County Council approves collecting fees from nonprofits

Jason Cato and Margaret Harding

Nov. 6, 2009 (McClatchy-Tribune Regional News delivered by Newstex) -- UPMC's decision to close its Braddock hospital riled Allegheny County Council to the point it could cost local tax-exempt entities, a council member said today.

Council unanimously passed a bill that would collect fees for "essential services" such as public safety and public works from the hospital system, local universities and others exempt from paying county property taxes.

The plan, approved Wednesday, would raise an estimated $13 million a year, said Councilman Nicholas Futules, D-Verona. There are about 25,000 tax-exempt properties in the county.

"We believe (nonprofits) have an obligation to at least help out," said Futules, who cosponsored the bill introduced by Charles McCullough, D-Upper St. Clair. "We would love to hear the word that they will donate the money to us rather than being mandated to do it."

UPMC spokesman Paul Wood said his organization voluntarily contributes to the city and region in a number of ways -- from $518 million in reduced and free health care last year to $100 million for the Pittsburgh Promise. He said UPMC already pays $24 million annually in various taxes.

UPMC had $7.7 billion in revenues in the fiscal year ending June 30.

"We've always supported the city and the county and the region in a whole host of ways," Wood said, adding that he didn't know how much UPMC would have to pay under the bill. "We're just going to have to see where it goes."

University of Pittsburgh spokesman John Fedele said the university contributes hundreds of thousands of dollars in revenue to the county through property taxes on its owned and leased properties and through a contract with Port Authority that provides free bus service to students and staff.

"We intend to use any means available to retain our tax-exempt status," Fedele said in a statement. "All in all, the university and its students use few county services, and the university contributes far more resources than it uses."

Carnegie Mellon University spokesman Ken Walters said the university is reviewing the bill and couldn't comment.

Council passed the bill, 14-0, with Councilwoman Amanda Green, D-Stanton Heights, absent due to being on her honeymoon.

County Executive Dan Onorato has a week to veto the bill, sign it or let it pass without his signature, said spokesman Kevin Evanto.

Onorato had planned a "cooperative conversation" with nonprofits during 2010 about contributing money to the county beginning in 2011, Evanto said.

"We're not opposed to the concept of asking nonprofits to contribute," Evanto said. "The question is how do we go about doing it."

Futules said council is willing to work with Onorato to amend the bill, if necessary.

Under the plan, nonprofits would be required to apply annually for tax-exemption status with the county. A $200 fee would be imposed for every 1,000 square feet of building space over the first 1,000 square feet.

Those eligible for exemptions include churches, primary and secondary schools, and charities that provide food, clothing, shelter and medical services to the needy.

Council has considered similar plans during the past year, but the announced closure of UPMC Braddock united council members on the issue, Futules said.

UPMC plans to close the hospital Jan. 31. The hospital lost $7.5 million in fiscal year 2009, officials said.

"It pushed a lot of buttons with council members because they used the words 'loss of profit,' " Futules said. "OK, so they lost some money here. They made hundreds of millions elsewhere."

Newstex ID: KRTB-0288-39514826