IA are billed $9 per 1,000 square feet rounded to the nearest 100 square feet. Discounts known as credits are available to landowners who limit or control stormwater runoff. There is an appeals process to handle disputes about IA.

A policy is on the books for non-payment of fees, and the authority will soon hold a committee meeting to debate on the actions it will take for non-payment of fees after a review of each case.

One difference between West Chester Borough and Clarion Borough, in addition to size (WCU has the largest enrollment in PASSHE), is that West Chester is a Home Rule Borough and imposed its stormwater fee for service under the authority of Section 2961 of the Home Rule Charter and Optional Plans Law.

West Chester Borough

A public record of the Commonwealth Court of Pennsylvania for the Borough of West Chester v. Pennsylvania State System of Higher Education and West Chester University of Pennsylvania offers some background on the situation.

A memorandum opinion filed on July 15, 2019, included some of the case history.

The history included the following:

• Counsel for PASSHE informed West Chester Borough by letter dated January 18, 2018, that the university would not pay the stormwater charge. Through letters sent on February 23, and March 5, 2018, the borough rejected PASSHE’s and the university’s refusal to pay the stormwater charge.

• The borough sent PASSHE stormwater charge invoices listing the aggregate amount due for 2017 as $105,760.85. The borough sent the university stormwater charge invoices indicating a total amount due of $5,855.81 for 2017.

• WCU owes similar amounts for the 2018 Stormwater Charge, which they also declined to pay.

• The borough does not dispute that PASSHE and the university are immune to local taxation but alleges that the stormwater charge is a fee for service, rather than a tax. On April 13, 2018, the borough filed a Declaratory Judgment Action against the respondents in this court’s original jurisdiction, seeking to establish that the stormwater charge is a fee for service, rather than a tax, which respondents are obligated to pay.

An order issued on June 15, 2019, by Christine Fizzano stated: “The preliminary objection of the Pennsylvania State System of Higher Education (PASSHE) and West Chester University of PASSHE (collectively, Respondents) is OVERRULED. Respondents shall file an answer to the Borough of West Chester’s Declaratory Judgment Action within thirty (30) days of the date of this order.”

The final resolution has not taken place and lingers somewhere in the Pennsylvania court system.

West Chester Borough Manager Michael Perrone confirmed the case is still flowing through the courts and both sides are in Discovery.

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