POTTSTOWN PA – As real estate prices continue to fall across Southeastern Pennsylvania and the rest of the nation, a result of the recession and slow sales, more owners are challenging municipal assessments of the value of their properties. That spells trouble for many taxing entities, but particularly for school districts that depend most on real estate tax revenues to support their budgets.

Assessment battles are becoming as much a problem in the Pottsgrove School District as anywhere else.

The district Board of School Directors unanimously agreed Tuesday (April 13, 2010) to spend up to $9,500 to hire a Plymouth Meeting company that will conduct independent appraisals of four commercial properties within the district. Their owners claim the parcels are valued for far more than their current worth.

Neither the owners, or the addresses of the properties in question, were revealed in the board action. District Business Administrator David Nester made it clear, however, that Pottsgrove faces substantial declines in tax revenue, and potentially larger budget problems in the future, if it loses cases pending before the Montgomery County (PA) Board of Assessment Appeals.

Directors authorized the appraisals to be done by Mastroieni and Associates, a firm that specializes in “valuations and appraisals for a wide variety of commercial and industrial properties, hotels, resorts and recreational real estate,” according to its website.

The Mastroieni work product presumably would be used by the district as evidence during appeals hearings to justify current valuations.

“I assume it’s worth spending this amount of money to us,” director April Kontostathis asked Nester before the vote. “It is,” Nester replied with a nod. “We only look like this at large assessment appeals.”

Compared to neighboring school districts like Spring-Ford, which has far more commercial real estate and, consequently, a greater number of appeals in process, Pottsgrove’s not-to-exceed-price of $9,500 seems comparatively tiny.

Spring-Ford’s board in recent months authorized multiple appraisals costing more than $108,000 to fight appeal filings on properties owned by SmithKline Beecham and Quest Diagnostics in Upper Providence (PA) Township, the SEI Investments corporate headquarters in Oaks PA, Springford Country Club and Limerick Aviation in Limerick PA, the Giant Food Store in Royersford PA, and others.

“Do the townships contribute anything to this cost?,” director Fred Remelius wondered. “No,” Nester flatly responded, prompting Remelius to shake his head.

The reason? Townships that make up the school district – Lower, Upper and West Pottsgrove – often aren’t interested. Their budgets represent a fraction of the district’s expenses, they tax real estate at far lower rates, and so they have much less to lose in assessment appeals.

Lower Pottsgrove, for example, was asked during February 2010 to join the district in a settlement conference regarding the value of ChesMont Storage property on Industrial Highway, which had already progressed beyond the assessment board into a court case. Township solicitor R. Kurtz Holloway, during the township commissioners‘ March 1 meeting, explained the district hoped to reach a compromise on the assessment rather than continue the legal battle.

Commissioners needed to authorize the solicitor to participate at an additional cost, they were told, but Holloway suggested they pass on the opportunity. “The school district has more at stake here, and we should be comfortable to just follow Pottsgrove’s lead,” he explained. Commissioners took the advice, and unanimously passed a motion to officially decline the district’s invitation.

Related (to the Pottsgrove School District Board of Directors’ meeting of April 13):

• Ringing Relocation Decision Deferred Again
• Pottsgrove District OKs New Bus Contract, Up 2.2%
• School Board Member Headed For Afghanistan Duty
• Wh’cha Reading? At Pottsgrove, Something Different This Summer

Photo from Swift Economics

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